Your are rich – So we have to give you more

I’ve been spending a little less time on the blog and focusing more of my time on writing for the mainstream media in recent days. A part of shifting focus has been work-related. The other has been the fact that there are issues that need to be raised in a place where there’s going to be wide discussion.

The most prominent issue that has caught my attention and the attention of many in Singapore is the issue of foreign worker dormitories. The reason for this is simple, these are the places where the explosion in Covid-19 cases have been found and the government has decided to throw a lifeline to the dormitory operators by offering to foot the bill for the increased operational costs that the dormitory operators will have to face. More details on that story can be found at: [LINK]

While the stay-at-home orders and lockdowns on the dormitories has undoubtedly raised operational costs for the dormitory owners, one has to ask why the government has decided to step in as their proverbial sugar daddy. This is especially in a situation where the dormitory owners are in no danger of going bankrupt.

As matter of principle, I’m against subsidies from the government, whether its to individuals or corporations. Having grown up in the West, I saw how noble intentions ruined. Welfare, which was meant to help the poor ended up destroying the incentive to work. “Free” healthcare was often abused (think of the 18 months it takes to get an appointment with an orthodontist in the NHS) and then, there’s the well subsidized business of farming, which became very lucrative for farmers who realized that farming was not about crops or livestock but filling out forms.

I get why some subsidies exists. On a personal level, there are people who are basket cases that you can’t leave to rot (think of the problems they’ll cause as they rot). I think of Flesh Ball and her various men as an example. When it comes to businesses, there are times when a subsidy is necessary, especially when it involves bringing something to market that will have eventual social benefits. Renewable energies for example, were highly subsidized because they were expensive. However, those subsidies have paid off in that the cost of producing renewables are now competitive and it has provided the world with energy sources that don’t damage the environment.

Then there are exceptional circumstances where subsidies to businesses help provide social collapse. Subsidies to businesses in the current shut down of the global economy have helped keep people who might otherwise be unemployed in a job. The alternative is mass long-term unemployment, which in turn would mean social unrest.

So, the question is, does the dormitory operations industry justify giving a subsidy? I believe that the obvious answer is no.

Firstly, there is no benefit to the tax payer in doing so. Unlike renewable energy companies, they are producing anything that would add value to either people or the planet in the long run. They are merely putting people into a certain space and charging a fee for it.

Secondly, the dormitory operators are not in any danger of going bankrupt and throwing people out of work. While a breakdown of their number of employees is not available, a look at Centurion Corporation’s website would indicate that they are still hiring. [LINK]

As mentioned in two letters to the Straits Times (including one by me), the dormitory owners are exceptionally profitable. Details can be found at:

https://www.straitstimes.com/forum/why-foot-the-bill-for-dorm-operators-that-have-profited-for-years; and

https://www.straitstimes.com/forum/forum-let-dormitory-operators-face-the-music-themselves

Numbers quoted in both letters were taken from Centurion Corporation’s financial website at (Being a listed company, Centurion Corporation has to publish its financial results): [LINK]

The letter by Mr. Cheng Shoong Tat got the board of the Centurion Corporation to scramble and they had to issue a “clarification” as to what their $103.78 million profit on revenue of $133.353 million meant. They’ve made a point that of that $103,78 million profit that they made includes a “one-time” net fair valuation gain of $66.3 million on investment properties and assets held for sale. The clarification also makes the point the worker dormitory business is just 65percent of their total. More details can be found at: [LINK]

What does this mean in layman terms? Is the company saying that the $66 million in “fair-valuation” gains merely an accounting treatment rather than actual cash?

Even if you take the “clarification” at face value, Centurion’s profits are exceedingly healthy by any standards. If you take out the “one-time” net fair-valuation gain, the profits before tax would be $44.735 million (Gross Profit less expenses), which would mean profit margins of 33 percent (still very healthy by any standard) and if you less income tax, there’s still $37.522 million, which means a margin of 28 percent. Furthermore, the “one-time” net valuation gain is also in the financial results for 2018, which would suggest that the one-time gains are fairly consistent. All these factors should not distract from the fact that Centurion Corporation is sitting on a cash pile of some $48 million (cash at bank).

Nobody is saying that Centurion Corporation and its brethren are not allowed to make profits. What is questioned is why the tax payer has to subsidise them when there is a situation where they are likely to make less. The point about going into business is that you take the risk and rewards accordingly. When times are good, you are entitled to your profits but when times are harsh, you take the losses. Other businesses have also taken hits. SIA, for example has had to lay off staff because the global airline industry has been badly hit. However, SIA provides jobs for many Singaporeans and actively promotes Singapore, something which the dormitory owners do not.

The most crucial point to the case against footing the bill is that many of the costs that are now being imposed on the dormitory owners are now being forced to take on, were costs that should have been factored in when the Foreign Employers Dormitories Act (“FEDA”) came into force in January 2016. This act essentially sets certain standards in the industry of providing accommodation for foreign workers and the fact that the government introduced this act would indicate that the government realized that it needed to have some oversight on the industry. More can be found at: [LINK]

This leads to the fact that half of all dormitory owner’s flout licensing requirements on a yearly basis as the Minister of Manpower admitted to parliament: [LINK]

So, the question remains, why should the tax payer bail out a highly profitable and cash rich industry from failing to fulfill its legal obligations? What hold does this industry have over the tax payer that it can demand a right to be subsidized to correct its own failings. When was it my obligation as a tax payer to fund an industry’s right to make healthy profits.

 

Tang Li

*Although I’ve been based mainly in Singapore for nearly two decades, I’ve had the privilege of being able meet people who have crossed borders and cultures. I’ve befriended ministers and ambassadors and worked on projects involving a former head of state. Yet, at the same time, I’ve had the privilege of befriending migrant labourers and former convicts. All of them have a story to tell. All of them add to the fabric of life. I hope to express the stories that inspire us to create life as it should be.

 

 

yyy
SPONSORED ADVERTISEMENT
Loading...

19 Responses to “Your are rich – So we have to give you more”

  • Boh Kia See:

    It is obvious to be that the standards for dormitories are meant for those operators who are not affiliated to the PAP in one form or another. the effect is to make sure that only those affiliated to the PAP will make a profit. That is the reason why enforcement never materialise. After all, those people have a back door channel to the Minister through the PAP, so it is difficult to enforce rules when they are all part of the same party–all friends and lackeys.

    So this bail out with taxpayer money is to ensure the owners and businesses affiliated to the PAP can continue to reap the profits. that is why there are so many hanger-ons in the PAP.

    The only way out of this malaise is to remove the PAP and then recover the subsidies directly from them. There is no reason or authority to use taxpayers money to maintain the profitability of private companies.

    VTO–the PAP.

    GD Star Rating
    loading...
  • NotMyProblem:

    Foreign workers benefit a lot of people, specially PAP’s cronies!

    Employers get foreign workers cheap, employing slaves! Some earning kickback!

    Dormitories operators earn money from rental collections.

    Facilities providers make money from urgent facilities and supply.

    When these people (mainly with some relationship/connection with PAP) said, they don’t make any profit, please believe it’s true! Definitely it is!!

    GD Star Rating
    loading...
  • Average Joe:

    Thanks for sharing, great perspective and analysis, the govt will have to justify to the general public on how they are going to recover the cost in the aftermath of this epidemic due to their misplaced priority for over-committing public fund so generously without clear distinction between social obiligation/responsibility and bailing-out-businesses that has amassed obscene profits for years while evading liability for flouting FEDA ACT.

    GD Star Rating
    loading...
  • Tracey Ching:

    Aiyoh, previous articles have already explained that the Operators are connected. Under the index of cronyism, Singapore came up TOP and under the index on freedom of the press, Singapore came down Bottom. Despite multiple degrees, the elite in this country have no knowledge of the ethics of conflict of interest. Or they pretend not to know.

    GD Star Rating
    loading...
  • JialaT JT:

    This serves as a wake-up call to the voters that it is high time to change the political system of “ownself check ownself & ownself praise/reward ownself” in the light of this Covid-dorms crisis!

    -NO ACCOUNTABILITY FOR INCOMPETENCE
    -REWARDS CRONYISM
    -RECOVERY COSTS TAXPAYERS FOOT

    SAY NO TO THE ABOVE, VOTE PAP OUT!

    GD Star Rating
    loading...
  • trublu:

    Well,they say the EXTRA BIGLY BUDGETS ARE MEANT TO HELP us but i saw a miserly $600 in my bank acct.
    I want them to take back the $600 but STOP MAKING OLD RETIREES OR JOBLESS sgs like me PAY G$T ON BASICS ESPECIALLY MEDICAL BILL$$$!!!

    WHEN COMMON sinkees suffer,the rest say thumbs up to PAP for not granting aid to old uncles like me but ,at the same time,quietly SUCK LOLLIES LIKE BABY BONUS ETC from the same govt that say helping older needy sgs means more FUTURE TAX BURDEN FOR THE YOUNG SUCKER$?

    MIND YOU,becos of AEGING N CHRONIC ILLNESSES ,I HAVE A FEW OPS THAT CAUSED ME A BOMB N EMPTIED MY SAVINGS BUT I STILL PAY GST ,THE AMOUNTS BIGGER THAN THE REDUCED INCOME TAX IF MY BANKER-NEPHEW?

    THIS IS ALL WRONG N I CANNOT AGREE WITH TANG LI that we must not extend SOCIAL SECURITY TO OLDER SGS IN NEED WHILE STILL TAXING them????
    Where is the fairness of paying SOCIAL COSTS vs receiving SOCIAL BENEFITS?

    FARK,TANG LI,I CAN GIVE YOU THE $600 BUT YOU MUST ASK THEM TO CUT OFF GST ON MY MEDICAL?

    GD Star Rating
    loading...
  • patriot of TUMASIK:

    Good Tangfastic STAY AWAY and don’t give your shit here but it can be easily accepted where you are GOING with more Local readership especially the 70%…

    and clear as dayLIGHT why you left your Balls overseas and return as a EUNUCH…try HARD you may be NOTICED and be invited for Tea @ Istana

    GD Star Rating
    loading...
  • patriot of TUMASIK:

    Quote: “Writing FOR the mainstream Media…” unquote TanGfastic

    ED…Please take NOTE: he is writing “FOR and NOT to”… the Fake NEWS

    Thank heavens a Fraud revealing himself…a Mole Or a Weasle or BOTH including a EUNUCH!!!…maybe a Liar too???

    GD Star Rating
    loading...
  • ThickSkinned SpoiltBrats:

    A Good Throw
    A Hit in the Face

    Too Bad
    Too many Spoilt Brats
    Growing Thick Skin
    Heck care what others say
    Till the ass can’t bray
    Greed is here to stay

    GD Star Rating
    loading...
  • John Richards:

    The question to ask is, what hold do the Dormitory operators have over the government?

    GD Star Rating
    loading...
  • Tremendous:

    All the while in the village, poor villagers don’t get enough welfare treatments. These villagers are told that the village cannot be a welfare village. Not so for rich villagers. They will be given welfare treatments even if they are slow to ask for them. Idiots, not the normal ones are so easy to find there.

    GD Star Rating
    loading...
  • Survey recently:

    I dont think I can buy a eat wind bungalow at sentosa cove for another 100 years, keep on dreaming….

    GD Star Rating
    loading...
  • Tracey Ching:

    Aiyoh! Previous articles already explained that the Operators are connected. Look up for the index of cronyism and you will find Singapore being placed at the TOP. On the other hand, if you look up at the index on the freedom of the press, you will find Singapore being placed at the Bottom. Despite multiple degrees, the elites pretend that they do not know the ethics of conflict of interests

    GD Star Rating
    loading...
  • PAP, Pls Don't IncreaseFees:

    Most of the Domitory Operators or Owners are PAP Grassrootr Leaders. That why the PAP use Taxpayer Money to provide 180,000 Daily Meals to the Foreign Workers at these Domitaries, subsidise their Medical Treatment as well as pay for the increase Operation Cost of the Domitories. Our neighbour Malaysia is smart in that the governemnt refused to pay any money as it is the responsibilt of their employers.

    PAP in future please do not increase fees or charges sych as water, electricity, parking , COE, GST etc..

    Or else we have to vote PAP out.

    GD Star Rating
    loading...
  • Waste time:

    Tang Li asks with all the highfalutin but nothing that’s not ask. Why not investigate the root causes and enlighten us?

    GD Star Rating
    loading...
  • NotMyProblem:

    “… why should the tax payer bail out a highly profitable and cash rich industry from failing to fulfill its legal obligations? What hold does this industry have over the tax payer that it can demand a right to be subsidized to correct its own failings. When was it my obligation as a tax payer to fund an industry’s right to make healthy profits.”

    @Tang Li; To answer your question I would like to paraphrase a minister’s comment made in parliament to Worker Party. “Take money from taxpayers to give to friends”.

    GD Star Rating
    loading...
  • Tang the mainstream mediator:

    “If you don’t want to slip up tomorrow, speak the truth today.”

    - Bruce Lee

    GD Star Rating
    loading...
  • Mephisto:

    Well. Singaporeans are indifferent. They are so used to the stench
    it doesn’t register anymore.

    GD Star Rating
    loading...
  • MarBowling:

    Sinkaporean, better be prepared aftermath Covid 19 and the Pandemic ERECTION! When NOT if Mai Hum and Gang OBTAIN a STRONGER MANDATE that the 69.9%, Seatwarmer cum 4th PeeM Heng Sweet Cake WILL PROUDLY ANNOUNCE TO INCREASE GST FROM 7% to 10%(instead of origin 9%)to CUSHION the NEGATIVE IMPACT TO OUR ECONOMY CAUSED BY Covid 19 and OF COURSE TO HELP THE POOR TO OVERCOME HARDSHIP SO THEY CAN CONTINUE TO SLEEP LIKE A BABY ALL NIGHT LOONG!

    GD Star Rating
    loading...
Member Services
Self-SupportMembers LoginSelf-Support
Sponsored Advertisement
Search On TR Emeritus
Sponsored Advertisement
Announcement
Advertisements
Visitors Statistic
Latest Statistic
Advertisement

UA-67043412-1