Thursday, 26 February 2015

#SGBudget2015: Baas, Mehs and Happy Bleats.

A review of Budget 2015 from the point of view of someone with retired elderly folks, home mortgage to pay for and an upcoming child. All screen caps are taken from the official SG Budget 2015 page.

Meh. How useful are career counsellors? I doubt that someone sitting in an office all day can be equipped with adequate "industry experience and knowledge" to advise job-seekers. I think they should put more effort into the "enhanced internships". Learning is more effective when it's hands-on.

Happy bleats. It sounds promising. The Workforce Development Agency (WDA) website already has a plethora of courses, so the latest announcement is like the icing on the cake, which should entice more Singaporeans to sign up for courses to upgrade their skills. In the past few years, the Government has put in a lot of effort to improve the workforce. I remember when I was reconsidering my career path many years ago, there weren't so many courses available, and if one was not sponsored by an employer, the subsidies were meagre. So good job to the Government for all the improvements made since then.

I am curious, though, about how they intend to monitor the use of the SkillsFuture Credit. And for those who do not use it, what's going to happen to the credits in their account?

The implication of increased subsidies by the Government for job training is that it could lead to an inflation of course fees with more course takers and more people suddenly wanting to become "trainers and consultants". Some of them may not be up to the mark and may be taking advantage of this free for all. I hope the Government can keep an eye on that, and not waste funds on courses conducted by inexperienced trainers.

Baa. The contribution rate is not the problem. The main issue is that the CPF is being treated like an infinite source of cash to fund things like overpriced public housing, education fees, investments, etc. It has veered away from its original aim of being a fund to be withdrawn and used in old age. If we do not address this, it is a sinking ship. It's just taking a longer time to sink. The CPF has achieved a decent ranking when compared with other retirement funds around the world because it was only in the last decade that Singaporeans started spending their CPF extensively even before they reach retirement, mostly on expensive public housing. The full consequences have not hit us yet. Using our retirement savings to buy property makes our retirement fund vulnerable to fluctuations in the property market. An elderly person risks losing a significant portion of his retirement fund by buying and selling property at the wrong time, and this is worsened by the fact that the Government actively encourages people to invest in expensive public housing. There is a real risk here that the tweaking of contribution rate does not address.

Happy bleats. These measures are slightly better as they encourage working and saving in a subtle way.

Only one happy bleat. I was upbeat about this until I saw the line stating that it will only be implemented in 2016. Why not this year?

I am also concerned about the means-testing component. Will it benefit the right people? Those who need help the most are the low-income elderly with children who are earning low income themselves, or who are in the lower middle class with their own families to support.

I know of some low-income elderly with numerous children who are able to support them, or who have rich children who are living on landed property. Because these elderly continue living in their small flats, they collect a lot of Government subsidies and their children do not have to support them even though they can afford to do so. My concern is that the Government may be helping the wrong people if they only focus on the elderly's wages, level of household support and type of housing. Some may think that I am mean for saying this, but it is time that the Government reviews the beneficiaries of its assistance schemes, and those whose financial status have improved should have their welfare payouts removed. There are some elderly who do not need the money as their kids have grown up and are now doing well, and there are people who genuinely need the money but who are not getting it.

One common refrain among social workers that I heard was that "once you start giving them social assistance, you can't take it back even though their financial status has improved". This is not true and a lazy way to go about it. Assistance rendered should not be permanent. There should be review from time to time.

What if after removing their welfare payouts, their rich children refuse to give them money? Well, they can go to the Tribunal for the Maintenance of Parents.

(Off-topic: I am sure there are many offspring around who are not keen to support their parents for various reasons, some of which may be justified. Perhaps one day we can remove the legislation, but pragmatically, I don't think we can do so yet, because the current elderly population from the "Pioneer Generation" are generally not finance-savvy. They were brought up to believe that their children would support them, and that they need not plan for retirement. The day we have a more self-reliant retired population is the day that we can stop legislating filial piety.)

Meh for D1 and happy bleats for D2. Nobody ever complained about having too much money. However, the partnership with childcare operators will need to take into consideration the operators' overhead costs in running the childcare. It would be extremely difficult for them to keep fees affordable and send their teachers for training if rents continue to rise. This issue was highlighted back in 2012. If there isn't already, there should be some form of rent control for operators providing childcare services. Better and cheaper childcare facilities will encourage more women to rejoin the workforce, which is what we want to alleviate our manpower shortage, right?

Happy bleats. These measures are excellent.

Happy bleats. Transport subsidies will definitely be appreciated. A lot of parents complain about transport costs, and with the Government trying to squeeze more tax from vehicles and petrol, the school bus operators may be affected too.

Meh. The first point is not "fostering", right? More like incentivising. 300% is a lot.

Happy bleats. No one has ever complained of having too many GST vouchers.

Happy bleats. I would prefer, though, that they give more rebates to people living in smaller flats. I don't think these rebates are necessary for people living in bigger flats like 5-room and executive. The rebates, however, mean a lot more to those living in 1- and 2-room flats. Their rebate months should have been increased. Three months is too few. 

Meh. A taxi driver once told me how he switched to a lower carbon emission taxi model, but then gave it up because it was inconvenient as the gas his car needed wasn't available at all gas stations. I guess households with cars can now use their savings from the maid levy to pay for the increase in petrol duty.

Baa. I can see that the Government's focus is on taxing the high-income-but-not-super-rich category. Someone earning $320,000 including bonuses may draw a gross salary of about $20,000 plus a month. 

The people earning more than $20,000 a month are certainly not among the super rich. Why stop at "above $320,000"? Shouldn't the increase in income tax target the super rich rather than the somewhat rich?

Is it because the Ministers don't want to be taxed more??? :/
Whether an individual earns $20,000 a month or $200,000 a month, his or her income tax rate is the same. This is the one aspect of SG Budget 2015 that I am least happy about. Bear in mind that the salary scale shown here does not include their substantial bonuses. Their total taxable income is much higher.

Friday, 13 February 2015

AHPETC vs PAP: The big debate that nobody cares about.

With the AHPETC debate heating up the Parliament for the past two days, I had expected more furore from the supporters of both parties about it. Yet scrolling through Twitter and blog updates yielded nothing spectacular. Yes, there were blog entries from the usual suspects like Bertha HensonFAP and TOC. But from the rest of the tweets and blogs, I could only find the usual, "Ah, the Government is at it again..." and "Sian, why are they still at it....?" Not many people seem to be taking the debate seriously. I wonder why.

Even people who tried to drum up support for the Government's cause against the Workers' Party on certain forums failed to elicit much response. I guess Singaporeans are all too jaded by now. If the politicians haven't noticed, many people are getting sick of the politicking. We also have better things to care about... It is, after all, the busy festive season for some of us.

And that could be it. The "powers that be" may have chosen the wrong time to have this controversial debate. If the PAP thought that having this O$P$ debate in Parliament near the Chinese New Year period is going to make people turn against the WP, it may have played its cards wrongly. Generally, people feel more generous during festive seasons. They are not so nit-picky about where the dole goes. This has been proven time and again by research on the behaviour of public donors. But I digress.

What the PAP did get right, however, was in questioning AHPETC for the lapses using easy-to-understand sound-bytes. Phrases and words like "conflict of interest", "lost monies", "hara-kiri", "rot", etc., were bandied around by PAP Members of Parliament. And they are much more memorable than the long and tedious speech that Sylvia Lim put together to explain in precise detail where the money went. She obviously has not read the book Don't Think of an Elephant. By framing her reply in a defensive way, "The auditors did not find that the Town Council had been dishonest", she is unwittingly creating the impression that there could be some undiscovered dishonesty. In this respect, Faisal Manap did better, because he simply said, "We have been honest in dealing with the lapses." Do take note, politicians. If you have been honest, just say you have been honest. No need to say that you are "not dishonest".

I understand that both PAP and WP are trying to appear like they aren't politicking and that they are hotly debating this topic because they really care about us, the residents of AHPETC. But let's just say, most Singaporeans were not born yesterday. As a resident, I feel perturbed that "residents' needs" are being highlighted, but nobody's getting the opinions of the residents. At least, no complaints from residents have been highlighted thus far. There's no proof of any link between the supposedly lacklustre accounts management of WP and its impact on residents. The PAP claims that it's very concerned about the residents being "shortchanged". What do they mean? And how have the residents been shortchanged? Even the PAP MP Sam Tan who revealed that he lives in Aljunied GRC did not explain if he was shortchanged. I am rather bewildered because I don't feel that my life is any worse off than it was before. Having lived in Tanjong Pagar GRC before, I don't feel that there's anything particularly special about a PAP Town Council compared to a WP Town Council. There's no evident sign that my housing estate in AHPETC is falling into a state of disrepair. The hard truth is that when people do not see any difference in their lives, it's really all a matter of sums and figures that have nothing to do with them.

The WP similarly played the "residents card", claiming that the transition period after the General Elections of 2011 was tough because they had to scramble together their resources to take over. Low Thia Khiang sounded almost plaintive when he said that nobody wanted to work for him and emphasised that residents' rights should be protected with a depoliticisation of the processes in the transfer of power between parties. That is a fair enough point to make and I can sense their exasperation and frustration. Nevertheless, I think they need to start being more committed by providing a timeline of just when they intend to produce all the necessary documents that the Government wants. Failing which they will definitely lose some votes. These swing votes may not necessarily swing back to the PAP, but more people may start voting for other political parties if they wish to contest in the AHPETC wards.

In a way, I am glad that the PAP is questioning the WP because I expect no less from a political party in Singapore. The PAP has, of course, set a very high standard for governance, and any party that wants to fill those shoes must be able to meet the challenge. In a climate where being critical of the Government is becoming the norm, it is very easy for an opposition party to get complacent and assume that people will always sympathise with them. The other hard truth is that Singaporeans also want to see results and they will not vote against the incumbent MP if there's nothing wrong with him or her. For example, my friend who is sometimes critical of the PAP still voted for her PAP MP because he is doing a good job, in her opinion. He is frequently seen at community events, and she is happy with the way her neighbourhood is being maintained. Her views of WP echo the views of the PAP, that it is too much of a "sound and fury" type of party. While I acknowledge the tremendous efforts of WP MPs in Parliament, Khaw Boon Wan is unfortunately right that running a country requires a lot of expertise in boring tasks, like accounting. The WP cannot forever hope to deflect criticisms away by claiming that it is being hampered by the Government. The voters expect them to be able to stand up to the PAP. It is hoped that WP will one day be able to present itself, not only as a "co-driver" or a "check and balance" party, but as a party that is able to lead and run the country in a truly democratic way.

Since the motion to check on AHPETC has been passed today with 85 MPs approving it, I suppose there won't be a further debate about this in Parliament. Some queries I have remaining are:

1. Did the WP reply to the nonsensical assertion by the PAP that something is wrong because AHPETC lost money, while its managing agent, FMSS, made money? If not, why not? It is nonsensical, because to the best of my knowledge, the managing agents of Town Councils aren't charity organisations.

Is the PAP implying that the managing agents that they have outsourced the care of their Town Councils to should, in fact, lose money? Then who will want to set up a company to manage our Town Councils? Sure bankrupt one.

2. When is WP going to tell us the timeline that it has proposed to complete the annual report that it apparently owes the AGO?

3. So, the PAP has repeatedly highlighted the WP's lapses in supervising a "conflict of interest" and in upholding "moral integrity". But I have seen many online comments telling the PAP to "look in the mirror". It's high time that the PAP rethinks its practice of assigning important positions to "related parties" and apparently awarding multi-million-dollar contracts to its associates in the PAP grassroots such as in this case and this one as well?

Should such lucrative tenders be awarded, will the PAP leadership walk the talk and reassure us of the fairness of the procedures by disclosing to us the winning companies' associations with the PAP before the socio-political blogs "discover" them?

To put things in perspective, such connections between "related parties" are endemic in Singapore. Just ask the people who've been around in the business communities. If the PAP hopes to convince the public by waving the "red card" in WP's face, i.e. alleging moral dishonesty because of conflicting interests, it should probably start by getting rid of the culture of hush-hush decision-making and the practice of suka-suka giving perks to the people you like and ignoring the people you don't like in professional dealings.

Taking verbal potshots against the opposition parties in Parliament can help you to control public discourse only up to a point. Like I said, most Singaporeans were not born yesterday.

Some new blog posts that have come up:

The finance-savvy blogger known as "Cynical Investor" has said that he might blog about the potential hurdles that WP faces in doing the "forensic audit" that the PAP MPs have demanded for. I look forward to reading his insights, which will be enlightening because he seems to know a lot about accounting practices. However, his recent argument on the non-financial side of the matter isn't that convincing. For instance, he echoes a commonly touted view that the mistakes by WP are particularly damnable because they have lawyers on their team. There are two assumptions in that argument: First, professionals don't make mistakes. Second, all lawyers are knowledgeable in laws dealing with conflicts of interest between political organisations and private companies. I am sure all lawyers do receive general training in different types of law, but I am not sure if Sylvia Lim and Chen Show Mao are necessarily equipped with the skills to peruse laws dealing with this type of conflicts. (Like how I am not sure if colorectal surgeon Dr Koh Poh Koon would be able to operate successfully on my womb, even though he's a distinguished surgeon in his field.) As the WP has admitted, one of its mistakes was in not engaging a consultant to oversee internal controls to ensure that they have complied with the Town Council Act.

Kenneth Jeyaretnam has also written a detailed post about the problem with husband-and-wife teams who have too much power. I especially concur with this paragraph:

We should not lose focus on what this attack is really about. We must resist the PAP’s attempt to turn MPs into mere town council managers. By putting the WP on the defensive over their failings in corporate governance the real aim of the PAP is to deter the Opposition from carrying out their proper function, which is to force the Government to be transparent and accountable and govern in accordance with the people’s wishes.

Indeed, Opposition MPs are around to hold the Government to account. It was unfortunate that in running the Town Council, WP hired a company that was unable to meet up to expectations. However, given that the PAP is still dominating the Government and looks set to continue its dominance, the fact that FMSS has an inadequate system should not be a factor in Singaporeans deciding whether or not to vote in WP MPs. We still need Opposition MPs to ensure that the Government does not rot. 

Rot is inevitable if the people in power have a vested interest to ignore public opinions, and carry on doing whatever it takes to keep themselves in power. This is evident in the issue of the low birth rate where blame was initially cast on the "selfish lifestyle choices" of the younger generation. Yet after finally listening to public opinion and building more flats, Singapore's marriage and birth rate went up last year. Many of the couples who married last year would have applied for their Built-To-Order flats in 2011, the year of the last General Elections (the waiting period for a BTO flat is about three years). In fact, I think it will only benefit Singaporeans if the PAP and WP can perform checks on each other, to keep each other on their toes. 

In my opinion, Singaporeans ought to have much larger concerns than petty municipal issues. Even though no evidence of wrongdoing has been found, supporters of the PAP have brought up examples of WP's supposed past wrongs as proof of poor financial management, such as changing the block signs. It's been years since the block signs were changed, and the pro-PAP people are still harping on it and claiming that it's a waste of public funds, though it is evident from the photos that the new block signs are more legible than the old faded block signs. Yet in the past few years, the Government has also built and rebuilt playgrounds, roads and demolished relatively new amenities to make way for newer amenities. I think that we should trust our political leaders if we have voted them in and I do not feel that Singaporeans need to nitpick on every decision. A change in the colour of the block signs and the removal of a basketball court is not going to have a significant impact on our lives.

What's more important is that we have a Government that is able to introduce policies with our best interests in mind and that is able to provide a safe and conducive environment for our family to live in and for our children to grow up in. What kind of country our children inherit depends much on us.