TR EMERITUS

What can the government do to help households and businesses to cope with the economic downturn? Here are my suggestions. Protect jobs The businesses that are badly affected by the economic downturn have to cut down their wage cost to match the decline in their revenue. Most of them have to retrench their workers. The retrenched workers will not be able to find alternative jobs in a depressed economy. I suggest that the businesses be encouraged to adopt a different approach. Instead of laying-off some workers, they should put ask the workers to take no pay leave. For example, if they have to cut their wage cost by 30%, they should ask all the workers to take no pay leave for 30% of the work week. To help these workers to meet their monthly expenses, the government can provide a monthly loan to the affected workers to cover the loss of income. These loans can be administered by the Central Provident Fund and is based on the loss of income as declared by the employer. Some workers have savings and may not need to avail themselves of this loan. Others may not take the full amount of the loan, as they can reduce the expenses. The loans will carry an interest rate of 2% per annum and can be repaid in the future, when the economy recovers. If they are not repaid, the loans can be set-off against the CPF savings at the time of withdrawal or on the sale of a property covered by CPF. The workers on no-pay leave can use the free time to take up a training course (for which they may receive an allowance), take up part time work, or just take a break. They do not need to worry about the financial impact. For self employed workers such as taxi drivers, the loan can be set at a certain percent of the average monthly income in normal times. These measures give the workers a reason to remain confident about the future, as the economic downturn will be short lived. The mood of consumer confidence will be good for the economy. Reduce rental Apart from wages, rental represents another important component of the operating expenses of a business. The government can encourage by landlords to reduce the rental of the business premises to help the tenants to tide over this difficult period. This encouragement can take the form of a cash subsidy for 50% of the reduced rental. The landlords will be happy to do their part to help their tenants to get over the difficult period, as half of the cost is shared by the government.  It is better than having no rental from tenants that have closed their business. This 50% subsidy can also be given to stall holders and taxi drivers who have to pay a rental for their taxis. Providing cash flow Many businesses may need assistance on their cash flow. The government can help them to get the financing from the banks by guaranteeing the loans that they have to take during this period. The loans will be capped at the amount of the monthly rental and the wage bill. It does not cover the other financial needs of the company. The banks will be willing to grant the loans at competitive rates, as they do not have to face the credit risk. How much will these measures cost? The measures that I have suggested are for the duration of the economic downturn. They can start now and continue for a year or two, until the economy recovers. The actual cost to the government is the rental subsidy and the future write-offs of the loans from workers and businesses that are not repaid. This is a sum that the government can afford. After all, we have already kept more than $1 trillion in reserves. My suggested schemes also have some self control mechanisms to prevent abuse. The government will need to engage auditors to check on these loans and subsidies, but the abuse is likely to be small.   Tan Kin Lian        Read More →

There are signs that the PAP may call for the general elections (GE) in the near future. Mr Heng Swee Keat said in an interview that the PAP will not rule out holding the GE during the current outbreak of Covid-19. Ms Josephine Teo announced this week that PAP will be introducing its women candidates in due course. Also, the Government has just published changes to several electoral divisions yesterday, 12 March 2020. The SDP calls on the PAP to refrain from such an irresponsible act. All state resources should be focused on dealing with the spread of the virus which the World Health Organization has called a pandemic. The situation in Singapore has flared up again and could worsen considerably in the coming weeks and months. The SDP has been repeatedly calling on Singaporeans to unite and cooperate with the authorities in this difficult time. Our priority is to rid ourselves of this health threat. Elections can come later. We hope that the PAP will not capitalise on the crisis by holding the GE at this time as it will take away valuable resources needed to combat the virus outbreak and jeopardise the public's health and well-being. Experts have different opinions as to when this pandemic will end. As such there is no urgency to hold an election in the midst of this crisis. After all, the term of this parliament does not end until April 2021. The SDP, therefore, calls on the Government to categorically rule out the GE until clear signs indicate that we are seeing tail-end of the virus spread. No to do so would signal that the PAP is putting its own interests over the people's safety. Prematurely calling an election will undo all the good work the people have put in these last two and a half months, working together as one, putting aside party politics to help our country and our people deal with this viral threat.   Singapore Democrats      Read More →

Singapore's health system has coped very well with the coronavirus pandemic, this is one thing you need to recognize. It is clear that the decision makers in Singapore's health system, such as the National Centre for Infectious Diseases clinical director Shawn Vasoo, and my previous boss executive director Professor Leo Yee Sin, are being given free rein to try to contain the virus. I respect their work. The health system approach to advise doctors at clinics to give 5 days of medical leave to people with respiratory symptoms (at low cost for residents and citizens), otherwise which they would (likely) be sent to hospitals for coronavirus testing and inpatient treatment (free for citizens and residents) has also helped to curtail the spread of COVID-19 in Singapore. But there are loopholes - people on short-term visits aren't covered under the low-cost/free regime for the coronavirus, which means some people might not want to be tested and fall out of the system, and also do people with other illnesses have to pay for their other illnesses even if they are hospitalized for COVID-19, and cause worry for them too? These are loopholes Singapore's expensive health system would need to address outside of the coronavirus situation. But it is clear Singapore's COVID-19 strategy relies very much on the health system to contain the coronavirus (and the police to assist in contact tracing). On the one hand, this means that Singapore has built up strong systems in these areas to cope with crises such as this pandemic. On the other, it means Singapore's strategy does not take into account people's involvement enough, and this creates another loophole. From the speeches of the ministers, it is clear they have planned in advance to deal with an outbreak such as COVID-19, and the measures currently being put in place are as a result of this. It is also clear Singapore is planning for a pandemic such as this to last for some time, after which the Singapore government hopes to emerge relatively unscathed while other countries would be seriously beaten, and then take the advantage when the time comes, to come out ahead of others. How long it is planning ahead for, I don't know, 3 months, 6 months, maybe longer? This is part of the reason why the Singapore ministers get angry when Singaporeans don't go according to their plan, and of course not, Singaporeans were never informed of the grand strategy, and even if so, collective behavior cannot be planned for. This is why, when panic buying occurred, people were called stupid and idiots, and an embarrassment - because the behavior is seen as creating a smudge in the Singapore government's aim to look all-prepared to tide through the coronavirus. And this is why some of the people who became infected were called socially-irresponsible, because if they had been more responsible, Singapore's COVID-19 numbers would be lower, and make Singapore look better. But herein lies the problem - a nationwide strategy cannot be implemented if it doesn't have the involvement of people. Singapore tied through the first wave of this coronavirus alongside countries like Taiwan and South Korea because of their strong health systems. Hong Kong and Macao was also able to successfully keep it at bay for now because of social distancing measures adopted bottom-up by the citizenry in the former and top-down in the latter. However, the relative success in the countries in the first line lulled other countries into a false sense of security that they could cope as well. The messaging in part given by the Singapore government that COVID-19 might turn out to be just like the flu, also does not help. This has created a false sense of ease among health systems around the world, many of which cannot cope, simply because if containment measures are not put in place early on, the number of infections will rise too quickly for the health systems to cope. It means countries should have taken any new epidemic seriously, and not have allowed themselves to be lulled into complacency. What this means for Singapore is that as the second wave of infections spread through the globe, and possibly a third wave later on that will spread through poorer countries which have tried to downplay the seriousness of the virus, the pandemic will last for many more months, and it will impact on Singapore. Infection numbers could increase further unless Singapore can close off its borders, but Singapore won't and cannot, because Singapore relies on exports for daily necessities as well. And when fear sets in once again for whatever reason, panic buying or other such behavior could occur again. And this is why Singapore's coronavirus strategy cannot be just a top-down approach that does not account for the feelings of people on the ground. It cannot be a do-what-I-say-because-I-have-everything-put-in-place approach. It doesn't work that way because in times of crisis, people do react, whether in a rich or poor country, democracy or authoritarian. People are the same no matter how much you control them or if they run free. The Singapore government's approach as of now seems to shame people and victim-blame to get people to conform to their strategy. This therefore presents as a massive loophole. It is 5 to 6 million of uncontrolled variables. Singapore is not North Korea, and even in North Korea, people don't all comply. It is therefore pertinent that on top of the highly effective health systems approach being implemented now, that the government needs to overhaul its social-psychological approach to seek to understand people's responses and engage with them as partners to manage the coronavirus. This means anticipating how people will respond to new measures or global occurrences and then enacting new policies and communication plans to respond to them in advance - just like how the government plans for the economy. This also means putting in place budgetary plans to compensate people who lose their jobs, for example, because people who know that they can still ensure their livelihoods can be maintained will feel more secure and calm, which will strengthen Singapore's coronavirus response. If the government does not have enough experts to develop the necessary understanding of people during these times, then it needs to get them onboard. Singapore's foresight strategy has been over-reliant on planning ahead for the economy, but not enough in the aspect of the society. Thankfully, planning ahead for the economy also means putting in place a strong health systems. But it is not enough moving ahead. What Singapore needs right now isn't just a whole-of-government approach. What it also needs is a whole-of-society approach. Only when people can see and know that the government is also putting in place policies which takes care of them, and not just the economy, will people learn to trust the government and play their part to help secure Singapore's defenses against COVID-19. This is what it means when we talk about psychological defense. We cannot escape the reality of it. While Singapore's policymakers are business people who care about maintaining their business interests, Singapore is not just a company they run. While such an approach could be feasible in times of relative calm when there are enough resources to keep people in their place, during times of crises, there are multiple variables including uncertain human reaction. This means even as Singapore's elite business people-leaders want to continue running Singapore like a company, it requires these business-leaders to have more empathy to their employees, and support their employees, if they want their employees to support their business.   Roy Ngerng      Read More →