Saturday, August 30, 2008

Electricity and Profits...

"As of June this year, about 13,700 household have been put on pre-paid metering scheme...."
- Straits Times 29 Aug 2008
"" The minimum amount for topping-up is S$10 and the maximum is S$250. At every top-up, 20% of the top-up amount will be deducted to pay for the arrears and 80% of the top-up amount will be credited on the smart key." - SP Power Website
I don't know why other countries give the poor a subsidised utilities rate that they can afford with their lower wages when they can simply copy the PAP govt idea of pre-paid electricity. The idea is very simple - as Singapore Power increases its tariffs to preserve its profits, electricity becomes unaffordable for many Singapore families. The usual mantra is to blame the poor folks for using too much electricity and asking them to cut down. However, if after living in relative darkness at night, watching only 1 hour of TV and occasionally turning on their fans to beat the heat...they still cannot make ends meet and pay their electricity bill, Singapore Power will cut off their electricity rather than risk its profits. A meter will be installed at the person's home so that he can have electricity only after he pays up. So where does the person get the money to pre-pay for his electricity? I guess he can cut down on other things like food and transport.....the price of which has been raised to encourage them to use less.
Welfare is a dirty word....but reducing the profits of GLCs such as Singapore Power is even more forbidden. Those who talk about it deserve to be accused of engaging in the politics of jealousy. Singapore Power tells us that it needs to increase tariffs to preserve its profits because price of oil has been rising. The thing is Singapore's electricity is generated using natural gas whose price until recently has been fairly stable/flat however somebody signed a contract with the Indonesians to link the natural gas supplied to Singapore Power to the price of oil. Anyway cost has been increasing and they need to pass this on to Singaporeans. It is indeed important to keep Singapore Power profitable. How profitable is profitable? Singapore Power has made enough to acquire several Australian companies PowerNet and Alinta in multi-billion$ deals. Just imagine that Singapore Power makes enough from Singaporeans to acquire the major power suppliers in Australia a nation several times the size of Singapore. The profit that Singapore Power makes is not just enough to upgrade its power plants in Singapore but there is enough left for large overseas acquisitions. However, it doesn't seem to have enough to fund a low tarrif programmes for the poorest Singaporeans who have contributed to its profits over the decades.
Singaporeans should feel proud of our monopolistic GLCs. Unlike other countries which require similar companies to return excess risk free profits to the citizens, our GLCs have been able to use the money to grow overseas and create top jobs for the power elites in our society. When you fall on hard times and the Singapore Power man comes over to install the pre-payment meters at your home and you have no money to turn on the heater for your shower, remember that it is cold in Switzerland and that cold shower is one step closer to the Swiss standard of living the PAP promised to the people a few years ago.

Friday, August 29, 2008

GRC celebrates our racial harmony....

Tonight, somewhere in Denver, a man is nominated to run for the president of America - his name is Barack Obama. The people who have nominated him have made a grave mistake. This man is black and has an African name - the people of America, the majority of whom are white will never see pass the color of his skin and funny name. If the Americans want to ensure that the minorities are represented in the presidency, they should change their system to elect a racially mixed group of people that will form a presidential team rather than one person to be president.

GRC is one of the many great innovations of the PAP govt. It is certainly unique and there is no other country on earth where people vote for a team of politicians. You see the people else where have enough problems deciding on one person to represent them let alone a team of people. For them to figure the quality of men & women who form such a team will be a practical impossibility....and this whole idea of having a team defeats the purpose of having an election in which voters are to exercise free choice to choose the person who best represents them. In Singapore things are different - the PAP selects candidates through exclusive tea sessions and launch them into politics. We are told these are the best people to represent us, elections campaigns are short and primarily for the purpose of showing support for upgrading programmes. You don't have to worry about the quality of the people as long as they are from the PAP and not the Opposition. Although they don't have to face long and tough elections, they will understand your concerns and work hard for your interests. Elections give you a chance to show which estate upgrading plan you support - we are given this choice : vote for the PAP and you get $400M worth of upgrades, vote for the other fellers and you get zero. Most people don't even remember who they voted for - can you name all the MPs in your GRC? But most of the people will know when they are going to complete that blue dolphin fountain at the town centre.
Why do we need GRCs? Our govt tells us that we have trouble overcoming the barriers of race when it comes to choosing our leaders. Although representatives from the minority such as Devan Nair, David Marshal and JBJ, the PAP govt suddenly found out in 1988 that it was harder to get a candidate from a minority race elected. Electoral wards are merged to form GRCs which must have at least one minority candidate. The GRC started with groups of 3 and then grew to 6. Voters have to figure out 6 people (or 12 if you include the opposition slate) to cast their vote. The GRC is there because the PAP worries a lot about representation of minority races, it doesn't want them to feel disenfranchised ...... the other minority (33.33% of the citizens) who voted irrationally and ungratefully voted for the opposition. of course, deserves nothing.
Somehow years of promoting racial harmony has not help us to overcome the mental barriers when it comes to electing our political representatives. We need the GRC system to help us have a racially harmonised parliament. If minority candidates in Singapore which is so racially harmonised have difficulty getting elected, then Barak Obama has no chance at all in the US presidential elections. The Americans don't have laws to make sure neighborhoods are racially mixed, that races do not form "enclaves" and they don't jail racist bloggers....what chance does Barak Obama have in such a racially unharmonised society. The American learn something from us and adopt our GRC innovation.

Thursday, August 28, 2008

Profit drive SMRT to EXCEL....!

"Yes, I think they excel in packing people like sardines into crowded trains for more profits!" - Lucky Tan

Taking the public transport these days is great. You get to be really close to other Singaporeans and you certainly make contact with many foreigners....physical contact. You learn to push and you learn to push back. SMRT is certainly very efficient these days - they transport more people per train than ever before. SMRT is excellent because of the profits it makes - the more profits the better they become. No wonder Raymond Lim is so agreeable to fare hikes that boost SMRT's bottomline- all he wants is for Singaporeans to have better public transport. Raymond Lim also tells us that going private has resulted in cost savings - it is strange that I don't remember SMRT ever cutting fares with those cost savings....if there is so much cost savings why do they need to raise fares? The answer is very simple - "profits drive SMRT to excel". Raymond Lim also tells us that SMRT has the lowest cost per passenger among 9 international rail operators. How do you lower the cost per passenger - pack more passengers into each train! The other 8 "international operators" probably have trains with plenty of seats for passengers and space to swing their arms about - see how inefficient other public transport operators are compared with the SMRT - they probably pack half the number of people into each train compared with the SMRT.

Given the high cost of cars and taxi fares in Singapore, most SMRT passengers won't have other options during peak hours. You can pack them anyway you want for higher cost savings and bigger profits. In Singapore Inc, we should never trade profits away for something else because it is profits that drive us to be excellent.

"Together...Excellence for Singapore" - 1986 National Day Slogan

From the way our monopolistic GLCs operate and churn out higher profits year after year you can tell that PAP is indeed an excellent govt.

Public transport: Re-look fare-driven business model

THE Singapore Mass Rapid Transit (SMRT) corporation and ComfortDelGro have submitted their applications for fare adjustment to the Public Transport Council on Aug 1.
The SMRT reported first-quarter operating profits of $48m while ComfortDelGro reported first half-year operating profits of $126m for the period ending on June 30.
SBS Transit, the listed local rail and bus arm of ComfortDelGro, reported first-half year operating profits of $24m for the same period.
In their most recent full financial year, SMRT and ComfortDelGro made operating profits of $178m and $335m respectively, while SBS Transit posted $53m.
The fare adjustment application is not timely. In fact, the whole idea of the fare adjustment mechanism is flawed. Both SMRT and ComfortDelGro cited rising fuel prices and increasing operating costs as the main reasons for their application. Which business in Singapore does not face these problems? Many companies reported severe losses during these turbulent times and can they pass on the cost increases to their customers?
The SMRT is dependent on the local rail and bus segment for more than 65 per cent of its operating results, while ComfortDelGro derived 60 per cent of its operating earnings from overseas operations.
It is timely to review SMRT's business model by growing its non-fare income stream without adding an extra financial burden to the poor commuting public suffering from shrinking disposable income due to inflation.
The Government's efforts to drive more motorists onto trains and buses through its electronic road pricing strategy seems to have paid off, judging by the increase in train ridership.
Train ridership jumped significantly over the past six months and full year ridership is expected to dwarf last year's.
Without granting an increase in fare, the operating profits of the transport operators are bound to increase due to higher revenue and economies of scale.
In the short term, the application for fare adjustment should be stayed while the Government works closely with the two transport groups to re-invent their business model.
In the long term, maybe they should be revamped towards a cost-based model and differentiate the rail and bus segments from their other market-driven commercial businesses.
If viable, surplus from these other segments could be ploughed back to subsidise the rail and bus segments since they are riding on monopolistic gains in the captive public transport market.
That could possibly bring about lower fares without compromising ridership comfort and quality, and achieve the grand policy goal of lesser cars on the roads.
Ee Teck Siew

Wednesday, August 27, 2008

Going into recession....AGAIN!

Our industrial production output plunged 21.9% compared with Jul 07. This is a leading indicator and it tells us that we are likely to see a recession by the 3rd quarter and this data will be out in October. The main culprit is the biomedical sector which basically "fell off the cliff". Some silver lining in our electronics export which grew 5.9% from a year ago. Looks like Singapore will be among the first batch of countries to go into recession.
Given the challenges we faced during the Golden Period, imagine what a recession would feel like when it hits. We already have one MP shouting in parliament for help for her constituents. Here we go ago...recession = tighten belt = not much we can do for those in dire straits. You would think that given the numerous recessions we have been through we should be more systematic in giving out help.
"They are the cleaners, the hawker assistants who, despite the Government's mantra of helping citizens help themselves, are so down and out they have no way of helping themselves" - MP Lily Neo
It is all very simple. During the good times about 20-30% of Singaporeans earn barely enough to make ends meet - there is no way for them to save up for hard times. When the recession comes and they are retrenched, they are underwater almost immediately. Our govt schemes like workfare assumes that times are always good and jobs (though low paying) are plentiful. So what happens during recessions? In 1998, many were retrenched including professionals - when they run out of spare cash, had their electricity cutoff and defaulted on their HDB payments, they would queue up at the MP's office to ask for help. I'm not too sure what help the MP gives them - maybe ask Singapore Power for a grace period. Bills run up very fast because people have little savings. We have a system in place to go for the highest GDP growth, when that growth stalls...things unravel quickly.
"What is worse than being poor? Being poor in Singapore!" - Lucky Tan
“But the only viable long-term solution is economic growthincreased productivity, the retraining of workers and, consequently, higher salaries for them."
- Minister Yu-Foo on the poor.
"But Mrs Yu-Foo....the growth of the last 4 years did nothing much for the poor, they became poorer. Shouldn't we be looking at something else?" - Lucky Tan
I guess the PAP govt has it all figured out. The best solution is higher productivity (work harder), retraining and economic growth. This is the mantra for the past 20 years. Yet our income gap keep widening. So the poor worker isn't working hard enough, he hasn't gone for enough retraining....20 years of retraining is not enough lets make it 30 years. Their plight is not a function of the system the PAP put in place - an erosion of workers' benefits, relentless import of foreign workers, refusal to put in place a minimum wage, GLC greed and lack of social safety nets. It is the worker himself who is to be blamed - he did not up his productivity although he puts in 12 hour days, he did not undergo enough retraining...since he needs to work 12 hours a day he probably has to forego his sleep to get retrained.....The system is is the poor themselves who have to be blamed for their own plight. The system is just ...the public transport fare increase is also just, the rise in utilities rate is also just, GST hike is also just so was the ministers' pay increase. If the system is just, then it becomes unjust to interfere with it by giving more help to the poor. The poor have to accept their poverty is their own doing and not the work of this great govt of ours.

Sunday, August 24, 2008

I.O.U.S.A....the movie.

A few weeks ago, I wrote about the subprime crisis being just a pitstop on the list of economic challenges the US faces in the coming years. I just found out a movie has been made about the "larger" long term crisis. I.O.U.S.A talks about US heading for a long term decline and eventual bankruptcy if nothing is done to change its current economic trajectory.

"Deficits don't matter ...." - Dick Chenney.
"....until your lenders stop lending...." - Lucky Tan

Warren Buffett has a role in the movie explain what can go wrong if you spend too much:

You don't need a Phd in economics to figure out that US is in big trouble....and country just cannot go on spending and borrowing like what the US has been doing for the past 20 years.

Saturday, August 23, 2008

How many people in Jamaica?

I've been spending a lot of time watching the Olympics. The excitement and entertainment started with the opening ceremony and has not stopped. The highlight for Singapore this year is winning our first medal in 48 years. There was some coffeeshop cynicism about how we found the talents to win and plenty of debate about whether it is right to import talents for the purpose of winning medals. I think what is important is these talents are trained in Singapore and provided the support and 'infrastructure' that allowed them to rise to top. We did not just pay money to bring in adults who were given instant citizenships to represent us. The International Table Tennis Federation passed a new rule this year banning players from switching national allegiance after the age of 21 to prevent countries from relying too much on imported talents.
After trying to win something for many years, we decided that we have import talent because Singapore is "too small" to produce olympic medallists. Singapore came close when Ang Peng Siong held the world best time in 1982 for the 50m freestyle. He was considered the world's fastest swimmer that year but unfortunately the 50m was not an olympic sport until 1986. At the SEA games, we usually win a disproportionate number of swimming medals against more populous nations. The reason for this is we have infrastructure in place before of the efforts of pioneers many years ago who loved the sport. The Chinese Swimming Club which started many years ago at East Coast used to swim in the open ocean and recruit members door to door to join their club. The unforgettable Dr. Chan Ah Kow who was a member trained his children to be top swimmers...Patricia Chan, Mark Chan.

Is it meaningful to import sportsmen to win medals if the interest is waning in a particular sports? The medal we win in a particular event reflects the coaching standards, national support and the passion of our people for that event. If we can only win by importing people, we have to keep importing people if we don't have Singaporeans passionate in that sport. Watching the Jamaicans in the sprint events leaves nobody with any doubt that are many boys and girls in Jamaica who love to sprint, they have world class coaches and all the infrastructure needed to produce world class sprinters. They completely dominated the sprint events in the Beijing Olympics winning more gold medals in these events than the rest of the world combined.
So how many people in Jamaica? 2.8M....if you're determined enough to achieve something, size doesn't matter. The other sport that the Jamaicans are good at is bobsled which is a Winter Olympics event and they won the gold medal in the World Push Bobsled in 2000. There is no snow in Jamaica but the Jamaican bobsled team is not going to let this stop them from doing well. This spirit and determination is captured in the move Cool Runnings and it tells us why they are so good at sports.

Friday, August 22, 2008

Badawi takes the KL MRT....

"I'm not happy this must be fixed" - Badawi

"Mr Badawi, you haven't seen the faces of Singaporeans on the MRT" - Lucky Tan

Why must the Prime Minister of a country take the public transport to find out what it is like when he can ask his Transport Minister who will ask the SMRT who will then send a reassuring letter that the service quality is world class but needs to be maintained with more fare hike. This Badawi must really be very free to be enjoying the public transport in KL ( I thought that Anwar feller is keeping him busy).

Looking at the photo, the KL trains appear to be underutilised there is atill a lot of empty space. They should learn how to pack more people in their trains from Singapore. He should be telling his people that the transport system is world class and is the best they can get so they will feel better when they take the train.

"Are you aware that people are squeeze like sardines
on buses and trains when they go to work?"
- Ms Chee to PM Lee in court

The other day during rush hour, I took the MRT and realised that it is possible now to have a "hands free" journey. The train was so packed that I don't have to hold on to the rails.

Sunday, August 17, 2008

Rallying a Nation....can wait!

The last thing you want to do is give a speech to an audience whose mind is somewhere else. Good thing this year's National Day Rally is postponed to Monday otherwise Singaporeans will be faced with a tough choice of watching a table tennis match live vs listening to the most important political speech of the year by our PM. The Chinese team (representing China :-)....) has the No.1, 2 and 3 players in the world so it will be an uphill battle for the Singaporeans. Between the two events, I had actually prepared potato chips and Coke for the National Day Rally because I think it will be more uplifting....really can't wait....

It is about one year since MM Lee told us we are in a golden period (Jul 2007).

MM Lee has great powers of prediction but I think he forgot to tell us that period was to last only for one more month before the subprime crisis struck and sank the global economy. Last week when he said something about things getting worse, for unknown reasons, I suddenly felt a lot better. With things getting worse, I guess PM Lee have to step up to the plate to say how he intends to face the new and old challenges for our nation.

Encouraging Singaporeans to make more babies. Ha this one is really difficult. In the 80s, MM Lee was highly concerned that graduate moms were not producing enough babies and we were losing all those good quality genes. Priority was given to children of graduate mothers in school etc. Unfortunately people mistook his good intentions for some kind of evil discredited eugenics theory and reacted badly in the elections. The govt decided to reverse those policies....and thank goodness they did otherwise A* might have lost more than half their scholars who were reported to be living in HDB flats. Some remnants of these policies remain and I'll get to them a little later. Singaporeans don't want to have more children...why? why? why? Life is so good in this world class globalised city shouldn't we do our duty as humans to deliver more of mankind to this wonderful city? Are Singaporeans just selfish? They want to enjoy life unhindered by the burden of having children? ....Er how come the Malaysians and Europeans are having more children, is it because they are poorer than us? Is it true that the rich have money and the poor have babies?

While it is true that very poor nations have high fertility, there is no correlation between GDP and fertility rate once GDP gets above US$10,000. So why does our birth rate continue to decline, despite various govt measures:

Tax Incentives and baby bonus. Today Singaporeans get a $20,000 tax rebate if they have a 3rd child. This rebate has to be used over 5 years is not meant for the average Singaporean who does not pay so much in income tax. In the baby bonus scheme, the parents have to be rich enough to put money into an account to get matching funds from the govt. When I first saw it, I thought - "here we go again, govt giving money to high income earners who don't need the money to have more children"....but no lah... our govt has a compassionate heart, they doing this so that the average Singaporean will not burden himself further trying solve our nation's fertility problem. See how considerate our govt is to average and poor Singaporeans...they are shifting the burden of child bearing to the higher income. In being considerate and compassionate, our govt has created a challenge for itself by trying to solve the problem with less than half its child bearing resources. If we truly believe that everyone, regardless of his parents' income, has a fair chance of success we should encourage every to have child not just one segment of our society.

Going Swedish..... Recent reports in our papers hinted that we might be going Swedish to boost our birth rate:

"All parents get 13 months of leave, and continue to receive 80 per cent of their pay - with the cost borne by both the state and employers. On top of this, they can opt for another three months, though they will get just $40 a day during this time. " Straits Times Report Jul 08

"Oh my, if companies have to shoulder this burden, they will hire more FTs for sure!!" - Lucky Tan

I'm sure that if they implement what the Swedish have, our birth rate will shoot up. However, with such a large part of our workforce imported, our employers who can have ample supply of foreigners will not foot the bill of paid leave or loss of productivity resulting from the leave. What will happen is unemployment among Singaporeans (which is an unpublished statistic today) will simply shoot up from one unknown level to another unknown level. I'm really curious about how Swedish the govt will get and whether we will be selectively Swedish like the tax incentives given out to the higher income.

Narrowing the Income Gap. Yes, here we go again. The gap has grown when the economy boomed and will be growing even faster when the economy falters. It has been more than 10 years since the problem was first identified. So far the formula to addres this has been more worker retraining, blame the global competition for the gap and explain that imported labor has nothing to do with the gap. Maybe if we drag this problem long enough, people will start getting used to it so it won't be a problem. ....the resident sleeping at the bus interchange is now a PR, I don't even blink when I see Singaporeans digging the trash ...I getting used to that 70 year old cleaner at the hawker center. I guess its a matter of getting used to so I expect the PM to give the usual treatment to this problem - welfare is a dirty word, retraining and more retraining is the need for social safety net, no need to revise our tax structure, no need to improve labor laws to safeguard our low income workers.

I hope PM Lee will also take the opportunity to remind us of the dangers of Western influence such as support for human rights something our society will be much better off without. He will probably explain more about this idea of an inclusive society in which nobody should feel left behind....a far superior idea compared with the chaos of western style democracy. He will talk about this openness in our society which allows for a diversity of views to be expressed. You can express your diverse views via the ST Forum, Feedback Unit and at meet-the-people sessions. Your views will be taken into account along with the views of others, processed, categorised and fed into govt papers and eventually govt policies. Many Singaporeans must have expressed their views that the GST has to be increased, that there should be means testing for hospitals, that CPF Life is good for us, that massive increases in ministers' and top civil servant's pay will be good for Singapore. See how well your views are taken into account in the formulation of major policies in this inclusive society. I really encourage you to meet and share your thoughts with your MP at meet-the-people sessions....say what you want and feel included in our society. I'm sure our PM will talk about how open our inclusive society is during the National Day Rally.

Saturday, August 09, 2008

National Day 2008 : Celebrating the Singapore Spirit !

Those who have children always want that their children's future to be better than their own. If they have struggled, they want their children to have an easier life. My parents experienced the turmoil of the post World War 2 era when Singapore was a colony under British rule and we no say in its future. Our forefathers fought hard against colonialism for the right to determine Singapore's future and they fought even harder for its survival. What we have today is what our parents fought for yesterday. What we fight for today will be what our children will have tomorrow.
This year's theme for National Day is "Celebrating the Singapore Spirit". The most important spirit in a people is their fighting spirit. I'm not talking just about the willingness to stand up and fight for Singapore in times of war but the also the spirit to fight for what we believe is right. To fight and shape our destiny:

"Beneath the load how we
yearned to be free
Then came the day of liberty
when we took our destiny...."
- Rony Tan's Singapore Song

We fought so hard against colonialism to take back our destiny and be free. Our forefathers. my grandfather and yours were not obedient serfs who accepted the rules and laws our colonial masters laid out. They fought to build this nation so that their children and their children's children can call this place home and have the liberty to shape our destiny.
The 5 stars on our flag represents 5 ideals we are to uphold - democracy, justice, equality, progress and peace. While we evolve in this increasingly globalised world, we must never lose sight of our ideals. We must never allow our democracy to be weakened or we will end up serfs in our own society without a say in our destiny. If we allow inequality to widen there will be unnecessary suffering among the poorest and weakest members of our society. The best way to preserve these ideals will be to elect leaders who sincerely believe in them.
In recent weeks, the issue of Singaporeans not wanting to have children and emigrating to Western countries cropped up again. It has been more than a decade since these issues surfaced. People leave the country when they feel no sense of ownership. For many people there are many genuine economic advantages if they leave Singapore - higher pay, better housing, better medical care etc. The best way to retain our people will be to give them a sense of ownership and we can do that by upholding the ideal of democracy in which everyone has a say in the way the country is run. People have to lose the fear of speaking up for this sense of ownership to be felt. The surest way to perpetuate this fear is to bankrupt and jail those who speak the loudest...when you do that, those who speak softly become silent and slowly people will stop speaking up and sense of ownership disappears. Singapore becomes just another city ...another place to make a living ...a hotel rather than a home.

In the past decade the income gap among Singaporeans have ballooned to 3rd world levels. Equality is an ideal we have to strive for....we cannot continue to implement pro-business policies at a time when corporate profits are at record highs, we cannot continue to implement regressive taxation such as GST to cut the taxes of the richest 1% of the population at the expense of the poorest, we cannot continue to depress the wages by opening the floodgates to foreign labor while state own monopolies increase fees and fares to grow their profits. On this National Day, we should never forget the ideals of equality and justice as we transform our socio economic system. We should never put money above people in our priorities and GDP above the well being of our poorest citizens.

"We pledge our hearts and lives
So in this homeland we vow
to live and die"- The Singapore Song
Our future depends on our courage to do what is right. Like our forefathers who fought against colonialism, we have to continue to honor our pledge to build a democratic society based on justice and equality. We cannot afford to be complacent and leave the fate of our home in the hands of those who may not care for our ideals.

Wednesday, August 06, 2008

Why there should be no by-election in Jurong GRC...

..why? Go by law lor....

Writ of election24. ¡ยช

  • (1) For the purposes of every general election of Members of Parliament, and for the purposes of the election of Members to supply vacancies caused by death, resignation or otherwise, the President shall issue writs under the public seal, addressed to the Returning Officer.
  • (2) Every such writ shall be in Form 1 in the First Schedule and shall specify the date or dates (referred to in this Act as the day of nomination) not being less than 5 days nor more than one month after the date of the writ and the place or places of nomination (referred to in this Act as the place of nomination).
  • (2A) In respect of any group representation constituency, no writ shall be issued under subsection (1) for an election to fill any vacancy unless all the Members for that constituency have vacated their seats in Parliament.
  • [10/88](3) Upon receipt of the writ, the Returning Officer shall proceed to hold the election in the manner hereinafter provided.

See how wonderful the GRC system is. A by-election needs to held only if ALL the members of the GRC vacate their seats. If 5 out of 6 members of the GRC resign or (God forbid) die, there is still no need for a by election under the law. In other words once we have the GRC system in place, we may never ever see a by election again....any MP vacates his seat will be covered by the rest.

Saturday, August 02, 2008

Lim Swee Say : The man and his Logic.....

Minister Lim Swee Say is the Secretary General of the NTUC. As the leader of the Singapore's sole national trade union one would expect him to put the interests of Singapore workers above everything else. You seldom see Lim Swee Say without a smile on his face. He looks like a person people would find difficult to not to like. That is probably why he was chosen for the job of Secretary General of the NTUC.

While union leaders in other countries are always asking for the best wages possible for their workers, the role of union leaders in Singapore is very different. They moderate wage demands during good times, persuade workers to make sacrifices during bad times. With bad times around the corner, Lim Swee Say will be very busy in the coming months explaining why workers have to make sacrifices.

Recently Minister Lim has been on the news persuading workers not to ask for higher wages as it will worsen inflation. His logic : Higher wages =>inflation. This is very interesting. As our state own monopolies, many of which are still wildly profitable, move ahead with price hikes, not a single minister has stood up to condemn these hike as inflationary and unnecessary. We are told that these hikes are necessary because costs has gone up and service quality will fall if we don't accept them. But when the low income workers whose real wages has fallen below what is sufficient for basic living ask for a hike, Lim Swee Say springs into action to explain the economic theory of the "wage-inflation" spiral. However given that our inflation is due to food and energy which are largely imported or cause by govt monopolies raising prices, how will wage hikes for ordinary workers cause prices to spiral up? Will the rise in the wages of a cleaner cause oil prices to rise and spiral up?

"How come raising ministers and top civil servants' pay does not cause inflation but raising the pay of ordinary workers does?" - Lucky Tan.

In the coming months, our leaders will ask us to tighten our belts as the economy slows. This is for our own good because our wages will remain stagnant as various state own enterprises raise their prices to maintain their it is best for us to be prepared for these increases. When we get out of the coming slowdown, we have to remember that it is good leadership that took us out of it and not a recovery of the US economy.
NTUC chief concerned global economy heading towards stagflation
Channel NewsAsia - Saturday, August 2

SINGAPORE: Labour chief Lim Swee Say has urged workers to work together to cope with a global economy which may be heading towards a state of stagflation — one sparked off by low growth and high inflation.

The NTUC secretary general made the call in his National Day message.

Singapore’s National Day is being celebrated amidst concerns about the slowing global economy and rising inflation, said Mr Lim.

And to tackle these concerns, the labour movement, the employers and the government are addressing two core priorities.

First, coping with the impact of inflation without being caught in a price—wage spiral.

"The worse thing that any country does at a time of high inflation would be for the unions and workers to push for wage inflation. Wage inflation is different from wage increment. Wage inflation means you are pushing up wages to fully offset the inflation," said the labour chief.

He added that companies in the unionised sector are currently in talks on their annual increment.

One key consideration that is being taken into account in these negotiations is the current state of inflation.

The labour movement noted that private sector companies in the unionised sector have been giving a higher percentage of built—in wage increases in the first half of this year compared to last year, with the figure in the range of 4.4 per cent against 3.8 percent in 2007.

— CNA/ir

It is still the economy, stupid!

I've insulted Bush and his merry men so many times that I'm surprised the CIA and FBI haven't come after me. It really makes one wonder how they can run the world's only superpower without laws to protect leaders and civil servants from insult. Compare that with Singapore where we have the right laws in place to arrest people who insult our civil servants and bankrupt those who defame our leaders. As Bush is not protected by such laws, I'll proceed to insult him for the way he handled the economy.
When Hillary's husband left office, he put the US economy on track to balance the budget, narrow the trade deficit and with sufficient to fund the retirement of the baby boomers. After 8 years of Bush-nomics, all that has changed. US is heading for bankruptcy. No, this is not a theory by a doomsday economist or a bunch of conspiracy theorists - the person who is saying this is the US Comptroller General who is the accountant for the US govt. To appreciate what is wrong, you should listen to him yourself:

The US is already the largest debtor nation in the world at some point in the not so far future, it will only be able to afford to pay for the interest on its debt. While Bush is not solely responsible for this situation, he hammered the last nails in the coffin. Given the recent subprime crisis and credit crunch, the last opportunities to solve this problems are probably gone as the balance sheet of the US govt is further decimated to solve the short term but severe economic problems.
The problem started many years ago when the US started having persistent twin deficits - the budget and trade deficits. To fund these deficits they issued treasury bills and the Asian govts like the China & Japanese were willing buyers given their huge trade surplus. This is the equivalent of the shopkeeper lending money to a customer to keep buying his goods. At the same time, the social security obligations of the US govt started to grow and they attempted to correct this during Regean's era by imposing a payroll tax. This that was suppose to fund the retirement of baby boomers in the next few years, however, the money is all gone! The US govt borrowed against the social social and now it is pretty empty just when it is needed to fund the retirement thus large batch of American retirees. When Bush entered office, these were difficult problems but not intractable. The Bush Administration took the stand that 'deficits don't matter' and proceeded to cut taxes for the rich, fight a useless war, increase defense spending and put America on a long term trajectory to fiscal disaster.
Many are saying that Bush is clearly the worst president ever for fighting a war on a false premise but it is his economic policies that will cause long term pain to Americans. The book by Paul Begala, "It's Still the Economy, Stupid" was written in was considered a scathing criticism of Bush's economic policies at that time but 6 years later the economy turned out to be far worse that the book predicted.

Friday, August 01, 2008

LATEST : Transport Operators press for fare hikes!

"Can the cleaner press for higher pay without getting arrested?" - Lucky Tan
Recently, the fare structure for public transport was changed to be based on distance travelled vs # of transfers so that "4 in 10 people will pay less"....if you read beyond the headlines, 6 in 10 people will end up paying more after this change. Even before the change, SMRT saw its profits soar by 6% to $40M for 1st quarter 2008. Now the transport operators are asking for more fare hikes.
Singaporeans will be given a chance to contribute more to our transport monopolies.
Transport operators to press for fare hikes
TRANSPORT operators SBS Transit and SMRT Corp are submitting applications for fare hikes later on Friday, but insiders are not holding their breath for any measurable rise. This is because the Public Transport Council (PTC) declared last month that fare adjustments this year were likely to be far smaller than last year's average 1.8 per cent increase. PTC chairman Gerard Ee has said that keeping the rise 'below one per cent' was a distinct possibility. This, in part, has to do with a 'redistribution' of fares, when commuters who make transfers during their journeys will pay less than they do today. For the past several years, those who make transfers, for example, from train to bus or bus to train, or bus to bus, end up paying substantially more than those who take a direct service to their destination - even if the distances of both journeys are the same. The Government has decided that fares should be purely distance-based. With this, those who need to make transfers will pay less when the new fares kick in on Oct 1. But those who enjoy direct services are likely to foot the bulk of the fare adjustment. Four in 10 commuters today make at least one transfer a day. While their journeys involving transfers will cost less from October, they are likely to pay more for other trips. As before, the fare adjustment is likely to hit commuters who pay in cash hardest. But on the whole, the PTC has committed to keeping the average fare hike to one per cent or less.