Insist on Meritocracy, Reject Mediocrity

Wan Bao has always been quite supportive of Workers Party (WP) all this while and it is exceptional for it to be so. This could be seen from the reports on WP since the Hougang By-Elections held earlier on. It is indeed rare to have a mainstream newspaper to be so supportive of an opposition party under Singapore’s unique political consrtruct. 


However, it should not be biased by its support to WP so much so that it would go that extra mile to use reports with twisted angle to attack those who have very different stance from it! (I am of course referring to myself!)

Just like the report shown above, it uses a very definite tone to assert that “majority of netizens feel that there is sourness written between the lines”; it would be totally misleading to those who don’t really know the fact at al! Well, I have checked through this comment posted on my FB and I have found there are over 20 FB friends agreed with my comments and have clicked “Like” while there are just only a handful of those usual suspects of hardcore WP people raising disagreement. How could that be considered as “majority”? Maybe the Chief Editor of Wan Bao should help the reporter to get a new pair of spectacles or that send the reporter to a couple of Statistics classes! Such gross misreporting could damage Wan Bao’s credibility and reputation (that is, if there is any left)!

Well, I am a straight talker and will not try to beat around the bushes. Some feel that this is REAL while more feels that this is just “ignorant” or even “idiocy”; this is just a matter of perspectives. Nevertheless, many people feel that as “politician”, it is better to be “slick”and have a “glib toungue”, must be more “politically correct”. However, isn’t that asking politicians to hide their real thoughts and replace them with sweet talking?  I don’t concur to such hypocritical pretence!

As for my comment, that is serious matter. There are a lot of people disappointed with WP’s performance since last General Elections. Even the so call “political observer” whom Wan Bao interviewed has to settle with the assessment of “WP’s performance is so so”. That is basically just a civil way (politically correctly smooth) of saying “mediocre”.  It is a fact that there isn’t much commendable performance. 

Right from the start, Chen Show Mao has conceded to PAP to become the great fearless Wei Zheng who will speak the truth, in all honesty with their criticisms. That basically means that PAP has become the Emperor while WP becomes the loyal court officials. There is basically nothing wrong to concede to the victor as it is a common practice in ancient history. But Wei Zheng is one who will speak up fearlessly (well, isn’t that as ignorant and idiotic as I do? LOL!) of the truth and facts and isn’t one of the fearful silent coward. However, just after one year plus, why has our Wei Zheng become the silent one on the policy front?
 

WP walks into parliament with the slogan of “Towards First World Parliament” but once in parliament, why are they bringing up such inconsequential questions on cats, dogs and bird droppings? Is it true that there isn’t any other important National issue to be brought up in parliament for debate? Why didn’t they bring up the issue of AIM in parliament earlier on?

Even for that “sure score” issue of ministerial salary debate, WP has screwed up so badly that it was mercilessly mocked by PAP. Not to mention about being exposed of plagiarism right in parliament. My little criticism of WP in my FB is really nothing compared to be shamed in the hall of parliamentary debate. How embarrassing! 

Just when we thought the worst is over, WP exploded with the Yaw Shin Leong scandal. The ultimate shame lies in how clueless WP was in handling such scandal. It has dragged the scandal for nearly a month before it was forced to tearfully sacrificed YSL. Apparently this has put a lot of doubt on the crisis management ability of WP. After the dust settled, we thought we could just close the chapter with a by-election. However, the WP candidate’s credibility was again put to doubt by a leaked minutes of its CEC meeting. Finally, the by-election has a happy ending with the magnanimous support of Hougang voters. But just as we thought all the storms have passed, residents under WP’s wards exposed that WP has used lucky draw to buy votes in support of HDB upgrading! This is the greatest ironic blow to opposition as a whole as we have been attacking PAP of using HDB upgrading to buy votes during elections! This is simply the pot calling the kettle black!
   
Our hearts are bleeding with all these missteps of WP! All these mediocre performance has absolutely nothing to do with the lack of confidence. I have thought through rigorously but I just couldn’t figure out how “confidence” (or the lack of it), as mentioned by the political observer, has to do with WP’s mediocre performance. However, I would say some of the incidents have to do with the over confidence, complacency and arrogance.

It is unimaginable that within such a short period of one and a half year’s time, WP has been making such fumbles in such high frequency and how is WP going to survive for the next 3 to 4 years before the next GE! Confidence can never solve these fundamental problems!

It is inexplicable for the Wan Boa’s political observer to assert that we should give WP one more seat so that they will have the confidence to perform better! This is really absurd! When did we become a country that abandon the core principle of meritocracy while rewarding mediocre performance?  We should insist on meritocracy and reject mediocrity.


If we lose this insistence on meritocracy, Singapore would definitely and eventually end up with a political slimy mud filled with mediocrity instead of becoming “First World” class!
If WP chose to contest the by-election due short term political interests considerations, before it rectifies, consolidate and make adjustment to its present team of MPs, even if it managed to win another seat, it will face the greater risk of having further mediocre impact that would cause even more blunders. This is especially so when it is obvious from Hougang By-election that WP is pretty dry on its talent pool now.
 
WP should stop and reflect upon itself, bides its time in re-consolidation and take stock of its weaknesses before it starts afresh again. Only in doing so, it would be able to meet the high expectations of its supporters to accomplish and fulfill its mission of creating the “First World Parliament”.

Nothing is absolute in this world. More may not be good. We should have quality MPs instead of just quantity. If the slate of MPs are still lacking in quality, it should just give them closed door training to perfection. WP should get its house in order first before it moves forward to win any other seats. In short, it is best for WP to give it a pass for this by-election.

Goh Meng Seng

Afternote: There are two interesting comments from private friends to me

1) If what WP lacks is confidence, then there is no need to reward it with another seat to boast confidence but instead, just send them to those expensive Motivational Talks available in the world!

2) If we are to extend the Wan Bao political observer's advice to commercial world, then companies will need to give those mediocre employees a big pay rise in order to boast their confidence to perform better!

选贤与能，拒绝平庸

晚报一向来都是工人党的忠实支持者，这的确很难得。这可从后港补选到现在晚报对工人党的报道可以看得出来。毕竟在新加坡的政治环境下还能有个主流媒体的报章如此拥护一个反对党，实在是得来不易啊！

可是支持归支持，可别以过分扭曲的角度去报道和打击站在不同立场的人士哦！（那当然是指我啦！）

就有如以上这篇报道，非常断定的说“多数网民认为字里行间酸溜溜”，不知情的人可要被误导了！因为我翻查了这面簿的留言，竟然发现有超过二十几位网友赞成我的说法而按了“赞”，而对我言论不满的人也只不过是那几位工人党超忠实的死硬支持者，屈指可数，这又这么算是“多数”呢？也许晚报主编应该给这记者重新配戴新眼镜了，或送去上几堂统计数学课吧！这样有缺事实的报道，可大可小，但对贵报的信誉（如有的话）可能会造成不必要的损害啊！

我这人是有话直说，不会拐弯抹角。有人认为这样才不失真，但有更多人认为这是“无知”，甚至是认为是“白痴“的也大有人在，真是见仁见智。当然，许多人都认为做为”政治人物“，就应该圆滑一点，应该”政治正确“一点。可是那不是叫搞政治的人物都要隐藏真心，而说些讨好人的假话吗？我可不认同这种虚情假意啊！

 说到我的言论重点，这可是重要话题了。有许多人对工人党从上次大选至今的表现都感失望，就连晚报所采访的”政治观察家“也说”表现平平“。其实说穿了，这只是客套话（政治正确的圆滑）。什么是”表现平平“呢？那就是表现平庸了。工人党的表现乏善可陈，这是众人有目共睹的事实。陈硕茂从一开始就俯首称臣的说要做大无畏的”魏征“，那么皇帝肯定是行动党了。这也算不了什么的，胜者为王，败者为寇是自古真言平常事。但是魏征是大无畏，讲真话，说实事的人（是不是有点像我这样无知，白痴的人一样呢？一笑！），而且绝对不会畏首畏尾的不敢吭声的懦夫。但是怎么才过了一年有多，我们的魏征竟然成为了政策沉默的魏征了呢？

 工人党打着”第一世界国会“的旗号进入国会，但在国会里尽问些芝麻绿豆的小事，如猫狗和小鸟粪便的问题，难道真的在也没有国家议题可陈上国会大厅议论了吗？为何没尽早把AIM这样损害选民利益的政治手段提上议会大堂？

就算是能拿高分的部长薪金辩论工人党也搞到一团糟，还被行动党真正在国会大堂狠狠的”酸“ （冷嘲热讽）了一顿。工人党议员在国会大堂上被揭发是文抄公这事不提也罢了。我这在面簿的网络小空间小小”酸“工人党并没什么大不了的，但在所谓的”第一世界国会“大堂上被对手大肆羞辱一番，情何以堪啊！当我们认为最坏的过去了，工人党竟然闹出了婚外情丑闻。这丑闻是丑在工人党一开始就不懂得如何去处理善后！拖拖拉拉的被丑闻纠缠了几乎整整一个月才以孔明挥泪斩马谡方式了结了。这危急处理能力真是叫人怀疑！当尘埃落定后，我们以为可以补选了事，但就在补选期间，候选人竟然被泄露的议会记录质疑在电视访问中所说不实！补选终于在后港人的宽容下圆满结束。也就在我们以为从此会风平浪静时，又被居民爆出工人党在管辖区内以幸运抽奖为利诱，收买对翻新支持的选票！这对于反对党一向抨击执政党以组屋翻新来收买选票是一种多么大的讽刺和打击啊！简直变成了小巫见大巫了！

工人党这种种的一切，是多么令人痛心啊！这一些平庸的表现，跟所谓的“信心”一点关系也没有。 我左思右想，怎么也想不出与”晚报政治观察家“所说的”信心“有任何关系，倒是想到也许有些事是跟工人党太过自信，自满和自大有关吧。我很难想象在这短短的一年半载里头，工人党竟然会失误频频，那么接下来的三、四年到底要怎么过啊！这不是多点信心就能解决的问题！

更令人费解的是，晚报的政治观察家竟然说要给工人党多赢一个议席，那么就更会有信心表现了！这真是似是而非的谬论！曾何几时我们已经抛弃了选贤与能的核心价值观而拥抱了奖赏平庸的道路呢？我们应该坚持选贤与能，拒绝平庸才对啊！

如果失去这份坚持，到最后新加坡的政治肯定不会成为”第一世界级“而将会沦为平庸无能的第九流混沌污潭了！

如果工人党为短暂的政治利益，在现有的团队还没调整和整顿好就参选的话，就算是真的给它赢得多一个议席，那也只会增加平庸误事的风险。这尤其是，很显然的，从后港补选工人党所推出的后选人看来，已经凸现了它蜀中无大将的窘境了。

工人党如今应该闭门思过，韬光养晦，重新整顿一下队伍，重新出发，才能不负众望的兑现它的政治使命和承诺。

事事无绝对，不是每一样事情必须多就是最好的。议员贵精不贵多。 如果既有的议员还未精，那就得先闭门练兵了。这时候让贤是为上策。

吴明盛

后记：我这篇文章，肯定会引来非议，但是眼看工人党如此的表现，真是痛心疾首。爱之深，痛之切。

SMRT - The Ugly Truth of Ultra-Capitalism

 This is derived from a blog post from Transitional Eternity. 

 It has confirmed my suspicion all along that the workers and drivers in SMRT have been short-changed by the management/Directors by allocating vastly disproportionate sharing of the increase in profits over the years. Director has increased their own fees by a whopping 970% over 11 years while the workers and drivers were given a mere 67% increment. These are derived from the costings found in the annual reports. 

 We have been talking about RISING Income gap or disparity all these while and PAP government just act blur when their own GLCs under their charge are practicing such blatant Ultra-Capitalism of exploitation and unfair distribution of earnings. 

Such practice of Ultra-Capitalism is totally unacceptable and unsustainable. It will be a key of social dis-stabilizer in the mid to long term.

Fruits of earnings of any cooperation should be fairly distributed among the workers, management/directors and the capitalists/investors. The percentage of increment should not vary too much else the income gap or disparity will be widen substantially over time. If this is not kept in check, the whole system may just collapse and chaos may reign. 

Goh Meng Seng

Mr Lui Tuck Yew, the money is over here 

Dear Mr Lui recognizes the need of a pay rise for our bus drivers, has asked commuters last Friday where “where is that money coming from”[Here] after two weeks of deliberate hibernation and expects commuters to pay for the persistent mistakes of SMRT’s poorly-maintained train tracks and exploitation of foreign labour at the expense of wage depression for local workers. His first appearance and golden words came after the dust for the SMRT bus drivers’ strike saga has settled.  

I spent my Saturday afternoon scouting for possible sources of that “money” that our transport minister Lui Tuck Yew demanded. And easily found the pool of money in:

(1) The Directors’ Fees

Steady growth in directors’ fees between 2002 to 2012 and 2007 is the exceptional year which sees a 0.26 million drop in directors’ fees. There are certainly more years of upward growth in directors’ fees than in SMRT’s net profits. By 2012, directors’ fees have grown to a whopping 970% in a span of 11 years.

Contrasting the generosity of SMRT on its directors, the growth of staff costs (excluding directors) is a mere 67%. While directors have seen their fees increased in several folds in the last decade, staff below the directorial level who constitutes the bulk of SMRT’s labour force and where a big majority of these people are directly involved in SMRT’s daily core business, sees little growth in their income.

Not belittling the role of SMRT directors play, however, staff who operate SMRT’s business are neither of negligible importance either. Without these people, directors will be deemed redundant! It is no surprise to see SMRT’s deliberate maneuver of low wages for its operational staff to drive away Singaporean workers and thus, giving way to the excuse of seeking overseas labour at a cheaper price.

When we compare directors’ fees with staff costs, it is not difficult to notice that the percentage growth in the former outruns the latter. Directors’ fees grow at a double digit rate for most years except for 2006, 2007 and 2011, indicting an above-inflation rate of growth for this group with a greater absolute amount than the wages of the majority of non-directorial staff. A 10% increase of a $60 000 fees would result in $12 000 in absolute terms.

Between 2004 and 2005 and 2008 itself, non-directorial staff sustained an actual fall in costs despite SMRT operating at a positive gain in those years. The percentage rise in staff costs ranges between 2.5% to 42.5% and a double digit growth occurred only in 2003 (42.5%) and 2012 (11.6%), where the rest of the decade, staff costs are either at a negative growth or growing less than 7% single digit rate on the average, which if inflation rate is factored in, the real growth is minimal.

Suggestion:

1 million dollars to come off directly from the directors’ fees towards the bus drivers’ increment fund as a compensation for the persistently poor performance of both train and bus services since 2011 and the inconvenience caused to commuters. As SMRT employs approximately 2000 bus drivers [Here], about 30% of its total staff are employed in thebus sector (SMRT Annual Report 2011), one million dollars would bring about an average of $500 p.a. extra.

Total number of employees in SMRT group

(2) In SMRT’s Net Profts

This is one area which private company SMRT could consider dipping into for raising bus drivers’ salaries.

Since 2002, SMRT has sustained consecutive years of positive gains. By 2011, it generated a 2.8 fold of net profits compared to 2002 and even during a weakening net profit in 2012, there is still a 2.1 fold gain as compared to the 56.8 million in 2002.

There were three less better years in SMRT’s overall net profits growth for the period between 2002 and 2012, namely 2006, 2011 and 2012 but respectively years of net profits still clinches 2 times more than 2002’s net profit.

Total net profits’ accumulation comes to a figure of 1.3 billion dollars in the last 11 years alone, 23.6 times of that of 2002’s net profit figure. However, on paying its staff (excluding directors), SMRT has spent a total of 2.5 billion in the last decade, a mere 13.9 times than that of 2002’s. Net profit growth easily outstripped the growth of staff costs, baring the strong reluctance of profit sharing with its non-directorial staff who does the actual work in generating revenue.

SMRT may be successful in expanding its sources of alternative revenues beyond its core business—public transport itself. However, it would be myopic to neglect its core business without which will cause a severe dent in its alternative sources of revenues. 

As much as SMRT’s claim of its accountability [Here] towards its shareholders (the government being the largest shareholder in this case as Temasek Holdings owns a 54% stake in SMRT), however, it has more to account to the commuters for the facts that SMRT’s infrastructure comes from the public funds, as well as the transport fundallocated to the transport providers comes from the public’s purse strings.

Suggestion:

Dip into the pool of funds reserved for SMRT’s shareholders. As the largest shareholder, the government has the obligation in restoring the confidence of the public and its citizens of the promise of Singaporeans First by: 

1) securing well-paid jobs for locals (pay foreign drivers the same wage as local bus drivers to reduce the unfair reliance of foreign cheap labour) 

2) stop fleecing local commuters for profiteering. 

Mr Lui should allocate at least 4 million dollars from the pool of net profits which SMRT has amassed in the last decade. That meagre amount will not dent the 1.3 billion pool but will bring more quality living for its frontline workers and will also help to transfer the expense of SMRT's mistakes from the commuters. 

After all, our government works for the welfare of the people and isdistinctly different from those corrupted nations which milk its people to the last drop.

SMRT Strike - The National Interest Perspective

Photo: TOC

I was waiting for the various opposition parties like SDP, WP and NSP to issue statements with regards to this SMRT saga but after 48 hours of this incident, none of them have issued any press statement.

The irony is that Workers Party seems to be disinterested in labour issues like this one, least about protecting workers' right regardless of race, sex or nationality. National Solidarity Party is no longer interested to stand in solidarity with the workers' right to point out the flaws of the inadequate labour law we have in Singapore. Most surprisingly of all, the most vocal Singapore Democratic Party which has fought so hard on human rights and democratic issues has been unusually silent when human rights of the drivers were violated when they were forced to have medical check up against their will. 

Most likely, they thought that this is all about foreign workers and have nothing to do with Singaporeans. Furthermore, it is obvious that the PRC drivers were right in claiming unfair and discriminating wage treatment but partisan politicians fear that by acknowledging this simple fact, they may agitate their supporters. This is especially so when anti-FT policy and xenophobia is running all time high in Singapore.

Thus, it is "politically savvy" to stay away from this hot potato! It is quite disappointing indeed.

We Singaporeans do not like strikes or industrial actions, especially those that could cause great inconvenience to us. This applies to a strike in the public transport system like the one we have in SMRT. There are rules and laws to be followed. Many Singaporeans have expressed their anger on why these PRC drivers who went on strike didn't get locked up and charged in court. Apparently, the PAP government is reacting to this pressure now.

While we want preserve our rule of law and our good image as a "stable country with harmonious industrial relationship" in order to attract foreign investors, we must also understand the bigger picture and the implications behind this industrial relationship hiccup. 

Now, take a good look at the above data sheet derived from SMRT on the wages it set for its drivers. What's wrong with it?

It classifies wages according to Nationality. The simple fact that SMRT has classified wages according to Nationality is in itself a discriminating act. It is totally unacceptable.

I have talked about the lack of Anti-discrimination Employment law in Singapore since many years ago. Places like Hong Kong has set up Equal Opportunity Commission to look into complains of discriminating employment practices. In spite of having Anti-discriminating concept written in Singapore's Constitution (Article 12), there is nothing written in our Employment Act that uphold this spirit of Constitution at all. It just stays as a "Highfalutin" idea.

This SMRT strike has put Singapore in a very bad spotlight internationally. It exposes Singapore as a place that condones discrimination in employment. It is in our National interest to right this wrong and opposition parties should be pushing for anti-discrimination employment law! We do not want to be seen as a place that condones modern slavery, do we?

Some Singaporeans may cry foul and argue that why should we treat foreigners equally in employment in Singapore? Why should we give them equal or fair wages?

It is in the interests of our workers to uphold equal and fair wages for foreign workers. PAP and businesses have claimed that they only turn to employing foreign workers because they can't find local Singaporeans to take up the jobs. But is this true?

When you allow businesses to use lower wages to employ foreign workers, just like the case in SMRT, inevitably you will be encouraging them to displace local Singaporeans as much as the FT quota allows! The reason for them to employ foreign workers have changed; it is not due to the difficulties in finding Singaporeans to employ but rather, they are substituting the more expensive Singaporeans to reduce cost!

If we have anti-discrimination law that dictates that everybody will have to be paid on equal terms, then the cost of employment of foreign workers will be higher than employing Singaporeans when government levies are taken into account. This will discourage companies from employing foreign workers indiscriminately just to replace Singaporeans for the sake of cost cutting. Companies will only turn to foreign workers when it is totally necessary because it would incur higher cost. This will align us to the concept of letting companies to employ foreigners if only if they cannot find Singaporeans to do the job.

Thus, insisting equal wage terms for foreign workers will in fact protect Singaporeans from being displaced. This will cut down our over reliance on foreign workers which could become a vital factor in unstablizing our social structure.

So far, both SMRT and PAP government have mismanaged the SMRT Strike quite badly. Apparently they don't understand the PRC's culture well enough. Strikes in China are very common nowadays and they should not be ignorant about that. Unlike Singaporeans, they will fight for their rights when there is a perception of unfairness. Furthermore, PRCs are very Nationalistic in nature.

Well, from the observation of how the PRCs reacted to the DiaoYu Dao dispute, you will see that they will go all out on Nationalistic sentiments. The new Chinese leadership has tried very hard not to be seen as weaklings when it comes to sovereignty issue. Japan is a large country and it may be forgiven for not able to resolve the matter easily.

However, if the PRCs are to be seen as being discriminated and bullied by a little red dot like Singapore, the new Chinese leadership will face even greater pressure and obstacles in establishing  its legitimacy. How would it react?

If the PAP government is to use its usual hard ball political methodology to deal with the PRC drivers in SMRT who went into strike, it would be seen as a "persecution " over discriminating practices. Even if the Chinese leadership does not want to do anything about it, what do you think the common citizens in China would do or react? When Nationality is involved in discrimination, it will no longer be our "internal issue".

It is not in our National interests to endanger the lives of thousands of Singaporeans who are working and doing business in China over some disgraceful discriminating acts of a GLC like SMRT. I have no problem in making sacrifices to defend our land and sovereignty but it would be very silly for us to make sacrifices for the disgraceful discriminating acts of a company which exploited the FT policy for its own benefits.

Some may argue that these PRC drivers should go according to their contracts but when a contract defies good nature practices, breaches natural justice and fairness, it should be viewed as invalid.

On the other hand, SMRT has forced these PRC drivers to be medically examined even though they may have provided Medical Certificates to apply for medical leaves. Such act is unacceptable and has created unnecessary doubts on the professionalism of those doctors who have issued the medical certificates in the first place! Such move has further damaged Singapore's international image and has unnecessarily put our medical doctors on international trial.

SMRT and the authorities should back track, resolve the issue with proper tact. The only way the government could resolve this issue is to handle it FAIRLY and JUSTLY. 

For a start, the government should denounce SMRT's disgraceful discriminating practices and order it to right the wrongs. It could even take a step further to declare that it will look into enacting anti-discrimination laws to protect the rights of workers. It should also review its FT policy as well. On the other hand, it could issue a formal warning or reprimand to the PRC drivers and set up a union or mechanism for them to utilize in future similar event. 

Even if the government chose to charge these PRC drivers in court, the negative impact would be significantly reduced because the SMRT has been dealt with for its discriminating practices. Charging these PRC drivers without addressing the perceived wrongs of discrimination by SMRT would put Singapore in a very bad light internationally and may even ignite anti-Singapore sentiments in China which could put our citizens at risk there. 

SMRT and the PAP government are only concerned about the damages this strike would do to them as in compromising their authority. They should look at the bigger picture on the international impact of this strike. It has far more implications on the good image and reputation of Singapore as a modern country internationally. 

We should not be viewed as country that condones unfair and discriminating practices of exploiting nature. We should not let this saga damages our medical doctors' international standing as well. We have suffered enough as a Nation from the various mishandling of this strike and we should demand PAP government to right the very wrong, the root of the whole problem by enacting Anti-Discrimination laws in our employment act. 

Goh Meng Seng

After Note: Two opposition parties have finally put up their views through press releases on this matter:

Finally the Opposition parties have issued statements regarding the unprecedented strike by SMRT employees.

Singapore Democratic Party (SDP) - http://yoursdp.org/news/time_to_reinstate_workers_rights/2012-11-28-5471

National Solidarity Party (NSP) - http://nsp.sg/2012/11/28/national-solidarity-partys-statement-on-the-strike-at-smrt/

Singapore People's Party (SPP) - http://www.spp.org.sg/spp-statement-on-the-recent-smrt-bus-strike/

Workers Party Issued their statement at last on 30 Nov 2012

http://wp.sg/2012/11/wp-statement-on-bus-drivers-strike-smrt-must-address-workers-grievances-better/

HDB Housing Policy Revisit

Recently SDP has launched and introduced its Housing Policy Paper. While I applaud SDP's effort to work on such policy paper, I would have to make it clear that its proposal doesn't make sense to me.

Some may think that what SDP has proposed is "similar" to mine when it uses "cost plus" (minus land cost) pricing mechanism but this is not true at all. I did make reference to "cost plus" pricing during last General Elections but I did not elaborate on the finer details because that was intentionally left for the debate with Mr Mah Bow Tan that I have challenged him to attend. Of course he has side stepped and the rest is history.

Let me revisit the issue of Housing policy, the last piece of puzzle that I have not put up during last GE.

Land Acquisition Act & Obligations of Government

To understand the issue of public housing fully, we must first go back to history to understand the first conceived architectural structure of Land Reform plus Land Re-distribution that pioneers like Dr Goh Keng Swee has set up.

The understanding of the issue of public housing in Singapore would not be complete without understanding the combined effort of Land Acquisition Act and HDB set up.

During the early days of Nation building, massive amount of land was owned by individuals and companies due to the past economic model of having rubber plantations and such. It created a situation that there was an imbalance distribution of limited land resources for housing the growing population as well as modern development. Modern city planning would not be possible without acquiring land from these land lords. But for the government of the day, PAP, to acquire massive parcels of land at market prices, would mean asserting a great pressure on government finances. Thus Land Acquisition Act was enacted to facilitate the land redistribution and modern city planning. It allows the government to acquire land at dirt cheap prices. However, with such power comes the obligations for the government to provide cheap public housing for the masses. This is the unwritten social contract that comes with the empowerment of Land Acquisition Act.

Some may think that the obligation of the government only applies to housing the people at that time but this is totally mistaken. The 99 lease implemented on HDB flats is one of the ways for the government to recycle the land for future generations' use. Technically speaking, any government at any time in history, present or future, would have the obligation to provide such basic needs of housing to the citizens. This is especially important for a land scarce island state which is facing the impact of globalization.

The Land Acquisition Act is not meant solely for the government to earn extraordinary profits (in the form of accumulating reserves) on the expense of the various land lords, big or small. It is meant for land reform and land redistribution to the masses. That is why I am so angry when Mr. Mah talked about "raiding the reserves" if we were to sell HDB cheap to our citizens. He doesn't understand the balance between of the power and obligations of the government implied by the Land Acquisition Act.

Globalization & its impact on Citizens' Housing Needs

This is one of the major topic I am supposed to talk about in the coming talk I am going to give at Hong Kong City University. (The talk will take place on 12 Nov 2012)

Free Market economic principles dictate that we will only have real Free Market if and only if we have free mobility of labour, free mobility of capital,  free flow of information and free flow of goods and services. Most of the time, globalization aims to achieve all these.

However, such concepts may have detrimental impact on our citizens. Land supply is more or less LIMITED in Singapore and we can't possibly increase TOTAL land supply indefinitely by land reclamation. It means that supply of land and thus, properties, would be limited as a whole. On the other hand, we could possibly, technically speaking, have UNLIMITED supply of liquidity if we open our doors for foreigners to come in and speculate on our properties. Housing is first, a basic needs to our citizens. But due to the nature of limited supply of properties, they are always viewed as "store of value" or "investment" that could provide extraordinary returns. This is especially true for small city states like Singapore where land is scarce. However, property speculation would be bad for local residents. Speculative investment in properties could only push up prices, rentals and eventually overall inflation to the whole economy without productive contributions other than initial building and construction activities in the economy.

Such speculative transactions in property are devastating to local residents' well being, unlike speculation on the stock markets or scarce commodities like gold or coffee beans.  Price fluctuation or inflation on gold hardly affect the majority of the population, especially the lower income segment of the society. For commodities like coffee beans and such, its impact is limited because supply of coffee beans can be increased in the long run. For oil prices, it may have impact on the population but that is another issue for another day.

The Main Issue of Contemporary Public Housing Policy

When you have theoretically unlimited foreign funds (due to globalization) chasing after limited land resources where housing is the basic needs of the local residents, you will have teething problems here. The main issue is how policy makers could shield local residents or citizens from the adverse impact of globalization in terms of the basic housing needs. To go even further, how to turn the adverse impact of Globalization in terms of property inflation into something that the local residents or citizens could benefit from?

PAP's initial land redistribution plan via Land Acquisition Act and HDB policy of cheap, affordable housing would be a perfect wealth redistribution effort if it is not for its greed in exploiting more profits or money from the system. The "Asset Enhancement Scheme" pushed by PAP since 1990s is in effect, an attempt to enhance government's coffers and transferring the burden to the future generations. At the same time, exploited as a means to buy votes from Singaporeans. I would consider such act as irresponsible and in effect, breaching the social contract embedded in the Land Acquisition Act, dishonouring its obligations to take care of the citizens' most basic needs of housing.

PAP government has not only cut back rental flats for citizens (ironically, at the same time, supplying more rental flats for foreign workers) but it has exploited the HDB flat ownership scheme to beef up its coffers in terms of higher land cost. It has even gone into overdrive by limiting supply of new HDB to exploit its monopoly power to such a stage that it would push up the HDB housing prices in a short span of a few years . Coupled with its liberal FT policy, granting record number of  PRs and new citizens, it pushes HDB prices to record high. In return, through the pricing mechanism that linked to the market, it benefits from higher prices for new HDB flats it sold even though cost of construction and building these flats have barely increased over time.


This is the fundamental reason why I have advocated to have cost-plus pricing mechanism in the very first place, to prevent the government, any government of any time, to exploit the system, the monopoly power it held as the biggest supply of housing flats.

Aim of Policy Options: Protecting Citizens from Adverse Impact of Globalization

Whatever policy options we proposed, we must address the fundamental ills of globalization but to make a balance by not crashing the whole market totally. We must also try to allow our citizens to ride on the benefits of globalization at the same time, if possible. We must be cautious that our policy may end up creating a class of citizens who might be trapped in the poverty cycle unintentionally.

There are some people who view that we should ban PRs from buying HDB flats, even from resale markets. This is NOT a feasible policy option. PRs make up 20% to 30% of HDB resale market and if we are to ban them from it, it will result in a devastating crash of the market and the value of citizens' HDB flats. It will affect those who have bought resale HDB flats very badly.

Some people may have a very simplistic, overly simplistic, policy recommendation of increasing the grants for first time buyers. This may sound good but it doesn't solve the main problem of the extraordinary HIGH property inflation rate (i.e. the rate of growth in prices) embedded in the present pricing mechanism due to the linkages to the resale market prices. The resale market prices were adversely affected by Globalization, the free inflow of foreigners who become PRs and brought with them, excess liquidity into the market.

The NOM HDB option proposed by SDP may look good at first instance but if we take a second look and second thought, it is actually not a good policy option. Although it has addressed the ills of pricing mechanism linking to the resale market pricing by proposing the cost-plus, minus land cost structure, but the restrictions applied on these NOM flats would mean that Singaporeans who owned these flats will be left out in the long run and would not be able to upgrade themselves if their NOM HDB could only be sold back to HDB at LOWER prices than they have bought! They could not even rent out their flats to increase income!

They are not paying for a flat that they "own" but prepaying their rents to HDB! This option is worse than renting from HDB on a monthly basis because they would not be able to save as much money as they could when they have to fork out more money (as compared to those who rent) each month to pay their mortgages. This will create a poverty trap unintentionally for these NOM flat "owners".

Creation of the Parallel Market Segment

SDP is trying to create a parallel Market Segment but the restrictions imposed, would mean that Singaporeans will never benefit from the capital gains brought upon by globalization.

There is nothing wrong for the government to allow citizens to benefit from capital gains because, if you remember what the first part of this article says, the land reform or redistribution effected by Land Acquisition Act is basically aimed at that: redistribution of land and wealth to the masses, using the government as the medium.

We have inherited a good system in HDB from our forefathers like Dr Goh Keng Swee because it could be used to create a parallel market segment that shields our citizens from the adverse impact of Globalization by selling very much cheaper flats to them at cost-plus while at the same time, whenever they need, they could cash out on the resale market.

And due to the 99 year lease, this could technically be repeated indefinitely for future generations of Singaporeans! More importantly, we cannot stop globalization and the fact is, we will be stuck with a substantial number of PRs and foreign workers on our land as well.

We must also think strategically on how to house all of them on this tiny little island. If we are to prevent Citizens from selling or renting their flats to these PRs and foreigners via SDP's NOM scheme, we may end up with lots of problems later on. It is impractical to impose such restrictions on a national wide strategy. We must well allow our citizens to have the option to sell their first flats to these PRs, earn from the capital gain, and go back to buy from HDB again for a new flat that would also be cost-plus but include land cost as well. This would be a win-win situation for the nation as well as the individual citizens.

Ironically, it was Hong Kong that have a more advanced housing policy. Under its Housing Ownership Scheme (HOS), the government will sell its flats to Hong Kongers who have lower income (classified as Green Card category) at cost plus minus land cost. For those who have rented flats from the government, they could convert their rental flat into their ownership by paying that at a discount, under cost-plus minus land cost (CPMLC). Those HOS flats owners, could sell their flats on the open market under Green Card Category. If those having higher income level (classified as White Card Category) wanted to buy these flats from the resale market, they will have to pay the additional land cost to the government.

CY Leung's administration is now thinking of changing the rules so to allow the White Card category to buy new HOS flats directly from the government at higher price (cost plus with land cost).

The unfortunate thing that happened for the HOS scheme in the past is that the Hong Kong government back in 2003 was forced to stop this scheme due to the pressures of property developers, legislators and the public (who own private properties) at large. It is good to see that the Hong Kong government under CY Leung is now reactivating the HOS scheme in a more aggressive way.

So far, in my opinion, the scheme adopted by the Hong Kong government is the more appropriate one, targeting at those who really need help in getting housing and allowing them to hook up with the housing inflation eventually. At the same time, such policy option will not create a big unnecessary burden on the government of the day.

In SDP's proposal, it allows present HDB flat owners to "convert" to NOM and forcing the government to pay up hefty price premium to these owners, This will create a potentially huge financial burden on the government finances unnecessarily.

I would instead, adopt the Hong Kong's model with a slight modification. If the HOS flats under Green Card Scheme is sold on the resale market at over 100% or 150% more than the initial price of purchase (i.e. 200% or 250% of initial price paid), the seller will have to capital gain tax on the additional excess price. This will curb excessive property inflation and act as an automatic cooling measures.

The Necessity of strengthening Rental Flats scheme

Having written so much on home ownership scheme, we must not overlook the needs of those families who may not be able to afford to purchase or continue their mortgage payment for their HDB flats. This is part of the obligations of the government under the Land Acquisition Act.

In Singapore, when we talk about rental flat scheme, it always brings to mind those one room (basically no bedroom) flats. This is not necessarily so. If HDB could provide 2 room or even 3 room flat for rent to foreigners, I don't see why they shouldn't provide similar size rooms for rent to our own citizens to fulfil their needs..

Young couples who cannot afford to buy HDB flats even with that cost-plus-minus-land-cost scheme at first instance, should be given the option to rent the flats cheaply with necessary size (cater for family planning and needs) while with the future option of buying these rental flats later on with further discounts taking the rent they have paid so far into considerations. These rental flats could exist even within the new HDB flats that are sold. As such, it will not create gutter cluster and provide good housing options for young couples.

Conclusion

My housing policy proposal may not be the perfect one but it covers several important concepts and direction.

First, it is an important obligation for the government to provide the citizens their necessary basic housing needs. The land acquisition act could bring capital gains to the government when it sold land for commercial use or to private property developers but it should not make extraordinary profits out of the citizens because it was meant to be a land-wealth redistribution scheme in the first place.

Secondly, the policy option should shield local citizens from the adverse impact from globalization. This could only be done by de-linking the pricing mechanism of the new HDB flats for first time buyers from the resale market which is filled with excess liquidity brought by foreigners or PRs.

Thirdly, the creation of a parallel market segment that could be linked to resale market segment again for the citizens to benefit from the excess liquidity brought by globalization when they sold their flats there. There is nothing wrong for the government to allow citizens to benefit from capital gains. After selling their flats, they could buy from HDB again but at higher price that include land cost this time. This would be truly the idea of "second bite of the cherry".

Forth, this policy option will also help to mitigate and cater to the needs of the growing population due to globalization. By allowing citizens to sell their flats in the resale market and buy from HDB again, it will help to increase the housing supply to cater to the growth in PR population.

Last but not least, by providing the intermediate rental scheme to young couples, we will promote early family planning and minimize the hassle of relocation for these young families when they could well afford to pay for their own flats. By locating these rental flats within the sold flats, we will not create the unnecessary class awareness among citizens. The young families would be more willing to convert their rental flats into ownership in such environment and would minimize the wastage of resources in building cluster of rental flats that would become vacant when tenants upgrade.

Goh Meng Seng

Is Population Growth a Ponzi Scheme?

The following is an article taken from this website, The Globalist.

If you read it without knowing who the writer is, you might just conclude that he is writing about Singapore's PAP liberal FT policy but he is not. Joseph Chamie is a demographer who is expert in population issue and was director of the United Nations Population Division for 12 years. Please read on and you will have a better idea of why PAP is selling the "More is Better" solution to us in terms of liberal FT policy.

Globalist Analysis > Global SocietyIs Population Growth a Ponzi Scheme?
By Joseph Chamie | Thursday, March 04, 2010

The basic pitch of those promoting population growth is straightforward in its appeal: "More is better." Joseph Chamie, who has spent a lifelong career as a demographer, including 12 years of service as the director of the United Nations Population Division, finds that more is not necessarily better.

ernie Madoff's recent Ponzi scheme has drifted out of the world’s headlines. However, there is another even more costly and widespread scheme — "Ponzi Demography" — that warrants everybody’s attention.
While it may come in many guises, Ponzi demography is essentially a pyramid scheme that attempts to make more money for some by adding on more and more people through population growth.
While more visible in industrialized economies, particularly in Australia, Canada and the United States, Ponzi demography also operates in developing countries. The underlying strategy of Ponzi demography is to privatize the profits and socialize the costs incurred from increased population growth.

Concerns about population growth become radioactive. Politicians, journalists and environmentalists choose by and large to sidestep the entire issue.

The basic pitch of those promoting Ponzi demography is straightforward and intoxicating in its pro-population growth appeal: “more is better.” However, as somebody who has spent a lifelong career as a demographer, including 12 years of service as the director of the United Nations Population Division, I find that more is not necessarily better.
As has been noted by Nobel laureate economists Joseph Stiglitz and Amartya Sen as well as many others, current economic yardsticks such as gross domestic product (GDP) focus on material consumption and do not include quality-of-life factors.
Standard measures of GDP do not reflect, for example, the degradation of the environment, the depreciation of natural resources or declines in individuals’ quality of life.
According to Ponzi demography, population growth — through natural increase and immigration — means more people leading to increased demands for goods and services, more material consumption, more borrowing, more on credit and of course more profits. Everything seems fantastic for a while — but like all Ponzi schemes, Ponzi demography is unsustainable.
When the bubble eventually bursts and the economy sours, the scheme spirals downward with higher unemployment, depressed wages, falling incomes, more people sinking into debt, more homeless families — and more men, women and children on public assistance.
That is the stage when the advocates of Ponzi demography — notably enterprises in construction, manufacturing, finance, agriculture and food processing — consolidate their excess profits and gains. That leaves the general public to pick up the tab for the mounting costs from increased population growth (e.g., education, health, housing and basic public services).

In an unrelenting public relations campaign, every effort is made to equate population growth with economic prosperity and national progress.

Among its primary tactics, Ponzi demography exploits the fear of population decline and aging. Without a young and growing population, we are forewarned of becoming a nation facing financial ruin and a loss of national power.
Due to population aging, government-run pensions and healthcare systems will become increasingly insolvent, according to advocates of Ponzi demography, thereby crippling the economy, undermining societal well-being and threatening national security.
Low birth rates, especially those below replacement levels, are considered a matter of national concern. Without higher fertility rates and the resulting population growth, the nation, it is claimed, faces a bleak and dreary future.
So Ponzi demography calls for pro-natalist policies and programs to encourage couples to marry and to have more children, which will lead to the promised sustained economic growth.
In addition to financial incentives and other benefits for childbearing, appeals are also made to one's patriotic duty to have children in order to replenish and expand the homeland: “Have one (child) for mum, one for dad and one for the country.”
In addition to measures to increase fertility levels, Ponzi demography also turns to immigration for additional population growth in order to boost companies' profits. The standard slogan in this instance is “the country urgently needs increased immigration,” even when immigration may already be at record levels and unemployment rates are high.
Among other things, increased immigration, it is declared, is a matter of national security, long-term prosperity and international competitiveness. Without this needed immigration, Ponzi demography warns that the country’s future is at serious risk.

The sooner nations reject Ponzi demography, the better the prospects for all of humanity and other life on this planet.

Another basic tactic of Ponzi demography is a pervasive and unrelenting public relations campaign promoting the advantages and necessity of an increasing population for continued economic growth. Every effort is made to equate population growth with economic prosperity and national progress.
"Economic growth requires population growth" is the basic message that Ponzi demography wants the public to swallow. No mention is made of the additional profits they reap and the extra costs the public bears.
Attempts to question or even discuss Ponzi demography are denigrated and defamed to such an extent that concerns about population growth become radioactive. Politicians, journalists and environmentalists, for example, choose by and large to sidestep the entire issue.
When confronted with environmental concerns such as climate change, global warming, environmental contamination or shortages of water and other vital natural resources, the advocates of Ponzi demography typically dismiss such concerns as unfounded and overblown.
And they claim there is no scientific basis, or they obliquely stress “innovation,” ingenuity and technological fixes as the only appropriate and workable solutions.
Many are complicit with Ponzi demography or at least tacitly support its goals. Few politicians, for example, are able to resist promises of campaign financing, the appeal of increased numbers of supportive voters, prospects of increased tax revenues and the political backing of pro-natalist and pro-immigration lobbyists and special interest groups.

Increased immigration, it is declared, is a matter of national security, long-term prosperity and international competitiveness.

Many environmental groups are also reluctant to take up or even touch the volatile subject of population growth, especially those that have been burned on this issue in the past. Such groups fear possibly offending some members and donors, which might undercut their organizations and efforts.
Despite its snake-oil allure of “more is better,” Ponzi demography’s advocacy for ever-increasing population growth is ultimately unsustainable. Such persistent growth hampers efforts to improve the quality of life for today’s world population of nearly seven billion people as well as for future generations.
Moving gradually towards population stabilization, while not a panacea for the world’s problems, will make it far easier to address problems such as climate change, environmental degradation, poverty and development, human rights abuses and shortages of water, food and critical natural resources.
Fortunately, most couples around the world have chosen — or are in the process of choosing — to have a few children rather than many and to invest more in each child’s upbringing, education and future well-being. Nations need to make the same vital transition with respect to their populations.

The sooner nations reject Ponzi demography and make the needed gradual transition from ever-increasing population growth to population stabilization, the better the prospects for all of humanity and other life on this planet.