Wednesday, May 23, 2018

The FATAL Mistake of PAP

The FATAL Mistake of PAP

Well, the Fatal Mistake fell upon Singaporeans while PAP made use of such manipulation of CPF-HDB financing to boast its own political capital built upon the great cost on Singaporeans' retirement financial adequacy as well as future generations of Singaporeans' housing needs.

Many people do not understand why I call Asset Enhancement Scheme as an outright scam. Let me explain in simple terms.

If someone forced you to put 50% or 40% of your salary into his safe keeping, promising you a miserable return of 2.5% per annum but tells you that you could use a big bulk of it to purchase only a precious stone from him and nothing else. He claims that it will increase in value forever, 10 times, 15 times, 20 times...

Else, you will have to wait until you are 55 years old before you can take back your money... then, it increases to 65 years old and then, he says, you cannot take out whole lump sum but only bit by bit....

What would you do? Of course you will use whatever amount of money you can get from these money you kept with him to buy this supposed precious stone!

Then, he inflated the price of this precious stone artificially because he is the monopoly supplier of these stones, under the slogan of "enhancing the value of the stones"... in fact, made you pay money to "upgrade" the stone with beautiful boxes.

However, right from the start, this guy knows that these stones could only last 99 years and by then, it will be zero value and under the contract, he could take the stones back from these buyers.

What about the promise of "Asset Enhancement"? What about the Empty rhetoric that these stones will rise in value FOREVER?

Anyone with a good mind would conclude that this is a scam. The contract drafted by that guy has specifically said that the stones will expire and have to be returned to him but yet, he is telling everyone that it is an asset to them and it will rise in value forever!

Now, this is just the beginning of the problem. If it is just a bit of money lost to a scam, that's not a big issue. But in the case of CPF-HDB, a few generations of Singaporeans' retirement financing is at stake!

It is a deliberate scam whereby money, your money, is deliberately channeled into a dead end with only one outlet available. i.e. buying HDB flat (later on private property but that is another issue). It is just like an irrigation of water. PAP had made use of your money, to make its HDB 80% ownership successful and claim credits for it. But it is in fact, a manipulation of your money which results in over-consumption of HDB public housing.

The fundamental Fatal Mistake made here is that in its zeal to get Singaporeans buying its HDB flats which continues to be inflated in prices as compared to 1970s and 1980s, PAP government has encroached into the core CPF funds meant for Singaporeans' retirement.

A prudent financial plan for retirement would require a person to save at least 20% of his or her income for retirement at anyone time. With prudent investment return about 5%-8% above inflation rate, it would provide a decent retirement for everyone.

A balanced financial plan would mean that a person should only spend 20% of his or her income on housing. This would mean that 40% of his or her income would be set aside for retirement as well as housing. 60% would be available for daily consumption.

However, PAP has screwed it up with its manipulation of the CPF which supposedly acts as function of retirement saving but they have mixed it up with housing financing, apart from other usage.

Only 11% of a person's salary are kept as fixed savings for retirement... inclusive of Medisave for healthcare. To make it worse, the returns for this 11% of savings is just 4%. Hardly meet the requirement of 5%-8% above inflation rate.

Thus, it is not surprisingly at all that most Singaporeans will not be able to afford a comfortable retirement just depending on the CPF savings.

The "solution" that PAP gave initially, is that HDB "is an asset" which Singaporeans could "monetize" for retirement. This was what MBT said during GE 2011 when I questioned PAP rigorously on the principles of having high HDB prices which created insufficient CPF savings for retirement.

I was hoping he would take up my challenge of an open debate on HDB-CPF back then because I would have hantum him with the basic fact that HDB is a 99 leasehold PUBLIC HOUSING which Singaporeans do not have a say on whether they could enbloc their flats. This is basically because, in legality, Singaporeans as HDB dwellers, do not own the land which their flats sit on! They have no legal rights over the land and cannot make any decisions on what to do with it, unlike private property owners.

And if HDB flat is an entity with an expiry date while PAP government apparently is not interested to do SERS for all HDB flats, then how could it be an "Asset" at all in the first place?

HDB flat is a Consumption good, not an Investment good. Period. It is totally misleading, dishonest and irresponsible for PAP to tell Singaporeans that their HDB is some sort of super investment which will rise in value forever!

And if HDB is a consumption good, it is totally unreliable to depend on it for retirement financing at all! Well, first of all, the value of HDB is destined to drop when its lease is running out!

I am explaining the CORE problems of the HDB-CPF axis before providing any viable solutions. It is basically a bad policy of funds manipulation which has gone wrong, resulting in bad financial planning for 80% of Singaporeans.

I am angry at PAP for its reckless and imprudent policy manipulations with total disregard of Singaporeans' welfare and prudent financial planning.

It is a foregone conclusion that most Singaporeans who have paid inflated prices for their HDB flats will suffer when they eventually find that there are insufficient funds in CPF for their retirement. You will see more elderly people pushing carts, washing dishes and cleaning tables in the years to come.

What made me extremely upset is despite of the obvious enslavement scheme of a 30 year mortgage for buying a HDB flat, MBT and PAP back then still blew their trumpets that HDB is still "AFFORDABLE"! Over-spending on mortgage of HDB, resulting in insufficient retirement saving in CPF and sometimes, with additional cash payment to finance a 30 year mortgage but yet, PAP is still blowing the trumpet of "Affordability"?! That's the most irresponsible remarks and political statement made by MBT and PAP.

Wait for my subsequent postings here... I shall touch on what are needed to correct this horrible HDB-CPF axis of evil.

Goh Meng Seng


Anonymous said...

Fatal mistake of PAP?

But how fatal can it be when PAP is still very strong politically, and thanks to the type of opposition leaders like you?

And do you think what happened to Najib on May 9 can also happen to Hsien Loong?

Or can you be a "Sinkie Mahathir" to make Hsien Loong a "Sinkie Najib"?

By the way, how's PPP getting on? Any hope that it can become part of a "Sinkie Pakatan Harapan" in the next election?

Or have you demoted yourself from a fiery politician at the hustings to become a armchair blogger and netizen like me?

Remember, your ideas and opinions may be good and correct but if you are not or there is no "Sinkie Mahathir", it is still useless.

Anonymous said...

Goh Meng Seng, I have a suggestion or rather a request for you.

Can you use your talent and intellect to persuade Tan Cheng Bock (TCB) to be the "Mahathir" of Sinkieland? I think TCB has the best political credentials to become a "Sinkie Mahathir".

Your good friend Tan Kin Lian is also a good, talented and sincere man who has the interests of Sinkies at heart. But unfortunately he totally lack political credentials and also is not politically savvy, and this greatly contributed to his receiving a paltry 5% votes in the 2011 Presidential Election, and which was quite sad for me as I had voted for him. So I think he cannot be a "Sinkie Mahathir", even if he wanted to.

As for Tan Jee Say, I think he is still struggling like you to build up his SFP, so I think he has little hope of becoming a "Sinkie Mahathir". Furthermore, and just like you, his political credentials had also been severely damaged by receiving only 20+ % votes in the last GE.

So unless TCB is agreeable to be a "Sinkie Mahathir", I have no hope for the Sinkie opposition at present or for the future.

Fake News said...

The abuse of top schools-They dictate the procedures that non-exam smarts are sieved-out, by trying to claim ownership of the results obtained by the schools. They took the lead by setting exam papers and questions where only the top 50% have the ability to tackle. Students who perform below the grades are told to leave the school or the chance of repeating only once more so in JC. Students are told JC is not for them maybe they are more suitable for Poly or Technical. In secondary schools students are being shifted between express and normal depending on their school exam results.Therefor the anxieties face by students and parents not a good place to be in . In large the big "T"(tuition) is an evil necessity in daily lives.

Neighbourhood schools-Teachers work closely with the students. Whatever results obtained by students are build up naturally by the school as not all students have the glories of tuition. Theories that the upper-class ensure that their children not combine with the lower. Reason being that they speak poor English and are bad company . Schools has been ingrain between the haves and haves-not. And this is the sad truth.

Anonymous said...

Uni and poly also like that. Only allowed to repeat on the modules once. If fail again get thrown out. In secondary school when cannot pass the subject the school will force you to drop. Heard that neighbourhood schools pass of fail no need to stay back. They wan you to have an education.

Anonymous said...

10% alumni. 40% distance and 50% results for admission to the so called school of choice.

Anonymous said...

Not all parents give their children school stress. Its the schools who are giving parents the stress. If and whenever students who do not do their homework or absent from remedial it was always the school who would call the parents to complain.

Anonymous said...

Not wise to spend too much time to persuade others to see your world. Others who don't share your intuition, whatever argument will not persuade them.

Anonymous said...

Their value-added kemahiran are mostly the skills we cannot live with...…..air-cons, hair stylists, electricians, carpenters, constructions, plumbers...…...and so on and on from a non-develop country.

Our value-added kemahiran are mostly skills we can live without...………..spending wholeheartedly huge sums of monies and phasing out checks ……………….so on and on from a develop country. It only reflects that they have nothing better of programming.

Anonymous said...

Engaging intellectual and philosophical in a debate is one way we make sense of things. Unfortunately this is not the case for everyone.
To enjoy the give and take of debate, we just have to make sure to channel our provocative questions- answers to the right person(s).