Friday, November 24, 2006

News Flash: Salim's Press release

Salim has issued a press statement to Straits Time with regards to the inaccurate report about him buying the Cheng Tng for Dr. Chee and his comrades during the IMF protest:

From Salim's blog:

PRESS STATEMENT: Clarification to The Sunday Times Report

Hi all, I've already issued a press statement to the local media, specifically to the Sunday Times. Here's the statement:

Dear Editor,

I refer to your newspaper report, "What's the story?", dated 12 November 2006.

The article stated that," But Mr Abdul Salim, a WP candidate in Ang Mo kio GRC during the May General Election, did more than just look. Along with some other young WP members, he bought some cold cheng tng for Dr Chee and comrades..." I wish to clarify that there is one factual error in this paragraph. I did not buy the cold cheng tng for Dr Chee and his comrades.

Although i was present at Hong Lim Park as an observer and a concerned citizen to bear witness to the protest carried out by Dr Chee and his comrades, but at no time did I buy any cheng tng for them. Your inaccurate report has caused tremendous confusion and unnecessary distress to my supporters, party colleagues and family members.

I am dissappointed that your reporters did not check the facts with me, no matter how minor it is, before publishing them. Small inaccurate details like this could create false impression and mislead your readers. It may also discredit your newspaper as a reliable source of information to Singaporeans at large. I hope that your reporters could be more factually responsible in their writing in future so as to avoid such harm to both your newspaper as well as the people concerned in your articles.

Yours Sincerely,

Abdul Salim Harun

My press statement will also be put up at the WP Youth Wing Website shortly.

Wednesday, November 22, 2006

Next Article: Is Shin Corp a "Good Buy"?

This is just a preview of my next article about Temasek's venture into Thailand's Shin Corp which has caused much "haze" over our foreign relationship with the new Thailand Government.

Of course, it is may be on hindsight that many analysts will start saying that Shin Corp has become a lemon but the truth is, there are enough information about the nature of the deal prior to transactions that will create considerable doubt over the whole saga. I will try to examine why the deal turn sour and what possibly went wrong in the decision making process.

Goh Meng Seng

Thursday, November 16, 2006

GST mystery

One of the Sammyboy forummer pointed out one discrepency of my earlier article on GST. The 5% GST in Singapore generated only $3.6 billion instead of the optimum theoretical $7 billion from our GDP of $150billion.

I double checked on Ministry of Finance website and I have found some interesting fact: the difference in tax base between Income/Corporate tax and GST is only 26%. And the fact that the effectiveness of GST is only half of what it should be, it may mean that the tax itself will be more regressive than initially thought. This is due to the fact that only the rich corporates and individuals could avoid spending in Singapore or save more. Although we have forced savings as in CPF, but most people spent part or even all of their CPF on housing and healthcare.

The following is my reply to the forummer:

Dear thisalsocan,

I have searched for the budget 2006 figures and I got the figures from the following link:

Ministry of Finance 2006 Budget Highlights

It seems strange to me that by simple calcuation, the tax base for both GST and Income Tax only differ by 26%. i.e. Income & Corporate Tax: for each 1% generate $556 million, 1% GST generate $702 million.

This could mean that GST is only half "efficiency" than it is supposed to be. i.e. the value add tax only manage to tax on half of the GDP instead of the whole.

This may be due to a few facts mainly: forced saving in terms of CPF (some part of CPF may be spent in terms of healthcare or housing) and also huge savings by corporates and rich families which may be transferred overseas. i.e. as long as they don't consume in Singapore, they are not taxed by GST.

What does this mean? GST is more regressive than we first thought! For most of the families earning less, they would spend most of their income with little savings. Even for their CPF, they may have to spend on housing and healthcare. Thus, the 50% of GDP that manage to "escape" GST taxation would come mostly from wealthy corporates and families.

Goh Meng Seng

Wednesday, November 15, 2006

GE Questions Finally Answered: Fare & GST UP!

GE Questions Finally Answered: Fare & GST UP!

Updates: Please note that the figures on GST collection is theoretical value. The actual value (from Ministry of Finance Budget 2006 figures) for GST collection per 1% is $702 million while for Income/Corporate Tax per 1% is $556 million. The tax base for GST is not as wide as I first thought. I have written another article on this little "mystery" posted in this blog.

During the May General Elections, I have asked the ruling party, PAP, to come clean with their plans for Singapore. The two main questions I have asked are:

1) Is the PAP government going to allow public transport fare increase?
2) Is the PAP government going to increase GST to 7%?

The local press did not publish my direct questions to PAP and PAP have chosen to keep silent on these questions but instead, they are more interested to continue harping on the James Gomez saga during the elections.

It is only 6 months after the May GE that I finally got my answers. The answers are Yes and Yes. I am very puzzled that if PAP is so confident that Singaporeans will support its intention to allow public transport fare hikes and GST to be increased to 7%, why didn't they say so during the May GE?

Unfortunately for Singaporeans, they have to make voting decisions with incomplete information. But I guess this is not the end yet. I believe that GST will be raised further to 10%. Why? PAP government wants to lower income tax from 20% to 16%. In thier calculations, this could only be achieved by increasing GST further by at least 3 percentage point.

I believe by now, most people will know that GST in itself, is a regressive tax. In essence, it is "robbing the poor to help the rich". It taxes on the poor so that the (income) tax on the rich could be reduced. From the news report, it is interesting to derive one simple fact: the tax base for GST is twice as big as Income tax. It means that for Income Tax, only the top 50% of income earners will be taxed. Let see how this could be derived:

It is said that for every 1% of Income tax, it equates to $700million tax revenue. Singapore's GDP is about $150 to $160 Billions. Government spending is about $20 to $30 Billions. Thus, for 1% income tax to derive $700million, its tax base must be about $70 billions.

As for GST, it is supposed to be value added tax, thus its tax base is the whole of GDP. This will mean that 1% of GST does not equate to 1% Income Tax. That means, in the simplest case when 1% of income tax is reduced, only roughly half a percentage increase in GST would be needed to cover the lost in tax revenue.

It will also mean that a 2% increase in GST will increase government revenue roughly by $3 billion. My question is this, is PAP going to spend $3 billion in welfare schemes since it claims that the increase in GST is to help finance social safety net?

Besides, PAP government has openly said that they do not believe in a "permanent" comprehensive welfare scheme but an increase in GST will definitely increase their tax revenue permanently! I am really puzzled by PAP's latest "selling point". PAP has never worked on the basis of direct financing; eg. road tax, ERP and COE revenues are not directly used in development of road networks and such. There is never a direct link in revenue to spending. All revenues collected will be pooled and redistribute accordingly. Thus it is a bit strange to me that PAP has in fact claimed that they will increase GST to finance the social safety network which is not a "permanent" system in their governing concept. In fact, if I could remember correctly, the highest government spending lies in Defence. Spending on welfare schemes hardly reach the billion mark! So what are they going to do with the potential increase of $3 billion of GST revenue? How many percentage of this increase will go to welfare scheme?

The reasoning that offset package will be in place to offset the increase of GST. But my question is, offset for how long? One year? Two year? GST will apply EACH AND EVERY YEAR, forever if it continued to be applied, not just one year! I really don't know how many Singaporeans will buy their reasoning of "offsetting" but don't they get tired of their stale marketing technique for so many years?

The most disturbing thing is that, since income gap has been widen throughout the years, is it right to further widen the income gap by taxing more (GST) on the poor and perhaps, reduce the income tax on the rich?

The most comical thing is for PAP to make comparisons with other welfare states' GST tax rate! Yes, they pay high tax but their welfare schemes are intensive and comprehensive. It seems to me that PAP government wants the best of both worlds... high GST tax rate but low welfare schemes!

Even for a capitalist city like Hong Kong, has its own side of welfarism which is more comprehensive and "permanent" than PAP's. The Hong Kong government has just announced that it will sponsor each child that goes to kindergarten HK$13000 (about $2600) every year. Out of this amount, HK$3000 is for the kindergarten to spend on their teachers' development while HK$10000 will offset the child's school fees. It would practically mean that each child will only need to pay a very neglible amount of a couple of hundred HK dollars each month for their kindergarten education. This scheme is set to solve the unequal opportunity available for those poorer families that could not afford to send their children to kindergarten and at the same time, encourage Hong Kongers to have more babies by reducing the cost of upbringing a child. Beside this scheme, Hong Kong's most impressive systems are their healthcare subsidies and unemployment benefits.

Granted that HK manages to save on defence spending but the fact still remains that it has one of the lowest rate of tax in Asia: 16%. Of course the welfare spending will create burden on its government's financial health but I think people would not mind to pay a little bit more tax when they know most of their taxes are spent on the benefits and welfare of its people. Thus, even though many Hong Kongers resisted their government's plan to implement GST, personally I am not really against the idea basically because I know the Hong Kong government really takes care of its people. It is just a matter of how much GST should be implemented.

But in Singapore's context, I do not think the PAP government is that generous in helping our citizens. They are more interested in the amount of surplus they could accumulate and how to win elections by utilizing government funds in providing HDB upgrading. In fact, when PAP government keeps promising hundreds of millions of dollars of upgrading programmes (in total, at least $2billions) during the elections time, it has never mentioned about how these upgrading programmes could be financed.

Given that the PAP government has not come up with any concrete plans on a more comprehensive welfare scheme or mention any increase in healthcare subsidies, I do not think it is justifiable for PAP to increase GST to 7% by giving such vague link to social safety net. PAP, please show us the beef and we will decide whether to buy your argument or not!

Goh Meng Seng

Sunday, November 12, 2006

Whats's the Story?

Whats's the Story?

Updates: One of the reporter responded to my article here, "Thanks for the response. Regarding the cheng tng, we did say that Salim brought it, along with some young WP members." The impression of the article is that Salim bought the cheng tng with the help of other WP young members, I quote: " Along with some other young WP members, he bought some cold cheng tng for Dr Chee and comrades, a gesture that was highlighted, with thanks, on the SDP website" The word used is "bought".

I am amazed by the imagination that the reporters have when they write the "hot story" about Workers' Party with regards to Tilik's and my resignation. First of all, I must clarify again, two factual errors:

1) The report suggested that Salim bought the 'cheng tng' for the SDP protestors:

" Along with some other young WP members, he bought some cold cheng tng for Dr Chee and comrades, a gesture that was highlighted, with thanks, on the SDP website.
The cheng tng overture received an icy reception from the WP leaders."

As far as I know, it was Melvin Tan that bought the cheng tng, not Salim. I think ST reporters will have to keep up the 'high standards' that MM Lee has set for them, at least to be factually accurate in their reporting.

2) Secondly, the article seems to indicate that my resignation got to do with:

a) the internet guideline
b) the 'jockeying among young members' eyeing for the 'A' team.

One of the reporter that I spoke to even ask me whether my resignation got to do with my move from NEAC (where the Aljunied GRC is included) to CAC. I hereby reiterate that my resignation is a simple resignation for a simple but important reason, accountability. It is on my own initiative to request a shift from NEAC to CAC for strategic and tactical reason that I am not going to reveal.

Furthermore, I have resigned even before I know about the details of the internet guideline. Thus, it is impossible for me to make decision based on something that I was not even aware of in the first place!

As far as I know, there are no signs of "jockeying" among young members for a bigger role within the party. In fact, most younger (in age) senior party members have decided to step down from positions in the Youth Wing willingly so to let young and new members to take up more responsiblities within the party. Melvin, Tilik, Shin Leong and I have voluntarily stepped down from Youth Wing positions and did not take part in the Youth Wing Council re-election process! Most importantly, we come to the same decision without even the need to consult each other! We are all very happy that the party has grown in strength and that there are many more people willing to take up our positions in the Youth Wing. We are not 'power crazy' at all but in fact, altruistic in all sense. We understand our visions, missions and roles very well.

It is unfortunate that Tilik and I have decided to resign for two very different reasons. Some may think these are insignificant reasons or even "laughable", but to us, these are not small matters. It is a matter of principles and convictions. And to suggest that either Tilik or I resigned due to 'power struggle' would be grossly inappropriate and insulting to us. We have come a long way and decided to join Workers' Party when it was at its lowest point in recent history. It is definitely not power, fame nor any materialistic gains that motivated us to join Workers' Party at its weakest point. It is just pure passion, beliefs and convictions that bring us together in Workers' Party. If it is about power or better prospects of gaining power, fame or materialistic gains, we would not have chosen Workers' Party; Tilik would not have quitted PAP to join Workers' Party.

We have come together, work together, trying our very best to develop and build up the party, right from its lowest point. I feel that it is really insulting to us for people even suggest that we resigned due to 'power struggle'. Ironically, this would be the most 'laughable' reason in our persepective!

I would rather people see our reasons for resigning from Workers' Party mistakenly as 'trivial' or 'laughable' than being insulted in such crude way.

Goh Meng Seng

Thursday, November 09, 2006

My Resignation from Workers' Party

My Resignation from Workers' Party

I did not expect to write this so soon as I wanted to wait until the present parliamentary sitting is over before I make any public statement on my resignation which I think is not news worthy at all, but may be a distraction to Sylvia Lim's maiden speech in parliament.

Anyway, for some reasons, the ST reporter got to know about it sooner than I desire. I granted the interview with the view that it is better to make it clear right from the start rather than allowing the reporter to write with all sorts of speculations in mind.

The following are just some facts that I need to clarify:

1) I resigned from Workers' Party on the day when the misinformation of I threatening to sue an internet forummer was reported in Today. This is due to my private assessment on the damage done to WP's public image despite the fact that I have clarified the facts on the matter to the Today's reporter. I guess Today will never make any reports on misinformation about any PAP MPs or ministers with their clarifications put side by side. Well, this is life in Singapore.

2) For some reasons, ST chose not to report the specific reason I gave them about the damage done by the Today's report on the misinformation (though with my clarifications by the side).

3) Nevertheless, damage has been done to WP's image. I have talked about the importance of accountability for all my adult life and I think in view of the situation then, I will have to practise what I preach. It is a matter of personal integrity to me. If I do not practise what I preach, on what moral grounds do I stand when I question the ruling party about accountability in their governance?

4) This is the reason that I resigned. The speculation proposed by the ST reporter that I quit because I am unhappy about the rules which are going to be implemented (over internet engagement) is totally unfounded. It is only healthy that people have diverse views about anything in a political party. The most important thing is that, at the end of the day, we will come to a consensus and move on from there. It would be a total disaster for a political party to have members agreeing 100% on everything everytime.

5) None of the CEC members has requested me to resign over this matter. In actual fact, some have tried in private to convince me to stay on. My heart felt thanks to them but I think it is an important political point to be made.

6) For those people who like to speculate all sorts of things and come up with all sorts of conspiracy theories, they will be very disappointed. This is a simple resignation over a simple but important reason.

The most common reaction from people is that I am quitting politics altogether. However some will be relieved and some will be disappointed to learn that this is definitely not the case. ;)

My political vision and dream is to work towards an alternative political system for Singapore, to initiate positive change or reform to Singapore's political system. Joining a political party to provide meaningful political competition to the ruling party is merely one of the many ways or possibilities in achieving this goal.

I have written in this blog about the dilemma between the choices of partisan politics and NGO's role of creating more political awareness among the populace. In order for the reform to the political system to be successful, it will need the backing and support of Singaporeans. This could only be achieved when the political consciousness and awareness of our citizens are raised to a certain level.

Beside exploring the idea of forming or joining NGO, I have even explored into the possibilities of forming an independent alternative private think tank for all alternative parties. Political parties need policy research capabilities in order to perform their duties effectively. PAP, as the ruling party, has the support of the government funded think tanks to provide them the policy research capabilities. Alternative parties are deprived of such much needed resources.

I could even help out any political parties in various areas so to help the system grows. There are so many other ways one could contribute to the ultimate aim of reforming the political system besides standing in the frontline as a candidate during GE.

Of course, I may not rule out the possibility of joining any political party again or even form my own political party in future, but I think there are so many options available for anybody who want to do their part in initiating changes to the political landscape here!

Goh Meng Seng