Here's a picture of our new Minister of National Development Khaw sitting at a table next to one of Singapore's richest billionaire Kwek who was there together with other developers urging the govt to review its cooling measures in light of the unfolding economic turmoil.
For me, in this whole property saga, the PAP govt missed out a good opportunity to show it is extraordinary and to prove it offers a great difference compared ordinary govts in other countries. All the ingredients were there to give the PAP a chance to show a great distinction - the public housing experience, the rising income gap, lessons from the collapse of housing bubbles all over the world. The PAP could have done something innovative, something different and something that will prove once and for all it stands head and shoulders above the govts of other countries. But it didn't and fell into the same traps, stumbled into the same problems and had miserable outcomes that were the partial cause of its poor election results.
Going into 2008, we saw the bursting of the US housing bubble and the failure of the US bamking system caused by the fall in property prices. The bubble was there the result of Alan Greenspan cutting interest rates to get out of the post-911 recession. The housing bubble was not restricted to US but seen happening in Spain, Ireland and earlier we saw the effects on Japan - until today they have not recovered. We saw the lack of govt intervention in the housing market in US and parts of Europe resulted in a catastrophic consequences. Singapore has all the tools in place when we got out of this recession - a large public housing programme, experience from the 1996 property bubble and various social conditions e.g income gap, rising poverty to justify the provision of affordable homes. Yet the PAP became entrapped in an ideology that allowed home prices to rise far faster that workers' incomes and cause so much financial pain to ordinary Singaporeans looking for a home. Ex-minister Mah who defended govt policy to the end and had this awful last argument that if homes are sold cheaper than suggested by market prices, it is equivalent to robbing the reserves.
The effects of high home prices has far -reaching effects. A worker will find it hard to live on the same or lower wages if housing cost is high - we are an expensive workforce not because Singapore workers are greedy but because the cost of living is high and housing is a large part of it. It undermines the Singapore worker's ability to compete. High housing prices means lower disposable income which leads to a lower standard of living, and pressure on businesses that depend on domestic demand. High housing prices amplifies the wealth inequality among Singaporeans - the "have too much" who owns buildings ...right down to those who work full time jobs but struggle to own a home. Inequality in terms undermines meritocracy as it makes it steeper and harder for those who have to climb from the bottom....the high debt levels of poorer Singaporeans due to housing means the slope they have to climb is greased up so they can slip fall easily.
Minister Khaw works for us but he finds some time to listen to these billionaire developers asking him to review cooling measures as a new economic crisis erupts. But remember when the recession comes, Singapore workers' income will fall and they will cheaper more affordable housing when their incomes are depressed ....the mistake was already made by Khaw predecessor Mah who did not listen to the hundred thousand Singaporeans who had difficulties buying a home...billionaires were not too concerned as housing prices rose and ordinary Singaporeans have to take up higher debt burdens to own homes.