TR EMERITUS

CIMB - Cost of Living Survey Going by the CIMB survey and the attendance at Roy’s rant, Hard Truths is closer to reality (slightly only leh) than Heart Truths: The CIMB’s Cost of Living Survey revealed that 87% of Singaporean households can still save a portion of their monthly income. Outside property expenses, people are spending mostly on basic necessities, cars and transport, and retirement savings. And We think that the idea that households are struggling is not quite right. That people are quoting the last as one of their biggest expense items does not quite gel with the idea of hardship. Are households overstretching themselves to pay for their properties and cars? Our survey indicates that about 87% can save a portion of their monthly income (13% have no savings). Most manage to stash away 20-50% of their income. https://sg.finance.yahoo.com/news/chart-day-graph-shows-no-021300551.html Well this is certainly not the pix that PAP ministers and the constructive, mainstream media portray:  S’poreans are living the gd life under the benevolent rule of the PAP. And this is certainly not the pix one gets of the standard of living of ordinary S’poreans going by what Ngerng’s gang said last Saturday. Maybe taz why they only attracted a crowd of 2-3,000*. Most S’poreans including most of the 600,000 (30% of voters) that will always vote against the PAP, simply don’t recognise the S’pore that Roy and gang paint? I certainly don’t recognise it, when I observe the lives of my relatives. Most live in public housing, have salaries around the median, and have kids in school or uni. The CIMB survey captures them better than Roy’s rants or the PAP’s propaganda:  so long as got job, no serious illness, life is comfortable. There is a core of elderly S’poreans, who need and deserve, a lot more help from the state. But for most younger S’poreans only a few major renovations to the gospel of Hard Truths are needed, to help them: really affordable HDB flats (15 yr mortgages, not 20 yr mortgages), improved public transport services, universal healthcare (improved Medisave is the first step towards that destination), and a lot less FTs. The last is the most impt, cause FTs suppress wages for S’poreans esp. the PMETs. BTW, these comments appeared on FB below the link to the CIMB story: – Gotta laugh at the holiday part…it’s true. People in my circle of friends who complains about cost of living; these are the people who travels for leisure more than I do*. – And the same crowd of people will curse Yahoo for exposing their hypocrisy. Have to agree with them. Enjoy yr weekend esp. if you are an ISD employee. No comedy routines at Hong Lim this weekend. Can look at yr monthly CPF statement and smile, thanking the govt. — *The former was the figure reported by WSJ and the latter by Yahoo.  “Singaporeans, there are 6,000 people here today,”  Roy’s gf, New Citizen Han claimed. Maybe Roy should get her a new pair of glasses, courtesy of his defence fund? And a pair of hearing aids? Remember he denied her reported comments that he wanted to be a martyr and was planning to seek asylum in Denmark. She never denied the report.   Cynical Investor [Source]: Thoughts of a Cynical Investor (http://atans1.wordpress.com).      Read More →

(June 20)   - When Elzerie Alcaide moved to Wellington from Singapore in January, she swapped 12-hour workdays, vast mazes of shopping malls and a diet of takeaway food for nine-to-five hours, weekend drives in the countryside and home-cooked meals. Alcaide is among the 40,000 migrants, nearly 1 percent of the population, expected to settle in New Zealand this year, many of them white-collar workers attracted by a laid-back lifestyle and promising job prospects in an economy which is outperforming most developed countries. "Living in Singapore or Manila can be stressful," said the 33-year old, Philippines-born quality assurance analyst who recently started working at accounting software developer Xero . "But in New Zealand you can have a good work-life balance, and the work environment is more family oriented, which is really nice," Alcaide said during a break at the offices of one of New Zealand's fastest-growing companies.   Read more:   http://www.reuters.com/article/2014/06/19/newzealand-economy-migration-idUSL5N0OQ0Q420140619?rpc=401&feedType=RSS&feedName=rbssIndustryMaterialsUtilitiesNews&rpc=401    Read More →

Tharman’s and Teo’s Economic Damascene Moment? The public has largely ignored the June 6th 2014, Reuters report of key statements from DPM Tharman which, in the writer’s view, has major implications for Singapore’s GDP growth trajectory. Singapore is willing to accept slower growth as a trade-off for social stability, retain its national identity, combat over-crowding and  keep down the number of foreigners. He would be happy if Singapore grew 3% a year, as long as growth was driven mainly by gains in productivity. No tweaks would be made to the rules to help companies in the sectors that are struggling, as they had to adjust and find more productive ways of working instead. For some companies though the rules may ultimately mean they have to leave Singapore as its economy becomes less competitive for some industries. "You can't move into higher value, high innovation activities without freeing up labor and land from the old activities." DPMs Tharman & Teo Chee Hean Simply a musing by Tharman? But on June 20th DPM Teo Chee Hean, has stated that as Singapore’s economy matures, the country “cannot rely on a linear increase in labour, land, or resources such as energy to grow our economy”. That, he said, the economy grew by 3.9% in 2013 while labour force increased by 4.1% and job vacancies by 3% is damning evidence that foreign labour is a resource of vastly diminishing returns. “Singapore Government: The One Trick Pony”? The writer is not so presumptuous to think the DPMs read that article dated Mar 31 in which he posit Singapore’s long-run growth potential or natural growth rate ought to be 2.5 - 3.5% given relatively high business costs, constraints of land and labour and an ageing population. All macro-economic policies involve trade-offs, i.e. policy objectives cannot be attained without giving up something else or facing consequences.  Should GDP growth be pushed above the long run potential, the trade-offs in policies and the disparity in economic outcomes will be especially pronounced. Average GDP growth of 7% pa on over the past 10 years had indeed resulted in significant trade-offs and consequences with elevated inflation, infrastructure stress, over-population, growing disparity in income and financial risks in healthcare and retirement. It seems DPM Tharman shared the writer’s view that the consequences which resulted from excessive GDP growth must be resolved by the acceptance of growth more in line with the long run potential.  Profit Maximisation, Asset Enhancement and Population White Paper all dead ducks? If nothing else, it is a tacit admission that the rosy GDP figures of the past 10 years is a false paradigm created by financial and labour market distortions resulting from low interest rates and mass influx of foreigners. Shred the PM’s Playbook The problems of today are the consequences of the mobilisation of capital and labour to push GDP growth, the cornerstone of economic policies since the LKY era, now pursued to excess by Lee Hsien Loong. It is as if in an Oedipus psycho-drama he was aiming to outdo his father even though the latter criticised the excesses.  Like St Paul who saw the light and the errors of his ways on the road to Damascus, the DPMs should see their own errors, heed their own revelation and shred the policy playbook of the PM. Macro-economic policies must now re-balance the trade-offs from corporate profits and public sector surpluses to savings and wages. Increase CPF rates by 1%, prior to a total review of CPF. The MAS should instigate a rise in deposit rates to around 2%. This will both improve savings rates and squeeze the causes of inflation, i.e. unproductive businesses reliant on rising prices and low financing costs causing capital misallocations to construction and labour-intensive sectors. Both restrict the availability and increase the cost of foreign workers. Let the shift to the long-run growth potential get rid of excess foreign workers. This ought to raise productivity and improve wages’ share of GDP.  Accept the International Labour Organisation recommendation to introduce unemployment benefits for citizens, a counter-intuitive finding that the absence of such measures inhibits the risk-taking that is essential in cultivating innovation. Avoid the temptation of reverting to the false promises of past policies even if Singapore were to undergo a period of low or negative GDP growth. It is the price the nation has to pay for the excessive lopsided growth of the last 10 years. Breaking from the Old Faith If the PM does not concur with the Word, the Logos of his DPMs’ economic Damascene Moment, then break the old faith if they must, and consign the morally, intellectually bankrupt labour and capital intensive growth at all cost dogma to the dustbin of history. Then maybe this is the proverbial silver bullet that fells the beast. Chris K * Chris K holds a senior position in a global financial centre bigger than Singapore. He writes mostly on economic and financial matters to highlight misconceptions of economic policy in Singapore.  Read More →