"Isn't an all expenses paid free education to foreign students a subsidy? I guess it is all right to make foreigners unhappy. Singaporeans get to be happy by paying" - Lucky Tan
Being a Singaporean all my life, I have realised my happiness is not free and I have to pay for it. The more I pay, the happier I become. With much of the essential services provided for by GLCs - transport, utilities, etc, my happiness is very much secured as the govt does not subsidies much of it. In fact to make me happier, they have implemented what is known as a negative subsidy. You see the GLCs are usually monopolies that don't have to compete. You don't have much of a choice when it comes to, say, the SMRT which saw profits soar to $150M but had no choice by to increase fares last year. Singapore Power had no choice but to hike electricity tariffs although it makes enough to buy up the major Australian power companies.
I know many of you are worried about the subsidies for public housing. Yes, this is a cause for concern and many fear that it will cause us to be unhappy. I would like to dispel all misconceptions and fears surrounding subsidies for HDB flats. The HDB does not give a typical subsidy which is a "cost subsidy". The Libyans get a 100% subsidy since housing is free when they get married. This is something Singaporeans don't have to worry about given our public housing is the most expensive in the world and more expensive than private housing in most countries. What we get is actually a "market subsidy" which is the difference between HDB price and the price you pay for the same flat on the open market. Of course the open market price depends on many things besides the GDP & population density, it also depends on rules surrounding financing such as the use of CPF and 25 year housing loans. If housing loans are limited to 10 years and CPF is not allowed for housing, Singaporeans would be able to enjoy affordable housing at lower prices and retire with sufficient cash because they would have finished paying for their homes alot faster and CPF would be preserved for retirement. Having rules and policies that are favorable for the housing market helps to enhance this market subsidy - a subsidy that doesn't even help the people save enough for retirement.
"Do Singaporean men subsidise the SAF by serving their NS for a few hundred a month? Surely, SAF with its gigantic budget can pay market rate for labor and do without this subsidy. I guess it is okay for ordinary Singaporeans to give subsidy but it is not okay for them to get subsidy" - Lucky Tan
The Singapore govt works for the interest of ordinary Singaporeans. Giving them subsidies will cause them to be unhappy and it is good that our govt has confirmed this by checking with Gaddafi. Gaddafi is now a good leader although he once ordered the murder of dissidents overseas. Gaddafi's mistake was giving his people too much and he now has to take it back. Our govt has been wise enough not to make the same mistake and better still they will be taking more from the citizens as they take more steps in the right direction. Singaporeans, you should be happier now that you're means tested when you're critically ill to make sure you pay as much as possible - this will help you to get well fast as you see your bills piling up.
May 10, 2008 SM GOH'S VISIT TO LIBYA
Gaddafi tells SM: Subsidies can ruin a nation
Admission from Libya's socialist leader affirms what S'pore leaders already know
By Chua Lee Hoong
TRIPOLI - FOR Senior Minister Goh Chok Tong, the most important takeaway from his four-day visit to Libya this week had nothing to do with memorandums of understanding or other cooperation agreements. It was the simple message: A welfare state and subsidies will lead a nation to ruin. And he heard it from none other than Libya's socialist leader for 38 years, Colonel Muammar Gaddafi. Speaking to reporters before flying home on Thursday, Mr Goh said: 'For me the most important lesson is the affirmation of what we already know - that a welfare state and subsidies will lead Singapore to ruin.' Libya lavished subsidies on its people because it had enormous oil wealth, he noted. But despite that, its people wanted more. 'Gaddafi himself told me the people are not happy. They want more and more...(He's come to the point where he acknowledges the system) is not working,' said Mr Goh. The difficult task facing the Libyan leader now is how to remove, whether partially or totally, the 'many heavy subsidies', he added. In Libya, education and health care are free. Petrol costs 10 US cents (14 Singapore cents) a litre, 'way below market rates'. When a Libyan gets married, the government provides the couple a flat about the size of a three-room flat in Singapore. One option the Libyan leader is considering, said Mr Goh, is to use a portion of the country's reserves to give cash transfers to the people, and move from there to a market economy. The reasoning: It is better to give cash - 'they can spend it, save it or invest it' - than to give subsidies, as they lead to 'wastage, abuse and distortions of the economy'. This, noted Mr Goh, may sound very familiar to Singaporeans, as it has echoes of Singapore's policy of preferring cash handouts to price subsidies. 'For me, coming to a country with so much oil wealth, saying that heavy subsidies is wrong...that is a very important lesson for us,' said Mr Goh. He added: 'We must never make the mistake of changing our own policy and going the other way, of giving more subsidies to people. 'Even when we give out cash to people, in terms of growth dividends for example, (we already see people saying) this is not enough. 'At some stage I will have to tell the Prime Minister - please be careful, it's never enough. We must find a formula that will ensure we don't go down that route (of ruining the nation).' Mr Goh was in Libya to strengthen bilateral ties and explore opportunities for economic cooperation. He was the second minister to visit the country after diplomatic ties were established in 2006. Foreign Minister George Yeo visited Libya last year. Colonel Gaddafi took power in a socialist coup in 1969, 10 years after oil was discovered in Libya. Sanctions imposed by the United Nations in 1991 kept the country in isolation until 2003, when the country renounced its nuclear weapons programme and rejoined the international community.