Tag: Resilience Package

Coffeeshop Talk – Show Me the $$$

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I attended yet another “Young NTUC’s Coffeeshop Talk” on 3rd September. This is the second I attended, with the first one more than 6 months ago. The guest of honor this time is Ms Grace Fu (Senior Minister of State for National Development and Education).

The talk started off with an introduction to the mission (and / or vision) of the Ministry of National Development, and an explanation of each of the points. This include examples – like the Pinnacle at Duxton, the Southern Ridges Walk, plans to diversify commercial activities to the Kallang River Basin and Jurong Lake area (with success at Tampines) etc. In general, it explains the MND’s role as not only being a ministry of building houses, but also one with a plan to make Singapore a more attractive place. The introduction then ended with a multimedia presentation of development of Marina Bay and what it will look like upon its completion.

After which, the audience is invited to ask questions. Surprisingly, there were no questions about the MND’s mission and also the Marina Bay development. The first question asked revolved around the ever increasing COV (Cost over Valuation) and what the government gahmen plans to curb it, and whether more gahmen help is in place to keep housing affordable.

If I have gotten Ms Grace Fu’s answers right, it is her opinion that the days of ‘afforable housing’ that our parents know of is long gone and we can stop thinking about it (not her words but what I understood). The minister further mentioned that the gahmen has no intention to further raise subsidies as a result of the increase in COV, other than to very specific groups of needy people. Josephine Yeo (MP, Bishan-Ang Mo Kio GRC) elaborated further that she is against increasing subsidies because that will only encourage people to go for even larger, more expensive housing and driving the cost up further (something I agrees with very much). Someone else also mentioned that curbing COV with legislation only encourages under-the-table transactions which will not help with the situation very much.

The minister reminded everyone that valuation of flats is not something controlled by the gahmen and the COV is a result of transaction done between buyers and sellers. She mentioned that we could go through records of transactional prices and see for ourselves that COV has almost remained at zero most of the time, and at times even negative (i.e. flats are sold below valuation). It is my opinion that the minister seems to be in the opinion that control of the COV is in the hands of the buyers. In short, buyers should walk away from over-paying too much over valuation. On top of which, she mentioned that the gahmen has to allow prices of flats to appreciate, as matured estates with more amenities will fetch a higher price by default.

I do not necessary agree with the minister on her argument that the ‘regulation’ of COV is in the hands of the buyers, since my perception is that while Singaporeans may walk away from such a deal, certain cash-rich foreigners may not hesitate to pay above valuation which in the end fouls up everything for us. In fact, I have always been under the impression that prior to Hong Kong’s handover to China in 1997, some Hong Konger’s were paying way above valuation causing property prices to spiral upwards. In effect, there’s only so much Singaporean property buyers looking for a roof over their head could do.

The questions then moved on to the matter of the Ethnic Integration Policy (Ethnic Quota, or ‘EIP’ for short) maintained in HDB estates. It was asked why the quota is so strict, and why it can’t be eased as it was noted that some flats were left empty for years, and not sold even though there are buyers of certain races who want a flat in a particular area. One pointed out that it is a waste to leave the flat unsold until another buyer which meets the racial quota comes along. In answer, Grace Fu reminded all that it is national policy that an MP be representative of all races instead of their own. As such the EIP is also to prevent the appearance of townships with a heavy concentration of a particular race. As far as I am concerned, the minister basically gave text book answers and didn’t quite answer the whole question, though everyone understands the necessity of the EIP.

At this point of time a poll was taken on whether the attendees think it is just our luck or good planning that should Singapore recover quickly from the present recession. There is no surprises here, with a result showing 13% on good luck, and 87% on good planning. I didn’t place my vote, since I am in my opinion that it is both good luck and good planning. After all, our economy is so geared for export that we are the first in Asia to enter into recession not long after the Credit Crisis hits the U.S. There is of course no surprise we will rebound quickly once consumer confidence is restored in the U.S. However, I must admit that the steps taken to limit the damages from this crisis, such as Jobs Credit, is pretty good planning in a way.

Finally, a quick poll on taken whether one would be upset and disappointed when their children send them away to an old folks home when they are old. This eased the ‘tension’ on the matter of housing, and surprisingly the results were pretty close – with 52% saying they would, while the remaining 48% saying they wouldn’t.

The main topic brought up with regard to this poll, was whether legislation is necessary to enforce filial piety and the taking care of parents, why children would take their parents to home etc. From what I gathered, I think there is not so much an objection to people sending their parents to homes, but rather, the dismay that some people actually then abandoned their parents there and also not pay the homes for the services. It is almost certain most people are against legislation enforcing a matter of morality and I for certain is against the gahmen taking up the role of an arbitrator in moral issues. It is however clear, that there are no objections on using the already in place Maintenance of Parents Act to obtain payment from those who abandoned their parents to old folks homes.

Other topics involved the reasons in why some children would take their parents to old folks homes, from the lack of day care centers which is easy for their parents to travel to and also those who are afraid allowing their elderly parents to roam around causing social problems, such as losing their way home. After all, the two-child policy results in smaller families with only two children or less, and their own work commitments would make it difficult to take care of their folks at home. This reminds me of the situation of the mother in Jack Neo’s ‘Money No Enough 2’, and I can understand the helplessness and the lack of control over their situation.

The session rounded up after this, as it was running late (almost 9:30pm) on a Thursday night. Surprisingly, the matter on religious harmony was not touched on even though I noticed a poll was prepared for it and the minister did not touch on her other portfolio – Education.

All in all, I am still encouraged by such talks. While it may not necessary help us understand gahmen policies, not to mention that I may not always agree with all of the explanations and answers, it does help me understand more about what fellow Singaporeans think, and indirectly their reasoning behind the choices they made.

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Coffeeshop Talk – Budget 2009

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I should have posted this a long time ago… since I attended this event hosted by the Young NTUC at the Wang Cafe in Basement 1 of NTUC Centre back on 05 Feb 2009. That’s like 10 days ago… and it’s a little stale to talk about the Resilience Package now.

The Guest of Honor: Mr S Iswaran, Senior Minister of State for Trade and Industry. (Also MP for West Coat GRC.)

This is the first time I had a close up with a minister. While I already had a good opinion of Mr Iswaran when he spoke up on the matter of NS dodger, the Penis Pianist Melvyn Tan, the way he handled questions at the event further reinforces it.

Mr Iswaran did not display disgust or displeasure even though I personally felt some questions were similar with earlier ones and the previous answers would have answered them to a great extent. He maintained a smile throughout the session, without a sneer on his face. This is unlike the elitist image some ministers or MPs like Mah Bow Mabok Tan, Lim HngGey Kiang, Ng Eng HenEng, Teo ‘You be grateful‘ Ho Pin or even Charles ‘You lesser mortals’ Chong have presented, even though that may not actually be who they are, or the message they tried to convey.

I noticed Mr Iswaran maintained eye contact with the audience who raised the questions, listened attentively and patiently repeat some of his earlier points without sounding like he was admonishing a child. This is very unlike Raymond Lemon Lim, and Iswaran gave me the impression he genuinely wanted to clear the doubts and engage his audience as an equal. At one point of time, he also tried to ease tensions by mentioning he’s checking whether anyone is taking off his shoes to throw at him.

I didn’t keep a record of the questions asked, so I will briefly touch on some of the topics which surfaced a few times.

GST
By the end of the session I believe most attendees understood why GST is not cut.

Going by the estimate that 1% of GST would be equal to roughly $750 million in revenue for the state, he pointed out that by cutting 2% of GST, most of that $1.5 billion will not be more than the sum of GST credits and other forms of assistance the government gahmen will be giving to Singaporeans. In fact, a larger amount of the GST credits will be actually going to those of lower income because they spent every cent they earn. Incidentally, this opinion that lower income families have low or zero savings and high spending, is also what Lin Yifu, the Chief Economist of the World Bank has once mentioned. In other words, there is no dispute that while the decision not to cut GST is probably unpopular and misunderstood by some, it is founded on sound, if not solid, economic principles.

Also on this topic, some also asked whether the gahmen has any intention to give cash vouchers like those of the Taiwanese gahmen or why the gahmen isn’t also doing that. It was pointed out that the objective of the cash vouchers in Taiwan was to encourage spending to drive domestic demand, and they can only be used for very selected purposes. On the other hand, ours is an export based economy and thus there is not much effect to issue such vouchers. On top of which, the GST credits is in itself a even more flexible than the cash vouchers as the recipient can use it any way they liked.

Jobs Credit
This is quite a novelty and I must say that some serious thinking has gone into this.

The primary reasons behind the decision to give jobs credits to the companies was because it was the fastest way to ‘pass’ money to the companies. Based on every employee that is paid CPF by a company, the company would receive the jobs credit. The main objective of course, is to encourage companies to keep their staff.

The main reason why the gahmen did not consider policies to discourage retrenchments was that such policies generally become detrimental in attracting foreign investments. This was a view that was also shared to me in a chit-chat I had with Mr. Gary F. Bell who is the best man at my friend’s wedding on Valentine’s Day. He mentioned that there is a country where the law requires that anyone retrenched be paid a full year in salary. While it becomes hell for any companies to consider retrenchments there, it also make it difficult for the country to invite investors.

Mr Iswaran and his NTUC hosts admitted that retrenchment is simply more convenient, and jobs credit does not stop companies from doing so. However, giving jobs credit would also encourage some companies to retain staff, since it will be a more sustainable solution than a retrenchment exercise. While no one could guarantee that jobs credit will prevent retrenchments, it is expected to reduce the number of employees being retrenched.

While on this topic, the matter of CPF cuts was also touched on and explained. The reason that CPF cuts is not considered this time round, was that back in 1997, it is a wage competitiveness issue and the quickest way for the gahmen to reduce wages was to cut employers contribution. On the other hand, the problem we faces today affects almost all regions and economies, cutting CPF would only goes further to hurt workers while contributing nothing much to the problems at hand.

Miscellaneous
There are also some other stuff that were brought up during the session. One of which is a survey conducted by the host and the question is: Would you pay 6% of your pay for a retrenchment insurance scheme?

The No vote outnumbered the Yes vote by a small margin of 6% (i.e. 53% – 47%). I find that understandable, since the general impression of this being a social welfare scheme instead of a personal insurance scheme. In fact, it was impressed upon the attendees that such a scheme would encourage workers to choose unemployment because of the easy money they can get out of this scheme.

While I had voted NO myself, I had a very different reason for doing so since no details of this scheme was really made clear. I would have supposed that if the attendees were told that this would be a personal insurance scheme, i.e. how much you can draw from the scheme will be equal to what you paid into it, then it might be acceptable. Anyway, we already have a mandatory personal saving scheme and it is called the CPF.

One of the audience also asked what avenue does he have if he is out of job, while he needs to juggle his bills, his housing loans, his kids educational fees, and also the fees for his retraining. Unfortunately, I could no longer remember what the full answer was to that, but I recalled certain points were made that there are definitely means for the person to seek assistance for all of the above, and some examples from the previous crisis were cited. Of course the main reason I did not record all of this was because I was getting quite… hungry.

Of course, among the questions there was also one that was quite amusing, if not funny. One person was asking why the NTUC did not consider setting up a bank to help SME.

It brought some laughter among the attendees and Josephine Teo gracefully thanked the person for his confidence in NTUC and pointed out that even if it was to be done, it would take years before a proper bank can be set up. She backed that up by referring to the time taken to set up Income Insurance, and also the Supermarkets. She then referred to the component in the Resilience Package which will stimulate lending to SMEs.

Here are some photos of the event.



Photos – Courtesy of Rachel