Saturday, January 29, 2011

How much class "C" hospitalisation can cost.

Many have not felt the direct effects of means testing or understood the implications.
Minister Khaw keeps repeating the mantra that the 3Ms are sufficient, medical care is affordable and so on. What does affordable mean? Hundreds of thousands of Singaporeans are uninsured (almost 1 in 5) and are exposed to enormous financial risk.

Until we can compel the govt to make further changes and put in place a 1st world universal healthcare system, please help to keep your fellew Singaporeans informed and tell them what is actually going on. I've written extensively about the cracks in our system and the govt's continuous efforts to increase our healthcare burden to keep its own expediture down.

Here is a case to think about. A man had an accident and stayed in a class "C" ward for 2 months. This feller fell through one of the many cracks that most are unaware of - when an accident is "work related", there is no subsidy. When the company doesn't pay the full bill, you empty your Medisave and go into debt. Mr. Tan actually had Medishield but still had to go into debt to pay off his bills. Many don't have insurance due to pre-existing conditions, cannot afford it due to age (premiums go up with age) or poverty and some are misinformed by continuous govt propaganda that healthcare is affordable at public hospitals. Even when you have insurance, you have to read the fine print of what the insurance company will pay for and the payout limits of the policy - much of which has become inadequate as the cost of medical care escalates.
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Straits Times Forum [Link]
Jan 29, 2011

THE CASE
Worker served with $147,000 C-class bill

I HAD an accident at work last June. Initially, the interim hospital bill from the National University Hospital indicated a subsidy.

But when the final bill was given to me, I was shocked. The bill for my stay at a C-class ward amounted to an unsubsidised total of $147,000.

I was discharged on Aug 13 last year and the reason for the difference between what was stated in the interim bill and the final one was not explained at all.
Only after I asked was I told that the Ministry of Health had withdrawn the subsidy as the accident was work- related.

About a month after my discharge, I applied for a waiver of the outstanding amount of about $122,000 through my MP. This was after my company had paid $25,000.
As far as I am aware, the hospital did not reply to the appeal.
Three months later, after more deductions from my MediShield ($41,000) and Medisave accounts ($31,000), I was informed that the hospital was in the process of scheduling an instalment payment plan for the remaining $50,000.
Needless to say, my family and I are plagued by anxiety. I am 54 years old and work in the construction sector; my wife works part-time and my daughters are still in their teens.
How can an average Singaporean worker like me support a family, pay off a huge hospital bill and still find more money to pay for subsequent medical requirements arising from the accident and treatment?
If I had been given a subsidy, I would not have been burdened by this unexpectedly trying financial circumstances.
Tan Guan Seng

MM Lee on Elitism....

I've written about elitism here. It is actually a series of articles that covers my thoughts on the topic.

MM Lee has been spreading his 'hard truths' with much enthusiasm in the past few weeks. He has been sharing his ideas a lot in public and sometimes too frankly. This week he offended many Muslims by asking them to be 'less strict'. I won't go into too much into that I believe it was careless 'politically incorrect' remark on his part[Link]. He is not helping his party (and his son) by taking center stage and going around reminding of everyone the 'hard truths'. It makes it look like the PAP leadership is still taking directions from him and very often the 'hard truths' look like dogmatic beliefs - he provided little evidence or logic to demonstrate these truths in his interviews.

"People get educated, the bright ones rise, they marry equally well-educated spouses. The result is their children are smarter than those who are gardeners. Not that all the children of gardeners are duds. Occasionally 2 grey horses produce a white horse but very few . If you have 2 white horses, the chances are you breed white horses. It's seldom spoken publicly because those who are NOT white horses say, "You're degrading me". But its a fact of life. You get a good mare, you don't want a dud stallion to breed with your good mare. You get a poor foal.

Your mental capacity and your EQ and the rest of you, 70 to 80% is genetic. "

- MM Lee, Hard Truths interview.

I will explain in the subsequent paras why he is incorrect and his attempts to socially engineer our society has led to harmful outcomes and finally the far better way to get performance from a group of people.

Human intelligence is far more complex compared with a simpler human traits such as height. It is known as a polygenic trait resulting from a combination of genes mixed randomly during reproduction. MM Lee talk about genetics being 70-80% - if that is really the case, the 'nature vs nuture' debate which has gone on for the past 100 years would have been easily settled. Researchers studying population groups that have split up e.g. Africans in Africa and Blacks in America found that nutrition plays a much bigger role than genetics. Breast feeding can result in a average improvement of 7 IQ points for parents with a particular gene[Link] which may be the difference between the mean of a more intelligent race vs a less intelligent race. Suppose you get nutrition and environment out of the way and give every single child the best possible environment and the best possible nutrition - then the main factor would be genetic inheritance. The best research tells us when you do that, the parents account for 50% of the variation....the other 50% is probably random[Link]. It never goes up to the 70-80% MM Lee talks about. The implications is if you give all children the same start and equalise their environment make sure they get good nutrition, more top students will come from parents from the bottom 80% than the top 20%. In Singapore, the start for the poorest students is no preschool or $10 preschool [Link] while the richest parent send their children to $20K pre-school.

4 decades of clinging to this MM Lee's hard truth has led to a self-fulfilling downward spiral in terms of expanding inequality among the people:

1. MM Lee believes intelligence is largely due to genetic inheritance.

2. Because of this so called 'hard truth'. Policies designed to discourage poor and less educated from having more children. These measures including avoiding giving support to the poor when they have children to discourage them. This create a disadvantage and failure to potentiate the abilities of poor children - good nutrition and high quality early education.

3. Policy makers then look at the statistics that find children from educated parents do much better than students from poorer background. Then they wrongly conclude that MM Lee's 'hard truth' is true so better have more of the same type of policies to discourage the poor from reproducing by not supporting them when they have children.

We are losing talents and expanding the inequality in our society on this fallacy MM Lee calls a "hard truth". His attempts to socially engineer our society in the 1960-1970s by asking poorer citizens to delay marriage and have fewer children has led to the severe problems we have today which the PAP now tries to fix by massive immigration. His policies to give minimal help to the poor to discourage them from reproducing affects the children of poor families and creating a underclass. Today, a large part of the incentive for having children is given out as tax rebates than can only be used by parents with high income - it is designed so that nothing goes to poor parents who need the most help to realise the talents of their children. Baby bonus? Poor parents just don't have the extra funds to set aside the money for baby bonus accounts.

Let me ask you where we are today with 40 years of eugenics-based policies? The results are disastrous! The govt now wants to massively import 'talents' ....talent that could have emerge from our own people if not for years of bad policies and one man's desire to socially engineer the population. What the engineering accomplished was the expansion of inequality in our society - the highest in the developed world and a society now badly stratified.

Trying to engineer a better society by selective breeding has gotten us nowhere except to make us reliant on foreign sources of talent. There is a way to get performance and energise a a society that is far better and effective than trying to raise their IQ points by selective breeding. Just look at those 82 men and women, MM Lee himself selected from the best of his elites - not one can come out with a good argument for minimum wage, can't improve the deteriorating quality of life here, can't get elected except by linking votes to upgrading + silencing opponets...can't think of ways to make economic progress except by importing labor and making Singaporeans cheaper, better and faster...can't break out of the groupthink - MM Lee boxed them in with his 'hard truths' creating duds out of men who perhaps have some intelligence. The only way for the duds to be in control is to have sheep below them - denied of information, feed with propaganda. See what shackles our society is not the lack of people with inborn intelligence but an elitist top down semi-authoritarian govt. Elitism as a belief that a select group to which resources and decision making is disproportionately allocated will eventually de-energise the rest of the populace who don't participate, have no stake and ownership of ideas. They are fed propaganda instead of information ...think N. Korea vs S. Korea. One is an elitist regime, the other is a full blown democracy ...same people, different system of government...big difference in outcomes. Instead of socially engineering the people, much more is to gain by making progress in the political system. When there is freedom among the people to express themselves, when they have access to information because the press is free and the govt is fully transparent we can accomplish far more than trying to breed our way to accomplishment or importing "talents" to improve our 'genetic stock' and create an intellectual class - give everyone the freedom to think, participate and speak up....empower the people with information and tap on a diversity of opinion. An open society will ultimately triumph over an elitist semi-authoritarian system of govt.

The more extracts of MM Lee's 'hard truths' I read about, the more convinced that our govt's inability to solve problems is due to these 'hard truths'. They are hard only because one man refuses to accept the views of others and there is little flexibility to do anything different and make further progress. Other countries have since made political progress towards democracy while we are still locked down the the 'hard truths' of one man - many of these truths can be taken apart if we apply logic and the best scientific evidence available.

Tuesday, January 25, 2011

MM Lee on why he demolished rivals...

The extract from "Hard Truths" appeared in yesterday's New Paper.

"What political party helps an opposition to come to power? Why should we not demolish them before they get started? Once they get started, its more difficult to demolish them"
- MM Lee

Everytime the PAP is asked why they demolished opponents, they throw back this question- "why should I help my opponent?" Rather ridiculous because nobody is asking them to 'help' their opponents but to have a level playing field and respect our pledge to 'build a democratic society'. Political parties in democratic countries compete with ideas not shackle their opponents with arrest, bankruptcy and detention without trial. MM Lee also admits to demolishing his rivals when they are small to prevent the emergence a real challenge to his rule.

On why he thought it was necessary to demolish men such as JB Jeyaratnam:

"Well yes, Jeyaretnam to begin with. Chee Soon Juan is another. I think they deserve to be demolished. I have no regrets. Jeyaretnam went nutty, selling things in the corner, how did that help him? After closing down his practice, I mean, he thought, you know, Western Style, he's sacrificing for his country. No, it is personal ambition to knock me down. I mean, I just laughed him off and brushed him aside, which annoyed him. No, I have no regrets. Chee Soon Juan, also no regrets." - MM Lee

JBJ ended up selling books at street corners because that was all he could do. He never gave up despite the severe repression and that inspires many people today. It is quite absurd for MM Lee to say that he 'just laughed him off and brushed JBJ aside'. Brush him off? MM Lee went after him with his whole arsenal. For those who are too young to remember, they came after JBJ with a series of charges - read about it here : Link to Wikipedia, forcing him out of parliament and making him lose his property and wealth.

“But what I was angry about was the injustice in society, the disparity between rich and poor.." - JBJ, 1990 [Link]
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Today, we are all angry.

Friday, January 21, 2011

The TRUTH about how long the PAP will last...

Today's Straits Times headlines "Will PAP last?". This is how MM Lee sees it:

" If the decline in standards happens gradually, an opposition of quality will be launched. The public can sense it." - MM Lee

He does not see a problem for the PAP in the next 10 or 20 years. The issue for voters, as he frames it, is the quality and talent of men the PAP is able to recruit. ...so PAP will stay in power as long as it has top talents and does not split up. I don't believe this is true and I'll tell you why.

Warren Buffett once said that if people are not doing what you want them to do, you do not want them to be motivated or highly talented, you rather have them lazy, incompetent and unmotivated. Do you want leaders who are highly talented at making you cheaper, better and faster? ...highly talented and motivated at increasing the influx of foreigners...highly talented at finding ways like increasing the GST to increase the govt surplus. What is more important to voters is whether their interests will be served by the men they vote into parliament. The video clip in the previous posting, shows RP's Tony Tan explaining the issue is not whether the PAP can design and implement policies as they have the competence to do that. The real issue is the intent behind the policies. Even if the PAP remains as competent and qualified as it has been, once people believe they are not acting in their best interests, the PAP will be voted out. In past few years, much of the trust people have for the PAP has been eroded....I'll take you through a number of examples and after that reveal another reason why the PAP is in a more precarious position that most people think in the coming elections.

Just after the last elections, the PAP govt raised the GST from 5% to 7%. GST is a regressive tax that hurts the poor much more that the rich. The poor have to spend a greater portion of their income on living expenses than the richer folks. In order to get the people to accept the GST hike, the govt told ordinary citizens that the primary intent behind the hikes was to help the old and poor[Read the budget FAQ here]. Many would accept the hikes if the poor people were helped. However, most Singaporeans know from the past that GST hikes were usually done to make up for shortfall in the corporate tax cuts. For example in the 2003 budget when GST was hiked:

"4.3 From YA 2003, I have decided to cut the corporate income tax rate from 24.5% to 22%. This 10% reduction will save businesses $700 million a year.
4.4 Also with effect from YA 2003, the top marginal personal income tax rate will be cut from 26% to 22%, with corresponding cuts in all income bands. This will reduce the tax payable by most taxpayers by 13% to 16%, saving them $620 million every year.
4.5 I have decided to raise the GST rate from 3% to 5% from 1 Jan 2003. The increase in GST is expected to raise an additional $1.3 billion of tax revenue per year. " - Lee Hsien Loong, Singapore Budget Speech 2003
[Link]

In 2007, the corporate tax which was among the lowest in the world was cut from 20% to 18% [Link]and most Singaporeans who understood the real intent of the GST hike were outraged because it was done at a time when Singapore had the biggest income gap among developed countries and corporate profits as a % of GDP was at record levels. Knowing that the GST hike for the purpose of corporate tax cuts would be unpopular, the PAP tried to get the people accept it by saying it was done to help the poor i.e. they tried to hide the true intent of the policy. They used to be able to do this in the past when they controlled the media fully but today with the Internet, it is no longer possible for them to deceive ordinary citizens. I'll give you another example before I tell you how the PAP will lose its power. In 2009, the PAP govt push ahead to implement CPF Life by amending the CPF Act. The rationale given was that Singaporeans are living longer and so on - I'm sure you're familiar with those arguments. CPF as a retirement fund is a already very strained after all the liberalisation for investment, children's education and the purchase of HDB flats[51% of Singaporeans cannot meet minimum sum]. During the CPF Life debate, MP Low Thia Khiang came out with a suggestion which many if not most Singaporeans would find reasonable. His suggestion was that since Singaporeans already take most, if not all, the responsibility of retirement, the govt should create a fund to take care of tail end 'extra longevity' the govt project Singaporeans will have and do away with more complexity, confusion and further straining of the CPF scheme. It is a policy alternative the PAP will never consider because they will not create a fund for the old using taxes when they use the money to lower taxes for the rich and corporate tax cuts. They would rather pass the burden to ordinary Singaporeans because that is ideologically attractive to them. However, the idea from Worker's Party hardly leans to the left of the political spectrum. Most countries take care of some, half or all of the citizens' retirement needs - and most, if not all, do not have the vast resources in the form of sovereign wealth funds and govt surpluses. Yet at a time when many Singaporeans' ability to retire properly is affected by the severe income gap and rising cost of living, the PAP increased their burden and responsibility when so many other workable policy alternatives exist. The PAP cannot implement minimum wage when all other deveolop countries can. We don't have universal healthcare (some Singaporeans have to go to Malaysia for healthcare[Link]) when it exists in all developed countries. We have the biggest wage gap and a 3rd world wage structure. For this system that gives them little in the way of safety nets, Singaporeans are asked for huge sacrifices e.g. longest conscription in the form of NS after Israel and reservist duties. To answer the question of "how long will the PAP last", the question we have to ask ourselves how did the PAP last so long given the harshness of its policies and system.
People when given a free choice anywhere else in the world will rarely choose a govt like the PAP.- it is so far right on the political spectrum as reflected in its policies. Nowhere else among developed countries do people choose this type of govt and keep them in power when they have a choice. Occasionally they do vote them in for short periods when there is a treat of war or when the economic conditions are extreme but vote them out when conditions improve. The PAP lasted for several reasons. In the earlier years 1960s-1980s, the PAP was actually very popular due to the one-off rapid economic transformation.

Once the rapid economic transformation was over, people naturally wanted an alternative and the PAP's votes started declining. However, to maintain power, the PAP 1. controlled the media and limited the freedom of people to speak up 2. repressed of the opposition 3. modified the one man one vote system with GRCs and linking votes to upgrading. The control of the media is necessary to hide the intent of policies, make alternative approahces look unattractive and spread its propaganda. Control of the media alone is insufficient and so they repress the opposition to generate a climate of fear to make it hard for a strong alternatives to emerge. Even with these in place, the PAP is unable to halt the decline in support. For increasingly large number of Singaporeans, their support goes to"anyone but the PAP"....they don't need the opposition to have higher paper qualification or successful corporate careers but are willing to accept someone who will look out for their interests...... something Singaporeans cannot trust the PAP MPs to do anymore - their goal is the development of Singapore Inc not improving the lives of ordinary Singaporeans and in many areas this goal is divergent from the interests and needs of ordinary Singaporeans.

How long the PAP lasts depends on how fast they can change and move away from their ideology relative to the erosion of their ability to control information & spread propaganda and repress the opposition. The last 4 years has actually been a lost opportunity for the PAP govt. When Lee Hsien Loong took over from SM Goh, a carrot of change was dangled in front of Singaporeans. In 2004-2006 PM Lee spoke often about change & "remaking of Singapore" raising hope and expectations just as Badawi did in Malaysia when he took over from Dr. M - in 2004, Badawi's National Front actually collected 64% of the nation-wide vote comparable Lee Hsien Loong's 66%. 4 years after the elections, Singaporeans discover not much has change - change, if any, was in the direction they did not want - hike in GST, hike in Minister's pay, means testing for the sick, CPF Life, increase foreign influx, rising cost of living etc. Not only did the PAP fail to remake itself when it needed to, MM Lee came out to remind us how unchangeable the PAP is with his book on "hard truths".
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"You have to die for each other" - MM Lee.[Link]
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A blogger on the Internet pointed out that it is rather melodramatic and ridiculous for the MM to ask ordinary Singaporeans to sacrifice their lives for each other when he can't even get his ministers to accept anything lower than the highest pay for leaders in the world.

“We are a nation in the making. Will we make it? Am I certain we’ll get there? No, I cannot say that....I do not deceive myself for one moment that our differences of race, culture and religion will disappear" - MM Lee.

The MM Lee talks about the importance of nationhood and how hard it is to make Singapore into a nation from diverse groups of people...yet is it not the goal of the PAP to import people to grow the population? It is hard for locally born Singaporeans to bond with each other because of cultural differences but integrating hundreds of thousands of immigrants whose numbers will soon surpass that of locally born Singaporeans in a few years is okay?

"...successful transformation from a tiny fishing village to one of Asia’s — if not the world’s — most modern cities..." - [Link]

Don't you find it strange and insulting that Straits Times reporters write about Singapore being a tiny fishing village before the PAP was in charge of the place? Our forefathers came all the way from China and India braving the dangerous voyage to look for opportunities in a "tiny fishing village"? There are no tiny fishing villages in China and India? Our forefathers had no brains? Just one example of the "truth" they are trying to spread with this new book...the real truth about Singapore in the 1950s before the PAP is found here.

The book is 450 pages thick.....based on the extracts I've read, it will impress only those who have lost the ability to think. Along with the myths about the PAP leadership that they want to perpetuate and the justification (more like excuses) for every wrong that the man has been done...(bankrupting and jailing opponents simply because he felt they were 'duds') is this distorted view that Singapore's success is due primarily to the PAP. Today economic miracles are not so rare among East Asian countries e.g. Taiwan, S. Korea, Japan. Taiwan & S. Korea succeeded under authoritarian govts and continued to thrive after they became full blown democracies debunking the myth they could succeed only under strong dominant one party leadership. The book Hard Truths tries to pay up the myth that Singapore has succeeded because of a small group of elites and ideas of one man. In doing so, they tried to washed away the contributions of millions of ordinary citizens who formed the number 1 workforce in the world for many decades - a hardworking workforce that never went on strike, a workforce that accepted low pay, little benefits and long hours. This collection of myths released just before elections are held is a feeble attempt to persuade Singaporeans to continue supporting the man and his ideas..... the longer the PAP cling on to these so-called 'hard-truths', the faster it will be voted out....because a growing number of Singaporeans can see through the propaganda and know what needs to be done to have a better future for themselves and their families.

Thursday, January 20, 2011

Reform Party's Tony Tan on Imported Labor, Fertility and Quality of Life...




Tony Tan gave a very sensible explanation why we cannot allow the PAP to keep doing what it has done in the past few years - importing foreigners to keep the GDP growing. It is simple maths. If the PAP govt maintains the current rate of foreign influx, we will hit the limits of land and infrastructure within 5 years. Once we get to 6 million people, our quality of life will be badly degraded - just look at what happens to overcrowded cities with very high population densities. Importing people to grow the GDP is an unsustainable strategy with painful unacceptable tradeoffs.

Going forward we have to increase productivity because that is the only path to beneficial and healthy economic growth and get fertility back up as some countries have done by being serious about it - lets do away with those old policies and incentives that are hindered by the desire to socially engineer (through eugenics) our population i.e. based on the ideological unscientific belief that only the rich and graduates should have more children. The Reform Party says now is the time we reclaim our future. If we miss this chance for change, our children will never forgive us for letting them down.

Wednesday, January 19, 2011

Hard Truths and the Reality on the ground....

I borrowed part of the title of this posting from an upcoming book by ST writers called "Lee Kuan Yew, Hard Truths to Keep Singapore Going".[Link]

The team of writers was led/assembled by none other than Han Fook Kwang, the Straits Times editor who also wrote the book "LKY the Man and his Ideas". I guess the first book did not sell MM Lee's ideas hard enough so we need a 2nd book to get the hard truths across. When PM said he was going to gazette TOC as a political association, he said that it "has the potential to influence the opinions of their readership and shape political outcomes in Singapore". Now anyone with common sense is asking why isn't SPH & the Straits Times gazetted? With MM Lee appearing in the newspapers every other day, if not every day, to express his wise thoughts why does one need to get a book to understand his ideas?

I remember a speech by Bill Clinton a few years back. He warned about people who believe they possess the 'absolute' or 'hard' truths because it can lead to actions and decisions that are extreme and detrimental to human society.

"We do not want duds like Chee Soon Juan and JB Jeyaretnam getting into Parliament"- MM Lee during an interview for the book.

That was what he believed...and so he went on to have them bankrupted and 'demolished'. But all these people wanted to do was promote democracy in Singapore. When Singaporeans voted MM Lee into office 5 decades ago, Singapore was among the most democratic countries in Asia. Phillipines, Indonesia, Thailand were either ruled by dictators or under martial law. We had many independent newspapers, many strong political parties and a politically vibrant society. Today, many countries S. Korea, Phillipines, Indonesia, Thailand, Taiwan and even Malaysia have made progress to towards becoming full blown democracies while Singapore has turned into a one party state ruled by semi-authoritarian leaders. MM Lee has put in place an elitist system based on selection. You can read about how he came to the conclusion that such a system is superior to liberal democracy in Straits Times editor Han Fook Kwang's book "Lee Kuan Yew : The Man and His Ideas"[Chapter extract found here ]. While most would agree that good (the best) men with the right motivation to serve should be selected for the civil service, he extended this idea to the extreme by limiting various freedoms (speech & press) and eliminating the competition of ideas by repressing political opponents so that the selection system will have primacy over democratic elections....along the way, the PAP created GRCs and linked votes to estate upgrading. The reality is after decades of MM Lee's undemocratic system, Singapore is 27th on UN HFI and every single country above Singapore is a democracy and most are liberal democracies.

Chee and JBJ are not duds. The 82 people put in place by his selection system who allowed GST to be increased, ministers' pay to reach the highest on the planet, foreign influx to be so massive, and rejected the idea of minimum decent wage for workers....these people are the real duds.

"I’m not intellectually convinced that one-man, one-vote is the best. We practise it because that’s what the British bequeathed us" - MM Lee.[Link]

At the end of the day, we still have a "one-man-one vote" system which the PAP did not find a way to get rid of. While they undermine it by linking votes to upgrading and controlling the media to spread their propaganda, Singaporeans still do not have this right taken away from them. When ordinary Singaporeans stand in voting booth, they will ask themselves 2 questions, "Is my life better that it was 4 years ago? Will my children's lives be better 10 years from today?"....in the coming months, the one truth that will emerge is you cannot earn people's votes by making their lives worse....and this truth will soon dawn on the PAP!

Monday, January 17, 2011

Fertility Rate falls to disastrous low...

Singapore's fertility rate has fallen to a record low of 1.16[Link] per woman. This is down from last year's rate of 1.22.

He said the government would continue encouraging couples to produce more children, but admitted that raising the fertility rate would take time.
"For the foreseeable future, we will need to tap on immigration to augment our poprriulation, to support economic growth and to mitigate the impact of ageing,"
- Wong Kan Seng[Link]

Looks like falling fertility rate will now be used as the reason to import more foreigners. In the past we were told we need foreigners for their special skills. Then we were told we need foreigners to create jobs for Singaporeans. We have also been told that foreigners are here to take up jobs that Singaporeans do not want. Now the latest reason for increasing the foreign influx is our fertility rate is low. Singapore has the lowest fertility rate in the world if we count independent nations - if we count territories Singapore is 223 out of 226. We are above only Hong Kong & Macau which are part of China[Link].

I want to show you some charts of results of some countries that have intervened when the fertility rates fell[Australia][Sweden][Finland] and managed to turn their fertility rates around. You noticed that low fertility rates correlate with high population densities in places such as Hong Kong & Macau and Japan where the cost of housing and living is also high relative to income. So importing foreigners and over-populating our little island is likely going to make it worse - importing foreigners using low fertility as an excuse is going to plunge us into a disastrous vicious cycle....disastrous for locally born Singaporeans who will diminsih in numbers but perhaps acceptable to the PAP govt that sees Singapore as Singapore Inc so it doesn't matter to them where workers come from so long as GDP grows.

Importing foreigners and quickly converting them to Singaporeans does not solve the problem of an ageing population because they too will age and we will have an even bigger ageing population to deal with in the coming decades. So the long term solution has to be to get fertility rate up and reach a stable steady state fertility of 2.1. So far the govt has been unsuccessful.... and ineffective. How come they can do it in Australia but not in Singapore?....I tell you one of the reasons...but lets start with a story............

On Friday I took a taxi instead of the bus home to save time but tbe idea backfired. I paid a whopping $52 for my taxi fare. Yes, $52! Why? There was an accident somewhere at Rochor Road and I spent something like 1.5 hours stuck in the jam on the ECP. Spend money and get home later...tired, frustrated and poorer. The only good thing about being in the taxi for 1.5 hours was the taxi driver was quite talkative and had plenty to say about the govt - some of which is not so suitable for posting on my blog. Somewhere along the ECP the taxi said, "I felt the govt 'cheated' me when I had my third child". Cheated? That is a bit of a strong word to use. He told me that he had his 3rd child when he heard that govt was giving out $20K to encourage people to have more children. When his 3rd child was born, he waited for the govt to send him a cheque. He waited and waited but there was no cheque in the mail so he called up the ministry to find out what is going on. They told him the $20K is given out in the form of tax rebates and he would have to claim as rebates when he filed his taxes. It had to be used within 5 years. When he couldn't use up the $20K in 5 years they extended it to 7 years. At the end of 7 years, he got about $2K in rebates and $18K of the rebates was 'returned' to the govt. The same thing happens to many other lower income couples - they get little when they have children. The govt also gives out something known as baby bonus in which the govt gives out matching funds up to $8K(?) dollar for dollar to parents who put money in a baby bonus account - poor parents usually do not get the full amount because they cannot afford to set aside the money.

See the problem with these incentives. They give more money to the richer parents who are usually not motivated by money since they already have plenty and deny financial incentives to poor parents who love children and would be motivated by financial help. When the PAP says it wants to encourage Singaporeans to have more children, they do not mean ALL Singaporeans....they just want rich Singaporeans to have more children, They don't like the idea of parents who are not rich having more children hence they give out money in the form of tax rebates. In the eighties, they were even more blatant. The incentives were targetted at graduate mothers to have more children - you may ask why graduate mothers and not fathers? It is mentioned in one of LKY's speeches that he believes intelligence comes from the mother's genes[Read Population and Eugenics: Singapore's population policies]. In Australia, Finland and Sweden their policies to increase fertility rate encourages all parents to have more children not just selected members of society. That is why they have succeeded and the PAP govt has not....but PAP's failure is not going to bring disaster to itself but to ordinary Singaporeans who are fast losing their identity and their future.

Friday, January 14, 2011

Minimum wage news from around the world....

Go to google news. Search for "minimum wage" and see what you get[or just click here].



The first few articles should be news from Singapore about the recent minimum wage debate. That is followed by hundreds if not thousands of news articles from around the world on minimum wage being implemented, raised or debated. I quickly through the 1st hundred articles...you can go through the rest if you want. The truth is nowhere else in the world does minimum wage get slammed down as a bad idea as in Singapore. Most countries are thinking of raising minimum wage if they have one or aspire to have a minimum wage once their economy permit them to do so.


"Almost all who spoke on the topic argued that it would do more harm than good; by diminishing the economy's competitiveness, they said the measure would lead to unemployment for the very workers it intended to help." - Straits Times [Link]


Harm? How much harm (or rather economic disruption) minimum wage brings about depends on how much the wage structure resembles that of a 3rd world country (that is why all developed countries except Singapore has a minimum wage). When we talk about minimum wage which is implemented with little harm and great benefits in many countries around the world, the PAP MPs talk about how concerned it is about harm that it will bring to Singaporeans. Minimum wage is hard to implement in Singapore only because the PAP govt ruin every pre-requisite needed to implement minimum wage smoothly. You know what brings harm to Singaporeans? Since those 2 casinos were built we have seen a spate of crimes, numerous families ruined by gambling losses. A few days ago, it was reported that more than a thousand families had their family members excluded because of problem gambling at the casinos. ...and many more families will be harmed by this. Yet the PAP govt allowed these casinos to be built in Singapore saying that they create jobs. This argument is bogus because the Singapore economy has so many jobs we need foreigners to fill them - the real problem is structural unemployment and lack of better paying jobs ...the casinos solve neither of these. The casinos brings hundreds of millions in revenue to the govt and causes real harm to Singaporeans....

Thursday, January 13, 2011

Minimum Wage Debate : 5 hr Confession of PAP's economic sins...

It was reported in the papers today that:MPs debated the minimum wage for 5 hours yesterday in parliament.

"Almost all who spoke on the topic argued that it would do more harm than good; by diminishing the economy's competitiveness, they said, the measure would lead to unemployment for the very workers it intended to help" - ST 13 Jan 2011[Link]

Lets put things in perspective. This is the same parliament that debated and supported the idea that our political leaders should be paid the highest salaries in the world. Yesterday, the same parliament got together to run down the idea of minimum wages - paying workers a decent wage for their work.

The economic tradeoffs of implementing minimum wages are actually not so large provided certain pre-requisites are in place. These include having a not so large income gap, low cost of living and an economy that is not so dependent on cheap labor. When you have these in place, setting a minimum wage is just a formal step to put in place legislation to ensure a small number at the margin are not exploited and once minimum wage legislation is in place it serves as a back stop to prevent govt from taking easy solutions such as depressing wages to attract industries dependent on low wages just to keep employment down and a minimum wage will motivate businesses to invest and improve productivity. Minimum wage will also motivate govts to keep other business costs such as rent, utilities and transport low so that businesses can remain competitive.

"None of the MPs who spoke advocated that Singapore should implement a minimum wage now" - ST 13 Jan 2011[Link]

You don't have to take 5 hours to debate why Singapore should not it implement now. We cannot and the reason we cannot do it is because the PAP govt over the years destroyed all of the pre-requisites needed to implement minimum wages. Singapore has a very high cost of living - thanks to the HDB and various GLCs. Singapore has a very large income gap - thanks to the govt's policy to import cheap labor that depressed the wages of a large segment of the population. Singapore is dependent on cheap labor - productivity growth has been neglected because businesses have access to cheap foreign labor. Singapore's productivity growth fell to just 1% in the past decade - the lowest of all developed countries. Because these pre-requisites are missing Singapore cannot implement minimum wages as non-disruptively as some countries can.

The PAP govt believes it deserves the highest salary in the world. I believe that workers should be paid decent wages. What is so good about an economic system in whch workers work full time jobs but cannot make enough for decent living?

"......suggestions piled up on how to improve the Workfare Income Supplement (WIS) scheme, a regular payout given to encourage low-wage workers to stay employed.
As Mrs Teo declared: 'I think it's fair to say that most members agree that Workfare is a better alternative."
- ST 13 Jan 2011[Link]

Lets not forget in the ancient times slaves also have jobs and they also had food and lodging. Workfare locks a large segment of the populace in low paying jobs...menial jobs that they have to take up in order to receive workfare. As a temporary measure, it keeps their head above water as the cost of living rises - even that, the PAP can't do properly insisting that a large part of Workfare go to CPF and the average Workfare receipent gets only $80 a month. But surely our economic goals cannot be to keep a large segment of the population just above subsistence level? This is a govt that once dreamt of delivering the Swiss standard of living to Singaporeans ....and now it is saying that giving out Workfare to keep people just above subsistence is the best it can do. It just goes to show how far down the path we have gone. If you buy the PAP system and its solutions, we will go further down the same path....and that is the plan the PAP has for you and your children. With Hong Kong implementing minimum wages last week, Singapore is the only developed country without minimum wages and govt without the desire to put in place a minimum wage. ...this says a lot about the leaders and the system they have put in place.

Wednesday, January 12, 2011

TOC to be Gazetted

Recently, while I discussed the coming elections with a senior citizen, I told him about how the TOC organised the Face-to-Face, an event where people met, openly criticized various govt policies and broadcast it on the Internet. His response was "They won't allow this for long. They will 'go after' the people behind it". I thought the old man was wrong and we have made a bit of progress from the 80s. It turned out what the old man said was prophetic. I believe the turning point for TOC was the Face-to-Face townhall type meeting it organised. The authorities' light touch probably ended with that event. I think the govt probably figured out that a series of Face-to-Face type meetings leading up to the coming elections will not help the PAP.

What are the implications of being gazetted as a political association? It means that TOC cannot receive funding or have foreign involvement in its activities. TOC cannot be affiliated with political parties. It means TOC cannot invite foreigners to give talks at its events and all donors of to TOC have to be reported to the authorities under the act:

[Link]
Annual donation report12. —(1) Subject to the provisions of this Act, the responsible officers of every political association shall, within 31 days after the close of each financial year of the association, prepare and send to the Registrar a donation report under this section in respect of every recordable donation referred to in subsections (2) and (3), giving all such details in respect of each donor thereof as are required by the Schedule to be given in respect of a donor of a recordable donation.

Many organisations after being gazetted face funding challenges not because they depend on foreign sources of funding but locals become fearful of donating because donors have to be reported to the authorities. In Singapore, people are still fearful of being known to the authorities for supporting a political association financially through donations.

The gazetting of TOC is just a reminder of the type of system we have in Singapore. TOC did everything responsibly (as far as I can tell) all it did was to gather and promote alternative views and ideas. But once the PAP feel that their propaganda is undermined, they will proceed to shackle the organisation. Gazetting is just one tool from its arsenal. You recall the recent ugly episode involving the people behind Temasek Review - they tried to shine the spotlight on it and attempted to humiliate the people behind the site. It takes real courage for Temasek Review to continue after that. There is a saying in football : "Go after the players not the ball" to describe dirty tactics. From the time people were labelled commuists and detained without trial to the time Dr. Chee was sacked from NUS to the time JBJ was bankrupted to the time Temasek Review was put on the spotlight....the whole idea has always been to go after the people not debate ideas. After TOC is gazetted, its editors and donors are exposed, what happens to the people the next time TOC reveals the flaws in one of PAP's policy causing support for it to be undermined...it is not so clear...and hence there is always fear.....

Sunday, January 09, 2011

Singer 岳雷 has passed away.

Today a sad piece of news in the chinese papers about singer 岳雷 (Yue Lei) passing away at the age of 50. For those who have difficult reading the chinese news article below - it says that he passed away yesterday night in Malacca. He had planned to return to Singapore to celebrate the birthday of his adopted child but did not make it. Okay, you may not remember or know 岳雷 whose heyday was in the 80s. Here is a video tribute to him on YouTube, I'm sure some of you will remember him:

Yes, he was once a cultural icon that was very much a part of Singaporeans' life during his heyday as an entertainer.

....So at this point you may be wondering what has all this got to do with this blog?

Yue Lei had cancer and had gone to Mahkota Hospital in Malacca [I wrote about this hospital here] because, according to the chinese papers, his finances were tight and he had to sell his home to get medical care and tried to save money by seeking treatment in Malacca. ......his story casts plenty of doubt on Minister Khaw's statement:

"The bottom line : We have good high-standard public hospitals that are affordable because of the 3Ms" - Minister Khaw

If it is so affordable, why did 岳雷 have to go all they way to Malacca for treatment? It is sad that he had to die so far away from home without his loved ones by his side.

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5年前患鼻癌的“歌王”岳雷昨晚在马六甲逝世,享年50岁,遗体将在明天运回新加坡。

岳雷身边的助理兼好友Roger Tan今早证实岳雷的死讯,他受访时说:“岳雷是在昨晚大概11点半在马六甲去世。”岳雷去年7月把在新加坡的房子卖掉后就到马六甲休养,原本打算8日(星期六)回新为干儿子庆祝14岁生日,但因为需要到银行处理财务问题而延后,没想到昨晚却在睡梦中逝世。

Roger Tan透露昨晚发现岳雷身体冰冷、口吐白沫,他即刻为他做心肺复苏术,希望能够救活他,“但他只稍微睁开眼睛并流下眼泪。”岳雷随后陷入昏迷,在送到当地的Mahkota医院时被医生证实已经死亡。

Roger Tan目前在Mahkota医院办理手续,以将岳雷的遗体运回新加坡,并透露岳雷的丧礼将在汤申路的一间天主教堂举行。

Saturday, January 08, 2011

30% jump in Class C hospital bills since 2006.

"The Ministry of Health (MOH) puts this down to multiple factors - including a greater number of more ill and older patients, and patients asking for non-subsidised drugs and implants." - Straits Times 8 Jan 2011.

Is the MOH blaming the rising cost on the old and sick? Didn't the govt implement means testing that would have caused the hospital bills to escalate? Didn't the govt plan to make Singapore a medical hub for rich foreigners causing a strain on our resources and cost to spiral up?

In an earlier posting, I pointed out that the Medisave Minimum Sum has been raised at an annual rate of roughly 7%[earlier posting here] - that translate to a rise of about 30% for 4 years. When I posted that, I speculated that the increase may be linked to rising cost of medical care in Singapore and this is a concern because it is rising much faster than wages. Based on the figures released by the MOH, class C bills have increased 30% in 4 years. If you look at the average bill across all ward classes and hospitals we see a jump of more than 50%. The bills at a few of the hospitals have doubled. Look at the table below:
When you read the table you have to be very careful not to misinterpret the data given which is average and 95 percentile bill figures. For those not familiar with what goes on in a hospital they might think that the figures still look okay because they are under $10k for 95 percentile. A typical hospital handles numerous small cases e.g day surgeries, short stay for a few tests, hospitalization for observation (chest tightness, shortness of breath, pain etc). These small cases overrun the statistics and the very big bills are concentrated on a small number of cases when a person has a serious illness so what they should publish is the average of the top 5% of the bills or average of, say, the top 1% of the bills. Showing the 95 percentile is misleading because it misses the very big serious cases - the type that we are afraid would hit us once in our lifetime. Deficient as it is, the numbers are useful in showing that cost has escalated sharply in the past 4 years.

Minister Khaw had this to say about the massive increase in medical cost:

"The bottom line : We have good high-standard public hospitals that are affordable because of the 3Ms" - Minister Khaw

Affordable? In the same sense as Minister Mah when he said housing is still affordable after prices jumped by 60% in 2 years As for the 3Ms, it is full of holes. Many self-employed individuals don't have Medisave, hundreds of thousands are not insured[Link] and for you to get Medi-fund you have to exhaust all your savings, live in a home and have kw enough income to pass the criteria for receiving Medifund. It is more dangerous for Minister Khaw to say that medical care is affordable than for Minister Mah to say that HDB flats is affordable. For HDB flats, everyone knows the truth but for medical care many don't know what is going on until they get seriously ill ....then it is too late. There many holes and gaps that people can fall through. Take Medishield, many people are still on Basic Medishield. Basic Medisheld has limited payout for hospitalization/surgery that is now insufficient for the 'catastrophic illnesses' it is designed for because hospitalization cost has escalated. In 2005, Enhanced Medishield was introduced. However, many people developed various pre-existing conditions or are not aware and didn't upgrade to the new insurance. The word "enhanced" is actually misleading because it gives people the impression that it is unnecessary. It is essential for you to move to Enhanced Medishield because Basic Medishield is inadequate and will expose you to great financial risk. In fact Basic Medishield no longer offered to new Medishield applicants. Please double check your Medishield policy to make sure you're on Enhance Medishield. Even Enhance Medishield has cracks you can fall through. Under Enhance Medishield there is co-payment amount that you have to exceed before Enhance Medishield will pay you. You may think that paying a few thousand from your pocket is okay, however, many patients, especially those with early cancer, found out the hard way that certain illnesses require many short hospital stays and you end up paying more than a few tens of thousands. To fix this you need to purchase a rider to cover the co-payment amount - which is another crack in the scheme that people are not aware of. Newborns with congenital illnesses are not covered [Link].

When Minister Khaw had a heart attack and needed surgery, he paid $8. Many poor people will pay much more than $8 when they get hospitalized. In our system, the richest in our society like Minister Khaw pay less than the poorer members because they can afford better insurance i.e. the less financially well-off have to shoulder heavier burdens when they get sick. Minister Khaw should make the medical coverage he has universal for all Singaporeans. We already have the biggest income gap among developed countries and our healthcare system further exacerbates the inequality in our society.
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Jump in hospital bills over past four years[Link]


Most patients are able to pay, have MediShield and Medisave: Minister















THE average bill for a subsidised C-class patient in a public hospital has gone up by between a third on the low end and almost double on the high end, in the four years since 2006.



The Ministry of Health (MOH) puts this down to multiple factors - including a greater number of more ill and older patients, and patients asking for non-subsidised drugs and implants.

Friday, January 07, 2011

Face to Face : HDB & Workfare....

I found some time yesterday to watch the videos of the Face to Face town-hall style meeting between political leaders and a live audience organised by the TOC. It is a great effort on the part of TOC to get people together and speak openly about various issues. Here is the segment which I found most interesting during which the housing issue and income gap was discussed:




One of the members of the audience asked what is the solution for high housing prices and given that many people have committed to high prices how do we go about bringing it down. Various solutions offered were sell HDB flats at cost, form a different category of low cost flats and so on. I think the best answer was given by Dr. Chee when he suggested that we shouldn't try to formulate solutions without all the information at hand - get HDB to open the books first and enough intelligent people look at it and solutions will emerge. It is actually quite a hazard for opposition politicians to try to offer solutions to such a complex nearly intractable problem - they risk getting shot down and people poking holes ...it is not wise to offer yourself as a target when the problem is caused by 3 decades of PAP 'asset enhancement' polices. How do you bring down property prices now that they have already rocketed? Very often housing bubbles deflate on their own causing plenty of damage - e.g. US housing bubble, both the high prices and the subsequent sharp fall in prices caused a lot of pain. The main thing is not to let prices go out of hand in the first place.


3 decades ago, in the 80s, Singaporeans had a good thing going - until the PAP messed it up. CPF contribution was 50% and cannot be used for housing. HDB's mandate was to provide affordable housing so they had to supply affordable flat without people touching their CPF money which would have been more than sufficient for a proper retirement. The surge in property prices was caused by the CPF liberalisation (according to this research paper[Link]). The housing loans to GNP ratio went up from 0.1 in 1980 to a whopping 0.49 in 1997 [Link]- a 500% jump! So CPF was emptied for purpose of buying homes and households became highly indebted - now housing becomes intertwined with retirement. The household debt has grown to $150B as reported a few days ago and the President of CCS warned that Singaporeans are in a "precarious" situation. If not for these policies, Singaporeans would have affordable homes (HDB's mandate) and enough CPF to retire comfortably. The large amont of money we paid for public housing has mostly gone into GIC controlled by a small group of highly paid elites who operate with little transparency - even the late President Ong couldn't get them to open the books fully. How does such an oversized sovereign wealth fund build up by the blood and sweat of ordinary Singaporeans over several decades suppose to benefit the people?

" Housing booms thus create only an illusion of wealth...."

- Daniel Gros, Business Times 1 Jan 2011[Link]


High housing prices only benefit those who are rich and have a few properties which they can unload during the good times, the (smarter) speculators who time the market correctly and property developers whose revenues & margins increase with rising prices. The average Singaporeans family has and needs one home to stay in - they will only benefit if they decide to emigrate which is something many think of doing but most won't. High property prices take away the ability of Singaporeans to save for retirement and reduces disposal income that ordinary Singaporean families can use to improve the quality of their lives. So what can govt do about high housing costs? The govt itself has suggested building more rental flats or build a separate category of flats known as "no-frill-flats" for those who are too poor to buy at current prices. These solutions take care of the poorest of Singaporeans by giving them inferior housing to differentiate from already sold to Singaporeans at high prices. Should the HDB bring down the price of flats? No. The property is used as collateral for loans and people stuck at high prices will be in trouble if the need to sell when the loan is still large. Also, the high prices has created an "illusion of wealth", it is politically unwise shatter this illusion - the last thing Singaporeans home owners want to hear from an opposition politician is the plan to force down his home price. It is hard now to do what should have been done i.e. selling closer to cost, pricing it according to growth in median income to ensure affordability, managing supply well etc. The best the govt can do now is to supply the market with new flats , cool the market with measures and learn the lesson in the next business cycle not to try to boost the market by taking away the measures - remember when the market was still okay the govt liberalised the CPF further by allowing it to be used for the 20% downpayment[Link]. Other things the govt can do is lower the loan tenure - housing price level would be higher if loans can be 30 years vs 15 years - do it when prices threaten to rise and then leave these measures there when prices soften. A long term rise in housing price level much faster than inflation & median income growth is highly undesirable. The best we can hope for in the current situation is for income to catch up with the current price levels assuming the govt can keep the market "cool" over a long period and the global economy grows. The most likely scenario, however, is prices fall in the next downturn and if the downturn is bad, Singapore can experience some of the more nasty effects of housing downturns in other countries given the high level of debt here.

The issue of Workfare was also brought up during Face-to-Face. Gerald Giam of Workers party said that he thinks Workfare is workable but the govt insists that a large part of it goes into CPF and the average Workfare receipient gets only $80 a month. A number of bloggers have also step forward to support the principle of Workfare in the past few months. I want to take this chance to explain more clearly why I don't support Workfare as a long term solution vs minimum wages. Workfare is easy enough to understand-a large number of workers in Singapore no longer make enough for basic living and Workfare supplements their wages. The PAP govt fouls up its own solution by insisting that a large part of Workfare goes into the receipient's CPF account[Link]. But what really is wrong with Workfare? Singapore has a 3rd world wage structure and the biggest income gap among developed countries. That is why we have so many people who cannot support their families working full-time jobs. How did we end up with a 3rd world wage structure? Import of cheap foreign labor that depressed the wages of low income workers and kept industries dependent on cheap labor as a large part of our economy. Once there is cheap labor businesses stop investing to improve productivity and Singapore's productivity was just 1% a year for the last decade [Link][Link]. Workfare helps to entrench the 3rd world wage structure by forcing workers to work for low wages in menial jobs in order get their 'workfare'. It provides no incentive for businesses to improve productivity... businesses being able to get cheap labor will be less motivated to improve productivity. By supporting Workfare as a solution , Worker's Partywill take the pressure off the PAP govt to adopt policies that will move us away from a 3rd world wage structure and narrow the income gap. In the long run, if we do not change course, more people will fall into workfare which is actually a state of poverty (some call it slavery[Link]).

Something is wrong with our economic system if a man working full time does not make enough for a decent living and to support his family. All other developed countries have a narrower income gap and minimum wages. Being able to implement minimum wages says a lot about a govt and the economic system of a country - it has managed to keep the wage gap narrow, move away from industries dependent on low wages, and kept the cost of living contained so that the minimum wage is not disruptively high. Under the PAP we have none of these pre-requisites in place and if the PAP continues on the same path, we will move further and further away from being able to implement minimum wages. Supporting Workfare as a long term solution does not get us back on track to fix the 3rd world wage structure because it gives the PAP the license to continue importing more cheap foreign labor....because they can now argue that Workfare takes care all those whose wages are depressed due to their policies. Workfare over time will create a new and growing underclass among Singapore because it takes away the incentives for changes to our wage structure.

Wednesday, January 05, 2011

UBS Report : Purchasing Power Comparison.

In an earlier posting, I did a "not-so-rigorous" comparison of the cost of living relative to wages between Singapore and Malaysian cities and concluded that the quality of life in Malaysian cities may not be too far off from Singapore's[earlier posting here].

Here is what I wrote in my blog a few weeks ago:

"2 decades ago, when you make a general statement that the life in Singapore is better than in Malaysia, most people would believe it and agree with you. Today the difference in the quality of life is not so clear. There are still many things that Singapore does better than Malaysia. We have low crime rates (hmm...gangs?), an outstanding education system and outstanding opportunities for a small number highly talented individuals. You can make millions of you climb all the way up to be a minister or CEO of a GLC. However, most Singaporeans are not highly talented - ordinary Singaporeans have ordinary talents....and by the law of nature about half our population have below average talent & IQ. The rising cost of living especially the cost of public housing means that the struggle for ordinary Singapore to stay afloat becomes tougher with each passing year. For the elderly and low income Singaporeans, the pain of poverty becomes harder to bear as the cost of living spirals up. Many ordinary Singaporeans are beginning to ask...what is the key selling point of our system? One that makes them struggle their whole life without a good retirement in Singapore to look forward to." - [Link]


It turned out that UBS did a more rigorous study and found that the purchasing power of Malaysians in KL is actually higher that of Singaporeans. UBS did a comparison of 73 cities by measuring the purchasing power[Full report found here].

"Prices and Earnings provides a comprehensive comparison of prices (122 goods and services plus apartment rents), incomes, income taxes, working hours and vacation days for 14 different occupations" - UBS.


According to the report Singapore ranks 11th in terms of cost of living and 43rd in terms of wages. Singapore came in 42nd for purchasing power which is wages relative to the cost of living and Kuala Lumpur is 2 places ahead of Singapore. Singapore is behind Seoul, Tokyo, Taipei and Hong Kong. In 2006 Singapore workers have a purchasing power index of 54.9 (using New York as the base=100), today that figure has fallen to 40.6.

Basically, Singaporeans have been put on a threadmil. As wages go up, the price level of housing, transport and medical care goes up even more. Its like the speed of the threadmill is increased year after year and you are made run harder just to stay on the spot and not fall behind. For the bottom 30% whose wages have remained more or less stagnant for the past 10 years, their quality of life has simply deteriorated. So what is the selling point of this system for ordinary Singaporeans?

Growing Consumer Debt among Singaporeans.

"The recent big surge in housing loans and the growth of rollover balances raise the question of whether Singaporeans already facing one of the highest debt to income ratio in the world, have placed themselves in a precarious situation", Kuo How Nam, President CCS, ST Forum 5 Jan 2011.

Singaporeans did not place themselves in a precarious situation -the people in govt who failed to keep housing prices affordable and contain unsecured consumer lending did. I agree with Mr. Kuo that Singaporeans are in a precarious situation and many don't realise because the economy looks alright for now.

In the past 3 months, the total consumer debt in Singapore reached $150B. This figure consists of $111B housing debt and $40B in the form of credit card, car and unsecured loans. Mr. Kuo noted that the roll-over credit card debt has grown to a record $4B and the number of credit cards issued in Singapore has reached 6 million a figure that translates to roughly 6 credit cards for every eligible person with annual income above $30K. In the rest of the posting, I'll focus on issues surrounding credit card loans and unsecured debt among Singaporeans.

Lets start with a somewhat unusual question. Why do Singapore banks like hire American CEOs or bankers with experience in US who were part of the banking system that nearly failed? They hired them before, during and after the financial crisis...so it is not for lessons learnt on how to prevent a banking crisis. There are a few simple and sensible ways to stem the growth of unsecured credit/credit card loans but the Singapore govt will not do it even though it will be good for Singapore society as a whole. I'll tell you why in the later part of the article.

A few years ago, I went the the CCS to attend a talk. This talk [Link]is given weekly and compulsory for those who want to seek councelling from the CCS. I wanted to attend the talk to understand how CCS can help those in trouble and what the CCS does. Very often when we see articles of about people who run into debt problems there is a small box next to the article asking people to seek help from the CCS. ...the same way people are asked to go to NCPG (National Council of Problem Gambling) when the newspapers publish articles on problem gambling. Problems caused by consumer lending by banks are passed on to this small unit called the CCS which is registered as a charity and run by volunteers. With consumer debt of $150B and a rollover debt of $4B, you would think that something bigger than the CCS would be needed to handle the problems that surface. Given its limited resources, CCS does a decent job but there is only so much it can do for people who need help. During the CCS talk I attended, the presenter showed a simple flow chart - if you can pay the minimum sum for your loan, you go back and help yourself. Otherwise, they will talk to you to see if they can repackaged your debt repayment into a mazimum 5(?) year instalment at an effective interest of 13-15% by writing to the banks. They will advise to cut down your spending to keep your repayment period as short as possible i.e. do without your car, limit the number of times you dine out etc. If you're a hopeless case i.e. your debt cannot be repaid in a period acceptable by the banks, they will advise you to try to get help from relatives or friends, sell your property or file for bankruptcy. Throughout the talk, the present repeated this statement and in bold one of her slides: "What you owe is only money, do not pay with your life.....". Apparently, when people get to the point when they need help with their debt, they can be suicidal. Given its limited resources and setup, all the CCS could do is to give advice and write to banks - the banks used to have the right to reject the repayment plan and proceed with bankruptcy filings...in May 2009, the CCS was helped by a new legislation called the DRS (Debt Repayment Scheme) which compels the bank to accept repayment plan which the debt is less than $100K and the debtor has sufficient income to service the debt within a reason period.

The CCS' capacity to conduct talks to educate the public is limited compared with the 'mis-education' by banks that spend tens of millions on advertising telling consumers to borrow to spend on holidays, gadgets, weddings, etc. I changed my handphone number a few years ago because I sometimes received 3-4 calls a day from banks trying to entice me with low interest loans that later would balloon into toxic high interest loans. The problem is after I changed my phone number the banks somehow managed to get it and I'm starting to get these pesky calls from their telemarketers. The only reason why banks would offer low interet unsecured loan to customers is the knowledge that some customers would run into trouble and not be able to pay in full when the offer period ends and have to service the loan at very high interest rates. In other words, the banks are preying on their customers - this form of lending is known as predatory lending. Where did local banks learn all these 'tricks of consumer lending'? ...That is the anwer to the question why local banks like to hire American bankers to expand their consumer lending business and the whole idea is to turn ordinary Singaporeans into a cash cow - lending to them at high interest rates and turning them into credit card slaves...perpetually paying for their loans.

There are 2 simple solutions to the problem. When other govts discovered the problem caused by credit card lending and predatory lending by banks, they fixed it by capping the interest rates to about 13% - at that level banks would become more responsible in their lending by the banks. Examples are Malaysian and Taiwanese govts[Link]. This idea of limits was part of Obama's consumer protection bill but was shot down after the banks lobbied intensely against it[Link] because these high interest loans are very profitable. The other solution is to limit how much unsecured loans banks can make to an individual - today banks are allowed to lend 3 times an individual income. However, the MAS left a loophole - individuals overcome this limit by borrowing from multiple banks. What is required to fix this problem is for the MAS to fix this by limiting the number of unsecured loans an individual can apply for to 1 or 2 banks. These are simple solutions to fix a growing problem that harms our society. However, I doubt the PAP govt will do anything given that these activities are highly profitable for the banks and the PAP has been pro-business in its policies...also the PAP govt has interests in these banks and that always take priority over the interests of the people.