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

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

TOTD: HDB Issue - Never Populist, No Longer Lone Voice Again

Thought of the Day - Never Populist, No Longer Lone Voice Again

I was having a discussion over the Asset Enhancement Scam and all the issues involving HDB in my High School Whatsapp group and one of my friends wrote that I should not harp on the truth of HDB lease ownership and by reading the comments on social media, see what they want and sing their tune to get their support.

I paused for a while and I replied, I have NEVER been populist in my approach and most of the time, I turn people living in fantasies and myths into reality.

Unlike some politicians who would be that opportunistic and even agree with a BAD policy like Asset Enhancement Scam just because popular opinion of GREED was in support of it due to short sightedness, I chose to walk the less chosen path of going against the grains of popular opinion.

I would call a spade a spade, nothing else.

Asset Enhancement Scheme is a scam and it is important to make the point that you don't own any asset when you buy HDB LONG TERM TENANCY agreement because...


1) You don't even own the HDB flat as a property nor the land, what "assets" are you talking about?

2) In all normal TENANCY agreement, it is the responsibility of Landlord to do major maintenance and upgrading, so why are Singaporeans asked to pay for upgrading?

3) It is total Bullshit to say "GOV subsidize" your upgrading but the reverse is true, Singaporeans are subsidizing the GOV in upgrading!

4) You may think you would gain great "profits" when HDB prices are pushed up but at whose cost? At the cost of the buyer of your HDB PLUS the cost of higher HDB prices for your children and grandchildren!

5) Who are the ultimate Gainers from high HDB prices? SLA via higher land sales, HDB via more interests earned from loans and as the monopoly supplier of HDB flats and banks that make mortgage loans!

That's the reality of Asset Enhancement Scam.

I was the lone voice in the past fighting against HDB policy but not anymore. Glad that many have awaken.

I am so happy to read many other Singaporeans are speaking up about the Truth of HDB “Ownership”, against the PAP’s misleading narrative which is built on a total lie.

All scams are built upon ignorance and GREED of the victims, that’s why scamming lies could become some sweet tunes to these unsuspecting people.

It is my mission to exposed the bad scam of Asset Enhancement Scheme because it would be disastrous to our future generations for it to continue.

I am not against HDB as a PUBLIC HOUSING and I am even okay with the fact that there is no REAL OWNERSHIP of assets but just a prepaid long term lease of tenancy.

But I am against PAP political sophistry to turn HDB into an evil weapon of mass destruction of Singaporeans CPF retirement financing plan just for its own political self interests.

It is a total oxymoron idea to pursue a policy that will inflat HDB prices forever when the main aim of Public Housing is affordable housing for all Singaporeans!

The reason why I was so pissed off with MBT back in GE2011 was that he kept claiming HDB is “affordable” despite the fact that majority of new generation Singaporeans were made to pay more than 25% of their salaries for 30 years mortgage and yet he still claimed it is affordable! The direct consequence is, they will have less than 11% of savings in CPF for retirement funding! Any financial planner would tell you that this is definitely not enough for middle lower income earners!

Moreover, after paying their 30 years mortgage, they will find themselves stuck with a depreciating HDB value with totally insufficient CPF for retirement!

It is a huge time bomb of massive destruction in the making, all because of PAP’s manipulative moves in hoodwinking Singaporeans into believing this Asset Enhancement scam.

It always pains me when I read ignorant young couples forking out huge amount of money up to a million to buy a HDB lease of tenancy which s less than 80 years! We have to continue fight the PAP evil propaganda of HDB flats is an asset that will appreciate forever in order to drill it down to Singaporeans, it is nothing more than a paper that let you live in that flat for a time frame.

Singaporeans should change their mindset about HDB as investment. It is just public housing. All public housing are literally OWNED BY GOVERNMENT and they should be misguided and misled by PAP that they could use it to earn huge profits. It is your home, not an investment.

And as public housing, it should priced as such, Cost Plus, instead of “market price”. Only then, we could normalize and stabilize housing cost to all Singaporeans.

I hope that more and more people will have solid grasp of these HDB issues and help to spread the words so that we could build the Right social cultural mindset towards HDB as public housing.

Goh Meng Seng

Truth of HDB Ownership - 99 Year Leasehold Tenancy

HDB 99 Years Leasehold Tenancy Purchase

The Prime Minister has tried to confuse or sidestep the FUNDAMENTAL Question of "HDB OWNERSHIP". What types of Ownership are we having when we buy a HDB flat?

Many people have correctly pointed out with FACTUAL illustration of that little paper you sign when you purchase your HDB flat, regardless whether it is new BTO or resale HDB flats.

It is a purchase of HDB 99 year TENANCY OR WHATEVER is left of the tenancy agreement. This is NOT the usual property sake and purchase agreement.

This is why you will NEVER be issued a strata titles because what you have bought is only a long term, paid in advanced, tenancy agreement.

This is also why when you want to SUBLET out your flat, you have to get permission from the REAL OWNER, HDB.

Thus, PM Lee is Totally wrong to say that HDB "ownership" is the same as private property ownership because they own DIFFERENT things altogether. HDB ownership refers to the long term tenancy agreement while the private property ownership refers to the ownership of property, including the land.

This is also why when Gov wants to take away your car park or any space under your block to build anything, they don't need to pay you single cent because you don't own it! But if it is from private property, they will have to pay the private owners!

Similarly, all car park revenues from your HDB car parks will go to HDB, not HDB tenants, while for condominiums which decided to collect car park fees from visitors, the revenue will go to the management committee collecting on behalf of owners which is used to supplement maintenance fees.

HDB LONG TERM TENANCY ownership is the first of its kind in the world which hoodwinked people into thinking they are really owning a property or land but the hard truth is, they own nothing but the long term tenancy agreement!

This is the REAL truth of HDB "OWNERSHIP".

Goh Meng Seng

TOTD: PAP's Plan From First World to Third World

Thought of the Day - PAP's Plan From First World to Third World

There is a massive outcry over PM Lee's National Day Rally over his "advice" of adjustment to the rising cost of living.

The best weapon against rising cost of living is to increase our salaries. However, despite of PAP's boast about higher GDP growth, the salaries of Singaporeans have hardly catch up with the inflationary pressure. That's the crux of the matter.

Instead of solving the problem of inadequate rise in income, or for many people, a regression of income due to underemployment and job mismatch, PM Lee and his ministers tried to downgrade our living standards from First World to Third World!

We would expect the citizens to progress in life quality as the nation progress from underdeveloped country to developed country status. But what PAP is trying to do is to persuade Singaporeans to live with Third World Standard of living while continuing to give them TOP WORLD Class Million dollar annual salaries!

The truth is, while our GDP growth might have reached "First World Per Capital Income level" but in reality, Singaporeans' purchasing powers had in fact deteriorated over the years due to constant increase in prices. The artificially boosted GDP growth did not benefit Singaporeans much but in reality, it is due to the influx of cheaper foreign labour and more MNCs parking and registering their profits here in Singapore without creating substantial well paid jobs for Singaporeans.

Thus, it is really laughable for a self serving ruling party which hold the country at ransom to demand the highest salaries paid in the world for political appointments to try and lecture Singaporeans to cut down on "expectation" and "spending" by lowering quality of life!

Giving irrelevant "5 cents 10 cents tips" of "saving money" by going to hawker centres, using public Wifi to save data usage and such, which didn't really contribute to much savings at all for a household! Lamenting on how people are owning airconditioners and handphones as the source of higher cost of living without addressing the REAL cause of high cost due to the horrendous increases in tax on water, electric tariffs and eventually GST!

Most importantly, it is really unconvincing at all to lecture Singaporeans on cutting cost of living via lowering quality of life when PAP government seems to go into a spending spree in all sorts of infrastructures from HSR, Terminal 5 (yeah, we don't even know how expensive it is going to be!) and $16 million thrown into an "international party" between two leaders which yield no substantial results! Well, $16 Million could buy us a few years supply of water from Malaysia!

It is really sickening to me and reminds me about Animal Farm. The Pigs will live a luxurious lifestyle while constantly lecture the other animals to live a frugal life, over-worked till death.

If this is the First World Government Singaporeans wanted, then they really deserve the Third World quality of Life PAP wanted them to live... yeah, no handphones, no aircon, lowest quality milk powder for your baby, eat at hawker centres not restaurants (while they could play golf and drive most expensive cars in the world), work, live and sleep in humid and hot weather... no progress in life but only work to give the Ministers Top World Pay and money to splash on expensive projects of Grandiosity to glorify themselves as "great leaders".

Yes, our forefathers had worked hard to bring Singapore from Third World to First World country, but only ended up to justify the TOP pay for PAP Ministers and now, they will bring us back from First World to Third World, while maintaining their TOP salaries in the world.

Singaporeans, are you happy now?

Goh Meng Seng

TOTD: STOP Living in Self Denial!

Thought of the Day - STOP living in self denial!

I read quite a number of remarks, articles and comments over VERS and felt pretty amused and sad.

People are still living in self denial of the massive scam of asset enhancement scheme initiated by PAP.

People should STOP thinking that PAP is coming to your rescue and giving you great money with VERS!

PAP has screwed up badly over the Assets Enhancement Scam and there is no way out of it without great pain to many Singaporeans. Please do not live in self denial.

VERS is not about giving a great deal to Singaporeans but an attempt to avert a sudden supply and demand shock to the HOUSING market when a massive over 200k flats come into expiry within a few years.

Sink that in and stop hoping for PAP to come to your rescue from a real rapid depreciation of your HDB flat.

Goh Meng Seng

TOTD: Credits Due

Thought of the Day - Credits Due

Well, I have to give due credits to the Minister of National Development for the willingness to consider my comprehensive solutions to the HDB-CPF mess and adapted some of the important policy options stated in my proposal.

Although he didn't give me due credits for my inputs for the obvious reasons, but still, I think he is sincere in solving the big mess of HDB instead of living in self denial like his predecessors, especially MBT.

For the good of our Nation's future, we need people like him who is willing to look at problems and situations objectively and apply or adapt good policy options, regardless of whether it comes from the opposition camp or not.

But one word of caution to him, my solutions provided must be looked at in totality and not in selective adoption else he will risk having incoherence in his policies.

I was quite reluctant to write that article to provide my policy options at first because these policy views are the accumulation of more than 20 years of in-depth study and understanding the HDB issues in and out, through and through.

But a friend of mine, who is helping the government in crafting housing development policies, had urged me to contribute, write, publish and share my views, for the benefits of our nation. He said the committee will take serious consideration of any good proposals and views.

After much considerations, I decided to write. The reason is simple, since Lawrance Wong has the moral courage to openly declare and correct misperception of public on HDB by declaring your HDB flat will have zero value when the 99 year lease expired, I believe that he is sincere in his approach, unlike MBT who would continue to misled Singaporeans on "assets enhancement".

I know my article was passed around the members involved in the policy committee

I would rebut PAP or anyone who claims we don't provide sensible and credible policy views or options in future. We may not earn $1 million, but we are no less talented than anyone.

Goh Meng Seng

Comprehensive Set of Policy Options for HDB-CPF Mess

The HDB-CPF time bomb will blow up in 10-15 years time with a sudden surge of HDB flats passing their 40 year-lease mark. My estimate is that about 50% or more of HDB flats would have less than 60 years to their expiry by 2035.

As I have mentioned, the HDB problem cannot be tackled without tackling the CPF policies. They are like twin babies right now and the problem is magnified with such linkage between these two entities.

The following are the gist of the time bomb:

1) Inadequacy of Retirement financing due to over-consumption of Housing effected by the devious link between HDB and CPF.

2) PAP has misled a few generations of Singaporeans into believing that they could use their HDB flats for retirement by "monetizing it" and treating it as "pure asset" instead of consumption item. Nothing with an expiry date could be considered as a long term perpetual asset which one could depend on decades later in life.  Due to ageing population, there will be higher supply of old HDB flats than demand of these flats which are above 30, 40 or 50 years old. The financial regulations and illogical HDB rules restrictions have aggravated the situation.

3) Ageing population will result in potential oversupply of HDB flats in the long term if it is not kept in check. This is especially so when young couples are "forced" to buy BTO or HDB flats with longer lease while the HDB restrictions basically prevent them from buying old HDB flats with shorter lease left.

4) HDB rules also restrict Singaporeans from buying smaller and cheaper BTOs if their income level is high. These artificial rules will implicitly create over consumption of housing. 

5) The valuation system that HDB used has an inherent upward bias when it doesn't include the balance of lease as key consideration. This will create a market with pricing but without demand.

6) The massive problem of having huge number of HDB flats expiring their 99 year lease all within 5 to 10 years time will have to be dealt with careful planning decades in advance. PAP's refusal of initiating Enbloc for old flats will create an even bigger problem later.

The set of solutions are as follow:

A) De-link CPF from HDB or property purchase and Lowering of Employee's CPF contribution

CPF should be kept strictly as a fund catering for retirement. For a good financial planning, 20% of income should be saved for retirement. It means that while CPF could be de-linked from HDB purchases, Singaporeans could lower their Employee's CPF contribution from 20% to 3% while the Employer's CPF contribution shall remain at 17%.

Singaporeans should decide what to do with the excess cash as a result in the lower CPF contribution. They could use it for renting a flat, save it up, invest it in business or other financial products or use it to buy a property (HDB or otherwise) and pay the mortgage.

Such radical policy change will correct the past PAP's mistake in deliberately and artificially channeling Singaporeans' money into buying HDB flats, using more than what they should use of CPF money in paying the down payment and mortgage, resulting in over consumption of housing at the expense of retirement funding. Such problem will only surface decades later as more and more Singaporeans in my generations will realize.

Such social engineering to create an illusion of wealth and property ownership is extremely harmful to the Nation as a whole.

B) Dismantling of Restrictive HDB Rules of Social Engineering Manipulations. 

There are many HDB rules which are the results of social engineering attempts, should be removed. Rules that dictates high income level cannot buy smaller flats should be totally abolished. Housing consumption should depend on needs, not on income level. Whatever subsidies the government wanted to give should depend on income level and not HDB flat size. Thus, there is absolutely no reason why Singaporeans should be prevented from buying flats according to their needs.

Rules that dictate singles could only buy HDB flats after they are 35 year old should also be abolished. Such rules are based on "family-centric" reasoning but these rules are too restrictive and not helpful for singles to seek independence in living before they look for their lifetime partners. It also excludes people from other segments of the society to seek independence and privacy for their housing needs. As far as the government is concerned, each and every citizen will only enjoy grants or subsidies once, regardless of their age or whether they bought their flat before or after their marriage.

Rules that dictate young couples cannot buy HDB flats with short lease left should be abolished as well. If HDB flats are treated as a consumption goods, there is absolutely no reason for such rules to exist. Shorter lease, old HDB flats may cost much lesser and with the grants given by the government, young people could well afford to buy their first CHEAP old HDB flat to start their marriage life earlier. This will also encourage them to have children earlier with lower expenditures on housing.

Liberalization of the HDB rules will enhance market efficiency and liquidity, especially for the resale market of old HDB flats which have less than 60 years lease.

C) Re-configuration of Financial Rules and Valuation Methodology

At the moment, there is really an abnormality in the financial rules. For car purchase financing, although the COE restrict the car life span to 10 years, banks and financial institutes are still allowed to finance buyers for up to 7 years of mortgage. However, for some strange reasons, HDB flats with 60 years lease left will face a drastic drop in financial options and the purchase of flats with 20 years left, could not be financed at all!

If we just treat HDB flats simply as a consumption goods, there is no reason why there is a discrepancy in financial treatments by the banks and finance companies.

For owners of HDB flats with less than 60 years lease, they could not "monetize" or sell their flats mainly because of mismatch valuations of their HDB flats as well as liquidity problem due to such financial rules.

Re-configuration of the financing rules of old HDB flats based on the fact that it is just a consumption good like car, washing machine or any hire purchase items would allow adequate liquidity to flow into the resale market of these old flats. Of course, this must be accompanied by a revamped property valuation system which will give a more realistic valuation of old HDB flats based on the leasehold factor. It is just an old car. The older a car is, the lesser its valuation is.

Sellers of HDB flats should not be asked to repay back all the "lost CPF interests" due to their use of CPF funds to finance their HDB flats when they were young. Else, those elderly people who decided to sell their HDB flats to supplement their retirement financing will find it totally meaningless in their attempt to "monetize" their old HDB flats.



D) Kick Start a Redevelopment Plan for old HDB estates 

In anticipation of the impact of an ageing population with ageing HDB flats and estates, the government should start planning for the Redevelopment of these old HDB estates in stages. Instead of limiting SERS to 4% of total HDB stock of flats, there is an urgent need to kick start a Total Redevelopment Plan for ageing HDB estates.

This will of course involve enbloc of HDB flats in phases.

Although it is going to be an expensive ever-lasting process but it is a necessity to pre-empt a total chaos and collapse of the whole HDB resale market.

As the ageing population would mean that some land acquired via enbloc can be released for private development use while the resulting higher pricing of the redeveloped flats would make older flats with less than 60 or 50 years lease more attractive. This will create a new equilibrium which will effect a more efficient use of land and housing stock.

Redevelopment of old HDB estates will have to be carried out in phases, most probably stretching over 20 to 30 years time frame for one estate. Such staggered redevelopment plan will prevent a sudden chaotic situation whereby the whole old HDB estates with lots of HDB flats expiring within a short span of time resulting in a sudden shock shortage of housing stock to provide for those who are going to give back their HDB flats to the government.

It is totally irresponsible for PAP government to say that they will only redevelop 4% of HDB flats via SERS while just waiting to take back all other HDB flats from Singaporeans when their lease expired. Such method may save the government lots of money but it will create a great turbulence to the whole resale market for HDB.

Conclusion

The above outline of the combined policies needed to address the HDB-CPF Axis of Evil Problems will not prevent some Singaporeans from losing great amount of money from their misguided belief in PAP's Asset Enhancement Scam, especially so when they use lots of money to buy from the HDB resale market.

However, at the very least, we could achieve the objective to create a viable resale market demand for their old HDB flats which have less than 60 years lease left. This is done through liberalizing rules on HDB flats purchase, expanding the potential pool of buyers of these old HDB flats to singles and young couples with viable financing plan achieved by re-configuring of financial rules and valuation system based on rational reasoning.

While some Singaporeans will have to suffer a huge and painful cost  of greatly depreciated old HDB flats, the government should also bear the big bulk of the cost in creating this whole mess via a rational staggered enbloc redevelopment of those old HDB estates.

This is a very painful lesson for all Singaporeans that property transactions and speculations on your only residential home are simply a Zero Sum Game eventually.  Anyone's gain will be somebody's loss.

Goh Meng Seng

Solutions to HDB-CPF Mess MUST Address These Issues

Solutions to HDB-CPF Mess must address the following few issues:

1) Provide stability to the HDB resale market, preventing big crash or huge hike in prices.

2) Solve the inadequacy problem of CPF for retirement due to HDB purchase

3) Solve the insolvency problem of old HDB flats above 40 or 50 years old.

4) Guard against oversupply of HDB flats in the long run

5) Tackle the potential problems of massive expiry of 99 year lease in less than 60 years time.

6) The system of Valuation of HDB Flats has to have realistic reflection of leasehold terms of flats.

7) Cater to the needs of an ageing population with changing social-housing reconfiguration.

8) Choice and options for Singaporeans should be widen.

9) Re-calibrating social mindset and financial system to treat HDB as public housing, a consumption good instead of investment good.

This list may not be exhaustive but the Core of problems which need immediate solutions to address the short-mid-long term needs of the Nation.

Goh Meng Seng

TOTD: The High Speed Rail

Thought of the Day - The High Speed Rail

Some people ask me what do I think of Tun Mahathir cancelling the High Speed Rail project

Well first of all, we must understand that with such high price tag, it is bound to lose money for a long time to come if it was to be built, especially when it needs to compete with the current air flights between KL and Singapore.


Secondly, although most of the rail and stations were situated in Malaysia, Singapore will benefit most from its construction. This is basically why PAP Government is willing to foot half of the cost of constructing the HSR.

PAP will benefit from the shot up in land prices around Jurong area and it will make it easier for Singapore to attract Talents from Malaysia to come and work in Singapore.

However, it is obvious that PAP Government is facing grave cash flow problem despite of its boast of having huge reserves. Huge mega projects like HSR, Tuas Mega port, T5 @ Changi Airport, New Thomson MRT line etc... are creating an obvious pressure on the government finances, so much so that PAP is planning to raise taxes as well as borrowing to fund all these.

Why would all these multi billion dollars projects come all at once, at the expense of Singaporeans in terms of higher taxes?

Thus in my view, Tun Mahathir had made a timely wise decision to call off the HSR. Of course he did it for the consideration of his country's financial position but indirectly, he will also help Singapore to pause and think whether such mega project is really necessary for the time being.

Going for an expensive HSR which is destined to lose money will only serve the ego of PAP but will bleed us in the long run.

A medium speed rail may be more practical, cost effective and sustainable in the long run.

As for penalty, I would say that in consideration of Malaysia being our closest neighbor and it is struggling with the financial situation in the aftermath of GE14, its current financial and overall stability will also be our Core interests as well. Apart from being a gesture to rebuild our relationship with the new administration, it is also in our interest to see a stable and smooth transition of Powers in Malaysia. We will not be spared if Malaysia face a financial crisis.

Thus, in the spirit of maintaining the legality of contract and rule of law, I would suggest Singapore to impose only a token of fees for the breaking of contractual obligations by the new Malaysian administration.

Goh Meng Seng

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

TOTD: Awakening from the HDB-Asset Enhancement Myth

Thought of the Day - Awakening from the HDB-Asset Enhancement Myth

Several friends asked me "What is Lawrence Wong trying to do?"

They are referring to why Lawrence Wong keeps reminding Singaporeans that your HDB flat will have ZERO value when the 99 Lease hold expires.

They are confused and full of anxiety.

I simply told them, this is nothing new, I have talked about it more than a decade ago!

Almost all of them now consider to sell off their HDB flats in anxiety. Then I ask, where are you going to live?

Some ask me is that the reason why I sold my own HDB flat back in 2010? I said, yes, partly so but most importantly, I need the cash for the General Elections. I have no regrets.

Then they ask me, why didn't my relatives or the flat my mother owns in Ang Mo Kio sold? Here again, I said, where can they live if they sell their HDB flats?

The key difference here is that, my parents bought their flat in Ang Mo Kio, way before this nonsensical "Asset Enhancement Scheme" came about in late 1980s throughout 1990s, Goh Chok Tong's time. They bought it cheap. There is no anxiety of having a "costly HDB flat" turned into worthless ashes in the end.

Unfortunately, many people were caught by that TOTALLY MISLEADING Koyok of "Asset Enhancement Scheme" which was the Theme of PAP back in 1990s till 2000s that kept them in total monopoly of power. A few generations of Singaporeans have been misled into believe in such nonsense. Even up till GE 2011, PAP's MBT still tried to sing song about Asset Enhancement Scheme for "Monetizing HDB Flat" for retirement financing.

Well, lucky for MBT and PAP, he didn't dare to take up my challenge of OPEN LIVE DEBATE over his HDB-Asset Enhancement Scheme Policy, else he will be knocked out and black out totally. But their lucky is Singaporeans' misfortune. Most Singaporeans are still submerged in such devious myth of HDB Asset Enhancement Scheme for another 6 years, until Lawrence Wong broke the truth.

Lawrence Wong is simply telling the Truth, nothing but the Truth. Your HDB flat will become Zero Value when the 99 year lease expires. Why is he talking about this NOW?

This is because PAP government is not going to carry out SERS Enblock for most of the HDB flats, which is the only way to save you from the eventuality of Zero Value, because it is not profitable for PAP government to do it. They are just mentally preparing the massive Singaporeans living in HDB flats that they should not expect much from their HDB flats at the end of the 99 lease. They should be prepared to live with their whole life's saving in CPF being wiped off when the lease is nearing expiration.

The PAP government, if they still exist by then, will not renew your HDB lease at all.

Singaporeans should wake up from this TWO DECADES Myth about HDB-Asset Enhancement Scheme. This is especially so for the younger generations, those who are thinking of paying extraordinary high prices for their BTO or HDB resale flats.

I was amused and worried for those people who are forking out near to a Million dollars for a resale flat in some Prime location. You have to know that even if your HDB flat is located at Prime district or location, IT WILL DEPRECIATE eventually and BECOME ZERO in value when the lease expires.

Your HDB flat will start to depreciate when it reaches 40 year old. No banks will make normal loan when it passes 50 years old. When it reaches 70 years old, basically no bank will provide loan to  any buyer at all, regardless of where the flat is situated.

This is something PAP has been hiding from you while they were singing and praising themselves about HDB-Asset Enhancement Scheme as a political tool of Pork-Barrel politicking!  I would say that over 80% of all old HDB flats will not be Enblock. You just cannot "enhance" your HDB value when the eventuality of ZERO Value is definite!

The faster and earlier Singaporeans realize this FACT and TRUTH, the better it is for them. Else, you will end up destroying your own retirement financing plan.

I have not come to the CPF-HDB financing part yet.... that's for another article another day.

Goh Meng Seng

Don't Void Your Votes to Make PAP Halimah Looks GOOD! Anyone But Halimah!

Message of the Day

Don't make PAP Halimah look Extremely Good by voiding your votes! Just vote ANYONE BUT PAP HALIMAH!

Some people have been going around to urge people, especially Opposition supporters to void their votes. I hate to say this but this is an Extremely Stupid idea to start with!

First of all, do you know what will happen if these people managed to convince 10% of opposition voters to void their votes? It would mean that right after polling result comes out, the MSM media will have headlines screaming "Halimah has won a Glorious Victory with over 80% of valid votes cast!"

It would be even worse if both of the other contestants lost their deposits!

Do you want to make PAP look good with such a "Reserved Presidential Elections"?

Tony Tan is a Face-Losing President without much legitimacy or mandate basically because he got less than 50% of valid votes cast! The aim for this coming PE, IF THERE IS ANY CONTEST at all, is either to make Halimah lose or shame her and PAP by depriving her the basic mandate of 50%! This will be a tight slap on Halimah and PAP's public discourse of having a President who represents and unite Singaporeans.

This should be the ONLY Objective of this coming PE, to shame PAP for its political maneuvering and deprive Halimah the legitimacy and mandate of Singaporeans.

If we continue to have Elected Presidents who cannot even garner a simple majority of support from Singaporeans, then this Elected Presidency is basically flawed and we should then demand the amendment of the Constitution to have second round of voting between the two highest polling candidates if the first round of voting doesn't produce a winner who could garner more than 50% of valid votes cast!

Do not hand over the total monopoly of power to PAP so easily without a fight. The role of opposition politicians is to win votes, not to ask voters to void their votes and in the end making PAP looks extremely good with glorious results!

If PAP didn't even care about Barisan Socialists boycotting the GE back in 1960s, do you think PAP even care about people voiding votes?

Please do not repeat the stupid mistake which Barisan Socialists made when they boycotted the GE and handed over total monopoly of power to PAP so easily on a silver platter!

Goh Meng Seng

TOTD: The Paradigm Shift Which PAP missed

Thought of the Day - The Paradigm Shift Which PAP missed

When I read about how Singapore propaganda machine tried to justify Singapore's diplomatic stance by saying that Singapore "has not changed", I nearly choked.

The Global Power structure has gone through a critical Paradigm shift and the Diplomatic dynamics has also gone through a Paradigm shift but yet, PAP government still singing self-praise about "We have not changed"?

Didn't they realize this may be their Greatest Problem in Diplomacy?

Diplomacy is about getting the Best deal out of the Global situation for the welfare and benefits for our country. Najib knows this, so does Duterte but not our PM Lee and his bunch of inept colleagues.

Our Core Interests in the South China Sea saga is NOT about judging who is right or wrong, nor who should have what claims. All countries around the world will have their own territorial claims and nobody could really change their stance or mind, lest a Little Red Dot like Singapore! And this is not ordinary country we are dealing with but an economic as well as military giant in the making!

Our main Core Interest is only to keep SCS a safe passage way for our trading port to function effectively and it is about maintaining PEACE instead of escalating conflicts which may result in potential war. Besides, we are NOT even one of the claimants in this SCS saga!

PAP government has got it ALL Wrong. We may not like what China is doing but our aim is to maintain status quo of Peace at SCS, not about banging our heads against the evolving giant in this region.

And we have over 100 billions invested in China but yet, this silly bunch of White Ministers actually think they could get away with agitating China without getting hurt?

Someone keep pestering me to say what's my plan or how would I handle such situation. I would say that my only interest is to keep Singapore prosperous out of any situation. We should not take side but maintain our position that it is for EVERYONE's interest to keep Peace at SCS. No matter what happens, how the situation develops, we should always maintain PEACE within the region, especially at SCS.

To ask people to subject to some "international settlement" when one side didn't agree to bring it to International Court in the first place, is UTTERLY NAIVE and silly. International Law and judgement passed is one thing but could it be ENFORCED? The Americans have been ruled against in international court before but they just ignored them and what could the other countries do about it? An International judgement which is not enforceable is as good as toilet paper!

That's the reality of International politics and diplomacy.

Goh Meng Seng

TOTD - SAF Waste Basket of Talents

Thought of the Day - SAF Waste Basket of Talents

Have you noticed Singapore has produced quite a number of Generals every few years which will take up various positions in GLCs, Statutory Boards and such in the past?

For a small army which has NEVER fought a major war before to chunk out so many Paper Generals is rather amazing! If we were to count the "General - Army personnel" ratio, I bet we will be one of the HIGHEST in the world!

No wonder our Defence Budget is so high because we have to pay so many Generals as well as all other Colonels supporting them.

PAP government has followed its past traditions of giving out SAF scholarships and President Scholarships to the Top A Level students every year.

Yes, our Elitist PAP also select people based on A Level grades and you will be assured of good life ahead if your A Level results are one of the Best. PAP's flawed and extremely Elitist Meritocracy is determined solely by A Level grades which a 18 or 19 year old kids could get!

A friend of mine lamented in private chat over this.

In Economic theory, this is "crowding effect" of talents with bias tendency. And this is detrimental to the growth of our economy and private enterprises.

These Scholar-Paper-Generals (SPG) wasted more of their time in army for 20 over years before they were asked to leave and chuck into some GLCs or statutory boards. They have totally ZERO real life corporate experience but just helicopter into high position to lead any organizations assigned to them. Those who have been working in these organizations, amassing great amount of experience in the field, were passed from such promotions. I wonder how these people would feel, having a totally "Clueless Idiot" in the field to lead and tell them what to do! eg. The latest SPG former navy chief jumping into MOE to become Perm Sect.. Hey, he is totally clueless about Education!

The worst part is to have these SPGs to parachute into such important positions such as "Permanent Secretary" which has become rather "impermanent" nowadays! Every 2-3 years, Perm Sect will change. How could they have garnered enough experience and contribute to the Ministries adequately? In the past, we used to say, even if you put an idiot as a Minister or Minister of State, the Perm Sect will be able to run the show. But in the end, our Perm Sects are now totally lack of experience and "Half Barrel Filed"! it will be left to the mid-high level Directors of the Ministries to run the show! It will be extremely unstable and chaotic for these Ministries and definitely the sustainability of the whole system will be in question.

I do not expect a Perm Sect to stay in that position for more than 2 decades but definitely not this type of "touch and go" situation!

Short tenure for Perm Sect will create a serious problem. These people will only aim for SHORT TERM VISIBLE results but ignore LONG TERM beneficial planning! Just like the NOL saga! Selling assets off will of course create "huge value" for the government in the short term but what is the long term strategic implications?

Worse of all, the new Ministers may not even be well verse in their own Ministries as many of them have been "Merry Go Round" rotating among the Ministries... how could they possibly be contributing to the LONG TERM planning for the Ministries and Singapore as a whole with such short term tenure? It is seriously a situation of "the clueless leading the blind".

SAF has become a Waste Basket for "Talents". The current practice of SPG Elitism should be reviewed because it has proven to be detrimental to the development and growth of a Nation's economy by crowding out talents from private sectors as well as making them invalid to the corporate world after decades of "Yes Man" molding. We are starting to see the great harm that such system is doing to us now.

Goh Meng Seng

HDB 99 Year Lease Time Bomb

At least TWO PAP Ministers (Khaw Boon Wan & Lawrence Wong) have confirmed my point about the HDB 99 Year Lease being ZERO in value when the lease expired. This is an important critical fact that most Singaporeans have ignored for decades and despite of such reality, Singaporeans are still pumping huge amount of money willingly into HDB resale market which in turn, pushes up the new BTO HDB flats!

This is one of the important reason why I would insist a TOTAL de-link of new BTO prices from resale market prices because it doesn't make sense at all.

There are two broad ways of analysing the impacts and implications of this HDB 99 Years Leasehold issue. i.e. Macro Level vs Micro Level.

Minister of National Development Lawrence Wong has recently flip-flopped over this HDB 99 year lease issue. First he admitted that when the lease is up, the HDB flat will have ZERO value and the "Leasers" (which Singaporeans always thought themselves to be "owners") will have to return the HDB flat to HDB and HDB has to return the land to SLA. But a couple of days later, in a dismay effort to cushion off the shocking effect on Singaporeans, Lawrence Wong came up with the notion that "HDB is a good store of value"!

How could HDB flats which will depreciate and end up with ZERO value eventually to be a "good store of value"? That's totally nonsensical and illogical.

There are many people and well known bloggers who have written on this topic and got many points right but miss a few critical points altogether.

Micro Perspective

The former MND Minister Mah Bow Tan and up to now, Lawrence Wong, keeps talking about "Monetize HDB flat for Retirement", which is a totally flawed concept. I would have debated against Mah Bow Tan on this point LIVE on TV if he had dared to accept my challenge back in GE 2011 and I would have shot straight into his face with this 99 Year Leasehold issue of HDB and ask him how could it be possible to "Monetize HDB for Retirement" when most Singaporeans would face great difficulty in selling off their HDB flats when it passed the 50 year lease mark?

Yes, the Time Bomb doesn't start to blow up with it reaches 99 Year but rather, when your flat reaches 50 year old. How many people are able to fork out over $3000 or even $2000 monthly to pay their mortgage for your 50 year old resale HDB flat? Or even if they could afford to, why would they want to buy your flat knowing that it is going to depreciate further and become ZERO in value in the next few decades?

I believe the projections by the chart above (by Soh Yun Yee) is just too overly optimistic. HDB flats which pass that 50 year mark, would have suffered a steep fall in value thereafter!

And look at it this way, for HDB flats, you cannot own TWO HDB flats at the time! Thus it means that if your parents passed away and left you their HDB flat while you still own a HDB flat, you will have no choice but to sell one away! i.e. either you sell off your own HDB flat or your parent's HDB flat! Many Singaporeans will face this problem and with the upcoming silver bombing due to aging population, the resale market will be flooded with lots of old HDB flats with lease less than 60 years or 50 years while demand will be extremely small!

Thus, what is the impact? A major collapse of resale market for HDB flats which have less than 50 years lease!

This is the FUNDAMENTAL difference between a Private Property vs HDB flats with the same 99 year lease. For Private Property, you could still keep that property which you inherit from your parents and rent it out, really "monetize" it, but for HDB? You can't.

For Private Property, there is a good chance for you to seek private en-block and monetize it fully, renewing the lease again when you do so. But for HDB? You will have to wait for HDB to initiate that SERS which is basically non-existence now because it is not PROFITABLE for HDB to do so! This is the reason why only 4% of HDB flats had gotten SERS and Minister Lawrence Wong has "hinted" or rather "WARNED" that Singaporeans should not expect their HDB flats to enjoy SERS!

Macro Perspective

Uncle Leong has rightly pointed the following:


There are 1 million HDB flats, of which 70,000 or 7 per cent are over 40 years old. About 280,000 units are 30 to 40 years old. That’s one in three flats 30 years or older.

But what is exactly the implication? It means that by 2020, the problems of 99 Years Lease will start to surface. Yes just 3 more years. Most HDB flats were built in late 1960s, 1970s to 1980s. From 1970s to 1980s, we have housing estates like Tiong Bahru, Tanglin Halt, Queenstown, Bukit Merah, Bukit Ho Swee, Toa Payoh, Hougang (old Hougang), Ang Mo Kio, Bedok, Jurong etc built within this period. It would also mean that many flats from these towns will face the problems when they cross 50 years lease, starting from 2020 (1970 to 2020, it is 50 years)!


It also means that if PAP government just stop doing SERS or do it at extremely slow rate, when the lease expired for all these HDB flats in these towns, where are these Singaporeans going to find another HDB flat to live in? Where to find even HALF the size of these towns (assuming flats will be built double the height of the old ones) add together to house them?

By 2060, we will start seeing these problems exploding.

On the other hand, do you really think your HDB flats could last 99 years? I am doubtful that most HDB flats could even last 70 years while some could not even last 50 years due to poor quality of the material used during the late 1970s to 1980s construction boom. HDB upgrading could only solve parts of these massive problems. Some old HDB flats even have obvious cracks and problems of concretes falling off that walls before they reach 50 years old!

Conclusion

99 Years Lease HDB flats are good policy deal IF AND ONLY IF the flats are kept at extremely low cost and there are continuous efforts to en-block and rebuild them starting from 30 years old onwards. At least 50% of the flats built from 1960s to 1980s should be SERS or en-block and rebuilt before the 99 years lease expired. This will ensure we have enough land for cross generations usage and cater for gradual population growth.


It is not meant to be "Asset Enhancement" nor "Monetize for Retirement" but PURELY cater to the housing needs of Singaporeans of ALL GENERATIONS. 

Unfortunately PAP has strayed too far away from its initial ideology just to insert all means to milk Singaporeans while kicking the cans of problems down the generations instead of maintaining a good balance in providing for the critical basic needs of Singaporeans.

I would not mind to replace my 99 years lease HDB flats with another one when it is near expiry if I have bought my first HDB flat CHEAP at cost plus and continue to buy my second replacement flat CHEAP at cost plus as well!

But the crazy Asset Enhancement Scheme introduced by PAP government during Goh Chok Tong's era has really screwed us up badly with the poison of greed to entice Singaporeans to use more of their CPF funds to pump up the HDB flats while sold the FALSE dream of forever "Enhanced" value of their HDB flats so that they could "Monetize their HDB Flats for Retirement"! It has mixed up and over-drawn, over-stressed our CPF which should be strictly for our retirement needs!

Singaporeans are blinded by the poison of greed of short term gain in buying and selling their HDB flats in one or two generations, but they have unknowingly, sold out their own retirement plan and their future generations' welfare by falling for such poisonous enticement.

Goh Meng Seng

People’s Power Party (PPP) Response Committee on the Future Economy Report

For Immediate Release:

People’s Power Party (PPP) Response Committee on the Future Economy Report

We refer to the Committee on the Future Economy report. 

There is nothing exceptionally new from the report apart from recognizing International Trade and Relations as an important integral component of our Economic Success.

International Trade Treaties

People’s Power Party would like to reiterate our stance that whatever Trade Agreement or Treaties signed by the PAP must put Singaporean workers’ interests as the uncompromising first priority.

Singapore’s ruling People’s Action Party (PAP) has been very focused on securing trade agreements for its economic sustainability in an increasingly globalised world. 

Nonetheless, trade deals had more often came along with some trade-offs. One nagging opportunity cost has been the unemployment of locals.

In recent years and decade, we have seen PAP government having negotiated and signed Free Trade Agreements without much public consultation, debate or engagement. These FTAs include CECA signed with India which had basically opened up the flood gate for Indian PMETs to get jobs and stay in Singapore without much control. This has inevitably displaced quite a number of Singapore workers. In return, CECA mainly benefited large corporations like Temasek Holdings and GLCs to invest in India without substantial job creation for Singaporeans. 

We have also seen PAP government negotiated the now-failed TPP (Trans-Pacific Partnership) in secrecy without any public consultation. Only big MNCs were involved in the negotiation without the involvement and participation of our Labour Union or any other political parties or civil society groups. 

The failure of the TPP may mean a loss of opportunity for Singapore’s businesses.

However, we are more concerned about the need for transparency of any negotiation or signing of such trade pact . 

The failure of TPP coupled with the shocking “Brexit” of the United Kingdom’s withdrawal from the European Union, presented starkly to Singaporeans sudden moves against agendas that they have been herded towards.

Coming out of these shocking episodes is the clamour for transparency. The peoples of those nations wanted their voices to be heard and they have done so. The citizens of the US and UK have signaled that they want to be involved in decision-making that involves their lives and affects their nations. They want to know the details and not just be told. 

It would only be wise for the Singapore government to be open for a constructive dialogue that discusses the costs and benefits of all trade pacts including the TPP. 

PPP would like to suggest a public forum in which Singaporeans would be able to discuss any future negotiation of Free Trade Agreement with the Singapore government directly. This is especially important when FTA in present context is no longer just about demolishing trade barriers but involve more other aspects such as free mobility of labour, legal aspects of commerce and trade etc.

International Relations

We have seen how PAP’s missteps in handling international relationship had caused much upheaval, tension and unnecessary pressure to Singapore businesses in China. 

PPP would like to remind PAP that it no longer enjoys the protection of political goodwill and respect that Mr Lee Kuan Yew had garnered and it should tread carefully in the world politics, especially when it comes to the politics of big countries with huge economic clout. 

Singapore has survived and prosper throughout the decades with the help of great diplomacy in building bridges, making friends and creating political stability in our immediate region of existence. We have survived the uncertainty due to Confrontation, Vietnam war, Korean war, Cambodia war and the uncertainties due to the cross strait ties between China and Taiwan. We have managed to turn past enemies and threats into friends. We should not create unnecessary tensions in our region which is critical to our survival and prosperity. 

Apart from Globalization and Free Trade, Diplomacy of Peace is one of the most important survival strategy for an open economy like Singapore. It is worrying to witness how the current PAP government handle International Relationship and Diplomacy which will eventually affect our economic well being as a whole. 

We can only hope that the current mindsets of those involved in PAP government’s dangerous diplomatic stunts could be replaced with more humility and wisdom. 

Soft Power of Cultural Essence and Organic Industrial Growth

While we are not against the PAP government spending money on upgrading the skills of Singapore workers, but we observe throughout the decade, such programs had minimum value add to Singaporeans when our workers are not protected adequately from the displacement due to the influx of foreign PMETs. 

We also observe that PAP government has finally given up spotting “successful industry” to bet on after experiencing mediocre results from past bet on Bio-Tech industry. PAP government had led us in chasing rainbows one after another in the past decades but in the end, many Singaporeans of past generations eventually found that their skills are fast becoming obsolete when PAP tried to focus on other industries. 

We have serious doubt of such economic strategy. We would like to stress that most productive and useful innovations are derived from organic industries instead of learning something totally new and trying to compete with other countries which are already experts in this field. 

Singapore should identify its own Organic Growth Industries: those industries which we have comparative and competitive advantages. Innovations should be developed from these Organic Growth Industries to increase productivity. Else, we would be chasing Rainbows again like a headless chicken in the fast changing world of technology.

While technology is important in today’s economy, we should not lose sight of the Soft Power of Cultural Essence. We observe that there is a lack of utilization of Cultural strength in our local businesses and industries. 

There is a lack of in-depth exploration of the huge economic potential of our rich cultural heritage. Although we have a few good local brands that go regional and international, but compared to other countries we are still lacking behind. It shows that we have not put in enough efforts to help local companies in making use of our Cultural strength to enhance our international brand status.

Our cultural heritage could also provide us an advantage in enhancing our role in economic connectivity with our regional neighbours. But the apparent lack of general knowledge of our neighbouring countries has become a hindrance in making us an effective hub for the region. 

Increasing Business Cost vs Productivity Growth and Wage

DPM Tharman had put up a grand strategy to increase yearly productivity growth by 3% back in 2011. It seems that it has become an empty promise again. 

There are a few reasons why our Productivity Growth has been extremely low in recent decades. The high cost of doing business in Singapore has forced businesses to look for cheaper labour from foreign sources. This high business cost is basically due to the high rental which was basically controlled by GLCs and government agencies. Apart from that, indirect taxes such as COE on commercial vehicles has also taken a toll on businesses, especially business start-ups. 

Instead, PAP had addressed these issues by opening up the floodgate for cheap foreign labour which inevitably affect local wages and even displacement of local workers creating underemployment. Such move will inevitably reduce productivity growth as well as wages. 

The only way to ensure that Singapore continues to grow with high productivity growth is to prevent a Rent-Seeking Economy to develop. Rental and indirect taxes should be controlled so that more resources could be put into developing local human resources as well as business development.

Unfortunately, the CFE report did not touch on these important issues at all. 

Business Connectivity and Market Intelligence

There is generally a weak support of Market Intelligence and Research provided to local SMEs to help them in reaching out to the various matured as well as emerging markets in the region and the world. 

While the GLCs enjoy the support from the various government statutory boards in providing the necessary help in getting connected to the world and obtaining market intelligence of target markets, SMEs lack a comprehensive approach in obtaining such information and network.

If networking and connectivity are crucial for our local economic success, we would expect the PAP government to put more resources into building up resource centre and network of trade offices that focus on providing relevant information to local SMEs. 

Conclusion

We hope that this CFE report is not just another old wine in new bottle effort by the PAP government.

Sivakumaran s/o D Y Chellappa

Vice Chairman c/o Head of Policy Research

For CEC of People’s Power Party