TR EMERITUS

At this moment, arguably the potential top hot potato issue the masses are concerned in is likely to be none other than the CPF ever increasing Minimum Sum and the ever push back withdrawal age. The likely next hot potato to come in a close second is arguably job opportunities and threats faced by the masses from cheap foreign labour. The probable third hot issue is the widening income inequality gap caused by rising rentals across the economy resulting in a myriad of costs being passed on and borne by the masses in the end. Others like children's education, local issues and other social, economic and political issues shall be discussed and analysed. It is mind boggling that at the rate the Minimum Sum in the CPF is being raised, it is not an exaggeration to foresee that for those in their twenties and thirties, the amount being locked up when they reached 55 could be at least S$400,000 to S$500,000 in 20 to 30 years time including the Medisave Minimum Sum citizens need to maintain inside their CPF. That is not factoring in the forever pushing back of the withdrawal age which currently stands at 65. Even then at current prices, withdrawal amount are generally at a pittance few hundred dollars on the average across the board and a far fetch from golden retirement years after a life time of slogging in a pressure cooker society. For the younger generation, such concern is likely to set off chain decision in their outlook and choices. For some, heading off to the airport for the first flight out when a viable employment opportunity arises elsewhere seems to be a logical, wise and rational choice. For those staying back for whatever reasons, it is highly unlikely they would want to be parents of half a dozen offspring. Probably for many, given the choice, not even one. The regime's "half-hearted, disinterested and failed" procreation policy looks like going for a further astronomical, epic failure. Possibly before the turn of the century by 2019/ 2020 or even earlier, TFR is likely going to dip below 1.0 and this is likely going to create an unprecedented unease and tension. By then, it is likely to be too late. This regime could be the worst in human history record in terms of handling the TFR issue. Game over? Without a decent and reasonably paying respectable job, likely everything else is secondary and moot. With the relentless opening of the flood gates in the past two decades, the damage is likely done. The deep sense of insecurity and lack of confidence in the future and deep distrust in the establishment is highly possibly and indelibly imprinted and engraved in the hearts and minds of the masses. With many highly educated PMEs in their late thirties, forties and fifties being sidelined, retrenched and forced to drive taxis, taking up lowly security guard jobs to put food on the table as precedents, those among the younger generation are likely not going to make the same mistake as their uncles, aunties and parents. Another issue which should be of serious concern is on the economic front. In 2010, with a population of 5,076,000, domestic private consumption expenditure was at S$114,518,500,000. At the per capita level it is S$22,558 at the same year market price ( 2010 market price ). Looking at the per capita figure for private consumption expenditure for 2011, 2012 and 2013, the figures are S$23,032, S$23,359 and S$23,582 respectively at 2010 market prices. The increase in percentage terms for per capita private consumption expenditure is 2.1%, 1.42% and 0.96% for the year 2011, 2012 and 2013 respectively. The population for those three years namely 2011, 2012 and 2013 were 5,183,700, 5,312,400 and 5,399,000 respectively. What does the percentage increase of the private consumption expenditure in 2011, 2012 and 2013 reveal? What economic story is it telling or simmering underneath such statistics? Looking at such figures under the backdrop of other domestic economic figures reveal an "alarming" trend. Delving further into the individual spending components of the private consumption expenditure confirms the unmistakable trend of falling private consumption expenditure relative to overall GDP growth. How could this be? How to explain it in economic terms? As we know, the poor or the masses spend a larger proportion of their disposable income on essentials and basic necessities than the rich and well-heeled. If a larger share of national income is in the hands of the rich, what would happen? As mentioned, the marginal propensity to consume is far smaller for the rich as a percentage of their total income than the poor or masses. Aggregate total private consumption is likely to fall or grow at a much slower rate than GDP increase when more wealth are in the hands of the rich. The numbers in 2011, 2012, 2013 confirm such a trend. Looking at the minute breakdown of the individual components of the consumption expenditure patterns reinforced the unmistakable pattern and trend mentioned above. Now the problem is this could be the beginning of a longer term trend and 2011, 2012 and 2013 could be at the beginning of the curve. This implies economic condition is likely to get worst for the poor or masses in the coming years especially the next three to five years given current trend. Life would be more and more unbearable not only for the bottom 30% but also the lower middle income who are likely to be squeezed adversely and feeling the economic heat ever more and more. Economic decisions taken by a ruling regime is always about opportunity cost and trade off. The need to enrich the already wealthy and well-off and at the same time ensure the masses are not disproportionately disadvantaged by economic policies and decisions have to be seen to be equitably and fairly balanced. After all, where did all the economic policies originate or emanate from? From the ground? The people? The masses? How can it be? Obviously the establishment is the sole monopoly for economic decisions carried out such as monetary policies, fiscal policies, wage polices, immigration policies etc and thus holds the sole responsibility for any consequences and impact on the masses livelihood. How the situation come about till this worrisome stage is a rather complicated and long story and shall not be dealt with and discussed here and at this stage. For the other issues mentioned in the opening paragraph, it shall be touched on in Part 2: Further Potential Hot Potato Issues Concerning the Masses. P S S * The author blogs at pro-sustainable-sg.blogspot.  Read More →

07.06.2014 Return Our CPF@HLP - Leong Sze Hian Speech at CPF protest In my speech during the CPF Protest (Return My CPF) on 7 Jun at Speakers’ Corner, I said that Singaporeans may be short-changed by about $1 million because we probably pay the lowest real rate of return amongst national pension schemes in the world, historically in the last 25 years or so. How to calculate lost $1m? Quite a number of people have asked me as to how the figures can be derived. Difference between 3 and 6% from age 21 to 65? So, here’s an example. If you start work at say 21 years old with a salary of $1,500 – increasing at 4% per annum until age 65 – at 3% interest, you would have accumulated $1,491,087 at age 65. Average overall interest rate on CPF accounts?  As there is no disclosure as to what is the average overall interest rate on all the different CPF accounts (Ordinary 2.5%, Special, Medisave and Retirement 4.0% plus an extra 1% on the first $60,000) – we have assumed the average overall CPF interest rate of 3% in the above computation projection. If the nominal rate of return is say 6% (the historical average real rate of return after adjusting for inflation of national pension schemes in the world is we believe about 4%) – you would have accumulated $2,953,777. Difference of $1.5m in 44 years? So, you may in a sense, have been short-changed by $1,462,690 ($2,953,777 minus $1,491,087)! And we have not even factored in the difference in the returns of 3% (6 minus 3%) from age 65 onwards until death under the CPF Life scheme which pays 4% on the Retirement Account balance plus an extra 1% interest on the first $60,000 only (with any excess CPF that can be withdrawn but is left in the CPF earning 2.5% only). Assumptions? Note: We have assumed a 4% increase annually in the salary because the annualised real total wage growth from 2003 to 2013 was 1.5% and historical inflation in Singapore is about 2 plus % – and the Government’s target for real wage growth for the decade is 30% (2.7% per annum). Also, assuming that CPF contribution rates and ceilings may also increase in nominal terms in the future because of inflation, in line with the 4% salary increase. SY Lee and Leong Sze Hian  Read More →

Ms Indranee Rajah has written a Facebook post which the media have - not unsurprisingly - picked up minutes after she wrote it. Here is my reply, in bold, to what she wrote. Indranee Rajah Indranee Rajah (IR): In the Worker's Party (WP) statement on the Medishield Life, Mr Gerald Giam welcomed the recommendations but was quick to claim credit saying: "Many of the recommended enhancements to the MediShield health insurance scheme have been articulated by Workers’ Party MPs in Parliament as well as by many Singaporeans over the years...." Me: Err... this is a statement of facts. It is true that the recommended enhancements were articulated by many Singaporeans, as indeed Ms Indranee herself explained later. IR: The statement is instructive in its' approach which is: 1. claim credit; 2. keep it vague; and 3. call for more. IR: We can infer from the speed at which WP has claimed credit for Medishield Life that they think it is a great idea. Me: I think it is a little dishonest to give the impression or to say that WP “claimed credit” for itself solely. Clearly, WP’s statement also attributed the credit to many other Singaporeans which, even according to Ms Indranee, is a fact and true. IR: They are effectively saying the Medishield Life enhancements are their ideas. There is vague attribution to articulation by "many Singaporeans" ( more on that later ) but that's about it. The implication is that Medishield Life happened because they spoke up in parliament. No credit is shared or given to anyone else. Me: Again, this is not true. WP clearly said there were many Singaporeans who also contributed which resulted in the enhancements to Medishield Life. This – once again – is a fact which Ms Indranee accepted. So, quite strange why she keeps contradicting herself. IR: While WP MPs have raised healthcare issues in parliament, so too have PAP MPs and in far greater numbers and volubility. Me: No surprise here and nothing to claim credit about – PAP has 80 MPs in Parliament. Naturally, they would be “far greater in numbers”. As for volubility, well, if they were we would not be having so much confusion today about the changes to Medishield Life, would we? Even Grace Fu was saying just yesterday that the govt has its work cut out in explaining the changes. IR: The fact is, Medishield Life was born out of the Our Singapore Conversation (OSC) with the active participation of 50,000 Singaporeans, and healthcare was identified as a key area in which "Assurance" was needed. Thousands of Singaporeans from all walks of life contributed myriad ideas which were collated, reviewed, analysed, and formed into policy, eventually taking concrete shape in the form of Medishield Life. Medishield Life is the sum of the combined efforts of OSC participants, civil servants who manned the OSC secretariat and those who worked tirelessly on the policy recommendations, the PAP ministers, in particular the Ministers for Health and Finance and Mr Bobby Chin and his Committee all of whom worked to translate it into reality. It is a live example of what many have called for - a collaboration between government and people, and government listening and acting directly on what it has heard. Ah, you may say, but WP also attributed the recommendations to Singaporeans. Well, let's see what WP has said elsewhere about this. Me: I think again this is a little misleading. While certainly many Singaporeans have given their feedback at the OSC, surely there were also others who did so via other channels – newspaper forums, MPS, online comments, blog articles, etc. To attribute the changes to only what transpired at the OSC is misleading. IR: In the debate on the President's address. Mr Low Thia Khiang said: "To me what is important is the outcome of political process... constructive politics does not happen by order of the government nor does it happen through a national conversation or public consultation". IR: A lofty statement and a grand dismissal of the OSC process and public consultation. Me: I don’t see how Mr Low’s remarks are a dismissal of the OSC process. On the contrary, if the changes to the Medishield Life are solely a result of the OSC (which I doubt), it still doesn’t contradict what Mr Low said. Constructive politics does not indeed happen just because you sit down and talk about things. It depends on the result of such things, as Mr Low alluded to. So, I’m not sure what Ms Indranee is taking issue with. IR: Yet here we have one of the most constructive outcomes of a national conversation and public consultation - Medishield Life, an outcome for which WP now seeks to take credit. Me: This again is misleading. In fact, Ms Indranee herself seem to claim credit for it – when she mentioned that “PAP MPs and in far greater numbers and volubility” spoke up on the matter. So, this is rather disingenuous and one might even dare say, hypocritical of Ms Indranee. Me: If WP saying that it has raised the matter previously means they are “claiming credit” for it, then surely Ms indranee saying exactly the same thing – that PAP MPs “in far greater numbers and volubility” also spoke up for it – is claiming credit as well. No? IR: Two weeks ago, they dismissed the citizen feedback process. Me: Nope. WP didn’t dismiss the feedback process. IR: Now they attribute this policy to citizen feedback, obtained by that very same process. Me: This is misleading. See above. IR: In the last line of their media statement, WP says that it "will continue to advocate that the Government should shoulder a higher proportion of healthcare costs, and share more risks on behalf of Singaporean families." IR: WP provides no details of how this sweeping objective is to be achieved and they speak as though the government operates apart from its citizens. Me: As far as I am aware, the People’s Action Party (PAP) itself has provided no details on how the Government could achieve its objectives. See, the problem is that Ms Indranee conflates the Government and her party. The PAP does not come out with policies either. It is the Government which does – and with a big helping hand from the civil service which gets down to the nuts and bolts. Me: Is Ms Indranee herself able to come up with a full policy? Or will the PAP itself be able to? Not that I am aware of. Me: In fact, during GE 2011, the PAP was criticised precisely for not offering any policies. Its manifesto was roundly castigated for containing nothing more than vague motherhood statements. [Link] Me: Did we hear the PAP disclose the 6.9m population possibility during the election - or in its manifesto? Me: In fact, bloggers observed that "the PAP document consists of 25 pages compared to the 63 pages in the WP manifesto. Bloggers also noticed that the WP manifesto has detailed recommendations in 15 different policy areas." Me: One blogger said the PAP manifesto "seems to contain a series of vague promises, with neither details of specific policies nor information on how the various stated aims were going to be implemented." Me: So, for Ms Indranee to claim credit for Government policies without acknowledging that it is with a huge dose of help from the civil service is to well, not paint the full picture. Me: In fact, in that same Parliamentary debate two weeks back, PM Lee acknowledged (and accepted) that the WP “may not have the full complexity” of policy making. So, what is Ms Indranee talking about? Never mind that when they call on the government to pay more, they are effectively calling on taxpayers to pay more, since government is funded largely through taxes. Me: This is rather telling – for it is the Government which is now asking taxpayers to pay more for Medishield Life. In fact, the new premiums seem to have been doubled, increased by more than 100 per cent. Me: So, who really is asking (forcing) taxpayers to pay more for Medishield premiums? IR: Never mind that when they call upon the government to bear more risk, they are effectively asking the taxpayer to bear more risk as the risk has to be funded and paid for. Me: See above. Even those with pre-existing conditions have their premiums raised by 30 per cent – BY Ms INDRANEE’S GOVERNMENT. Never mind that WP has not provided any concrete proposals or details of how this is to be achieved, e.g. how high premiums should be vis-a-vis what the coverage should be, nor are there any suggestions on where the money to pay more is going to come from, nor how the higher risks they call for is to be assumed or protected against. Me: This is the height of irony – for Ms Indranee’s own government (she is a minister of state) has not even provided how much premium exactly Singaporeans are to pay. Neither has her government provided details of how the new changes are to be funded. IR: The sum total of what WP is really saying is: "Whatever the government does, we will say "Do more!" Me: And PAP MPs don’t say the same thing? I thought they were “far greater in numbers and volubility” in saying so?? IR: Thus providing the clearest possible illustration of that void which PM highlighted in parliament in response to Mr Low: ".... what you stand for cannot be what the PAP is doing and a little better. That means you have no stand. Whatever the PAP is doing, ask them to do better. That is easy. I can do that too." Me: This is lame. As mentioned above, PAP MPs do and ask for the same – do more! And indeed, the Government itself has often said it will do more! So, Ms Indranee, alas, is grasping at straws, engaging in meaningless and semantical and destructive political nitpicking.  I expected better from a Minister of State.--------------------  ** Read this very excellent response by Howard  Lee to the nonsensical and ill-informed Facebook note by Indranee Rajah. In addition, as can be seen in Giam’s opening speech at TOC’s dialogue, WP’s position was far from vague. Giam articulated specific proposals about what WP sees as issues with Singapore’s healthcare system. Also, it is useful to note that many of these were held since November 2013, when the Medishield Life Review Committee was still in deliberation. Indranee might also have missed Giam’s interview with the Straits Times, when he said, “Three days after the MediShield Life review committee was set up, I made an adjournment motion speech in Parliament where I gave a few proposals about how we can improve MediShield.” But if you were to go a little further back, you would realise that WP has documented a multi-tiered position on Singapore’s healthcare system. When it announced its election manifesto leading up to General Elections 2011, WP dedicated a chapter of five full pages to what they think Singapore’s healthcare system should be. Within these pages, a total of 21 proposal points on healthcare were made. Andrew Loh * From Andrew Loh's Facebook page.  Read More →