Unwinding HDB Asset Enhancement Time Bomb - Viable Options

Unwinding HDB Asset Enhancement Time Bomb - Viable Options

I am re-posting this Mind Map of HDB problems here to examine what are the options which are commonly put up but not viable at all.

Most people would jump into giving "solutions" to HDB problems without examining carefully the whole matrix of the problem in the first place. Housing problems are extremely complex, complicated and involved a whole web of direct and indirect linkages with multiple segments of market forces.

Properties are "durable" goods but at the same time, with a "long expiry date" aka leasehold. Along with financial rules, it makes the market pricing mechanism extremely complicated and in HDB case, we have at least THREE markets to deal with, apart from the private property markets.

Within the three main HDB markets. there are sub-market differentials like Rental, Studio Apartment, 3-room, 4-room, 5-room. Executive Flats, Executive Condos etc. The administrative and financial rules applicable to different market segments make the whole context even more complex.

As we can see in the diagram, the three RED shapes are the fundamental problems of HDB. The THREE KEY PROBLEMS are:

A) Over Consumption of Housing/HDBb

B) Inadequate Retirement Financing in CPF

C) Massive Expiry of HDB flats with 99 Years Lease.

Most people missed these three key points, focusing on something which only touches the surface of the problems.

For example, one may suggest lowering HDB BTO prices but that will still leads to Over Consumption of HDB because people may switch from a 3 room HDB to 4 room or even 5 room HDB flats when prices come down, using the same amount of money from CPF and mortgage. This can happen when a 5 room HDB flat price is reduced to a 3 room HDB flat at current price.

Problem A and B are linked. It is due to the excessive use of CPF money for Singaporeans to purchase their HDB flats which leads to both Over Consumption of Housing as well as resulting in shortage of CPF funds for their retirement 30-40 years later.

Unfortunately, ALMOST NONE of the political parties or so call "experts" has the courage to take the bull by the horn and suggest a drastic cut in allowing Singaporeans to utilize their CPF to buy properties like HDB!

Technically speaking, a 99 year lease hold of HDB or any other property will have little material impact on Singaporeans if they are only buying these properties for their own consumption as housing or as a HOME to stay. Nobody could presumably live beyond 120 years old, so to speak.

The only problem will arise when you over consume or over bought housing with hefty price, either in BTO or resale market. The problem will become more acute when PAP keeps selling you the idea that your 99 lease HDB flat is some marvelous ASSETS that can make money for you, even help you to finance your retirement as an "investment asset".

People will throw in all their money into buying HDB flats and hoping to make a pile of money out of it without much thinking. A 99 Lease Hold property, be it private or public housing HDB, will depreciate in value over time. This is even more so for HDB when you do not really own the land and cannot make decision on private enbloc of your flat.

That is why I am totally against the Asset Enhancement Scheme and consider that as a very bad policy scam which mess up the whole HDB concept.

Extending the lease of HDB will not solve this problem but in fact, aggravate the problem further by influencing the pricing of HDB both in BTO and Resale market going upwards.

We have a rather very unique problem in Singapore:

1) A massive 300K to 400K of flats were built within 15 years period from 1970 to 1985. This would mean that these flats will have their lease expired within 15 years in the future, starting from 2070 to 2085. Imagine 300K to 400K of HDB flats expiry within a short period of time that would create a massive housing shock.

2) Singapore is a tiny land scarce island. There is only that much of land we could reclaim from the sea without impeding on our strategic logistic hub status. It means that if we do not have a solid land redistribution plan or managed property market, the property prices will run out of control. This will turn our economy into a highly rent seeking economy

3) Our financial rules make it extremely difficult for HDB flats with less than 60 or 50 years lease to be sold in resale market. This will create an under-priced market for these old flats. It will create market inefficiency.

Whatever solutions or options anyone wants to put up, they will have to take all these into serious consideration.

The basics and fundamental problems need to address is:

1) In order to address the Over Consumption of Housing and Inadequate Retirement funds in CPF, the amount of CPF allowed to be used in buying HDB or other properties will need to be capped.

2) The impact of a massive expiry of 300K to 400K of HDB flats within a short period of time frame of 15 years will need to be addressed else we will experience a supply shock in the HDB markets.

3) The inefficiency of the Resale market for old HDB flats with less than 60 or 50 lease will need to be addressed. This is to correct the market bias against old flats, instead of creating an unnecessary price hike in this market, creating over consumption again. It will be a correction to fair value pricing for these old flats.

4) A reduction in BTO prices must be accompanied by a reduction in the use of CPF money in the purchase of HDB and private properties. This is to prevent Over Consumption of Housing.

5) Most of the HDB flats built in 1970s and 1980s cannot last more than 70 years or 80 years. This is due to the mass production process back then which compromised quality. The reinforcement concrete may not last 100 years at all.

All policy options should have minimum undesirable impact on the three main HDB markets, BTO, Resale and Rental markets. These impacts will indirectly hit the private property markets.

I am not saying my HDB policy will be the best but at least, it will address the fundamental problems to begin with. It will also take care of various variables which may create unnecessary impact on the HDB markets.

We must start with the right concept and public perception of HDB as a public housing policy. It is NOT an investment asset for anyone to make big money from because it will become a Zero Sum game. Either you will suffer insufficient CPF funds for retirement or your future generations will suffer exorbitantly high property prices.

The HDB Resale market is for Singaporeans to redistribute HDB flats through a fair pricing mechanism to cater to their needs, not a market for they to reap great profits.

Ultimately, if you want to make more money than your current job, invest in businesses or equity, bank shares or stock market or simply start a business etc.

Last but not least, asking people to sell off their HOME and live in other cheaper country, is really NOT a HONEST solution but a raw demonstration of National Policy Failure at the highest level!

A nation will cannot take care of its own people's basic needs of housing when they get old, is really not a nation worth fighting for.

Goh Meng Seng

TOTD: The Final POISONOUS Death Dagger stabbed into Alternative Media.

Thought of the Day - The Final POISONOUS Death Dagger stabbed into Alternative Media.

Most people like me, would look at the Fake News Law at superficial level on first sight. This is always the tactic used by PAP controlled Mainstream Media to mislead and misguide people into looking at the big punch while avoiding the poison darts and daggers hidden in that thick legislation.

While we are busy criticising why political appointees like Ministers were given such huge power to decide what's true and what's false, we miss the whole poisonous intent of this law.

Hidden within this legislation is the vicious intent to force the closure of all alternative media by taking aim at advertisers and sponsors of alternative media, instill FEAR into them while putting an "exemption clause" so that it could be used to exempt PAP's Mainstream media.

The reason why Facebook and other international internet media platform are so against this law is basically because not only the owners of these platforms would be criminally liable but advertisers on their platforms as well as sponsors will be criminalized by PAP government as "supporting fake news"!

The proposed law and with no single doubt, would be passed, says that if a website or internet platform has been found guilty of DELIBERATE spreading "fake news" or information (for 3 times within 6 months), those who donated or sponsored these sites, or advertise on these sites, will be charged in Singapore court as well!

Now you know why there is an "exemption" clause which gives PAP great power to exempt SPH, Mediacorp and media under its control from this law because, even these media outlet could not be sure that each and every news they broadcast could only be True but not Fake!

On the other hand, who would dare to advertise on alternative media like TOC or Independent SG if this law is passed? Who would dare to donate to these entities to face the risk of being prosecuted by PAP government if these media get into trouble with Fake News legislation?

This law is a total Farce. It is making use of the excuse of curbing "Fake News" to empower PAP Ministers with enormous Judiciary and Executive power to thumb down internet media which they don't like!

It goes against the spirit of Rule of Law whereby the Judiciary will be totally by-passed and smack of Rule by Law of a dictatorial power which will decide who will be exempted while who will be persecuted!

The potent poison actually lies within the details. If Singaporeans do not wake up to such blatant facts but chose to believe in PAP's sweet talk of its weak justification to empower themselves with such dictatorial powers, I fear Democracy will leave us eventually one day.

Goh Meng Seng

TOTD: What matters most in Politics?

Thought of the Day - What matters most in Politics?

I have put up a teaser just not too long ago, asking my FB friends to guess what I had replied a reporter's query on "when are you going to do ground work?".

My answer shocked him. I said, I am not going to "walk the ground", so to speak. Not going to knock on doors, shake hands and kiss babies.

His reaction is quite "normal" as this is the "default thinking" that politicians, be it PAP or opposition, should "walk the ground" in order to "win votes".

I explain to him clearly, I am not going to play the games according to the "indoctrinated rules" set by PAP.

PAP has not only drawn the electoral boundaries but also the "invisible political boundaries" for Opposition, to its own advantage, of course. PAP has always been trying to "mislead" and "misguide" political engagement via subtle "brain washing".

It all started way back in 1981, right after JBJ won the Anson by-election. The almighty PAP has lost its very first seat in one and a half decade. Naturally, the late LKY jumped with anger.

The often DULL parliament sittings had suddenly become all fiery with exchanges of missiles and dramas. It was apparent that the total dominance of PAP in the past immediate decade had made it complacent and lost the art of debate in the face of a strong and fiery opponent, JBJ. Parliament in the past could be an "empty rubber stamp" without the need of any real debates or even the need of attendance of MPs and Ministers. JBJ had changed all that. Even LKY himself had to make it a point to attend parliament whenever JBJ was making his speeches of criticisms.

In 1984, PAP lost another seat in Potong Pasir and this led to a serious rethinking of political strategy. Town Council Management entrusted to MPs was the solution.

It was an attempt to divert voters and politicians attention from the REAL CORE RESPONSIBILITY of an MP in parliament to drain their energy and attention into municipal issues.

In the Westminster system, municipal issues are taken care by District Councillors, who are also voted in by residents. An MP is never expected to manage the estate or be bothered by municipal issues because they are voted in to speak up on policy matters in parliament.

But PAP, knowing that they do not have strong MPs in parliament while having all the resources to take care of municipal issues by subcontracting out to professional estate management companies, tried to change the focus and direction of political engagement towards municipal matters instead of policy debates and law making in parliament.

PAP has successfully to mislead and brainwash both voters as well as opposition politicians to think that they should put most of their energy in knocking doors, convincing voters they can run town councils instead of putting up strong debates, policy ideas and scrutiny in parliament. After opposition won some seats, they will compete with PAP which has the whole machinery of People's Association (PA), in conducting durian tours, temple tours, organizing events etc... instead of spending most of their time in policy research and debates.

In the end, we have political parties doing Charity Work, giving out goodies, organizing events .... instead of doing the REAL political work of analysing, researching and commenting on Real political issues. Political parties are more like Charity Organization or Event Organizing companies or simply Social Clubs nowadays.

Voters are judging the "quality" of candidates by looking at whether they "serve" them by "knocking doors" or "visit" them. Or whether they attend wakes or temple dinners and such. Or organize any events for them...etc. The most illogical thing is, they even expect opposition who have not won any seat to do all these!

Instead of looking at the political views, ideologies or ideals of political candidates, we have voters basically "voting blindly" according to "party branding" or whether candidates "walk the ground"! These totally misguided perception and concept of politics is the direct result of PAP's subtle brain washing.

It always irks me when people start talking about "I only vote XXX party and not small parties" or "if you are contesting under XXX party, I will vote for you". I consider that as an expression of political immaturity. One who cannot discern good candidates from bad but resort to some "fuzzy branding", he must be too lazy to really study and understand each and every choices presented to him.

This is the reason why we ended up with lots of empty chairs and empty tables in Parliamentary sittings most of the time. When voters and politicians have WRONG and misguided priorities in politics, that's the end result we will get.

I will vote or support a person or a team for only two reasons:

1) Not PAP because I do not want them to be complacent when they get too high votes.

2) In the event of multi-corner fight, I will support the candidates who make good sense and have good political ideals or ideology which resonate with my belief, regardless of which party he or she is from.

I have gone through 3 General Elections. GE 2006 WP made great progress up from the devastating state of 2001 GE. This is partly because we played according to the brainwashed setting of PAP configurations, doing house visits, shaking hands and kissing babies.

In GE 2011, I changed the methodology subtly. I didn't knock on all the doors in Tampines but decided to ignite the fire on policy issues, mainly HDB issues. It set on a fire which ran wild and benefited all opposition.

I thought Singaporeans have evolved and matured politically. Finally they understood the importance of checks and balances, with a desire to vote in more opposition MPs. The path of Democratic Development should be on the right track of no return.

I was proven totally wrong in GE 2015. Voters are basically more Emotional rather than politically matured with the determination of making progress for Democratic Development.

I decided to stop all "political wayang" which is totally misleading, misguided and even detrimental towards REAL political Democratic progress for Singapore.

What we need is more public political discourse and education, not more door knocking saying Hi and Bye, shaking hands, kissing babies and making people "feel good" so that they will vote for you.

I decided to spend most of my time writing on my FB and copy some of the postings to my blog as an archive. I hope more people will be enlightened and provided with better reasoned ideas for them to talk about in their daily lives so that they could convince more people in their real life circles. Share the public discourse, ideas and ideals through FB or real life chats with friends and strangers.

This is a slow and painful process. It needs consistent commitment, nothing less than sweating out in knocking doors.

All political movements always start with evangelism of alternative ideas and ideals, not with knocking doors and kissing babies. When the seeding of ideas and ideals take root in the minds and hearts of voters, their emotional sway will be dampen and hopefully, what happened in 2015 GE will not repeat again.

Dr Sun Yat Sen had done that all his life, in order to convince people that a change of regime from Monarchy to Republic was a necessity. He changed China, not by knocking doors, kissing babies or doing charity work or organizing tours. He did it through endless and continuous evangelism of his political ideas and ideology, which were so alien to his people of his time.

Thus, I decided to break through the walls and boundaries set by PAP's political brainwashing. I will not play into their game of political patronage and wayangism. I will do what is MOST important in politics, the evangelism of political ideas, ideals and discourse.

If you expect me to knock doors, kiss babies, do charity work or organize events, then don't vote for me. If you only want to vote for some "big party with big brand", then I am not for you.

But if you want an MP who will put 101% in parliamentary work, scrutinize each and every policy and laws which PAP wants to pass, then I will be an extremely good choice for you.

My "Track Record" has nothing to do about how many blocks of flats I have "walk and knock", has nothing to do about whether I have run a town council before, definitely nothing about whether I am a good organizer of events or involve in giving out goodies as charity.

My "Track Record" is my consistency in providing my political views, ideas and ideals. Ideas and views which PAP would even adapt quietly without giving due credits, even million dollar "elite" ministers would read and adapt in their policies.

So next time, anyone of you start to talk about "walk the ground", "start campaigning" or "track record", think again.

I have never stopped "campaigning" since I graduated from university, against bad PAP policies. I "walk the hearts and minds" and my "Track Record" of policy ideas and ideals are thick.

Anyone who wants to be in politics, must have some policy views or policy ideas to start with. If you have none, sorry, I won't even bother.

Goh Meng Seng

Solutions to Solve Hyflux Saga

Solutions to Solve Hyflux Saga

There are a couple of ways to solve the Hyflux saga but the PUB getting FREE water plant is definitely NOT one of them.

As I have put it, PAP government has played a big role in manipulating the market which eventually result in the Hyflux crisis. Hyflux also tried to be Smart Alec, thinking they could undercut others in pricing their water by cross subsidies from selling electricity.


Whoever takes over the integrated plant will face the same problem because the contracts have been fixed while the oversupply of electricity due to EMA’s irresponsible manipulation is here to stay.

The only way to get out of this situation is to change the terms of the contracts. PUB should not fix water price for 25 years because this is totally unreasonable terms as energy price is volatile and nobody could possibly hedge it without incurring huge cost over 25 years.

A new pricing formula which will allow Hyflux to earn a reasonable profit should be renegotiated.

On the other hand, the Vesting Contract which EMA gave other power plants should be made available to Hyflux. Or that, Hyflux will have to renegotiate it’s contract on gas purchase.

The only way for Hyflux to stay afloat is to have consistency in all the pricing... from water, gas to electricity pricing. To have a mix of fixed and high volatility in some pricing will be a perfect formula for disaster. Worse, thinking that one could fixed a lower than cost water price while betting on cross subsidizing it via a volatile energy market.

By reconstruction or renegotiating water and gas contracts, government do not need to come up with huge amount of money to buy over the plant. It will just have to settle with a lower profit from dealing with Hyflux.

Hyflux will earn a reasonable profit (covering depreciation for 25 years) from this new arrangement but its profitability may be fixed within a range.

This is the viable option available but need political will to execute it.

Retail investors will not lose all or most of their investment. They could even continue to get their yearly interest when the new formula of contracts allow Hyflux to earn profits from its Tuaspring.

Goh Meng Seng

Trespasses of Judiciary

Trespasses of Judiciary

When PAP enacts a law to give its own Ministers the power to Judge, Decide and give out punishment to "fake news" publishers or propagators, it is a serious trespass of Judiciary power by the Executive!

This is a serious attempt to destroy the fundamentals of Democracy in Separation of Powers.

Judgement on "falsehood" is definitely not the same as a straight forward breach of rules like parking offences or speeding. It requires an objective and independent entity like the court to make judgements.

I would think that such law is totally unconstitutional as it basically made political appointees like Ministers empowered with judiciary powers! Ministers will have great potential conflicts of interests involved when they are making such judgement call.

To say that people could go to court and challenge the Ministerial decisions doesn't erase the fact that Ministers have been given powers that trespass and undermine the judiciary system.

Goh Meng Seng

Hyflux Saga - Role & Responsibility of PUB, EMA, SP and MAS

Hyflux Saga - Role & Responsibility of PUB, EMA, SP and MAS

First of all, the board of management of Hyflux has to bear the most responsibility in creating such a big mess.They have made a lot of assumptions when they bid for the tender to build and operate the desalination plant.

For every assumptions made, there will always be risk involved that such assumptions may not hold at all. And with numerous assumptions made, the risk will be compounded exponentially.

Basically, the problem of the whole Hyflux saga is due to the system of pricing. Hyflux is trying to juggle around a few important variables. A fixed water price given by PUB for 25 years, a variable fuel price (gas in this case), variable labor and material cost, a variable electricity price, a required fixed output of electricity with variable demand and uncontrollable number of electricity producers, a Monopoly buyer for water PUB, a Monopoly buyer for electricity Singapore Power... etc. In economics terms, this is a formula for disaster.

We must recognize PUB, EMA , SP and MAS as government entities. They are not private companies. They have public administration roles and responsibilities.

MAS should not even allow retail investors to invest in perpetual bonds at all as the risk is higher with higher complexity of the structure. MAS should not even allow CPF to be used for such investment at all. Here again, like Minibond saga which happened 10 years ago, MAS must be sleeping on the job.

EMA allowed too many electricity producers to exist in Singapore, so much so that there is 80% overcapacity! Did they even plan and forecast properly? The rigidity in the rules and regulation coupled with a complex pricing mechanism has resulted in electricity producers losing big money. This is not sustainable at all.

One may be puzzled why our electricity tariffs over the few years were so high despite the fact that there is great overcapacity and wholesale pricing given to these producers are too low and breeding them badly! The result is obvious. SP, as the sole owner of the power grid and sole distributor of electricity to household (it is only now it was opened up), is the one which gained the most from such arrangement.

However, we must remember that SP, as a government agency, should not only look at profit maximization at the expense of all other electricity producers. The system is unsustainable and eventually, these producers may go bust. It will cost great disruption to our electricity supply if that happens.

Similarly for PUB. It should not always look at profit maximization at all cost. Water is even more strategic than electricity and it must make sure that any system of supply within its supply chain, must be sustainable.

Furthermore, PUB should not cannibalize on Hyflux when it is down and out. The logic of commercial valuation of Hyflux's desalination plant as "negative asset" is totally flawed.

First of all, there is a conflict of interests here. The desalination plant is considered as "negative asset" is due to the fact that the contractual price which PUB paid to Hyflux for the water is under cost and unsustainable.

While I do not agree for PUB to use taxpayer's money to bail out Hyflux, but neither do I agree for PUB to cannibalize on Hyflux either. The Fair Price for PUB to pay for the desalination plant should be the opportunity cost of building a brand new one by PUB itself to supply the same amount of portable water, plus the opportunity cost of waiting for another few years for the new plant to be completed.

It doesn't make sense for Hyflux to basically give PUB its plant FREE for PUB to continue produce water and make money by selling water to consumers!

Hyflux could have dismantle the whole plan and sell the parts to other people, sell the land .... etc so to repay its debts. Why would it just give away to PUB FREE to make money?

The logic of commercial valuation of Hyflux's plant may base on commercial terms but it is morally flawed and unethical for PUB to take full advantage of Hyflux.

Paying a Fair Price for Hyflux's plant, the intrinsic value of the plant, does not mean PUB is losing any money at all because the plant could well provide earnings for PUB in the long run.

The proper thing to do is either for PUB to renegotiate with Hyflux on the pricing mechanism or simply pay a fair price for the whole plant.

The primary aim and objective of PUB should focus on maintaining adequate supply of water instead of maximization of profit by cannibalizing Hyflux while it is in trouble. Paying a Fair Price instead of getting the plant free may cause the cost price of this 70 million gallons of water per day slightly more expensive but I believe PUB will still be earning a hefty profit because the water tariff is really high in Singapore with PUB as the sole monopoly of water supply.

PUB, EMA along with SP have been maximizing their profits acting as powerful monopolies. They are Monopolies as buyers as well as sellers of water and electricity. It is time to redefine the roles and responsibilities of these entities.

This Hyflux saga has exposed not only the incompetency of Hyflux board of directors but also the terrible greed and cannibalism tendency of PAP government agencies. They will do everything to squeeze the suppliers of water and electricity while on the other hand, instead of passing the savings, they maintain extraordinary high tariffs of water and electricity to us.

Some may think this Hyflux only affects those perpetual bonds investors but the implications are far more complex. It basically reflects on the kind of government Singaporeans have voted in. If they can do this to Hyflux, in such unethical manner, they can do it to any Singaporeans out there. The unfair bullying tactic of cannibalism is really disgusting.

Goh Meng Seng

TOTD: PAP's Irresponsible Embarrassment

Thought of the Day - PAP's Irresponsible Embarrassment

When the Maritime Dispute was flared up back in late 2018, PAP Ministers, MPs and even IBs were making war cries all over.

PAP government even went to the extend of "demonstration of war preparation" by inviting the Main Stream Media to do the First of the kind of report on the Open Mobilization of the Airforce.

Live Firing exercises were carried out subsequently.

Along with the Main Stream Media and its IBs, PAP went on whipping up Nationalistic sentiments against Malaysian's "Intrusion of Singapore's Water".

PAP government has put it in no uncertain terms that the area in dispute is within our maritime boundary.

I was curious about that and did a series of research which I have posted on my Facebook here. It turns out that there is no Internationally recognized Maritime Boundary in that area of dispute!

In fact, the delimitation negotiation which Singapore held with Indonesia has stated very clearly that they could not confirm the maritime boundary which borders Indonesia, Malaysia and Singapore basically because Singapore has yet to negotiate and confirm with Malaysia government the exact maritime boundary between the two countries. Thus, the maritime boundary between Singapore and Indonesia stopped short at the western part of Singapore.

It basically means that PAP government actually KNEW that we do not have an official boundary drawn and confirmed with Malaysia in that area of dispute.

I would regret to say that Malaysia was right to say that the disputed waters should be considered as "International Waters" as there isn't any recognized boundary confirmed by any party.

Due to some strange unknown reasons, after more than 50 years of independence, PAP government did not initiate any formal negotiations with Malaysia on delimitation of the maritime boundary in that area.

If PAP knew these facts but yet, went on a series of actions to make war cries, then I have to ask, is that what a responsible ruling party should do?

Many people attacked me for "siding with Malaysia" but the truth is, it is always easier to be populist by hitting the Nationalistic drums rather than looking at the issues objectively and do our own research on these issues to come to a sensible conclusion.

I have stated very clearly in my previous FB posts, the only rational thing to do is to start negotiation with Malaysia to determine and finalize the maritime boundary in that disputed waters, instead of doing war cries which will result in irreparable damage to bilateral ties between the two people across the causeway.

Well, finally PAP comes to their senses and stop their irresponsible nonsense of Nationalistic adventure.

But I have this to say, PAP always tries to portray Opposition parties as "populist", "extremist" or even "irresponsible" but it seems that PAP is guilty of all these traits and Singaporeans should remember this, without a strong, rational, reasonable and critical opposition in parliament, any ruling party like PAP might just goes rogue and become irresponsible, endangering the safety of this nation with their nonsensical self-serving stunts.

Goh Meng Seng

https://www.todayonline.com/world/malaysia-and-singapore-agree-revert-original-port-limits?fbclid=IwAR3Z_ZAmmI0oSrzR-r4G1iq27l7bQ-lbu0xOdK_NgQhoYQ7803ugxRgdxUU





PUTRAJAYA — Within a month from Thursday (March 14), Malaysia and Singapore will revert to their original port limits after both governments agreed to suspend the previous extensions of their port limits.

They also agreed not to authorise and to suspend all commercial activities in the area as well as not to anchor any government vessels in the area.

These were among the five recommendations by a bilateral working group that both countries will implement with effect from Thursday, announced Singapore's Foreign Affairs Minister Vivian Balakrishnan and Malaysia's Foreign Affairs Minister Saifuddin Abdullah in a joint press statement on the same day.

The other two recommendations are: Vessels of both countries will operate in the area based on international law including the United Nations Convention on the Law of the Sea.

Relevant government agencies on both sides will "work out practical modalities to avoid untoward incidents in the area", said both ministers.

In the last of the five recommendations, both sides will set up a joint committee chaired by the permanent secretary of Singapore's Ministry of Foreign Affairs (MFA) Chee Wee Kiong and Malaysia’s foreign ministry secretary-general Muhammad Shahrul Ikram Yaakob.

This committee will look at the "boundary delimitation", which will ensure that the other recommendations be implemented within one month. Once that has been done, negotiations for maritime boundary delimitation in the area will commence within the following month.

“These measures taken by both countries shall be without prejudice to Malaysia's and Singapore's respective maritime boundary claims in the area,” said the joint press statement.

In the event that the committee is unable to reach an amicable solution on delimitation, the ministers added that both countries “may mutually agree to resort to an appropriate international third-party dispute settlement procedure on terms to be mutually agreed by the parties”.

“Both Foreign Ministers agreed that these measures were vital to de-escalate the situation on the ground and pave the way for maritime boundary delimitation of the area,” the statement said.

“These measures also demonstrate the commitment of both countries to work together to preserve a strong and positive bilateral relationship on the basis of equality and mutual respect, and to resolve bilateral issues amicably in accordance with international law.”

We have successfully conducted our Singapore Budget 2019 Forum today.

We thank all who have attended and also great appreciation to those who have helped to make this possible.

The following is our official statement on PAP government's Budget this year:

Budget 2019: Political Gimmicks without Bold Vision

Expansionary Budget with Money locked up in CPF and Medisave?

1. Finance Minister Heng Swee Kiat has declared that his Budget 2019 for Singapore government is an “Expansionary” budget and he cited the projected budget deficit of $3.5 Billion after taking into account of the net effect NIRC and Special Transfers of $3.6 Billion as supporting fact. However when we put the details of the Budget at closer examination, we have come to the conclusion that this Budget is NOT the usual “Expansionary” budget but just full of political gimmicks without bold vision.

2. A government Budget is an important tool of fiscal policy that is used to manage the economy. An Expansionary Budget would result in fiscal stimulations of the Nation’s economy in anticipation or direct mitigation of any potential economic slowdown or recession. But in Minister Heng’s Budget 2019, there is no mention of any job creation initiative nor bold vision for Singapore’s Future Economic development direction.
3. Most of the “additional spending” announced for the populistic Merdeka package ($6.1B), Long Term Care ($5.1B) and other the various injections of money into healthcare, workfare, schemes for SMEs ($4.6B) and education (Total of $15.3B of Special Transfers) are either just money transfers credited into CPF or Medisave accounts or deferred expenditure across a few years which do not have an immediate direct impact on overall spending in the economy.

4. It basically means that these money are effectively an “expected surplus” (over the announced $3.5B deficit) ultimately stashed away into the reserves via such Special Transfers arrangement.

5. Thus we do not really see this year’s Budget as “Expansionary” but rather a pack of Budgeting Acrobatic Gimmicks which channeled money back into the reserves masqueraded as “Goodies” for Singaporeans without real positive impact on the Economy.

Cost of Living

6. In a normal free market economy, inflation is normally caused by an excess demand on goods and services. This will drive up the cost of living for everyone.

7. However, in Singapore, inflation is mostly caused by the PAP government and its Government Linked Companies. The rise in water tax, electricity tariffs, public transport fares, healthcare cost, the rapid increase in rentals by GLC REITS, petrol and diesel prices etc. are the direct results of PAP governance.

8. How could the derisory $300 GST voucher cover the inflation caused by all these increases?

9. The BEST gift to ALL Singaporeans is NO GST instead of GST vouchers!


Cost of Healthcare

10. Any increase in healthcare subsidies for Merdeka generation could easily be offset by another round of increase fees in polyclinics and public hospitals.

11. We have witnessed how fees at public polyclinics and hospitals increased right after the last Pioneer Generation Package was announced in 2015.

12. At many instances, the fees at these public “restructured” healthcare entities are even higher than private clinics or hospitals before subsidies were taken into account.

13. There is a need to rethink whether the current model of “Restructured Hospitals” really serve Singaporeans’ interests at all.



Adverse Impact on SME

14. There are a couple of new but insignificant programs initiated in this year’s budget to help SME and workers to cope with changing dynamics of the economics.

15. However, out of the $4.6B slated to help both SMEs and workers over next three years, only $100million was put into funds for helping SMEs to upscale.

16. Although we agree to the overall strategy of reducing dependency of Foreign Workers in the long run, but we do not think it is a good move at all to apply such one-size-fit-all policy of reducing the Dependency Ratio Ceiling to cut across the board for the whole Service Sector.

17. Local SMEs are always grossly disadvantaged by the foreign workers policy whereby larger foreign companies enjoy concessions through government special incentives or technical advantage in sourcing their foreign labor via internal transfers from foreign bases.


Where are the Good Jobs?

18. Within the Service Sector, there are many sub-sectors which have very different labor situations. Singaporeans generally shy from certain industry or service sectors like hospitality, Food and Beverage sectors while there is a great underemployment for Singapore PMETs who cannot find jobs in other service sectors like banking, finance or IT etc.

19. A more calibrated approach should be implemented to focus more on reclaiming PMET jobs for Singaporeans in service sector instead.


Tax Cut for Taxi Companies while Higher Tax on Taxi Drivers?

20. The increase of diesel tax will affect SMEs greatly with an increase in business cost despite of the cut in road tax for diesel vehicles.

21. We are particular concerned on the impact on taxi drivers. While the PAP government gave a generous reduction in Special Tax on Diesel Taxi by $850, but this may only benefit taxi companies while taxi drivers suffer higher diesel price due to the double of diesel tax.


The Real Vision and Plan to Cut Pollution

22. A great percentage of commercial vehicles used in Singapore runs on diesel engines. The increase of Diesel Tax will not have significant effect on lowering the consumption of diesel for these commercial vehicles because the demand is totally inelastic.

23. Raising Diesel Tax now without providing a viable alternative to businesses will only result in a drastic rise in business cost. This may affect our leading position as logistic hub in Southeast Asia.

24. PAP government lacks the bold vision to explore clean alternatives for commercial vehicles running on diesel.

25. The key problem with diesel engines lies with the toxic cancer-causing nitrogen oxide emission. Thus we should phase out diesel vehicles from our roads totally instead of just raising diesel tax.

26. In fact, our long term plan should aim to reduce air pollution on the roads by phasing out both petrol and diesel vehicles totally by replacing them with electric vehicles.

27. Instead of harming our SMEs and economy by raising diesel tax now, we should be putting more investment and focus efforts to implement a comprehensive plan to promote electric vehicles by building relevant infrastructures and battery waste management system.

28. Singapore is lagging behind countries like China and Norway when it comes to implementation of a systematic plan of replacing diesel and petrol vehicles by electric vehicles to cut down harmful air pollution. This is due to the lack of bold vision and political will of PAP leadership.


CPF Inadequacy

29. About 75% of retirees are getting less than $500 from CPF payout. This is totally inadequate which resulted in many retirees living in absolute poverty.

30. It is an irony that Singaporeans had paid 37% of their monthly salary into CPF but yet they could not retire comfortably with a good payout from CPF.

31. It basically means that the CPF system along with the HDB and Medisave policies had failed to secure a decent retirement for most Singaporeans.

32. This will have to be looked into and only with Bold Vision could a government come up with bold plans to revamp the whole structure.


Long Term Care for Ageing Population

33. We will be facing the Silver Tsunami very soon when the baby boomers from 1950s to 1970s start to reach retirement age.

34. Putting billions into funds as future subsidies is a passive act which lack forward looking planning vision.

35. We would rather spend these billions now to build up both infrastructure and human resource capacity for long term care to prepare for the inevitable Silver Tsunami in the coming decade.


Pre-School Childcare and Education vs Fertility

36. The cost of Pre-school education is extremely high even after subsidies.

37. This is one important factor among the many issues that cause low fertility rate in Singapore.

38. Instead of putting more money in Edusave, it is time to focus to solve this pertaining issue of Pre-school education.

39. A cheap or even free Pre-school education system for all will also level up for children from poor families which will improve future potential social mobility.


Our Concerns:

HDB

40. There is no mention on any plan for PAP to resolve the huge problems which they have created in the past via Asset Enhancement Scheme.

41. No funds is allocated for any initiative on solving the time bomb of a huge stock of ageing HDB flats in the coming decades.

42. On the contrary, the Ministry of National Development has the biggest cut in its budget by 19.3%!


Financing Huge Infrastructure Spending via Borrowing

43. It is mentioned that part of the huge infrastructure spending like Changi Terminal 5 will be partially financed by borrowings.

44. It is also mentioned that Government will provide guarantee to these loans.

45. Is there a necessity for Government to finance such infrastructure spending when we have a huge National Reserve well above $500B?

46. Financing such infrastructure through borrowing would mean such spending on extremely expensive mega projects will escape rigorous scrutiny by parliament while the government has taken up huge potential liability as a guarantor.

47. The lack of accountability to parliament when the government takes up such huge liability will result in unchecked ex-Budget spending which could go wrong.


Conclusion: A Budget that Lacks Bold Vision

48. We are utterly disappointed by this year’s Budget which basically mimics the 2015 Election Budget without Bold Visions and lacks New Ideas.

49. This Budget contains a pack of gimmicks that attempt to make Singaporeans feel good and make believe that they had gained something substantial from it. However, most of these goodies are deferred goodies.

50. Unfortunately, these political gimmicks are done at the expense of the need of REAL immediate expenditures on various areas which we have listed out here.

51. Singaporeans deserve a better deal than what the current Budget could offer.
52. The reduction of GST relief and duty free alcohol concession for travelers is the best key feature to sum up this Budget 2019 – Small Mindedness without Bold Vision.

Goh Meng Seng
Secretary General
For CEC People’s Power Party Singapore

PPP Singapore Budget 2019 Forum

Budget 2019: Political Gimmicks without Bold Vision

 

 The PAP Government will be announcing their Budget statement on 18 Feb 2019.

People's Power Party will issue our statement, responses and views on this Singapore Budget 2019 in this Forum.








Guest Speaker: Mr Tan Kin Lian

Venue:
Agora Singapore
28 Sin Ming Lane, #03-142 Midview City
Singapore 573972, Singapore ,

Time:
2pm-5pm

As seats are limited, please RSVP.