Sunday, May 27, 2012

The People of Hougang stand firm!

Despite the attempts at character assassination. ...despite the estate upgrading carrots....despite the biased mainstream paper coverage....despite sending in the PAP big guns, the PM & DPM, to campaign for their candidate...the people of Hougang did not waver.

In 1991 when the Hougang people decided to vote for an opposition representative,  they knew something the rest of Singapore did not know and saw something the rest of us could not see. 21 years ago, before the Internet was widely used, before bloggers and the social media started to pierce holes in our blindfolds so that we could see through the propaganda, the people in this small section of Singapore had already seen a different vision for the country from the rest of us. When you  see this vision and start walking towards it, you will not be distracted by the little potholes, the little dirty tricks played by unethical politicians, their seductive promises and material temptations. For 21 years, the people of Hougang have continued on this long journey even when they were made to suffer deprivation and threats.

This is a long journey towards a democratic Singapore. Without democracy, there will be no future for our children for we will not be able to shape our own destiny. This is a journey away from our dark authoritarian past towards a vibrant democratic future.  The PAP has tried to retain their dominant power  by using pork barrels, propaganda, and threats...but these are precisely the undemocratic things the Hougang people are walking away from - the more the PAP uses them to get their votes, the further the Hougang people will walk away from the PAP.

Once a people know what they are doing is right and just, there is nothing you can do to force them off their path.

On Thursday, I went to the Hougang rally and climbed up one of the blocks next to where the rally was held to snap this picture.
As I climbed up the block, I noticed that it was very clean. I also noticed that most people staying in the block had left their wooden doors open, to let they air in, were relaxed at home with their families watching TV.  The tens of thousands of people who have gathered at the open field in Hougang were from other parts of Singapore not Hougang. See... the people of Hougang don't have to go down to the open field to hear the messages and be convinced to do the right thing - they already know which road to walk and what path they are taking so they gave their standing space at the rally to their fellow Singaporeans from other parts of the island. Singaporeans came looking for inspiration in Hougang to bring it back to their own corner of Singapore.

Today we have a govt that does not listen to the people. Does not act in the interest of ordinary citizens. It does what it wants then uses propaganda and pork barrel carrots to make us vote for them. They use their authoritarian powers to suppress their opponents and character assassination as a tactic to bring down their opponents. As they do this, we can see how much our fellow Singaporeans have suffered - the elderly citizens who are made to work at an advanced age, the large segment of workers with low stagnant wages, the high burden put the sick and their families. We look around and see our beloved country losing its identity and changing in ways we do not want it to change. We see little progress in our political system as other countries in Asia such as S.Korea, Thailand, Taiwan transform theirs to be free and fully democratic moving away from old authoritarian ways.

I sensed that many people were worried that when "Yaw-gate" broke and the frivolous Png-gate was created and played up, many people in Hougang would waver and succumb to the upgrading promises Desmond Choo dangled before them. After observing them for 21 years, I was confident they would stand firm so last Tuesday I wrote "You don't have to tell Hougang how to vote" . The people of Hougang can already see with great clarity where the PAP govt will take this country unless real change takes place. The PAP govt has demonstrated time and again that there will be no change if the people can be seduced by estate upgrading to give their votes to the PAP.

Once you see the same vision as the people of Hougang, you will have their revolve to take right path and not waver. 21 years ago, Hougang was just small SMC, a little dot on the map of Singapore but the people there knew that this long journey starts with each one of us taking a tiny step in the right direction...and if we work together these tiny steps will eventually add up to be a leap forward. There are many who will distract us, discourage us, misinform us, threaten us and lure us away from our path with tricks ...when that happens, ask yourself what will happened if Hougang people had yielded to these tricks and carrots yesterday - our nation would have been taken backwards and the small progress we made since GE2011 would have been undone as the PAP will interpret an Hougang victory as an endorsement of their policies and stop the already slow trickle of changes to improve the lives of ordinary Singaporeans. The rest of us have a lot to learn from Hougang to put our country's interest above our own local interest and understand there are more important things than facilities on our estate. By voting for the opposition, the people forego a wet market and other facilities that the PAP dangled to entice them....they have to travel to Kovan to do their marketing, But no change can come without sacrifice if they had succumbed to the divisive pork barel tactics of the PAP, it will be a great loss not just for Worker's Party but for Singapore. Each political party and MP should be elected  based on how their ideas and policies will benefit Singapore and Singaporeans ..and not how much money they can redirect from national coffers to use as carrots to obtain votes, That the PAP continues to use tactics that divide and harm the country, tells us they have not changed fundamentally. The people of Hougang inspire all of us to fight against this and do what is good for our country.

Friday, May 25, 2012

Plight of a HDB flat buyer.......

UPDATE: Admund has provided his mobile number:91557441 and email:
If you have questions on specific details of the case, you might want to check directly with him.

HDB does impose penalties in cases where the buyer is unable to secure a HDB loan of sufficient size and has to cancel his purchase because he can't raise the cash[If it's not income loss, what is it, HDB?] . Some commenters suggest that Admund has tried to buy a flat that is too expensive and should have been more conservative. This is actually irrelevant because the main point is whether HDB should penalize someone for a problem caused by HDB denying them access to sufficient loans. The purpose of imposing penalties for cancellation is to discourage people who are not serious about getting a flat and have no intention of closing the sale from making applications. In this case, the buyer has every intention of going through with the sale but was stopped by HDB denying him access to a 90% loan.

Yes, even people earning $1000 can own a flat....sure Minister Tharman sure!

Admund's plight just highlights how things can go very wrong for someone buying a HDB flat......the most expensive public housing in the world.

When you purchase a HDB flat and wish to get an HDB loan, you will need to first obtain an HDB Loan Eligibility(HLE) letter and the amount of housing loan that can be granted will depend on the buyers' age and monthly income. This letter is valid for 3 months from the date of issue[Link].

When buying an uncompleted flat directly from HDB, your loan eligibility will be subjected to reassessment at the time of flat completion before the loan is disbursed. For the case of BTO which take years to build, a buyer is reassessed when he collects his keys. If this reassessment fails and the buyer has no means to fork out the cash, the buyer will forfeit his option fees and 5% of the price of the flat.

In Admund's case, the HDB assessed him to be well paid so he was not entitled to any HDB grants. He paid $40+K for his down payment but was not able to secure a large enough loan from HDB to procure his HDB flat. Because HDB did not grant him a large enough loan (90% of the price of a flat) and he did not have sufficient cash to make up the difference, HDB made him pay a penalty of $28K and he lost his flat after trying to get one for 7 years.

This is quite amazing isn't it? Imagine in the case of BTO, the flats take years to build and the person gets sick or sees his income falling sharply due to job loss (to FTs?!) , the HDB takes half his down payment as a penalty after rejecting his HLE if he has no cash to pay for his home. 

How can HDB penalize someone for something unintentional and out of his own control? The main reason for failing the HLE (re)assessment is the loss of employment, illness or personal misfortune. Imagine the pain caused by HDB penalizing these people - it is unjust and unfair. 

Wednesday, May 23, 2012

Unethical electioneering practices must stop.....

There is a very sad letter I want you all to read. You can click it and read the letter in full.

The writer from Hougang urges his fellow constituents to vote for the PAP so that Hougang can "move on" and get new facilities and estate upgrading. He feels that Hougang has been the "sacrificial lamb for WP's call for democracy and transparency" and there are "enough voices from the WP in parliament".

One of the most damaging thing the PAP did to democracy and to the country is to link votes to estate upgrading. It encourages every voter to think of himself first above the interest of his fellow Singaporeans and the interest of the country. During every election, the PAP will dangle multi-million dollar carrots to secure votes. These carrots encourage voters to support the PAP even though they are against PAP policies that are harmful for the country and Singaporeans. Over time, instead of formulating beneficial policies that have good support from Singaporeans, the PAP has become dependent on this method of getting votes. In the last election, they promised rivers (Bishan river). MRT stations, parks, and all sorts of grand facilities. The more Singaporeans show that their votes can be bought, the less the PAP need to do to ensure their policies benefit ordinary Singaporeans.  They will respect you less if you allow your vote to be bought.

"The term pork barrel politics usually refers to spending which is intended to benefit constituents of a politician in return for their political support, either in the form of campaign contributions or votes" - Wikipedia

Pork barrel politics destroys policy-oriented party competition It takes the focus of voters alway from long term policy considerations for short term and selfish gains. If voters succumb to these tactics, the PAP will continue to use it for an unfair and unethical advantage. The forum letter writer instead of speaking up against unethical tactics of the PAP, urges the people of Hougang to yield to it in order to get facilities and upgrading. Lets turn our country away from this destructive path instead of sinking deeper and faster into it.

Put our fellow Singaporeans especially those in need above ourselves. Put the interest of our country above our own interest.

Facilities and upgrading may be lacking in Hougang - there are no artificial rivers, no blue dolphin fountains, no rose gardens and no spanking new playgrounds....but what the Hougang people have money cannot buy. They have our respect. It is this Hougang spirit that permeates to all corners of Singapore that will ensure our survival.

Hougang residents will not be swayed by carrots. They will vote for the best candidate to  represent them and speak for them in parliament.

Another election, another round of allegations.

Remember what happened during GE2011? A resident of Hougang sued the town council for the accounts and the whole episode was played up by the mainstream media to cast doubts on the minds of voters by planting the notion that the WP accounts in Hougang was messy['Messy' accounts: Not an attack on Low, says Lim Hwee Hua]. So what happened to this issue? It was played up during the election as something severe and became a non-issue shortly after that. Today, most people have forgotten what has happened but during that time it might have swung some votes to the PAP. 

Today's  Straits Times headlines: "WP faces allegations of dishonesty".

This is highly irresponsible and lopsided. Before I go into the details of this particular incident. Let me show you a video from the past.

In this video, Lim Swee Say claimed that he received his CPF statement every month. This is technically untrue because CPF statements not sent to account holders every month. However, you don't see any of our top bloggers calling Lim Swee Say a liar because this may just be a verbal slip, his memory may have failed him, he got confused with other accounts and it is irrelevant to the point he was trying to make. Even though he has been a CPF account holder for roughly 40 years, most of us gave him the benefit of the doubt. Of course, there are voices in various forums, chat rooms and coffee shops calling him "liar, liar" but the Internet is huge, you can always find someone saying anything you want to look up. The main stream media didn't go and pick this up, play it up and say that there are allegations that Lim Swee Say is a liar.

How did this whole episode about WP candidate Png get started:

1. Teo Chee Hean said that WP did not put their best candidate for Hougang because they didn't select Png for NCMP after the last GE - they instead chose Gerald Giam. This is a strange point to make because Choo is clearly not the best candidate the PAP has and PAP never puts its best "minister caliber" candidates in Hougang because they would lose,

2, Png defended himself saying he didn't support the NCMP scheme[Link] and during a walkabout exchanged comments with the media:

"I actually took my name out of the ballot for the NCMP post. Because I have a personal stand against the NCMP scheme, so that's why my name wasn't in the ballot. So I don't think DPM knows all of these...”

3. Leak minutes from WP CEC showed that Png's name was on the balloting paper[leak by "Secret Squirrel"].

4. Low Thia Kiang clarified that Png had express his strong opposition to NCMP scheme but the WP CEC that went ahead and included his name on the balloting paper. [Link]. Low further clarified that :

"(Mr Png) was not referring to the ballot paper, but to the ballot as in the voting process and the running for the NCMP position."  [Link[

Speaking to Today, Mr Eric Tan, a former WP CEC member and leader of the party's East Coast GRC team last year, said that Mr Png did tell him and two other teammates Mr Gerald Giam and Ms Glenda Han - that he was not interested in being an NCMP. [Link[

With all the facts established that Png was not interested in the NCMP post and hence did not take part in the ballot (voting process) but his name was included in the balloting paper by the CEC as were all the members of East Coast GRC...the Straits Times chose to publish its highly damaging headlines "WP  faces allegations of dishonesty".

"Deputy Prime Minister Teo Chee Hean said the episode raised questions on whether the WP was being 'honest and upfront' with Hougang voters." [Link]

Whether Png meant to say he was not on the balloting paper or he did not take part in the ballot or just wanted his name out of the ballot , they have to choose their own re-interpretation of his words to make him look like a liar. Its not like he told the world he received his CPF statements every month when he didn't - such a statement has no alternative interpretation but still most of us would give the person the benefit of the doubt.... that the speaker had slipped up verbally giving his speech rather than intentionally tried to mislead the audience. The interpretation of Png's words is also irrelevant to the main point he was making that he has no interest in the NCMP scheme.

That the PAP and the mainstream media go all out to damage the reputations of those in opposition running against them is nothing new. We saw it in the 2011 GE, we have seen it in the 2006 GE (Jame Gomez incident), and many times in past elections. The tactics that the PAP uses say a lot its values with regard to free and fair elections. Fairness appears to be so lacking in our society these days with the income gap widening....we are become more sensitive and wary to any kind of unfairness that take place; be it the treatment of our low wage workers or our beleaguered opposition.  Instead of coming up with policies that would be beneficial to Singaporeans, the PAP uses old tactics that the electorate can already see through for votes. Winning support from the people is not all so difficult - you just have to evolve policies that benefit the people in the long run and the PAP seems to have great difficulty doing this nowadays.

Tuesday, May 22, 2012

You don't have to tell Hougang how to vote!

Singaporeans are now focussed on the Hougang by election given it is the biggest political event this year. Some are offering their views on how Hougang residents should vote. This is absolutely unnecessary. The people there know what democracy is all about. They have demonstrated this to other Singaporeans for the last 20 years. Even when they were under threat of falling behind in various estate upgrading schemes, they did not yield. When the PAP dangled a hundred million worth from the upgrading pork barrel, they did not sway. What is Desmond Choo offering this by election? More upgrading more from the pork barrel - Hougang residents have rejected this form of campaigning for the last 20 years. Desmond Choo like his counterparts in parliament and in the ministry is still using old tired ideas, failed tactics and repeating the same old mistakes that lost so many elections at Hougang

Desmond Choo's rally speech shown here illustrates precisely what is wrong with PAP policies:

He said he had to help many with medical care, financial and legal problems. But this type of piecemeal efforts without changing the underlying policies that cause these problems will not take us anywhere. In fact, the election of people like Desmond Choo will help only to perpetuate failed schemes and policies of the PAP.  Organising a 1 day free TCM session for the sick is not going to solve the problems of our healthcare care system. Helping residents temporarily with their finances by directing them to piecemeal aid and charities is not going to remove the root cause of their problems. The more Desmond Choo goes along this approach, the more people will need help because the PAP will keep its policies intact without major change. Desmond Choo said he approached charities and  individuals rather than appeal to the ministers in his party to make changes that will solve these problems in the long term. The more Desmond Choos we have in parliament, the more the status quo will remain, more people will need help and the PAP MPs can proclaim they are very helpful, kind and caring people.

Lets not forget how the few tweaks to PAP policies came about. If not for the loss of Aljunied and the significant swing in the votes, you think the PAP will even twitch their policies let alone tweak their policies? The only way to bring about change has been demonstrated - it is through the ballot box. There is no other language the PAP understands. We can discuss and discuss. Feedback through the forum thousands of letters. We can tell the MPs in their face during meet the people sessions....but all this is useless because the PAP does not even move an inch unless you're prepared to reject their upgrading carrots and vote against them. This is the only signal they understand and nothing else. Unless people vote against them, they will just assume you're complaining and not serious about the changes you want. The PAP does not listen until you vote their MPs out of parliament. You have to show them you're serious.

This is precisely what the people of Hougang, Aljunied and Anson know better than the rest of us. We are sometimes lured by the kind smiling faces and campaign promises that they care for us and want our lives to be better but time and time again after they get elected with large margins, they will turnarond and put the squeeze on Singaporeans and implement policies that undermine our quality of life and trade-off our interests for that of their own power-elite network. Can you imagine what the PAP would be doing right now if people had not swung their votes to the opposition in the last election?

Vote for PAP men like Desmond Choo and he will fix the little pothole in your estate but you will find yourself unable to retire and financially strained when you get sick.

It is the people of Hougang that have led the rest of us through their courage and sacrifice in past elections. We don't need to tell the people of Hougang how to vote. They are the ones who will teach us how to vote!

Saturday, May 19, 2012

Extracts from Yeoh Lam Keong's Recent Interview

The full interview is found here

Mr.Yeoh Lam Keong's interview by ST's Susan Long was published yesterday. You should read this "long" interview for yourself but if you don't have the time, here are the extracts with some comments from me. His interview together with a what a growing number of prominient members from the establishment have expressed shows a very clear shift away from the thinking and policy approaches laid out by the PAP. - the PAP is clinging on to what will be or already is be the minority view.  Mr. Yeoh was the chief economist at GIC.

"Singapore's social policies are not future-ready" - Mr. Yeoh

I think they are not even suitable for the present. Okay lets go on to see what Mr. Yeoh has to say.

We end up killing the environment and stressing each other out. Perhaps as Lord Robert Skidelski, professor emeritus of political economy at Warwick University said, mass consumption capitalism has outlived its usefulness

Mr. Yeoh walks the talk. This ex-chief economist of GIC stays in HDB flat at Marine Terrace and like me, he uses public transport. He also avoids holiday resorts with air-conditioning.

His social awakening happened five years ago, when he was roped in to help analyse Minstry of Community Development, Youth and Sports data on poverty. As he examined the grim figures, he  realised serious structural problems were creating a growing underbelly of poverty in Singapore

This is growing underclass problem that has spun out from our growing income gap and exacerbated by the lack of social safety nets is probably much bigger now since Mr. Yeoh looked at the data. The income gap has grown and cost of living has escalated while the income of the lowest 20-30% has remained stagnant.

While watching football with his son at a coffeeshop, he chatted with a neighbor from a nearby rental block anf found out the later, after working as a cleaner for 10 years, earned $700 a month

Today on my way to the coffeeshop I saw the cleaner for my estate. She is aged, hunched back and can  only walk slowly. We are all heart broken. It is a constant reminder that something is wrong with the way the PAP govt does things.

Before long father and son had added to to their coterie of coffee shop companions, an odd-job laborer, who had been unemployed for 10 years because of a history of mental illness. The man had not eaten properly......Mr. Yeoh offered to go with him to see the MP. But the refused, fearing social workers "will bother my brother and sister"

Mr. Yeoh feels the safety net is undignified and insufficient. The poor man didn't want to be shamed before family or for govt officials to "bug his family to look after him". Last week a retiree by the name of Paul Tan wrote to the ST Forum to urge the govt to do more for the aged like himself because the number of suicides among the elderly has been increasing. Paul Tan explained that policies such as the Parents Maintenance Act designed to push responsibility of care for the elderly from the govt to children has strained many poor families who find it hard to take up this burden. Mr. Yeoh cited a Lien Foundation report that showed that the top-death related fear of Singaporeans is being a burden to their family.

We have extremely low taxes, such that we can afford to raise them somewhat and still remain very tax competitive

Lets not forget the last 2 GST hikes were accompanied by corporate tax cuts and income tax cuts for those in the highest brackets. At a time when the income gap was growing, the  PAP govt was shifting the tax burden from the rich to the poor.  The PAP govt also eliminated inheritance tax - I have not  heard a single person rich or poor publicly asking for this tax to be eliminated yet the PAP govt did it when nobody else was pushing for this. The question is not whether we are able to raise taxes but whether the PAP is willing to raise  taxes to bring about greater social equity - this goes too much against the ideological grain of the PAP.

.....Minister Gan Kim Yong to double health-care expediture from $4B to $8B in 2017, which will raise it from 1.5% to 2.5% of GDP. However, he points out that Taiwan was already spending 3.5% to 4% of GDP on health care in 2001.....Gan to his credit has assured Singaporeans that no Singaporean will be denied medical care if he or she needs it. "But rather than say it, why not design policy for someone to afford it, rather than have him deplete his own savings and his family's Medisave account first? The most important reform needed is still missing is that we still do not have universal financial access to medical care for all citizens, which is politically unacceptable in most democratic developed countries"

Taiwan has a universal heath-care system that delivers care to every single citizen so that nobody needs to worry about medical bills and can focus on recovery when they get sick. Singaporeans shoulders the highest healthcare burden as a % of total expenditure vs the govt compared with all developed countries.  This system amplify the effects of the income gap because this burden becomes disproportinately heavy for those in the lower middle income and below. The fear of high medical cost have spread to the middle income group as cost has risen sharply in recent years. Singaporeans have to shoulder the medical cost of their children, siblings and parents because a large number of Singaporeans are underinsured due to low wages or uninsured due to pre-existing conditions or too expensive to insure due to age.

He thinks that HDB needs to abandon its "market fundamentalist" pricing formula and revert to its original mission of meeting "social needs".

Mr. Mah under intense pressure in 2011 let the cat out of the bag. The high prices help to fill the govt coffers at the GIC and unlinking the HDB pricing from the market will be like "raiding our reserves"[Link]. Mr. Yeoh suggests the same thing as the WP - link HDB flats to a multiple of median income.

He worries that the if the govt continues with piecemeal tweaks but do not restructure sufficiently to meet the future.

Even before we talk about the future, the govt is falling way behind the current needs and apsirations of ordinary citizens for quality healthcare, transport, housing and retirement. The problems with our public transport became apparent and well known because many Singaporeans take the public transport every day. The porblems with healthcare are less apparent because a small %  get seriously ill every year and have to go through the system...but over time people will realise there is something not right here. Retirement and housing have become linked as CPF funds are drained for the purchase of expensive homes causing a large number of Singaporeans not to have sufficient money for retirement unless they monetize their homes - basically you work your whole life to pay for your home, give it back when you die ....and where did all the wealth you created go? ....Straight into the GIC's coffers. Now here's an ex-GIC economist with a conscience to tell you things don't have to be the way they are today and there are more equitable models that will still work for Singapore. The problem is we have to find people willing to lead this change and we see none of them in the PAP.

Thursday, May 17, 2012

A tragic accident evokes intense emotions...

Last Saturday, Singaporeans woke up to read about a tragic accident that occurred at Rochor Road. A Singaporean taxi driver and his passenger were tragically killed when the driver of a limited edition Ferrari beat a red light and struck the taxi at a breakneck speed of 150km/hr-200km/hr. Newspapers reported that the taxi's engine ripped off by the impact and flew as far as 30meters.

This accident has been the focal point of much discussion among Singaporeans for the past few days. There are numerous reasons for this. This accident apparently caused by a driver from PRC is one of a series of accidents  involving foreigners. Perhaps the dramatic manifestation of the difficulties we have integrating people from different places. The accident involved a taxi driver, an occupation that has is often associated with hardship among a large segment of Singaporeans - there are no social safety nets when Singaporeans lose their jobs and driving a taxi is one of the few tough options left for PMETs suffering from structural unemployment. The limited edition red Ferrari that cost $1.8M is seen as an immoral excessive conspicuous consumption  resulting from the growing income divide in our country. The Ferrari driver had another car, a BMW. The purchase of luxury cars by the rich is one factor in rise of the COE that puts ownership of cars out of reach for some lower middle class families that need a car badly, The driver who took the Ferrari to speeds of 150km/hr, way beyond our traffic rules, and beat a red light (as seen from video evidence provided another cabby at the same junction[video not for the faint-hearted ] shocked Singaporeans who are generally law abiding citizens.

The 31 year old Chinese national, reported to have millions, is one of the many who move their wealth here for various reasons including tax avoidance[Facebook Singaporean founder] and other darker reasons due to the existence of casinos. Superficially such wealth is seen by some to make Singapore "richer" however this money is often brought here to be parked in our banking system or use for the purchase of property or luxury cars benefiting a small number private bankers and "already rich" property developers. Existence of "concentrated" wealth does not trickle down to create a better economy for the ordinary citizens as we have seen from here and numerous examples around the world. In Singapore this "wealth" adds to the hardship of ordinary Singaporeans by driving up the cost of living. In the past we welcome people who invested in new businesses, factories but in the last decade the rich bought residency simply moving wealth to Singapore and it was only recently that the govt realised this mistake and scrapped the "wealth for PR" scheme[Wealthy foreigners can't 'buy' PR status anymore]....its already too late because Singaporeans have been negatively impacted by this policy.

This accident has become an outlet for the anger that has been festering and building up in our society  for a long time due to the large foreign influx. There is much anger directed at the dead driver of the Ferrari, Ma Chi for flouting the rules and causing the accident. But fatal accidents occur every few days involving Singaporean drivers speeding. I'm sure Ma Chi did not have the intention of causing an accident and getting himself killed and that he hit a taxi and not a tree or another luxury car is purely incidental. The dramatic nature of the accident and the incidental links to many things that frustrated Singaporeans  helped fuel the anger. Because the accident involved a foreign national, Singaporeans associate this with their own negative encounters with  foreigners - spitting, speaking loudly in buses, quarreling in public, pushing they way into crowded buses and MRT, less than "smooth" driving skills of recently recruited foreign bus drivers. Much of this frustration has little to do with individual foreigners - it is not their fault that cultural and behavioral differences exist. They are not here to cause problems for you but to help themselves to job opportunities and scholarships to make their own lives better. The PAP govt took the large number of people in first then try to figure out how to integrate them later....after all the friction and tension shows up. Personally I think it is too little, too late and too difficult to change perceptions that are now so deeply ingrained. This mountain of resentment is easily fired up by various incidents involving foreigners.

Anger turned to sadness and sympathy when the taxi driver, Mr, Cheng Teck Hock passed away after 2 days in ICU. He was the sole breadwinner and had 3 school going children. Concern for Mr. Cheng's family led to a donation drive[Ferrari Accident: Ways to help the family] and Minister Shanmuggan has assured Singaporeans the family will receive hep:

"Law and Foreign Affairs Minister K Shanmugam said Mr Cheng's family will have the cast-iron assurance that they will be provided with all necessary assistance"[Link]

If you want to help Mr. Cheng's family, send your cheques payable to his wife Mdm Lim Choo Eng to:

THE CHENG FAMILY c/o Comfort Transportation Pte Ltd 
383 Sin Ming Drive 
Singapore 575717 
Attn: Customer Service Centre

Given this is one of a series of accidents, many Singaporeans have raised the issue whether foreigners should be made to pass the stringent driving tests that Singaporeans have to go through to get a license. In Singapore, we have one of the toughest driving tests in the world and Singaporeans are made to go through many driving lessons before they are able to pass the driving test. In some parts of the world, you can get a license after 6 hours of lessons and a simple driving test. In many places, you can get one by paying a bribe. This accident aside, our congested narrow roads are a lot harder to navigate than those in many other countries.  In Australia (Victoria), for example, they only allow conversion of driving licenses without a driving test for drivers from a few selected countries - Singapore is one of them[Link] but China is not on the list. When we talk about integration, it should not be a one-sided thing where Singaporeans adapt to foreigners. Drivers from different countries have different practices and habits. We put a requirement on Singaporeans to have a certain level of skills and demonstrate a level of safety before they are licensed to drive on our roads ...why is there no similar requirement imposed on foreign  residents here? 

Saturday, May 12, 2012

Risky Systems, Dire Consequences...Part 2

A reader posted this in the comments section of the last article:

Lucky Tan,

can you make this posting and analyse in your future post ?

"The Mess that is Singapore: Part II Explaining the Role of the CPF"

This guy is a higher flyer...

appear in!

before sin censor it.

This professor is a expert in SWF, and find something wrong with TH and gic

Christopher Balding is a professor in Peking University, HSBC Business School,[Link].
You can read his article in full but I'll summarize it as usual so there is clarity on the issues and questions he asked:

The Mess that is Singapore: Part I Explaining the Debt

1. Most of the public debt issued by Singapore govt consists of money borrowed from the CPF Funds of Singaporeans.

2. Since 1990, the Singapore govt borrowed $250B and has another $262B in budget surpluses, giving a total of of more than $500B.

3. GIC + Temasek do not publish their assets but it is estimated to be roughly $500B.

4. Even if they return 1%, they should have significantly more mone...and if returns are 7% as widely believed, the money should have doubled.

5. What happened to the money? Is it lost or hidden?

The simple answer to this question is the Singapore govt  has never published the total assets of the GIC so we don't know. There is no reason yet to believe anything sinister is going on. Former President Ong tried to get a full list of the assets but was told it is not a simple task. Over the years, there were reports of GIC investing in real estate, commercial properties around the world and those have to be revalued. Its not a mess as Christopher Baling alarmingly claimed but a lack of information.

In his next posting, The Mess that is Singapore: Part II Explaining the Role of the CPF:

"The reason the CPF matters and should concern Singaporeans is simple. The government of Singapore is borrowing money from its citizens through the CPF payed 2.5-4% and investing that money in other assets through GIC and Temasek hoping to earn a higher return. Publicly, GIC and Temasek claimed to have earned 7% and 17% since inception meaning they are earning a comfortable spread above the 2.5-4% they must pay for those funds. If Temasek and GIC earn less than the 2.5-4% they pay to the CPF, the government must essentially subsidize the losses to keep the CPF whole."

This issue has been discussed on my blog. If GIC makes above 2.5% (-4%), it keeps the excess returns. If it makes less than 2.5%, how does it pay the debt owed to CPF/Singaporeans? They would have to collect more taxes or print money to monetize the debt. The other way is to kick the can down the road by delaying CPF withdrawals. 

Countries build up reserves to guard against crisis and financial instability. However, GIC and Temasek's fund are invested in various risk bearing assets that will be affected by crisis - the last crisis they lost $50B. To fund the deficit in the budget due to the jobs credit in the last crisis roughly $4.5B of reserves was used. The size of the reserves are far bigger than what is needed to cushion against crisis - remember if the crisis is very big e.g. local bank failures, etc it is best not to use reserves created from borrowings from CPF to do it.

My main objection to the whole system is the fix returns for CPF account holders who at the end of the day bear the risk if there are investment losses and inflation but get none of the excess returns. The 2nd problem is even basic information on the total assets is not made public by the GIC. Third issue is the size, you can't just keep building and controlling it because a large part of it is paid for by ordinary Singapore taking up high debts for housing. There has to be a limit beyond which the surplus should be used to benefit Singaporeans in more direct ways rather than go into reserves controlled by a small group of elites.

Our contribution to the CPF is extremely high but retirement is still a worry for Singaporeans. This is caused by 2 things - low fixed returns on CPF money and use of CPF for expensive public housing. Both results in flow of money to the GIC to build up govt coffers and causes major retirement problems for ordinary Singaporeans. Many Singaporeans accept the system as it is thinking they can always monetize the homes for retirement (overseas?), it makes they system all the more vulnerable as housing prices get linked to Singapore's ability to retire for poor and lower middle income Singaporeans. The whole system passes the risk to Singaporeans who are already shouldering plenty of risks due to the healthcare system and the lack of social safety nets.

Friday, May 11, 2012

Risky Systems, Dire Consequences...

Yesterday night a somber CEO had to announce publicly that his bank had lost U$2B dollars in set of complex synthetic derivatives trade,

This CEO is no ordinary CEO but the king of Wall Street, Jamie Dimon, one of the most astute bankers around. The bank went through the financial crisis unscathed but suffered heavy losses last week when a unit of the bank took on complex derivative positions that resulted in unexpected losses:

“This portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed,” - Jamie Dimon, CEO JP Morgan.[Link[

If Jamie Dimon and his bank can't figure the risk they were taking, how will the rest of us ever fully appreciate the risks we are exposed to? The risk we are taking sometimes only becomes apparent when we are faced with the dire consequences. In today's world, financial risk is not so apparent. With all the technology that mankind has evolved and 2000 years of civilization, you would think that we should be able to run stable financial systems that don't erupt into chaos - but it does look that way in the last 2 decades ....we have had crisis after crisis....

Sometimes we are persuaded to take risks because everyone around is doing the same thing. In Singapore, taking a six figure loan for a car and 30 year mortgages are common practices. People think it is safe. But just look around the world  at what has happened. The people in Ireland and Spain, 4 years ago also thought that housing was an excellent investment. Both countries along with the USA have brought down by housing bubbles that burst. Yet, many Singaporeans refuse to believe the same thing can happen here. If you go back to 2005,  US home prices have not fallen  for several decades so nobody expected housing to collapse. Ireland's economy was so strong, it was known as the Celtic Tiger and the people there too thought that housing prices would never fall. Even before the US housing bubble, we have Japan that saw home prices falling for more 20 consecutive years  after its housing bubble burst. With so many examples around the world showing us the dire consequences of housing bubbles, our leaders still kept on telling us that our expensive housing is affordable - even a person earning $1000 can/should take up a 30 yr mortgage for a home. Instead of learning from what has happened to so many countries in recent years, the govt simply allowed the same thing to happen here and pass the risk to Singaporeans as it fills its coffers with the sale of new HDB flats.  The high prices and ability of Singaporeans to service loans are build on dangerous assumptions of low interest rates, low unemployment and stable incomes - things than can change abruptly.

Earlier this month when our inflation rate hit 5.2%, Minister Tharman said:

Speaking at the May Day dinner on Sunday, Tharman said that, while the Consumer Price Index (CPI) rose by about 5.2 per cent in March in this year from the same month last year, “it does not mean that the average Singaporean will feel this high inflation”. 

He explained that people who already own homes and are not buying new cars are not affected, because more than half of the inflation is due to higher cost of new car ownership and higher housing rents" - Link

So ordinary Singaporeans are not hurt by the high inflation because they have no aspirations to upgrade their homes and cannot buy cars. If the price of meat increases, you can avoid the inflation by not eating meat. If the price of clothes go up, most people don't feel it because they bought all their clothes during Chinese New Year? Our ministers are great at inventing funny logic when problems show up.

The main problem with high inflation is it erodes our savings and income. A 5% inflation means that your income fell by 5% even if you're paid the same numerical amount. High inflation is extremely dangerous when we have CPF returns fixed at 2.5%. A sustained period high inflation will hurt Singaporeans' ability to retire. For this reason almost all other pension funds such as Malaysian EPF and Hong Kong MPF invest their money with the goal of beating inflation and achieving real returns. Fixing returns on CPF is not safe but dangerous because the buying power of money is relative cost of goods we need to purchase when we retire - the safest approach has always been to  properly invest the funds in assets that preserve the buying power of the money and this is not the approach undertaken by the Singapore govt - it passes on the risk of inflation to Singaporeans by fixing the low returns.

Ordinary citizens in whatever country are often blissfully unaware of what is going on in govt, how the system works and what dangers lurk in the system they belong to. If you talk to a Greek citizen or an Icelander 4 years ago,  they won't be able even to imagine that their countries were about to sink into the depth of crisis and despair. But all the troubles are not entirely unpredictable if govts operate with full transparency and check and balance is in place to stop the missteps.

Thursday, May 10, 2012

Good Profits, Bad Economy...

US corporations have one of the best earnings seasons ever with 80% of listed companies beating expectations and profit growth of 6.7%. By Wall Street standard it has been a blockbuster quarter for US companies. The great mystery for those looking at the economy is this high level of profit does correlate with the weak anemic growth of an economy hobbling along with very weak job growth and GDP barely chalking up 2% growth annualized. What is going on?

"Of course, that return to pre-recession level earnings hasn’t translated into job or wage growth for America’s workers. In fact, inflation-adjusted wages fell last year. Big companies are also squeezing more productivity out of their workers, with annual revenue generated per worker increasing by more than $40,000 over the last five years. CEO pay, meanwhile, increased 15 percent last year." - [Link]

"According to a study by researchers at Northeastern University, during the first nine months of the recovery, pretax corporate profits rose by $388 billion while total wages and salaries rose by only $68 billion. Of the total, therefore, corporate profits received 85%.....By contrast, in four previous recoveries since 1980, the share going to corporate profits averaged just 19%. As a result, corporate profits are now at their highest level since World War II." - Time Magazine : Why aren't there more jobs

"The drive to boost published profits has pushed down business investment in both the U.S. and the U.K. This has boosted the relative wealth of owners of capital compared to the rest of the population. Because the rich consume less than the rest, this has had a dampening effect on wider incomes and economic growth" Wall Street Journal

American workers saw large productivity increase without corresponding increase in wages. With higher productivity,  US businesses achieve higher profits. They don't have to hire more workers hence we have the weak employment figures. With the income of workers stagnant, aggregate demand reminds weak and that has hindered the economic recovery.

With most of the wealth going to the rich, there is a dampening effect on consumption as the rich spend only a fraction of their income while middle class and below spend most of their income. 

Without increase demand, businesses are reluctant to invest and expand ,,,,they rather give out profits as dividends or keep a cash hoard,. 

Why are wages stagnant despite increase in productivity? There is a lot of slack in the US labor market with unemployment rate of 8.2% so there is no pressure to increase wages even as profits increase,

What has all this got to do with Singapore?  Remember all the talk by the PAP that productivity has to go up before wages....

 "This year, with the booming economy, we will definitely need more foreign workers so that we can create more jobs in Singapore. A few months ago, I mentioned to the press that we could need more than 100,000 foreign workers more this year. There was a big ooh which you could almost hear. Well, since then, we have recalculated. Maybe, we will get by with a few less, perhaps 80,000 workers. But I said this to highlight the trade-off which we face and which we cannot avoid" - National Day Speech 2010 PM Lee

Typically when our economy gets stronger, the govt lets in more foreign workers. This keeps wages down and companies don't have to increase wages even if productivity has increased. So productivity increase may not result in rising income. When Singapore businesses expand they have access to foreign workers, we see cost pressures building up in other areas such as office rentals, transport, housing etc.   Everything else goes up while wages remain stagnant. This boosts the wealth of "owners of capital", e.g the large businesses that own the office buildings etc and this worsens our income gap.

Most Singaporeans are wage earners. Unless we change the current economic model so that wealth generated is distributed in a more equitable manner, we  will not see an end to the rising discontent and the increased polarization of our society.

Tuesday, May 08, 2012

P N Balji : Soul Searching needed in govt policies

Excellent Article from Yahoo News : 
I added some comments in red.
The quick backstory of what Singaporeans have seen since the results of the 7 May 2011 general elections shows a People's Action Party government correcting policy mistakes that got voters so worked up that they brought the ruling party's share of vote to a historic low of  60.1 per cent and threw out two ministers and a senior minister of state from a group representation constituency (GRC).
Some unpopular ministers left the Cabinet, and hot-button issues like transport, immigration and housing are now being tackled with some urgency and eagerness.The phrase  "inclusive growth" keeps cropping up in politicians' speeches and interviews.
Roots vs Reality
But what we have yet to see is the policy makers taking a close and hard look at this government's ideological roots and whether the policies that grew out of these firm beliefs are still relevant. And more important, whether they are realistic to a population that find their lives squeezed by demands at home and at work.
It is hard for a govt to stay in power with unchanging ideological beliefs. Rising income gap has driven voters in USA and France to lean towards left wing ideologies.  The PAP has gone to far to the right (call it ultra-conservative) in the economic policies characterized by extremely low social spending, high defense spending, low taxes for the rich, a tolerance for rising income gap and poverty.  The ideologies that drove PAP policies were perhaps highly suitable in the earlier decades of development when rapid economic growth from developing to developed country masked some of the disadvantages of earlier policies.  With today's rising income gap leading to a high level of discontent, these policies have to be revamped to address today's issues and current problems.
For instance, there is a crying need for a public debate on whether the policy of letting transport be run by public-listed companies is still the right way. The mess that SMRT found itself in with last year's disruptions can be traced back to this policy.
The disadvantages of the current transport model has become painfully obvious to everyone yet the PAP continues to resist major changes. 
Saw Phaik Hwa was recruited to run trains, buses and taxis with essentially one KPI: Bring in more revenue by squeezing more money out of the retail space in MRT stations. She did an admirable job with retail revenue making up more than 40 per cent of total income.
But she forget that her organisation was also a public transport operator. Worse, her board and the regulator didn't remind Saw that she had the dual role of making money and providing an efficient, reliable and comfortable transport service.
If they had, then the second scary lapse at the Bedok MRT depot would not have happened. The nonchalant attitude she displayed after a train was vandalised at the Bishan depot clearly showed a transport system heading towards a crash.
I guess this was the start of the problems. The security lapses gave us strong hints that cost cutting may have gone too far.  
That crash came about in December last year when two major train disruptions and the subsequent inquiry prised open a can of worms that were eating away at what was once described proudly as the world's best transport system.
Still, no effort is being made to ask: Can the dual aims of making money and providing a public transport system continue to work?
Many people point to the privatized Hong Kong system that seems to work. However, why introduce this tension between money making goals and provision of public transport service . There are many nationalized public transport systems that are success stories....and we have a good efficient govt that can do this right. Given our unique situation in which the private transport is restricted by COEs, there is far greater need for an outstanding public transport system...getting by with minimum standards is not going to elevate the quality of life is where you can spend money and get great results.   
Healthcare cost is another ideological issue that needs to be taken off the policy holders' shelves, dusted and given a close and critical look. Just today, there is a letter in The Straits Times which tells the tale of  an elderly patient who has to pay $1,200 for 90 tablets of a drug  that he has to take for his postrate cancer. But generic versions of the drug are available at $160 for 100 tablets in accredited on-line pharmacies, the letter writer says.

You can expect more such real-life complaints to rise as an ageing society takes its toll on Singapore.
Soul-searching is also needed for Singapore's other policies like housing and  immigration and whether they are trapped in the ideologies of the old. And whether these beliefs, though they have brought the country from marshland to metropolis, are still sustainable.
The starting point of this appraisal should be that every sacred cow can be scrutinised and slayed, if necessary.
Rational vs Emotional
I happened to read a blog post by Minister of State (National Development) Tan Chuan-Jin reacting to a netizen's complaint about the price of public housing. Is the housing situation really so dire; Is the HDB flat so out of reach, Tan asks and then goes on to give a calm, rational and, I must say, compelling, explanation of how prices of flats are fixed.
Minister Tan's posting is found here. He explains how HDB prices new  flats. You can accept his logic that the price has to be linked to the resale market. You can also accept his argument that HDB sells a wide range of flats so people can select the one they can't afford. However, such explanations cannot address the discontent because flat prices have been rising faster than income and people cannot afford the flats they want and expect. Why do prices rise faster than income? is not just free market forces, the PAP govt added too many people onto this tiny island causing our population density to be higher than that of Hong Kong and housing demand has gone up and along with it prices. 
From a rational and textbook point of view, Tan's explanation should have easily settled the matter.
I don't think it settles anything. People are still unhappy.
But nope, the story line did not go this way. The reactions to his blog post show a public not satisfied with his explanation and take us to the heart of an issue that the leaders, despite the hammering they got at GE 2011, have yet to come to grips with.
The experience of a lady who has just started a charity project is instructive: "I found out quickly that there is no point talking to the people I am helping about why and how they got into their situations. What they are looking for is an immediate fix, like paying their utitility bills or putting food on their table.
"I do that first. Once that is done, they are prepared to listen to me on how to get out of their helplessness."
The leaders have gone to great lengths to communicate and engage with the stakeholders. They are on nearly every available platform; the traditional face-to-face sessions have also not been forgotten.
But, they have yet to master the art of communication to a diverse audience.
There is nothing new to tell in the Singapore story. Many know this story well enough... it is a small country, a nation with scarce resources, that nobody gave it a chance of success; its policies have worked very well to take it from third world to first world status. Even western journalists, once the biggest critics, are now eating out of Singapore's hand.
This story, if told in a rational and calm way can only make for boring reading. But you can tell this is in a compelling way if you become a story teller. Unfortunately, we have only one such story teller in Singapore: Lee Kuan Yew.
Look back at the speeches he has made, read his books. There is really no new material there, but they are still good stories.
The language he uses, the anecdotes he gives and the connections he makes with the audience show that a yawning communication gap exists between people like him and present-day leaders.

Dig in or test it?

There is a great opportunity to test the effectiveness of the government's actions post GE 2011. With a by-election looming in Hougang, the PM can go further and hold a few more, giving Singaporeans a chance to say what they think of governance in this new normal.
We are all eagerly waiting for this by-election and clearer signals can be expected.
It is time for a few of the older MPs to leave the scene and bring in new faces. Although such tests go against the PAP ideology, there is precedence. In 1992, Goh Chok Tong took that step to test the popularity of a government under a new PM.
Governing Singapore is getting tougher by the day. The good times of high economic growth are not likely to last. Social pressures that come with a growing income divide, an ageing population and a free and easy online world all make the future a difficult one.
The good times are not really so good anymore for the ordinary Singaporeans. The economic boom of 2007 and 2010 have been accompanied by high inflation. In March 2012, we saw an inflation rate of 5.2% .
The "free and easy online world" merely serve to overcome the propaganda in the mainstream media and wake Singaporeans to see reality for what it is.  
With such dark clouds forming in the horizon, ideological traps are the last thing the government wants to be caught in.
P N Balji has more than 35 years experience as a journalist. He is now a media consultant.

Saturday, May 05, 2012

Tommy Koh on healthcare and income inequality...

“I think the state should intervene and require all insurance companies to insure people with prior medical conditions. There should be no one in Singapore who is not insured against a potential catastrophic disease,” he added, noting that, currently, insurance companies will not cover applicants who have pre-existing medical conditions." - Tommy Koh[Link]

Singapore has 830,000 uninsured residents (2006 figures likely more if you take the latest figures):

"Mr Speaker, Sir, about 830,000 Singaporean residents - citizens as well as permanent residents – do not enjoy the insurance coverage of MediShield or its enhancement products. They make up 24% of the resident population. My Ministry will continue to encourage them to come on board, as otherwise they may be financially vulnerable should a major illness strike." 
- Minister Khaw, 14 Nov 2006

Shortly after Obama took office, he set out to fix the healthcare system because there was an crisis. The main reason for the crisis is 16.7% of Americans are uninsured and Obama wanted to reform healthcare so that everyone in US has health insurance. Singapore has 24% of its population uninsured and many who have not upgraded from Basic Medishield are under-insured and are financially vulnerable should they get sick.   Due to Singapore's aspiration to be a medical hub for the rich and the large foreign influx our limited medical resources have come stretched and healthcare cost has been rising sharply for the past few years[Link]. The lack of insurance coverage and high cost of medical care resulted in Singaporeans owing $40M last year to public hospitals [S'poreans owe public hospitals $40m in unpaid bills] . Many sell their homes [Link]or have to borrow from the bank to pay their medical bills. One of the key advantages of living in a developed country is being freed from worries about healthcare costs as medical care is provided to everyone through a universal healthcare system. Unfortunately this is no so in Singapore and the USA. The current 3M (Medisave, Medishield, Medifund0 comes with many cracks leaving many Singaporeans jfinancially vulnerable when they are sick and places too high a burden on the sick and their families.
k "Koh also opposed the view of economist Shandre Thangavelu, who was also at
Thursday’s roundtable, that the income gap is “part of globalisation and
technological change .The ambassador contended that Singapore’s practice of importing large
numbers of cheap and unskilled labour depresses wages in its service and non-tradable  sectors.." - Yahoo News[Link]

Lets get this very clear. Low wage workers are lowly paid not because of globalisation or technology. Our low wage workers are the lowest paid in the developed world as a result of the massive foreign influx  in the last 10 years. Yet on Labour Day the PAP message to workers is they have to get their productivity up first before wages rise. Our workers have been underpaid for the current productivity level due to PAP policies. When the income gap, structural unemployment and low wage problems showed up a decade ago, the PAP insisted that skills upgrading and retraining was the solution to these problems - under these programs low wage workers were retrained to do one low wage job after another. After one decade of applying the wrong remedy, they now claim that increasing productivity is the key. However, we know this is not true, in the US where productivity has been increasing there was no corresponding increase in wages due to the wage-productivity gap. The increased productivity simply went to raising profit margins and CEO salaries. Singapore workers have far less power than Americans  to bargain for better wages when productivity goes up because of the foreign influx. Also, as long as companies have access to cheap foreign labour, there is little incentive to improve productivity. I'm certain, based on the current set of policies, we are going to waste another decade and hundreds of thousands of low wage workers will continue to struggle in the coming years.

I truly appreciate more people from the establishment especially those previously closely asscociated with the PAP speaking up on these issues and urging the govt to make serious changes to their policies. These people cannot be accused of doing so because they are out to oppose the govt or other political reasons. The PAP should seriously listen. What Tommy Koh is saying is no different from what I've been saying and similar to what Chee Soon Juan and what an increasing number of Singaporeans think should be done. The rising social and political discontent will reach dangerous levels if we stay on our current path  Ultimately, what Singaporeans want is have these serious problems more effectively addressed and many remain hopeful the PAP can get it done.  However, there will be a point when time runs out and most Singaporeans conclude that the PAP has other interests that stand in the way of making life better for Singaporeans.

Friday, May 04, 2012

PRs in workforce jumped by 91% from 2001 to 2010

As of June 2010, our workforce consists of 1,712,600 Singaporeans (“citizens”), 334,700 permanent residents (“PRs”) and 1,088,600 foreigners.

PR+Foreigners make up 45% of our workforce.

In June 2001, they form 36% of our workforce.

Our workforce from 2001 to 2010:-

The number of Singaporeans grew by 16%.
The number of PRs grew by 91%,
The number of foreigners grew by 58%.

The workforce grew by 34%,

Thursday, May 03, 2012

Worker's Party's idea on transport comes to the fore....

During the 2011 General Election, WP released a manifesto that proposed we re-nationalize our transport system combine rail and bus to create operating efficiency and savings by cutting down on management overheads.

Here's WP's Eric Tan describing the idea at a rally speech in Bedok. The part on transport is 16 minutes into the video:

In today's Today (3 May), it was reported that analysts examining SMRT's financial statement and the expenditure needed for upgrades and maintenance feel that there may be a need to re-nationalize the SMRT:

In the 2012 Budget, our transport ministry proposed to allocate $1.1B to SBS Transit for the purchase of buses[Link].  Recently, the LTA announced that it will finance part of $900M cost to upgrade the required to  upgrade the SMRT system. Analysts believe that the upgrade will strain SMRT's financial health unless LTA finance a significant part of the $900M. It is always controversial for govt to inject money into private companies that are still paying dividends to shareholders. How do we account for this money? How much profit should the transport companies be allowed to make after receiving govt funding?

The $1.,1B to be used for buying buses is double the entire capitalization of SBS Transit of $521M. The govt can buy the entire bus company privatize it and still have some spare.change.
The bus company makes $36M in profits a year. This large part of money goes out as dividends to shareholders. It can be used for maintenance or paying the low wage workers in the company more - SBS has 5300 bus drivers [Link] $36M translate to $500 more per month for each bus driver.

Once our public transport system was privatized, there is a limit to the amount influence the govt has over it. There is a limit to the improvement in service quality because private companies have to take care of the bottom line and govt cannot just inject money into them to improve the service quality. The primary purpose of privatization was to improve efficiency however much of the efficiency  is gained within the 1st few years of privatization by cutting waste  -after that, the disadvantages of privatization start to emerge.

Going forward, the govt can't just keep injecting money into these private companies to ensure they maintain their service standards and don't falter with poor maintenance. Just maintaining basic service quality at acceptable levels won't give us the big leap in improvement in quality of life we want to be able to look forward to as Singaporeans.  Re-nationalization is one approach worth considering and it is far more workable than the current setup in which govt depend on private for-profit companies to deliver and have limited control over them when they don't.