Issues That Matter

Uniquely Singapore

F1 or F9?

LEONG SZE HIAN

ALEX LEW TAN YUNYOU TAN LI PING LIONEL CHEN

First Edition, October 2008.

Chief Editor: Andrew Loh

Chinese Editor: Ong Su Kiat
Producers: Tan Yunyou, Alex Lew Yan Liang
Graphic Design: Tan Yunyou

Copyright, Dicken Pte Ltd, Singapore.

ISBN
All rights reserved. No part of this book may be reproduced or transmitted
in any form without prior permission from the publisher.

Authors
Leong Sze Hian is a Wharton Fellow and alumnus of Harvard
University. He has authored 4 books, been quoted over 1000 times
in the media, and invited to speak more than 100 times in about 20
countries on 5 continents. He has served as Honorary Consul of
Jamaica, and is currently the President of the Society of Financial
Service Professionals. He has 3 Masters degrees in Financial
Planning & Financial Services, 2 Bachelors degrees in Economics &
Insurance, and 13 professional qualifications.
Alex Lew Yan Liang is the Chairman of the Society of Financial
Service Professionals (SFSP) Student Sub-committee. He is a double
major undergraduate at Nanyang Business School and is
concurrently pursuing the CFA charter. Alex is an active student
who takes leadership positions in school clubs and external bodies.
Not only does he have a passion for finance, he is also interested in
policy-making in Singapore. He is also the founder of TIA
Conferences and is currently the leader of the group.
Tan Yunyou is a third year undergraduate at Nanyang Technological
University, majoring in Civil Engineering. He co-founded TIA
Conferences, which partners societies such as SFSP to organise
public forums on investing. He has keen interest in graphic design as
well as policy-making in Singapore.

Tan Li Ping is the Vice Chairman of the Society of Financial Service

Professionals Student Subcommittee. She is a Banking and Finance
undergraduate at Nanyang Business School and enjoys dancing and
participating in community work. Li Ping is also the leader of the TIA
Conferences marketing team.
Chen Yingren Lionel is a final year business undergraduate at
Nanyang Business School. His interests lie in the hands-on
application of processes and the marketing field in business.

Editors
Andrew Loh is the founder of The Online Citizen (TOC) and is
currently its Deputy Editor. He is a strong believer that
Singaporeans, particularly the younger ones, need to throw off the
shackles of fear when it comes to participating in the political affairs
of the nation. He presently works full-time on TOC, having
previously been involved in a family business.
Ong Su Kiat is a keen observer of the policy-making arena in
Singapore. He is a Hwa Chong Alumnus, and is currently pursuing a
degree in Banking and Finance. He also has a strong passion for
Chinese culture.

ACKNOWLEDGEMENT
We would like to thank Mr. Tan Kin Lian for his kind endorsement
and our fellow Singaporeans for identifying these issues and
indirectly contributing to the creation of this book.

CONTENTS

FOREWORD ........................................................................................ I
PREFACE .......................................................................................... III
............................................................................................... V
1. CHARITY .................................................................... 1
STOP PROFITING FROM CHARITY ........................................................... 2
............................................................... 3
A DISCREPANCY IN CHARITY FUND-RAISING ............................................ 4
........................................................................... 5
TRANSPARENCY NEEDED FOR CHARITY SHOW CALL CHARGES ..................... 6
....................................................... 7
HOW MUCH HAS BEEN PAID FOR CHARITY SHOWS? ................................ 8
........................................................... 9
LESSON FROM KIDS: STOP PASSING THE BUCK....................................... 10
..................................................... 13
2. CPF .............................................................................. 16
INCREASE 2.5% CPF INTEREST RATE.................................................... 17
2.5% .................................................... 19
MANAGE CPF PROPERTY CAP WITH PLANNING ..................................... 21
..................................... 23
RELAX CPF RULES FOR REAL ENTREPRENEURSHIP................................... 25
................................. 27
MEDISAVE A BIG BURDEN FOR THE LOW-INCOME ................................. 29
.......................................... 31
MAKE MINIMUM SUM PAYOUTS LAST LONGER ..................................... 32
................................................. 35

3. CREDIT ............................................................................. 37
NEW CREDIT CARD MAY LEAD SINGAPOREANS INTO MORE DEBT ............. 38
................................. 40
NETS FEE HIKE: COMPETITION LEGISLATION SHOULD BE ABOUT PROTECTING
CONSUMERS ................................................................................... 42
NETS ..................... 45
BE FAIRER TO DEBTORS BY MODIFYING PLANNED DRS........................... 48
(DRS) ........................... 51
PITFALLS OF CREDIT-CARD BALANCE TRANSFERS .................................... 53
............................................................. 56
TIME TO INCULCATE VALUES OF THRIFT, MODESTY IN CHILDREN .............. 58
............................. 60
4. EDUCATION ..................................................................... 62
WHAT IS THE RATIO OF FOREIGNER TO LOCAL SCHOLARSHIPS?................ 63
......................... 65
JOHN HOPKINS UNIVERSITYS-A*STAR BREAK-UP RAISES MORE QUESTIONS
.................................................................................................... 67
JHU A*STAR ................................. 70
BETTER TO FAIL AND LEARN FROM IT .................................................. 72
..................................................................... 75
LIFE-LONG LEARNING BRINGS INTANGIBLE BENEFITS TOO ........................ 77
............................................. 78
BALANCE USE OF FUNDS, MOE ......................................................... 79
......................................................... 81
5. HOUSING ......................................................................... 83
SETTLE QUESTION OF HDB SUBSIDY ONCE AND FOR ALL ........................ 84
..................................................... 86
INCOME CEILING FOR HDB FLATS MAY BE TOO LOW ............................. 87
......................................................... 89
LET SINGLES RENT VACANT FLATS WITHOUT PAIRING UP ........................ 91
..................... 93

CAN A BANKRUPT LOSE HIS HDB FLAT TO BANKS? ................................ 95

................................. 97
'DOWNGRADERS' NEED MORE INFORMATION FROM HDB ...................... 98
................................. 100
6. HEALTHCARE ......................................................... 102
DON'T RAISE MEDISAVE CEILING ....................................................... 103
............................................................... 106
RAISING COSTS FOR FOREIGNERS MAY NOT BENEFIT SINGAPOREANS ...... 108
............... 111
ISSUES HEALTHCARE PANEL SHOULD EXPLORE ..................................... 113
....................................................... 116
RELOOK MEANS TESTING FOR DISABLED............................................. 119
............................................... 122
FEE HIKES FOR NEEDY SHOULD BE REVIEWED...................................... 125
....................................... 126
7. INVESTMENTS ............................................................... 127
LOOK AT IMPACT OF LOW-COST PENSION FUNDS ................................ 128
............................................................... 130
HAVE CPF INVESTORS FARED BETTER SINCE 1993-2002? .................... 131
1993-2002 ................ 132
DISCLOSE SINGAPORE'S RETURNS ON RESERVES................................... 133
........................................... 135
HOW ABOUT A COMMITTEE ON CPF RETURNS? ................................. 136
....................................... 138
QUESTIONS REMAIN AFTER REVIEW ON ANNUITIES .............................. 139
....................................................... 141

8. POPULATION AND EMPLOYMENT ...................... 143

REVIEW POLICIES TO HELP ORDINARY SINGAPOREANS COPE WITH RISING
PRICES ......................................................................................... 144
................... 146
RETRAINING LOW-WAGE WORKERS: LET'S BE REALISTIC ....................... 148
................................... 150
MORE RESIDENTS WORKING FOR AN INCOME THAT HAS NOT CHANGED FOR
10 YEARS ..................................................................................... 152
........................................... 154
DISCLOSE MORE INFORMATION ON FOREIGN LABOUR .......................... 155
....................................................... 158
SHOW THE NUMBERS TO DISPEL NOTION THAT FOREIGNERS TAKE AWAY JOBS
FROM SINGAPOREANS .................................................................... 160
........... 162
9. TRANSPORT ................................................................... 164
EXPLAIN REASONS FOR BUS FARE INCREASE IN DETAIL .......................... 165
............................................... 167
THE POOR WILL BENEFIT MOST FROM TRANSPORT FARE CAP................ 168
....................................... 170
LET FIRMS LINK THEIR NAMES TO MRT STATIONS ............................... 172
................................................... 174
WHY NOT GIVE CASH REFUNDS? ...................................................... 175
........................................................... 177
WHY IS MONITORING TAXIS SO COSTLY? ........................................... 178
....................................................... 180
CONCLUSION ............................................................................. 182
........................................................................................... 184
APPENDIX .................................................................................. 186

Foreword

Foreword
Not many Singaporeans are as consistent and persistent - as Sze Hian
when it comes to writing letters to the press. Over the years he has written
more than 1,000 such letters to The Straits Times, the Business Times,
Today and The New Paper.
Known for his ability to "devour numbers" and explain statistics with ease,
many have consulted him on issues which are difficult to understand or too
intricate to wrap one's mind around. Matters such as the changes to the
Central Provident Fund, education and healthcare all of which are close to
Singaporeans' hearts.
Members of Parliament, private individuals, journalists and reporters all
have sought his opinion on matters of public concern and interest. His
many overseas speaking engagements testify to his much-sought after
status as well.
If you are wondering why he gives so much of his time to all these, perhaps
the reason is that Sze Hian feels information is important. With more
information, Singaporeans will be able to make better decisions on
particular issues. Questioning government policies may result in better
policy formulation as well. The end result is that this benefits Singaporeans
ultimately which, I suspect, is his goal.
It is thus appropriate that Sze Hian publishes this book of selected letters, in
both English and Chinese. Through them you are enlightened, your views
clarified further and your questions, perhaps, answered as well.
Serious at times, humorous at others, but always penetrating, Sze Hian's
intimate knowledge forged over the last 30 years of his professional life as a
I

Foreword
financial adviser is evident in these letters. Together with his on-the-ground
experience through his volunteer work with various Non-Governmental
Organisations, the reader will easily relate to the issues raised in this book.

Tan Kin Lian

II

Preface

Preface
We were interning at a finance institution a while ago in the central
business district of Singapore when we met Mr. Leong Sze Hian for lunch.
Halfway into our lunch, an old blind man, guided by his aged wife, came to
our table to sell us some packets of tissue paper for a dollar. It was a
startling encounter. Across the street was the business district where top
global corporations were located, but right in front of us, we saw the face
of poverty.
We were then inspired to discover the challenges faced by the lessprivileged in Singapore. As keen observers of the policy making scene in
Singapore, we decided to publish a book that consisted of Mr. Leongs
articles that best represent the problems Singaporeans face. To address the
Chinese-educated population in Singapore, we decided to translate the
articles to Chinese.
There is no doubt that Singapore has been one of the most successful
nations in our region. Over the last few years, our nation has achieved
consistent economic growth. However, there are several issues that the
common man and the less- privileged citizens face in Singapore.
This book aims to vocalize the problems and issues faced by them. We
believe that the contents of this book are important to anyone who has a
stake in Singapore. Through the articles in this book, we plan to raise the
awareness of present policy issues.

There will be 9 topics of discussion;

1)

Central Provident Fund

2)

Charity

3)

Credit
III

Preface
4)

Education

5)

Healthcare

6)

Housing

7)

Investment

8)

Population and Employment

9)

Transport

Besides national education textbooks and ministry publications, we strongly

urge Singaporeans, PRs and visitors to spend some time understanding the
structure of our society through this compilation. By identifying these
issues in this book, we hope that solutions can be found to solve these
problems.
To put this book together, Andrew Loh (Editor) sourced for the articles that
best represented the selected topics. Andrews wealth of experience as an
editor in The Online Citizen was truly a great help to our team. Ong Su Kiat,
an alumnus of the Hwa Chong family, has also been a great pillar of support.
His superior Chinese language skills were important in editing the
translated articles.
Finally, we would like to thank Mr. Leong Sze Hian for being a constant
source of help in the production of this book. His articles provide a
refreshing view of the policy-making arena in Singapore.

We hope you enjoy the book!

Alex Lew Yan Liang

Tan Li Ping
IV

Charity | 1

1. Charity

1 |

Stop Profiting From Charity

th

The Business Times, 29 October 2002

I refer to the newly launched National Council of Social Service on-line
charity donation portal www.donation.org.sg.
I would like to express my support for this new initiative, as I feel that doing
good deeds should not be motivated by the possibility of material gains,
such as prize money.
Sometime ago, I was approached by a primary school student with a
donation card from a charity , which indicated that he would receive a
pencil case if he accumulated 50 points ($50) and a bag for 150 points
($150).

Should children be encouraged to do good deeds for material gain?

When I was a child, my father taught me that one should do charitable

work, because it is meaningful, and not for some reward (or points).

Perhaps I am old-fashioned, or should I just change with the times?

Charity | 1

, 2002 10 29
National Council of Social Service
www.donation.org.sg

50 $50 150 ($150)

1 |

A Discrepancy In Charity Fund-Raising

The Business Times, 13th May 2003
I refer to media reports about the charity bread scheme running out of
funds. Although it will get a $50,000 grant soon, the scheme costs $20,000
a month to run, and may fold if there are no sponsors.
The programme has 400 volunteers delivering leftovers from 70 bakeries to
68 welfare homes every day. It would be a pity if $20,000 a month cannot
be raised to support tens of thousands of Singaporeans in welfare homes.
The Community Chest is raising $42 million this year to fund 130 social
service programmes and support 324,000 beneficiaries.
The National Kidney Foundation raised $53 million in 2001 to support about
2,200 patients for dialysis with the NKF this year. To treat a patient, it costs
NKF $2,600 a month.
The above statistics seem somewhat disproportionate. I would like to ask
whether anyone can help us understand the above phenomenon in
charitable giving in Singapore.
Has anyone or any tertiary institution done any survey or research on
charitable fund-raising and giving in Singapore?

Charity | 1

, 2003 5 13

$50,000
$20,000
400 70
68
$20,000

130
324,000
NKF 2001
2200 NKF 2600

*
http://www.mfa.gov.sg/experience/apr2003/Images/Coverstory.pdf
http://www.foodheart.org/news/index.php

1 |

Transparency Needed For Charity Show Call Charges

th

The Business Times12 August 2005

I refer to the President's Star Charity 2005 show on August 6 and July 31.
Unlike previous charity shows, there was no 20-cent charge for each
donation call. I would like to ask if this is the first time that a charity show
does not charge for calls.
How much revenue has telephone companies made from all the charity
shows in the past, which I understand began in 1994? For example, the NKF
received a total of 3.2 million calls during its three charity shows in April
2004, and 2.6 million during its first-ever Children's Medical Fund Show in
July 2004. At 20 cents each, does it translate to a revenue of $1.16 million
for these 5.8 million calls? If each call donation was $5, the 20-cent call
charge means that an additional 4 per cent did not go to the beneficiaries
of the charity.
Should we add this 4% back to determine the actual percentage that goes
to the beneficiaries of the charity?
Do charity shows in other countries charge for donation calls? Will charges
for donation calls and SMS be scrapped for all future charity shows?

Charity | 1

, 2005 8 12
8 6 7 31 2005

1994 1994
, NKF 2004 4
320 , 2004 7
260
, 580 16 ?
5 , 4%
4%
?
?

1 |

How Much Has Been Paid For Charity Shows?

nd

The Business Times22 November 2005

I refer to the article 'Cancer Show figure covered all costs: NKF' (The
Business Times, Nov 18), and media reports about Mediacorp refuting
allegations that it profited from the NKF Cancer Show.
NKF had paid Mediacorp $2.5 million to produce the show. Before the NKF
saga, I believe there were charity shows in almost every month of the year.
If there were, say, 10 charity shows in the year, the total sum received may
be around $25 million.

This amount is, I believe, more than half the total sum collected by the
Community Chest in an entire year. Why was the sum received never
disclosed until now? I would like to ask how much in total was paid for all
charity shows last year.
In my letter 'Transparency needed for charity show call charges' (The
Business Times, Aug 12), I asked how much charity revenue has been lost
through the 20 cents charge for calls, and whether following the President's
Star Charity Show in August - which was the first time that calls were free would mean that future charity shows would also be free of call charges.
To-date, there has been no reply, and call charges have started again at the
last charity show.
Can TV broadcasters and anybody else who have been paid, tell us once
and for all, instead of disclosing in bits and pieces, how much has been paid
to them for all charity shows since they began in 1994?

Charity | 1

, 2005 9 22
NKF
11 18
NKF

10

8 12 $0.20
8 $0.20
$0.20

1994

1 |

Lesson From Kids: Stop Passing The Buck

th

The Straits Times24 December 2005

I refer to the article 'PWC rapped for not spotting lapses' and the letter
'Former NCSS president clarifies chain of events' by Dr Robert Loh Choo Kiat
(The Straits Times, Dec 22).
I overheard some children talking about the National Kidney Foundation
(NKF) saga, and was struck by their satirical take on the issue.
In gist, they were saying everyone seems to be passing the buck and making
excuses.
'Durai pass to NKF board, board pass to patron,' they said.
In fact, the patron did not even know Mr T.T. Durai's remuneration, and did
not 'know and endorse' it as alleged by the board.
'National Council of Social Service pass to Commissioner of Charities, COC
pass to Health Ministry, ministry pass to auditors, auditors pass to..?'
Dr Loh, former president of NCSS, has clarified to the media that 'the
revocation of NKF's Institution of Public Character status by itself would
send a strong signal that something was not quite in order. The COC had to
be informed of this action and why it was taken'.
Within less than a month of the NKF's IPC revocation, the Health Ministry
restored it, relying on the assurance of past periodic routine audits by the
auditors that the financial statements did not show any unusual
transactions.

10

Charity | 1
The auditors have responded in a statement that 'our primary responsibility
was to express an opinion on whether the NKF financial statements show a
true and fair view. We believe we have discharged that responsibility'.

To echo Dr Loh's concerns, if regulators globally relied only on the cursory

facade of routine audit reports, despite 'red flags' being raised periodically,
financial scandals like Enron and now the NKF might never come to light.
Parents tell their children: 'Admit your mistake. Don't make excuses.'
In this instance, the children may have taught us adults something, by the
clarity and simplicity of their logic.
It has been said many times that we must restore public confidence,
otherwise at stake are the hundreds of thousands of needy Singaporeans
who are the beneficiaries of the 1,700 charities and voluntary welfare
organisations in Singapore. My fear is that if the children's perception
permeates through to the general population, public confidence may
continue to slide.
On Internet blogs and forums, thousands are 'screaming for blood' and
asking 'who's to blame'.
In a sense, we need to reflect how many of us have to take part of the
blame for our gullibility in donating to glitzy TV charity shows in the hope of
winning a $500,000 property we now know was not sponsored but paid for
by our donations, and donating more in a year to the NKF with only 1,700
beneficiaries than the Community Chest with more than 300,000.

11

1 |
Going forward, we should say no to extravagant charity shows with prizes
and telephone call charges, so a greater percentage of donations goes to
beneficiaries.
Perhaps we can learn a thing or two from countries like Japan, where,
whenever there is a serious financial scandal, those responsible admit their
mistakes, apologise and resign.
While I do not advocate this, what is at stake is so great - the future of the
charity and volunteer sector in Singapore - we must move on. I would like
to commend the Health Minister, as to date, I believe he is the only one
who has apologised - not Mr Durai, the former NKF board, the auditors or
anyone else.
To restore public confidence, perhaps we should listen to the children. We
must stop passing the buck and making excuses.

12

Charity | 1

, 2005 12 24
12 22 PWC
Dr. Robert Loh Choo Kiat
, 12 22
NKF

...?
NKF
Institute of Public Character,IPC
COC
NKF
NKF

NKF

13

1 |

Enron NKF

1700

NKF
NKF 1700
300,000 $500,000

14

Charity | 1

NKF

15

2 |

2. CPF

16

CPF | 2

Increase 2.5% CPF Interest Rate

th

The Business Times19 December 2006

I refer to NTUC's proposal to reduce the CPF contribution for lower-income
workers and put 40 per cent of the Workfare bonus to CPF.
On one hand, we are putting more of the Workfare Bonus cash payout to
worker's CPF, but on the other, we are cutting their CPF contribution so
that they can have more cash for living expenses.
Since both Workfare and the CPF contribution cut are for lower-income
workers, are these not contradictory? For example, if the employee's CPF
contribution is lowered from 20 to 10 per cent, and the proposed 40 per
cent of Workfare is channelled to CPF, for a worker earning $600 a month,
his or her take-home pay would increase by only $20 a month ($600
multiplied by 10 per cent, minus Workfare - $1,200 multiplied by 40 per
cent, divided 12).
This is an increase in disposable cash flow of only 3.3 per cent. In contrast,
if the Workfare bonus is left unchanged as a fully cash payout, the increase
in cash flow would be $60, which is three times more. For those whose
monthly HDB flat mortgage repayment is $120 or more, the CPF and
Workfare changes may not improve their cash flow at all, as the net cash
disposable income of $100 or lower would be less than the existing $100
Workfare cash per month.
It may also be counter-productive to use Workfare to top up workers' CPF,
and then pay them a lower interest when they retire.
In the past, those who had less than the CPF Minimum Sum (MS), and
chose not to withdraw half their account balance allowed, were paid 4 per
17

2 |
cent on their entire CPF account balance. Now, those who turn 55 with less
than the MS, currently $94,600, who choose not to withdraw half of their
CPF balance, as the other half will be transferred to the Retirement Account
(RA) which earns 4 per cent, are now only paid 2.5 per cent.
Why is it that Singaporeans are not allowed to keep as much of their CPF as
they like, to earn 4 per cent interest, when they retire? For richer
Singaporeans who have more than double the MS, which is $189,200, they
will be paid 4 per cent on the entire MS of $94,600. Hence, the current
policy pays the rich more and the poor less.
To further illustrate this unfairness, a rich man with $189,200 will get 4 per
cent on $94,600, whereas a poor man with $94,600 will get 4 per cent on
$47,300 and only 2.5 per cent on the other $47,300.
According to the Department of Statistics' (DOS) General Household Survey
2005 (GHS), there were 106,384 households with no working persons,
presumably most of which are retirees. With the rapidly ageing population,
Singaporeans who are risk adverse or not investment savvy may have a dire
need for their CPF after the age of 55 to earn 4 instead of 2.5 per cent.

18

CPF | 2

2.5%
, 2006 12 19

40%

20% 10% 40%

20 600 10%
1200 40% 12
3.3%
60
120

100 100

Minimum Sum
4%
55
19

2 |
94600
2.5%
Retirement Account 4%

4%
18920094600
4%

18920094600
4%9460047
300 4%47300 2.5%
(DOS)2005 (GHS), 106384

55 4%
2.5%

20

CPF | 2

Manage CPF Property Cap With Planning

th

The Straits Times17 October 2002

I REFER to the article, 'Calculate again before buying a home' (The Straits
Times, Oct 5), by Vladimir Guevarra.
The National University of Singapore (NUS) Department of Real Estate's
study recommends that Singaporeans have at least $70,000 in their Central
Provident Fund Ordinary Account, to be able to afford a $400,000
condominium unit.
This recommended minimum CPF balance is increased to $210,000, if one
decides to buy the same unit in 2008, when the CPF withdrawal limit for
housing is reduced to 120 per cent.
It is probably not very realistic or practical to expect young Singaporean
couples to wait until they have the above amounts in their CPF, before
buying a home.
In all probability, I think many will continue as they are doing now, in that
they will purchase a home once they have the 10 per cent ($40,000) cash
downpayment, and the other 10 per cent downpayment in their CPF.

One possible strategy, if one decides to do this, is to calculate the

estimated housing-loan outstanding balance, when the CPF withdrawal cap
is reached.
For the example cited in the study, for a 30-year housing loan of $320,000
at 4.5 per cent interest, the cap would be reached after 28 years.

The outstanding loan balance then would be $23,607.

21

2 |
One could start a dedicated monthly cash savings and investment plan at,
say, a projected return of 6 per cent, and target an accumulated amount
equal to the loan balance, when the cap is reached.
This would ensure that in the worst-case scenario, one would have the
funds to pay off the loan, when CPF money can no longer be used.
If this accumulated amount is not required then, it could be utilised for
other purposes, such as for one's retirement plans.
For this example, the home-owner starts with regular monthly savings of
$16, increasing at 5 per cent per annum (saving more as one's salary
increases in future), for 28 years, in order to accumulate $23,607.
Similarly, for the 120 per cent cap which will apply in five years, the cap will
be reached after 22 years, with a loan balance of $130,513. The homeowner would be required to start with monthly savings of $155.
Perhaps only time will tell whether most Singaporeans can manage the
risks and implications of the CPF changes, through financial-planning
strategies such as the one described above.

22

CPF | 2

, 2002 10 17
Vladimir Guevarra , 10
5
NUS
40 7

2008 40
21
120%

10%40000,
10

30 3200004.5%
28
$23607
6%

23

2 |
$23607
16 5 28 $23607
5 120 22
$130,513 155
2008

24

CPF | 2

Relax CPF Rules For Real Entrepreneurship

th

The Straits Times7 July 2003

I refer to the article, 'Measures to help jobless adequate: Ng Eng Hen' (The
Straits Times, July 1), which reported that Acting Manpower Minister Ng
Eng Hen disagreed in Parliament with calls to allow people to use their CPF
money to start businesses.
He also pointed out that most start-ups fail.
Yet we often hear other ministers urging Singaporeans to become
entrepreneurs in order to help Singapore's economic development and
mitigate the loss of jobs.
It does not make sense to urge people to take risks and become
entrepreneurs and, at the same time, tell them not to risk their Central
Provident Fund money on a new business because the failure rate of such
ventures is high.
How can we expect Singaporeans to take risks when the Government
shows itself unwilling to do so?
Since they would be risking their own money, budding entrepreneurs
would probably be even more careful and start a business only after
coming up with a proper business plan and projections.
They are likely to be more worried about losing their CPF than the CPF
Board.
If a person already has, say $300,000 in his CPF account, why not allow the
amount in excess of, say $200,000, to be used for starting a business?

25

2 |
With the balance of $200,000 growing with interest until the retirement
age of 62, there should be enough to provide a reasonable monthly annuity
when he retires.
Incidentally, $200,000 is more than double the current minimum sum of
$80,000 that one has to set aside at age 55.
If CPF policy is not flexible for those with higher CPF balances, we may end
up with a nation full of retirees with sufficient monthly incomes but few
entrepreneurs, lower economic growth and fewer jobs.
Even private property owners who are prepared to downgrade to a new
Housing Board flat to free up more capital for entrepreneurship, have to
wait 30 months to do so.
Perhaps entrepreneurship has to start with the relaxation of policies on
what we can do with our CPF money, because only when one bears full
responsibility for the risks that one takes, can there be a true
entrepreneurial spirit.

26

CPF | 2

, 2003 7 7
7
1

62

55

27

2 |

30

28

CPF | 2

Medisave A Big Burden For The Low-income

st

The Business Times21 September 2004

I refer to the article 'Medisave: CPF cracks whip on self-employed' (The
Business Times, Sept 17).
Self-employed people who earn more than $6,000 a year have to make
Medisave contributions of up to 8 per cent. So a person who earns $6,001
has $460 a month to live on after paying Medisave.
About 20,000 households are said to be more than three months behind on
their HDB mortgage repayments or utility bills. And the number of
households three months or more in arrears on mortgage repayments
reportedly rose almost 15 per cent from 2002 to 2003.
Pay-as-you-use meters will be introduced soon to make sure 'poorer'
families don't have their electricity cut off. And about 15,000 households
are said to be unable to pay their children's school fees. Is it any wonder
that if can't pay your power bill or your children's school fees, you can't pay
your Medisave either?
The economic crisis, 9/11, Sars and stubbornly high unemployment have
made it hard for some self-employed people to pay Medisave. On the other
hand, Medisave contribution rates have increased from 3 per cent in 1992
to 8 per cent now for those aged 45 and over.
For self-employed people to renew their licence, evidence of Medisave
contributions must be produced. So chances are that some people may
have had to give up their trade and look for alternative work because they
were unable to pay Medisave.
29

2 |
Before 2003, those who had not previously been issued a Notice of
Assessment/Non-tax advice from Iras had to contribute Medisave based on
an assumed income of $6,000 a year. But this was raised 50 per cent to
$9,000 in 2003 at the height of the economic downturn, increasing the
burden on some self-employed people.
With such people already finding it hard to get by, should we be adding to
their stress by threatening to take them to court?

30

CPF | 2

, 2004 9 21
9
17
6000 8%
6001 460
20000 3
3 2002
2003 15

15000

9 / 11
45
1992 3 8

2003
$ 6000 2003
50%9000

31

2 |

Make Minimum Sum Payouts Last Longer

th

The Straits Times15 October 2005

I refer to the article, 'How to bank on a pretty pension' (The Straits Times,
Oct 8).
The default life annuity is expected to be implemented in one to two years'
time. A default life annuity uses the prevailing CPF Minimum Sum at age 55
to purchase a fixed guaranteed life annuity payable monthly from age 62,
for as long as a retiree lives.
One can choose to opt out of a default life annuity, and leave the Minimum
Sum, currently $90,000, with the CPF Board at 4 per cent interest, and
withdraw, from age 62, $711 monthly for 20 years.
I would like to make the following suggestions to the Government:

1. Allow those who do not need the $711 each month to defer their
withdrawal to a later age than 62.
In so doing, the monthly withdrawals can last to an older age, instead of
ending at age 82. I understand that at age 82, the life-expectancy survival
probability is around 20 per cent for males and more than 30 per cent for
females.
Currently, those who withdraw $711 when they still have other sources of
income or assets to liquidate for retirement, may just deposit the money in
a bank account paying about half a per cent interest. It would be better to
leave the amount with the CPF Board at 4 per cent interest.

32

CPF | 2
2. Have a retirement calculator on CPF Board's website to enable retirees to
compute how long their withdrawals will last if they choose to withdraw an
amount lower than $711, and the survival probability at the withdrawalending age.
This option may be particularly useful for retirees who are concerned about
providing an income for their dependants for a period which is longer than
20 years.
This may be the case because of the longer life expectancy of their spouse,
or infant dependants. This will help retirees to make discerning decisions,
depending on their individual circumstances, needs and concerns.
3. Consider allowing flexibility to change the amount and timing of
withdrawals.
For example, if a retiree elects to draw less than $711, but lands in
unexpected financial difficulty some years later, allow him to withdraw
more, as long as the withdrawals are such that they do not deplete his
retirement account before age 82.
Where a retiree dies before age 82, allow the monthly $711 to be paid to
the nominees until the end of the 20 years, as if the retiree had lived till age
82.
This is because the retirement-account balance is paid in a lump sum to the
nominees. Some nominees may not know what to do with the lump sum,
and may just leave it in a fixed deposit earning around 2 per cent interest,
or, worse, invest the sum, which may result in losses.
4. Allow those who have more than the Minimum Sum, and who are not
financially savvy to invest the money, to leave larger sums with the CPF
33

2 |
Board at 4 per cent interest, so that they can withdraw more than $711
monthly from age 62.
Many of retirees' concerns, like living too long, not having enough income
when they need it most, and providing for dependants if they die early,
may be minimised if there is more flexibility in the CPF rules.

34

CPF | 2

2005 10 15
10 8

55
62

$90000 4% 62 $711 20

$711 62
82
82 20 30

$711
0.5%
4%

35

2 |

$711

20

$711

82
82 $711
20

4%
62 $711


36

Credit | 3

3. Credit

37

3 |

New Credit Card May Lead Singaporeans Into More

Debt
th

The Business Times24 July 2007

I refer to the article 'Citibank offers credit card for low earners' (The
Business Times, July 19).
The article said that Citibank is the first bank here to launch a credit card for
those earning less than $30,000 a year.
This new card, which is aimed at students and other young adults, will
charge higher interest at 28 per cent on rollover balances.
Whilst I can understand the rationale for making credit available to those
who earn below $30,000, and don't qualify for a credit card, why is the
interest charge so high?
This is 4 per cent more than credit cards, 10 per cent more than hirepurchase, 16 per cent more than unsecured credit lines, and about 23 per
cent above the prime rate?
Those who rollover their credit balance, may end up doubling what they
use and owe, at an estimated two years or so.
We may be able to take a leaf or two out of Malaysia's book.
It has recently announced regulations stating that the maximum interest on
credit cards cannot exceed 15 per cent for those who do not default on
their repayments in any 12-month period.

38

Credit | 3
The annual fee of $28 for the credit card for those earning less than
$30,000 works out to be 5.6 per cent of the credit limit of $500. This I
believe, may make it one of the highest fee -to- credit ratio in the world.
As I understand, Singapore already has one of the highest levels of debt per
capita in the world and such credit cards may propel us to even more debt,
as well as the proportion of the population with debts.
How many students may end up being in debt even before they graduate?
How many young adults may be in debt, even before they start a family?
How many Singaporeans may be in debt when they reach retirement,
which should be the time that they should have accumulated sufficient
assets for retirement, instead of having debts or a negative net worth?
It remains to be seen in the future, as to how many of the estimated
900,000 Singaporeans aged 18 to 54, who earn below $30,000, may end up
in debt, and be financially stressed.

39

3 |

, 2007 7 24
7
19
$30,000

28%
30000

28% 4%
10% 16% 23%

15%
$28 500 5.6%

40

Credit | 3

$30,000 18 54 90

41

3 |

Nets Fee Hike: Competition Legislation Should Be

About Protecting Consumers
th

The Business Times6 July 2007

I refer to the report, 'Anti-competition unit clears Nets fee hike' (The
Business Times, June 26).
Four heartland merchant associations, with about 4,000 members, have
told the media that Nets has offered to charge them a lower rate, but only
if they do not have other debt or credit payment facilities.
Isn't this clearly anti-competitive behaviour?
When Microsoft did something similar by requiring vendors to not offer
competitors' software, it was fined billions of dollars in several countries all
over the world.
By its action, Nets is denying consumers the very alternative payment
methods which were given by Competition Commission of Singapore (CCS)
as the reason why the Nets fee increase was not in breach of the
Competition Act.
Since Nets has said that it does not allow merchants to pass on the Nets'
fee to consumers, why is it that taxis charge a 3 per cent administration fee
since Nets payment was introduced in taxis about three months ago?
The CCS has said that the Nets fee hike is not an abuse of a monopoly
position, and that the increase does not amount to an infringement of

42

Credit | 3
Section 47 - relating to a company abusing its dominant position - of the
Competition Act.
If a monopoly like Nets raises fees by as much as three-fold, although its
profits have been increasing by 53 per cent from 2004 to 2005, and 44 per
cent and 13 per cent from 2002 to 2004, how can it be deemed as 'not
amounting to an infringement or (not) abusing its dominant position'?
Can the CCS give us an example of just one case of infringement of the Act
since the formation of the CCS, so that the public may have a better
understanding of what constitutes an infringement?
As it would appear that even Case is not very clear about what the
Competition Act entails, and its application vis-a-vis consumers, more
information from CCS may be helpful.
Otherwise, Case may be 'barking up the wrong tree' again in the future.
Going forward, consumers and other organisations may also be reluctant to
bring up new anti-competition cases.
So, CCS - please clear the air by telling us more and give us some guidelines
as to what is 'anti-competitive'?
On CCS noting that consumers have alternative payment methods such as
credit and debit cards and ez-link cards, how many people qualify for a
credit or debit card and how many organisations do not accept credit ,
debit and ez-link cards?
Moreover, those under 16 years old cannot have a debit card (unlike Nets,
which is available to anyone with an ATM card). The typical debit card also
43

3 |
has a $20 annual fee unless one charges at least $1,800 a year, plus a
monthly service fee of $2 if the monthly average balance is below $1,000.
For the majority of the population, there may thus be no alternative
payment methods.
As the timing of the increase coincides with the GST hike, what is the view
of the Committee Against GST Profiteering (CAP)?
As Case is disappointed with the CCS's decision, will it raise the issue with
CAP? In other countries like the United States, this may clearly be an
infringement because it is a monopoly raising prices many fold despite
rising profits, which will surely result in increased prices for consumers.
The interchange fee after the hike may be among the highest in the world.
At the end of the day, the competition legislation should be about
protecting the consumer, particularly from monopolistic providers of goods
and services. It is the intent and spirit of the Act which should prevail,
rather than the niceties of what is within the CCS's purview on price
changes.

44

Credit | 3

Nets
, 2007 7 6
6 26
Nets
4000 Nets

Nets
Competition Commission of SingaporeCSS Nets

Nets
Nets 3%
Nets
47

Nets 2004 2005

53%2002 2004 44% 13%

45

3 |
Case

16
Nets$20
$1800
$1000 $2

Nets (CAP)

CAP

46

Credit | 3

47

3 |

Be Fairer To Debtors By Modifying Planned DRS

th

The Business Times, 26 April 2007

I REFER to the article 'Public feedback sought on debt repayment scheme'
(The Business Times, April 23).
Arguably, the worst thing about being a bankrupt is that one is blacklisted
for life, even after one is discharged from bankruptcy, in that one may
never be able to get credit for anything - buying a flat, car, furniture or
computer.
Therefore, unless the proposed debt repayment scheme (DRS) addresses
this issue, in effect, there may not be much difference between being a
bankrupt and a debt repayer.
In this connection, I would like to suggest that the proposal to maintain a
public database of cases under the DRS be reconsidered, so that providers
of credit cannot use the database to deny credit to debt repayers for the
rest of their lives.
In a way, being bankrupt now may be better because you just pay what you
can and what is deemed reasonable according to your income and
expenses, and you will very likely be discharged in three years for debts not
exceeding half-a-million dollars.
Under the DRS, you have to pay the amount determined by the DRS
Administrator through a repayment plan of up to a maximum of five years,
provided the sum is not more than $100,000. But if you default, you can
still be made bankrupt.

48

Credit | 3
So, the key difference may be what the DRS Administrator deems to be
reasonable full or partial debts payable under the repayment plan, using
the 'best interests of creditors' and the 'availability of disposable income'
tests.
In this regard, I think we may need more information to assure the public
that the 'best interests of creditors' and the 'availability of disposable
income' tests under the DRS will be the same - if not better - from the
debtors' position, relative to the current tests under bankruptcy.
Otherwise, in some cases, one may actually be worse off, and still end up
bankrupt too, eventually.
On balance, the net result may be that creditors in general will be better off
under the DRS by collecting more debts than under the current bankruptcy
regime, if the failure rate of DRS is high, because for defaulters, the total
period under the DRS and subsequent bankruptcy may be much longer
than the current three years discharge by certificate from bankruptcy.
Will creditors receive more under the DRS for five years, compared with
three years under bankruptcy?
Why do you think many people today pay about $1,800 to self-petition to
be made a bankrupt? So that they can reasonably expect to start life again
after three years.
In contrast, many debt repayers may end up paying more, struggle to make
ends meet much longer, and, sadly, still default during the long five-year
repayment period when one's job may still be lost, or when business takes
a turn for the worse.

49

3 |
In this respect, I urge the DRS Administrator to exercise flexibility under the
DRS Modification of Repayment Plan.
If there is a substantial and material change of circumstances affecting the
debtor's ability to pay - for example, if the debtor receives a substantial
inheritance or enjoys a significant increase in his earning ability, or suffers a
pay cut - the administrator may modify the plan to increase or decrease the
amount

payable

by

the

debtor

to

the

creditors.

Five years is a long time to not have anything go wrong for one who is
perhaps currently already at his or her wits' end financially.
Finally, after the successful completion of the plan, the debtor shall be
released from all debts under the plan, with the exception of certain debts,
for example, debts due to the government.
What are some examples of 'debts due to the government'? Why are such
government debts accorded special exemption? Since the DRS is to help
Singaporeans, why accord special status to government debts over other
debts?

50

Credit | 3

(DRS)
, 2007 4 2

$100,000
5

'

'

51

3 |

3 5

1800

3 5

52

Credit | 3

Pitfalls Of Credit-card Balance Transfers

th

The Straits Times7 July 2005

I REFER to reports about banks offering zero interest to vie for credit -card
balance transfers and the articles 'Local consumers shuffle their plastic
better' (The Straits Times, June 2) and 'Life in plastic not so fantastic' (The
Straits Times, May 28).
As at the end of April, Singapore had more than 22,000 undischarged
bankrupts. If there are 1.5 million Singaporeans working, this means that
about three out of every 200 workers are currently bankrupt.
As this figure does not include discharged bankrupts, the record high in
bankruptcy cases, which continue to climb every year, should be addressed
urgently.
I would like to ask what is the total number of discharged bankrupts, so
that we know the extent to which Singaporeans are being denied credit for
a lifetime.
Americans blew more than US$24 billion on credit -card fees last year, an
18 per cent jump from 2003.
I would like to ask what is the total amount of credit-card fees that
Singaporeans pay in a year. This may be a more revealing statistic than data
on the percentage of cardholders who missed monthly payments or rolled
over debt.
For example, once a credit -card balance transfer has been arranged,
interest at up to 24 per cent per annum is charged from the date of

53

3 |
purchases, instead of from the normal statement due date, which is
typically about three weeks from the statement issue date.
This means that for normal credit -card statements, one may be given an
interest-free period of as long as 45 days from the date of purchase.
If you default on your payments, pay late or pay less than the monthly
minimum required, your record at the Credit Bureau may have a negative
remark which may mean that you may never be able to get another credit
card or other forms of credit.
What this means is that you may be stuck with having just the balancetransfer credit card which charges interest from the date of all your future
purchases.
In this scenario you may be much better off had you not arranged the
balance transfer in the first place.
The promotional balance-transfer rate of, say, 3.88 per cent per annum is
typically valid for only about six months, after which it would revert to 24
per cent.
I receive brochures, letters and telephone calls almost every week soliciting
credit -card balance transfers. I understand that almost all balance transfers
are not applicable to a financial institution's existing customers, as they
apply only to balance transfers from other institutions.
Does this mean that one has to keep transferring from one financial
institution to another every six months or so, until one runs out of financial
institutions?
In a sense, in so doing, financial institutions are discriminating against their
own customers. Why is this so?
54

Credit | 3
One brochure I received said 'Balance Transfer at 0.33% p.m.' on the cover,
but the fine print inside said 'Interest is calculated based on front-end and
add-on method by multiplying the principal loan amount by the specified
monthly rates for the full tenure of the plan. Effective interest rates for 12month plan and 24-month are 7.09% p.a. and 9.31% p.a. respectively. An
administrative fee of $60 applies'.
If the $60 fee is factored in, the effective interest rates are even higher.
A recent credit -card bill had the statement 'Payment Holiday: With the
festive season around the corner, we understand the importance of
financial flexibility. As our valued customer, you have been specially
selected to have the option to defer your minimum payment this month. If
you choose to take up the option, please note that normal interest charge
of 2% per month will continue to apply on your outstanding balance from
the date each charge was effected. You will be advised on your payment
due in next month's statement.'
This statement is somewhat misleading because it is not normal for 'normal
interest charge' to apply from the date each charge was effected.
Are financial institutions upholding the spirit of the new code of practice for
credit cards?

55

3 |

, 2005 7 7

5 28
5 28

4 2.2
150 200 3

240 2003 18%

24%

45

56

Credit | 3

3.88%
24%

6 ,

0.33%' ,
,12
7.09%,24 9.31% 60
' 60
:,
2%
,
'

57

3 |

Time To Inculcate Values Of Thrift, Modesty In Children

th

The Straits Times, 16 November 2004

I refer to the article, 'Teetering on the brink of bankruptcy' (The Straits
Times, Oct 31).
Credit-card debts and bankruptcies have reached record levels in
Singapore. In Britain, many have been driven to suicide because of credit card debts.
When a credit counseling service was launched recently in Singapore, it was
deluged with calls.
According to Monetary Authority of Singapore guidelines, only those who
earn $30,000 or more a year can apply for a credit card.
However, some banks will give one a credit card even if one does not have
any income. One need only make an 'unsecured' credit -card application
after putting in a fixed deposit of $10,000.
The number of supplementary cards that a main cardholder can have is
unlimited. Out of about 3.7 million credit cards, about one million are
supplementary cards. I understand that our ratio of supplementary to main
cards is one of the highest in the world.
When we were young, our parents and the Post Office Savings Bank gave us
piggy banks to encourage thrift. Now, the young get supplementary cards.

58

Credit | 3
As a society, are we not encouraging spending and credit , instead of thrift,
when so many Singaporeans give supplementary credit cards to their
dependants?
One can just walk along Orchard Road and apply for credit cards from seven
banks, which would give one credit of 14 times one's monthly income.
No wonder more than 30,000 people in Singapore owe more than $20,000
on their credit cards. Three out of four have rolled over their debt during
the last 12 months.
The loosening of credit policies - like no down payment for car purchases,
and repayment of up to 10 years - is good for the economy but bad for the
tens of thousands who have difficulty servicing their debts, and their
families. Likewise a casino, which will undoubtedly be good for the
economy and tourism but bad for those addicted to gambling.
Maybe our only salvation lies in inculcating the values of thrift, modesty
and less materialism in our children.

59

3 |

, 2004 11 16
10 31

$30,000

$10,000 '
370
100

7
14
3 20000
3 4 3 2
60

Credit | 3
10

61

4 |

4. Education

62

Education | 4

What Is The Ratio Of Foreigner To Local Scholarships?

th

The Business Times, 13 October 2006

I refer to the Public Service Commission's reply, 'PSC study awards given to
S'poreans' (The Business Times, Sept 22), to my letter, 'How many
foreigners get scholarships here?' (The Business Times, Sept 21).
According to media reports, foreign students make up 9 per cent of
Singapore Polytechnic's 1,300 students each year and almost all are on
scholarships.
Forty Pre-U Two students were offered full scholarships and five Singapore
polytechnics were offering scholarships that pay 80 per cent of tuition fees
in Sichuan, China.
River Valley High School gave free scholarships worth $80,000 each in China.
Raffles Institution has given free scholarships in China for the past 10 years
- 1,240 were given in Shandong, China.
NUS awarded the SIA-NOL undergraduate scholarship to 40 students in
India. NUS gave 140 scholarships to foreigners in 2001. A*Star said that it
would give scholarships to foreigners on the condition they become citizens
when they graduate.
St Joseph's Institution (International) will offer up to $3 million of open
scholarships over the next two years to bright students from Singapore and
the region. A*Star is also going to sponsor five regional students a year
under its Young Researchers Programme to study at SJI International.
Only about 25 per cent of PhD students in Singapore are Singaporeans.

63

4 |
In reply to a question in Parliament on April 19, 2005, the Minister for
Education said: 'Foreign students constitute 20 per cent of the universities'
enrolment and more than 60 per cent of those (foreign undergraduates
who receive tuition grant subsidies) who were admitted to our universities
between 1996 and 1999 have become permanent residents or Singapore
citizens since graduation.' This means that less than 40 per cent left
Singapore after getting subsidised education.
I understand that now, more than 20 per cent of undergraduate and
postgraduate students are foreigners on scholarships or the Tuition Fee
Grant, whereby they just pay 10 per cent more in tuition fees than
Singaporeans on condition that they work for at least three years in
Singapore after they graduate.
Against this backdrop of spending on education for foreigners, it has been
reported in the media that less than 20 per cent of needy Singaporean
students were successful when more than 1,000 applied for an annual
bursary of $1,500 from a local university, which sparked an outcry among
some alumni in newspaper forums.
Subsequently, financial assistance funding was increased in tandem with a
rise in tuition fees, and in 2005, four out of 10 students who applied for
bursaries were successful.
The Ministry of Education's university bursary has a qualifying gross
monthly per capita household income of not more than $900.
So instead of just one public agency like the PSC telling us that they do not
give scholarships to foreigners, how many scholarships in total are given to
foreigners relative to Singaporeans?

64

Education | 4

, 2006 10 13

9 21
PSC 9 22
1300 9%

40
5 80%

$80,000
1240
40
2001 140
A*Star

() 300
A*Star
5
25%

2005 4 19
20% 1996 1999
65

4 |
60%
40%
20%
10%
3

$1,500 20%

2005

$900
PSC

66

Education | 4

John Hopkins Universitys-A*Star Break-up Raises More

Questions
th

The Business Times27 July 2006

I refer to media reports about Johns Hopkins University's Singapore arm not
meeting A*Star's goals in their tie-up.
A*Star's statement that Johns Hopkins University's (JHU) agreement was
terminated because it failed to meet eight out of 13 performance
benchmarks may raise more questions. Its spokesman had, only days earlier,
described the problems as a period of 'transition' - a decision taken by the
leadership of the American university and the agency to replace the current
'operating model of collaboration' with a 'new model of partnership' still
being developed.
It is interesting to note that whilst five of the performance benchmarks
(KPIs) relating to recruitment were not met, output in the five KPIs typically
associated with academic research far exceeded their targets.
For example, in the first year, the result was zero for training programmes,
graduate students and visiting faculty, and a shortfall of 78 and 62 per cent
for full-time faculty, and research scientists respectively. Even by the
second year, the result was still zero for graduate students, with a shortfall
of 50 per cent for training programmes, 66.6 per cent for visiting faculty, 92
per cent for senior investigators with international reputation, and 69 per
cent for research scientists.
In contrast, the KPIs for number of post-doctoral participating in research,
joint projects with other research institutes in Singapore, papers published,
papers presented at top conferences, and conferences organised; far
67

4 |
exceeded their targets by 20, 300, 260, 300 and 100 per cent respectively.

If you are not able to recruit the numbers you target, but fewer people are
able to produce much higher outputs, then what is the problem? Perhaps
what is more important now is to try to understand why it is so difficult to
get researchers willing to come to Singapore. We need to find out how to
make our research environment more attractive.
It is perhaps instructive to note that all three KPIs relating to commercial
end-results, failed to produce a single patent, new technologies or new
products. In this context, maybe there is a need for us to re-examine our
fundamental strategies and approach.
If JHU, which is arguably one of the best in the world in its field, is not able
to meet A*Star's standards, are the goals realistic and achievable within the
time frame stipulated?
In the final analysis, KPIs and agreements aside, it is a 'no win' for A*Star,
JHU and Singapore, as Singapore has clearly stumbled in its maiden major
medical research effort.
We should focus on learning from the experience rather than concentrate
on apportioning blame. Otherwise, we may just be reinforcing the scientific
community's perception that Singapore's environment is not conducive to
creativity.

I cannot help but feel that the root cause of the problem may be a clash of
two cultures - Singapore's technocratic efficiency versus the American
ideals of freedom, liberalism, diversity and creativity.

68

Education | 4
For example, JHU prefers to recruit young researchers as they may have
more passion and are hungrier for a research breakthrough, whereas
A*Star wants researchers with international reputation.
Unlike other American universities and scholarships, JHU does not believe
in bonds for its scholars, like A*Star which has a history of even taking
bond-breakers to task.
As one researcher I spoke to said rather profoundly, you need to be happy
to be creative, so Singapore's happiness ranking at 131 out of 178 countries
has to improve.

(Reply from A*Star: DJHS did not deliver as promised.)

69

4 |

JHU A*Star
, 2006 7 27
John Hopkins University JHU A*Star

A*Star JHU JHU 13

8 A*Star
JHU

5 5

78% 62%
50%
66.6% 92%
69%

20%300%260% 300%

70

Education | 4
3

JHU A*Star

A*Star JHU

JHU
A*Star

JHU
A*Star

:
178 131
(A*Star DJHS

71

4 |

Better To Fail And Learn From It

th

The Straits Times, 12 March 2003

I refer to the article, 'Want to be entrepreneur? Don't expect govt
handouts' (The Straits Times, May 3).
It states that 16-year-old Zhang Zhen Wei, a Secondary 4 student at Raffles
Institution, indicated that the system could be at fault for the lack of
entrepreneurship here.
He was quoted as saying: 'I'm afraid to fail. We've been taught since young
to pass tests. If a person fails, he'll have to answer to his teachers and
parents and he is branded a failure.'
I think we need to send the message to the young that failure is all right by
saying things such as: If you fail a test five times and pass on your sixth
attempt, and someone else passes it the first time round, who do you think
will know the subject matter better?
Is it better to fail a little in primary school and learn from the experience,
rather than wait until you are in university to fail for the first time?
In my work experience, I have found that those who fail several times in
attempting the licensing or professional certification examinations in the
financial services industry, are more resilent and tend to have a better
chance of success in the long term, particularly when things get tough, such
as during economic crises and the recent Sars outbreak.
The Straits Times article also referred to findings about Singapore by the
Economic Intelligence Unit and the Global Entrepreneurship Monitor.
72

Education | 4

One finding was that Singapore ranked poorly on entrepreneurship

compared with other countries but was top in Asia for its policies and
framework to encourage businessmen.
This finding may suggest that developing entrepreneurship is not so much
about policies and framework, but rather the spirit of entrepreneurship,
which is linked closely to the spirit of freedom and which requires a
mindset and cultural evolution that takes years, if not decades, to build and
nurture.
For example, the American education system has often been criticised for
being too liberal and lacking uniform standards, with the diverse range of
its institutions and courses.
However, its diversity is, in a sense, its greatest strength as the system has
resulted in the push for constant innovation and survival.
Perhaps students in Singapore should be allowed a greater freedom of
choice in selecting subjects.
Also, almost every scholarship that I have encountered is for study at
prestigious universities in developed countries in North America, Europe,
Australia and Asia.
How about scholarships to study in, say, Latin America, where there are old
universities which may never have had a Singaporean student?
Latin America may have few ties to Singapore now but this may mean that
it also offers the greatest opportunities in the future.
73

4 |
Perhaps we need to realise that it is better to fail early in business, so that
we learn about the pitfalls, which would reduce the chances of failure in
future ventures.

74

Education | 4

, 2003 3 12
5 3

16

Economic Intelligence Unit

Global Entrepreneurship Monitor

75

4 |

76

Education | 4

Life-long Learning Brings Intangible Benefits Too

th

The Straits Times 12 November 2002

I refer to Ms Jessica Tan's letter, 'Life-long learning a waste of workers' time
and money' (The Straits Times, Nov 8).
According to a study by the Commonwealth Department of Education
Science and Training, Australia, a male graduate earns A$622,000 more
over his lifetime than a non-graduate.
Increasingly, as more employers and human-resource professionals have
gone through or been exposed to life-long learning, the acceptance of
degrees and professional qualifications attained through part-time study
will increase.
Life-long learners may even have an advantage in that they have
demonstrated their perseverance and ability to manage work and study at
the same time.
Life-long learning has many benefits, like knowing oneself and others, or
enhancing work performance and non-work interests, other than getting a
better-paying job.
Perhaps Singaporeans should view life-long learning as an attitude, rather
than a means to an end.

77

4 |

, 2002 11 12
Jessica Tan (
,11 8 )
,
$622,000

78

Education | 4

Balance Use Of Funds, MOE

th

The Business Times, 23 January 2007

I refer to the article 'Trust fund set up to help needy pupils' (The Business
Times, Jan 11).
According to the Ministry of Education's (MOE) website, it was announced
at the 'Lee Wee Kheng Fund For Needy Children Award Ceremony' that the
number of FAS (Financial Assistance Scheme) recipients has increased from
about 15,000 in 2005 to 35,000 in 2006.
I find this statistic somewhat alarming. Why is it that the number of needy
students given financial assistance has jumped by 20,000, or 133 per cent,
in just one year, when last year was one of the best years for the economy
marked by record jobs creation and very low unemployment rate?
Has the MOE's criteria been so strict in the past that 57 per cent of those
who qualified last year, could not qualify in 2005 and in previous years?
How much more did MOE spend last year in helping the additional 20,000
students, compared with 2005?
The MOE recently announced that it will be working with an international
research team to develop 15 schools of the future with wireless networks.
The team has access to part of a $500 million fund.
There may sometimes be a trade-off whenever we spend a lot of money on
something new in a big way. For example, when the new NEU PC Plus
Scheme was announced last year to replace the NEU PC Scheme, needy
families with school-going children got a better package, but needy elderly
families without school-going children were no longer eligible for a low-cost
PC and Internet access.
79

4 |
There are thousands of children who are unable to pay their school fees,
and who have no pocket money to go to school going by the number
getting help under the ST Pocket Money Fund.
There are also free breakfast schemes offered by some schools and various
organisations which give one-off vouchers to needy students.
Also, more than 2,000 university students are applying for a bursary of only
$1,000 plus a year and needy students at 100 schools will get $1 million this
year to help pay for school lunches, uniforms, transport, spectacles, from a
$25 million bequest left by the late Mr Lee Hiok Kwee.
Given these realities, we may need to balance the $500 million fund
available for the school of the future project with more help for needy
students.
(MOE reply: Balanced use of public funds in education)

80

Education | 4

, 2007 1 23
(, 1 11 )
Lee Wee Kheng
2005 15,000
2006 35,000

20000 133%

57% 2005 2005

2005
20000
15
5

NEU PC Plus NEU PC

2,000 100
$1000000
81

4 |
Lee Hiok
Kwee
5

82

Housing | 5

5. HOUSING

83

5 |

Settle Question Of HDB Subsidy Once And For All

nd

The Straits Times2 January 2007

I refer to Mr Viktor Ye Kok Kheong's letter, 'Did HDB land pricing use Raffles
Place as rule?' (The Straits Times, Jan 1).
Housing and Development Board said that ' HDB does not reveal the land
and construction costs of specific projects as they vary from location to
location... That is why it incurs an overall deficit each year for its homeownership activity, as reflected in its annual accounts which is available
publicly'.
The reason given for not revealing the land and construction costs is
somewhat illogical, because the HDB is not being asked to disclose the costs
of every project or location. Why not just reveal the breakdown of total
costs, and a few examples of some projects and locations, now and in the
past?
What the HDB is saying is akin to 'since we cannot tell you each and every
item, we won't tell you anything at all '.
Every once in a while, the question of the cost and pricing of HDB flats
comes up in the media. So, why not put a stop to the on-going speculation
that HDB flats are not really subsidised?
In the interest of maintaining Singapore's reputation of having the highest
standards of transparency and corporate governance, the HDB should keep
up with the standards of disclosure in the private sector.

84

Housing | 5
To illustrate the point of transparency, no real-estate investment trust or
publicly-listed company would be able to give the reason given by the HDB
for not breaking down the information on the major cost components in its
accounting statements.
How can we tell whether HDB prices are 'at market price' without a
breakdown of the land and construction costs for comparison purposes?
As to the market price for land taking into account the 'substantial
resources... invested to provide major infrastructure, such as roads, MRT,
sewers and utilities, for the new housing development', thus significantly
enhancing the land value beyond the acquisition costs incurred by the
Government, aren't the billions collected every year from road tax,
electronic road pricing, property tax, 30 per cent water- conservation tax,
etc, supposed to be used to provide such infrastructure?

85

5 |

, 2007 1 2
Viktor Ye Kok Kheong
?(,1 1 )
:,
...

,?
:,
,
,?
,

,
,
?
...,
,,,,
,
,,30%?
86

Housing | 5

Income Ceiling For HDB Flats May Be Too Low

th

The Straits Times 6 November 2006

I refer to the HDB 's reply, 'Smaller flats for the lower- income (The Straits
Times, Oct 23) to Ms Phang Geak Lean's letter, '$3,000 ceiling stands in way
of smaller flat ' (The Straits Times, Oct 12).
It states: 'The household income ceiling is $2,000 for new two-room flats
and $3,000 for new three-room flats ... Households with incomes of more
than $3,000 can consider buying new four-room or larger flats within their
affordability.'

The HDB seems to be making the assumption that those who earn more
than $3,000 can afford a four-room flat.
According to the HDB's July 2006 fact sheet, the price of four-room flats is
from $131,000 to $182,000. Its latest offer of four-room flats costs
$230,000 to $292,000 ('450 new flats in Geylang for sale'; The Straits Times,
Oct 27).
Even if we assume one is able to buy the cheapest at $131,000, the
monthly repayment on a 30-year HDB subsidised loan after paying the 10
per cent downpayment is $472.
This leaves a net 'after mortgage payment' monthly disposable income of
$2,528.
Deduct $100 for school fees and pocket money for two children, and we are
left with $2,150. Based on a family of six (couple with two children living
with parents), the balance per capita disposable income is $358. If we

87

5 |
assume food at $9 and transport at $4 per person per day, total food and
transport will come up to $390 per person per month.
This means the family's monthly deficit is $192 ($390 - $358 x 6), assuming
they don't spend any money at all on entertainment, holidays, learning
activities, insurance, maintenance and repairs, and so on.
Those who are self-employed, and do not have employer's CPF contribution
for workers, may have an even higher monthly deficit.
I suggest the HDB review its income ceiling eligibility for flats , because my
example clearly demonstrates that some Singaporeans who earn more than
$3,000 may not be able to afford four-room flats .
Denying them the purchase of a smaller three-room flat may lead to
financial stress and very little CPF when they retire.

88

Housing | 5

2006 11 6
Phang Geak Lean $3,000
10 12
(10 23

$2,000$3,000
$3,000

$3,000
2006 $13,000
$182,000 $230,000 $292,000
450

$2,528
$100 $2,150
$
$4
$390

89

5 |

$192 ($390 - $358 x 6)

$3,000

90

Housing | 5

Let Singles Rent Vacant Flats Without Pairing Up

th

The Straits Times20 January 2005

I refer to the letter, 'Why build more flats when many are unoccupied' (The
Straits Times, Jan 17); the President's Address, 'Building a better home for
all' (The Straits Times, Jan 13); and the report, 'Joint Singles Scheme stays'
(The Straits Times, Nov 27).
On Jan 12, the President's Address called for ensuring a place for everyone
and for the needs of all Singaporeans from all strata of society to be looked
at.
In a previous parliamentary session, Minister of State for National
Development Cedric Foo said that if singles were allowed to rent flats
without pairing up, the doubling of resources could require an additional
investment of some $900 million from the Government.
I understand that there are about 10,000 HDB flats that have remained
vacant for many years because the HDB has been unable to find buyers.
I suggest that some of these flats be made available for rental to singles.
Why talk about the cost of building new flats to meet the demand of singles
when there are so many unwanted vacant flats?
I understand that there are also many vacant HDB rental flats. For example,
in Block 100, Aljunied Crescent, I believe about half of the 224 one-room
rental flats have been vacant for many years.
I would like to ask what is the number of vacant HDB rental flats, in addition
to the many unsold HDB flats?

91

5 |
Why do we continue to maintain public housing policies that deny needy
single Singaporeans a roof over their heads when there are so many vacant
rental and unsold HDB flats?
If it costs $900 million to build 9,400 new flats to meet the singles ' demand,
what is the cost of keeping 10,000 flats vacant for so many years? Would it
not make business sense to rent them out till they can be sold?
It is hard enough to be old, single and earning not very much. On top of
that, they have to endure the indignity of having to find a stranger to live
with - the Joint Singles Scheme requires two singles whose combined
monthly income is below $1,500 - just to be able to qualify to rent a flat.
If you are earning $900, you will have to find another single who does not
earn more than $600 to qualify. How many Singaporeans earn less than
$600 a month?
The HDB gives a six-month grace period for the remaining tenant to find a
new flat -mate if the two singles cannot get along. Can you imagine the
pressure and stress on the elderly single with low income when such
situations arise?
According to a study ('Link between stress and ageing found'; The Straits
st

Times, 1 Dec 2004) by Dr Elissa Epel of the University of California, San

Francisco, stress leads to physiological ageing, poor health and a depressed
immune system.
Perhaps those who decide on the singles housing policy could try to put
themselves in the place of those who are elderly and single , with low
income and no shelter, to truly appreciate their plight.
(HDBs reply: It's still 'no' to singles renting HDB flats singly)
92

Housing | 5

,2005 1 20
1 17
1
13 11
27 ,
1 12

100 224

93

5 |

9400

$1,500
$900 $600
$600

Elissa Epel
2004 12 1

94

Housing | 5

Can A Bankrupt Lose His HDB Flat To Banks?

th

The Business Times, 8 October 2004

I refer to reports quoting a study titled Credit Cards and Consumer Lending
in Asia-Pacific 2003-2005 by the Lafferty Group saying that Singapore is one
of the smallest consumer credit markets in Asia. However, it has one of the
highest levels of consumer debt per person in the world.
The debt of the average Singaporean was estimated to be 122 per cent of
his personal disposable income, up 2 per cent from a year earlier.
Bankruptcies are at a record high in Singapore, despite an improving
economy, and the first-ever study of credit card usage patterns released on
Sept 30 by the Consumer Credit Bureau said that about 30,000 credit card
holders have outstanding balances of over $20,000 each.
With oil prices at an all-time high and rising interest rates, the costs of
servicing debts may rise, and this may result in more bankruptcies.
I also refer to media reports that if one becomes bankrupt , the housing
loan mortgagee bank will have to foreclose and realise their security within
six months of the date of the bankruptcy order, or such extended time as
the Official Assignee may allow.
I understand that third-party creditors, such as credit card companies,
cannot take possession of an HDB flat even if the flat owners are unable to
pay their debts because such debts are not secured against the HDB flat. On
the other hand, the bank which granted the mortgage loan can recall the
loan and sell the flat if the loan agreement allows it to do so in the event of
bankruptcy.
95

5 |
If one has credit card debts, is made a bankrupt and the bank sells the flat
because the loan agreement allows it to do so in the event of bankruptcy,
does it not mean that one can lose one's HDB flat due to other non- HDB
mortgage debts?
So, does or doesn't one run the risk of losing one's HDB flat to banks, even
if one does not default on the housing loan monthly repayments?

96

Housing | 5

,2004 10 8
Lafferty Group 2003-2005

122% 2%
Consumer Credit Bureau
9 30
, 30000
$20000

97

5 |

'Downgraders' Need More Information From HDB

th

The Business Times, 26 November 2002

I refer to the Housing and Development Board's 30-month debarment
period for private property downgraders to new HDB flats.
HDB has indicated that it will waive this on a case-by-case basis for
'deserving Singaporeans who are former private property owners with
genuine financial hardship and unable to afford re-sale flats'.
Perhaps HDB can give some examples as to how financially-stressed
Singaporeans need to be in order to be considered? Such a move would
help people better understand what criteria are used to determine whether
they are 'deserving', face 'genuine financial hardship' and are 'unable to
afford'.
And who decides such things? Is it an officer, a committee, HDB by itself, or
in consultation with the Ministry of Community Development, Community
Development Councils, etc?
Is it also possible to tell us how many waivers have been granted and what
proportion of applicants has been turned down?
Very often we get replies to letters' forums saying that a policy cannot be
reviewed but that there will be flexibility on a case-by-case basis. Such
assurances are not very reassuring.
I would also like to seek clarification on whether the waiver is only possible
for 'former private-property owners', as opposed to existing private
property owners.

98

Housing | 5
How can a person plan to downgrade and get cash out of their private
property - so as to retire less financially stressed - if they have to sell first
and become a 'former private-property owner' before they can be
considered for a waiver of the 30-month debarment period?
For a $200,000 HDB flat loan, the difference in the monthly mortgage
repayment between the subsidised rate of 2.6 per cent and the average
market rate of say 4.5 per cent is considerable.
We are told that there are thousands of unsold new HDB flats, so it may be
to HDB 's benefit to allow their sale to former private-property owners.
The fact that one lives in private property and has never availed oneself of a
new HDB flat should not mean one has to be judged as being 'deserving'
and 'genuine'.
I would like to ask HDB to re-consider whether it is really necessary for a
person to be in 'financial hardship' before their life can be made more
financially palatable in the light of the current economic downturn.
Perhaps HDB should focus on providing affordable quality housing for all
Singaporeans, rather than be the judge of social and financial policies that
impact our financial decisions.
Is being a private-property owner such a 'stigma' that a person has, in a
sense, to be 'discriminated against' when trying to explore the HDB option
in one's financial planning?
(HDBs reply: Downgraders can easily buy an HDB resale flat)

99

5 |

,2002 11 26
30

30

200000 2.6%
4.5%
100

Housing | 5

101

6 |

6. Healthcare

102

Healthcare | 6

Don't Raise Medisave Ceiling

th

The Business Times, 26 April 2005

I refer to the report, Medisave, Medishield changes in the pipeline'' (The
th

Business Times, 25 April 2005).

Higher income earners may have their Medisave contribution ceiling,
currently at $30,000, raised in a year's time.
The reason given was that Medishield was designed with the B2 and C class
wards in mind, so for higher income earners, capping the Medisave
contribution ceiling might mean that they would not have sufficient savings
if they opted to stay in A-class wards.
This policy change in a way contradicts the recent policy change of farming
out the Medishield-Plus schemes to a private insurer because, on the one
hand, we say that we want to give those who can afford the choice of a
wider and competitively priced range of medical insurance schemes from
private insurers, but, on the other hand, we are now told we have no
choice but to have more Medisave for Medishield's design limitations.
If the higher-income earners choose higher-class wards, it is their choice
because they prefer it and believe they can afford to. So, why is there a
need to lock up more of their disposable cash-flow and assets in the
Medisave account?
The more one's assets are locked up in Medisave, the less will be available
for other uses like retirement expenses and desired health-related
expenses.

103

6 |
The restrictions on the use of Medisave actually limit the choice of many
health-related services available such as out-patient, health screening, etc.
This

may

mean

more

cash

out-of-pocket

medical

expenses.

The higher-income already pay more income tax and will be subject to
means testing if they opt for class B1, B2 and C wards. So, is it fair to make
them contribute more to Medisave?
Increasing the Medisave contribution and withdrawal ceilings may have the
undesirable effect of encouraging people to opt for higher-class wards,
because some may feel that they might as well use it since it cannot be
used for anything else.
Moreover, the balance in the Medisave account goes to one's CPF
nominees upon death.
Perhaps, healthcare policies should focus on the lower-income like not
closing the night services at polyclinics, instead of forcing the higherincome to contribute more.
After all, if those with higher income do not have enough when they opt for
higher-class wards, it should not be the government's problem.
The CPF cuts, lower contribution for older workers, and lower contribution
ceiling for the higher income, is already causing more financial hardship and
stress for some higher-income earners, who have property mortgage
repayments.
So, why reverse the downward trend of CPF contributions by raising
Medisave?

104

Healthcare | 6
This may mean even less disposable cash-flow for some whose earnings
were cut during the recent economic downturn.
By 2013, the CPF Minimum Sum will increase to $120,000 plus minimum
Medisave amount of $25,000. How much more will Singaporeans have to
set aside in their CPF in the future, when they reach age 55?

105

6 |

,2005 4 26
(4 25 )

30000
B2 C
A ,

,,
,
""
"",

106

Healthcare | 6
, B1,B2
C
?

,,

,,,

,
,
,,

, ?
,

2013 $120,000,$25000
55
?

107

6 |

Raising Costs For Foreigners May Not Benefit

Singaporeans
th

The Business Times, 13 December 2006

I refer to the article Foreigners to pay more for healthcare costs from
October (The Business Times, 11 December 2006).
Increasing medical costs for foreign workers may lead to employers
reducing the take-home pay, particularly for lower-skilled workers.
In the past, when foreign worker's levy, accommodation requirements,
polyclinic and Communicable Disease Centre fees were raised, take home
pay generally declined.
With the increasing trend of outsourcing, particularly for low-skilled work,
employers in the outsourcing industry typically have relatively low margins,
and are thus quite sensitive to higher labour costs, which they may have
some difficulty in absorbing, because they may already have committed to
long-term contracts with fixed pricing.
A spokesman from the Humanitarian Organisation for Migration Economics
has already raised the concern that the increase in medical costs will be
passed on to workers.
The reality is that employers cannot have Singaporeans and foreigners
working side by side, doing the same low-skilled job, with different pay.
So, the implication for low-skilled Singaporeans may be that their wages
may decline too.
This is reflected in the Department of Statistics' General Household Survey
2005, that the 11th to 20th percentile of households by income, had
108

Healthcare | 6
declining incomes by 4.3 per cent per annum from 2000 to 2005.
The playing field between foreigners and Singaporean workers may never
be level, as long as foreigners do not have to contribute CPF, whereas
Singaporeans have to.
Singaporean males also have to do reservist training.
Employers save by not having to contribute CPF for foreigners, and
Singaporeans may find it harder to survive with 20 per cent less take-home
pay compared to foreign workers.
The fact that most Singaporeans have families to provide for, compared to
foreigners who are here alone, may make it even harder for Singaporeans
to take on low-skilled jobs.
Instead of removing the subsidy for foreigners, reducing it for permanent
residents, and maintaining the status quo for Singaporeans, why not
increase the subsidy for Singaporeans using the expected $36 million
additional revenue?
Since many Singaporeans may have to bear the brunt of the increase for
foreigners and permanent residents for whom they are responsible for, it is
akin to a no-win situation for everyone, if the savings are not channelled
directly back to citizens.
For example, last year, Medifund paid out $39.1 million to 288,000 patient
applications, giving an average subsidy of $136.
Giving the $36 million additional revenue to Medifund could increase the
average payout to $261.

109

6 |
Thus, increasing the help to needy patients by 92 per cent. Alternatively,
current subsidies for Singaporeans could be increased across the board, for
lower class hospital wards.
I would like to suggest that we explore the possibility of not charging
foreigners and permanent residents more, but giving more to Singaporeans
instead. In so doing, all will be happy, instead of one out of four (noncitizens) on the island being unhappy, and perhaps another one or two of
the remaining three (citizens) being unhappy too, because they may have
to pay for the former.
Why not use some of the hundreds of millions collected in foreign worker
levies annually, so that Singaporeans do not have to end up paying for them?
In trying to address the issue that Singaporeans should have more
privileges than non-citizens, are we inadvertently creating other problems
for Singaporeans?

110

Healthcare | 6

, 2006 12 13
12
11

Humanitarian Organisation for Migration

Economics

Department of Statistics 2005

2000 2005 11 20
4.3%

111

6 |

288,000 3,910
$136 3,600
$261 92%

112

Healthcare | 6

Issues Healthcare Panel Should Explore

th

The Business Times, 30 August 2006

I refer to the article MOH publishes patients' average hospital bill data
(The Business Times, 23th August 2006) and media reports that Medisave
will be extended to cover general medical practitioner bills for those with
chronic illnesses, such as diabetes.
Those suffering from diabetes, high blood pressure, high cholesterol and
stroke will be able to use Medisave, 'bringing the total number of people
allowed to dip into their Medisave to one million'.
With the resident population at 3.6 million, does it mean that 28 per cent of
the population has diabetes, high blood pressure, high cholesterol and
stroke? If we include other illnesses, how many unhealthy Singaporeans are
there? What percentage of the population are not in good health?
This statistic is quite alarming, and I would like to suggest that the Health
Promotion Board step up its efforts to help Singaporeans stay healthy.
'A patient will have to pay $30 out of pocket for each visit, and 15 per cent
of the rest of the bill.' For example, if the medical fee is $80, the amount
that can be deducted from Medisave is $42.50. 'Each transaction will carry
an administrative fee of $3.05.' In this example, the administrative fee
works out to be 7.2 per cent of the amount deducted from Medisave.
The CPF pays 2.5 and 4 per cent respectively on the ordinary (OA) and
special accounts (SA). For this example, in percentage terms, the
administrative fee is 4.7 and 3.2 per cent more than the interest that CPF
pays us for OA and SA.

113

6 |
At this rate, some Singaporeans may be paying more to CPF by way of the
Medisave administrative fee, than the CPF interest they earn. Thus, those
with health problems may see their Medisave depleted quite quickly as
they grow older and generally require more medical services.
If each of the one million residents with the four chronic illnesses use their
Medisave just twice a year, the CPF Board will collect additional revenue of
$6.1 million from the administrative fees.
How much does the CPF Board collect in a year now from Medisave
administrative fees, and how much more will it collect when Medisave can
be used for out-patient treatment from October for the 275,000 people
with diabetes, and from January 1, 2007 for those with high blood pressure,
high cholesterol and stroke? Why do we have to pay a fee to CPF to use our
own Medisave?
In a recent Lianhe Zaobao study, a survey of more than 500 Singaporeans
revealed that 64 per cent of the respondents are not confident of coping
with medical costs. As to media reports that most people are able to pay
health costs using Medisave and that the 'released data' 'assure
Singaporeans that healthcare here has remained affordable', do the
hospital bills size statistics include pre-hospitalisation consultation,
diagnostic tests, in-hospital doctors' visits, post-hospitalisation treatment
and medicines? I understand that the trend has been to discharge patients
earlier from hospital. This may have contributed to the declining share of
hospitalisation costs to total costs.
The statistics speaks for themselves: An estimated 400,000 Singaporeans
do not have any form of medical insurance. According to the Credit
Counselling Service, 17.6 per cent of Malays who got into debt was due to
114

Healthcare | 6
medical costs. According to the World Health Organisation's World Health
Report 2006, Singapore at 36.1 and 7.7 per cent for 'general government
expenditure on health as a percentage of total expenditure on health' and
'general government expenditure on health as a percentage of total
government expenditure', was ranked 164 and 140 respectively out of 192
countries.
According to the Ministry of Health's website which was last updated in
June 2006, government health expenditure over GDP (gross domestic
product) (%) was only 1.2, 0.9 and 'na' for 2003, 2004 and 2005 respectively.
In contrast, the OECD median is 8.6 per cent. Why not consider waiving GST
for health costs? A healthcare focus group of five members of parliament
has been formed to examine the current healthcare system ('High-level
panel to explore healthcare options; Led by Minister of State for Health, it
will tackle issues of quality and cost', BT, Aug 15). Perhaps, the healthcare
focus group could look into some of the above.

115

6 |

,2006 8 30
8 23

360 28%

$30 15%
$80
$42.50 $3.05
7.2%
2.5% 4%
4.7% 3.2%

116

Healthcare | 6

610

10
275000 2007 1 1

500
64%

40
Credit Counselling Service
17.6%
2006
36.1%
7.7% 192 164 140
2006 6
20032004 2005 1.2%0.9%

117

6 |
OECD 8.6%
5
8
15

118

Healthcare | 6

Relook Means Testing For Disabled

th

The Business Times, 12 January 2006

I refer to media reports that means testing will start in April for some
services in the disability sector.
For example, children with palsy may have to pay $920, instead of $30 now,
for therapy.
I would like to suggest that consideration be given to the absolute amount
of the subsidy, instead of just an arbitrary cut-off of $1,000 per capita
income - 'calculated by dividing family's income by the number of
dependants'.
It is difficult for, say, a family with per capita income of $1,001 to pay $920,
as it may effectively consume about 92 per cent of the income.
The percentage increase from the existing subsidised rate should also be
considered, as in this case, it is a whopping increase of 3,000 per cent.
Household per capita income could also be incorporated in means testing,
instead of just per capita income per dependant.
To illustrate how this may impact the lower income group, two parents
earning $501 each with one dependent child will not qualify because the
per capita income per dependant is $1,002, which exceeds $1,000.
A single parent earning $1,001 with one dependent child would also not
qualify.
How could families like the above be considered as 'not poor' for means
testing?
119

6 |
The fact is that the disabled typically have to incur other additional
expenses due to their special needs, and thus the means testing subsidy
may just be one item of the overall expenses.
Reducing or taking away the subsidy may increase their financial burden.
As I understand that means testing has not been implemented for
healthcare , why is it being introduced for some services in the disability
sector first from April?
This, in a way, is discrimination against the disabled, when the rest of the
population are not subject to means testing.
In this connection, to help lower income Singaporeans, rebates in 1998 and
2003 included rebates on rent and utilities for HDB flats and ERS (Economic
Restructuring Shares) of $27 and $25 monthly per capita. They were given
to the lowest 20 per cent household income group and the second quintile
group respectively.
In contrast, the third and fourth 20 per cent of households had rebates of
$25, and the highest, $26. Why is it that the lowest 20 per cent had only $1
more than the highest, and the highest had $1 more than the second, third
and fourth quintiles? Shouldn't the lowest have been given more and the
highest least?
Affected parents may be forced to quit their jobs or take on lower paying
jobs, just to go below the $1,000 per capita, in order to qualify for the
subsidy.
Perhaps another alternative is to have another dependant like a child or
parent in order to qualify?
120

Healthcare | 6
It is saddening to read that without any subsidy, all 46 of the Spastic
Children's Association of Singapore's (SCAS) Eipic (Early Intervention
Programme for Infants and Children) clients will have to pay $920, while
another 34 awaiting admission to SCAS' new day-activity centre will have to
pay $720 a month.
How many of these disabled children qualify under means testing?
Those who cannot afford may have to take their children out of the
programme, stay at home, and their condition will simply deteriorate
without any therapy.
The charity sector is already challenged by the NKF saga. The new means
testing may only increase the stress on charities to get more funds to help
their beneficiaries.
The reason given was that 'means testing ensures that funds are allocated
more to the poor and needy, and less to those who are able to pay'. Unless
the scheme is flexible, those who are deemed to be 'able to pay' may
become very poor overnight, and some of the disabled may in a sense
become 'financially disabled' as well.

121

6 |

,2006 1 12
4

$30 $920
1000
-

$1001 $920
92%

3000%

501

1000
1001

122

Healthcare | 6

1998 2003
27 25 Economic
Restructuring Shares
20% 20% 40%
40% 60%25
60% 80%26
1 20% 80%
1

(Spastic Children's Association of Singapore)

EIPICEarly Intervention Programme for Infants and Children) 46
123

6 |
$920
34 720
$920

124

Healthcare | 6

Fee Hikes For Needy Should Be Reviewed

th

The Business Times, 23 March 2007

I refer to the increase in polyclinic and hospital charges. The 80-cent
increase for polyclinic fees may seem small in absolute terms, but it is a 10
per cent rise.
According to the Department of Statistics' (DOS) Singapore, 1965-1995
Statistical Highlights: A Review of 30 Years' Development, government
operating expenditure on health as a percentage of total government
operating expenditure has declined from 9.5 per cent in 1970 to 7.8 per
cent in 1980, 6.5 in 1990, and 6.3 in 2005.
The distribution of government health expenditure to private health
expenditure has changed from a 50/50 percentage split in 1965 to 25/75 in
2000. HDB one-room and two-room rentals were increased in November
last year. This trend of increasing fees for the lowest segment of needy
Singaporeans should be curtailed or reviewed.
According to the Yearbook of Statistics Singapore, the water, electricity and
gas tariffs' price indices rose by 8.6%, 2.8%, and 4.2% a year from 1995 to
2005, against inflation of just one per cent.
Transport fares were increased in 2000, 2001, 2002, 2005 and 2006. The
benefits of workfare and GST offsets for the lower-income may be
diminished by all these increases in basic necessities and services.
While I can understand and appreciate the need to raise fees, I would like
to suggest that fees for C class wards and polyclinics be kept unchanged by
having perhaps higher hikes for higher class wards, because the needy
should be spared the brunt of rising costs of so many increases all within a
period of just one year.
125

6 |

,2007 3 23

10%
Department of Statistics1965-1995
30
1970 9.5% 1980 7.8%1990 6.5%
2005 6.3%
1965 50/50 2000
25/75
11

1995 2005
8.6% 2.8% 4.2 1%
2000200120022005 2006

126

Investments | 7

7. Investments

127

7 |

Look At Impact Of Low-Cost Pension Funds

nd

The Business Times, 22 November 2002

I refer to the articles CPF takes in consultant for low-cost pension plans
th

(The Business Times, 14 November 2002), and Navigator shows the way
th

(The Business Times, 20 Nov 2002) by Genevieve Cua.

I would like to support the recommendation of the Economic Review
Committee's CPF working group that the government facilitate the
provision of low-cost private pension plans for CPF members.
I would like to ask whether a consultant was appointed when unit trusts
were

first

included

in

the

CPF

Investment

Scheme.

If one had been appointed, maybe we need to find out how the current
high costs of investing have come about.
According to the CPF website, the typical charges for investing CPF funds in
unit trusts are a transaction fee of between $2 and $2.50 per lot, service
charge of $2 per unit trust fund per quarter, with a minimum charge of
between $2 and $5; sales charge of up to 5 per cent; annual operational
charges or expense ratio of between 0.8 and 5.6 per cent of the NAV (net
asset value); redemption charge of up to 6 per cent of NAV; and annual
performance fees of up to 20 per cent of excess returns over benchmark for
the unit trust.
In addition to looking at low-cost pension funds, I would like to suggest that
the consultant examine the feasibility of putting a cap on the total expense
ratio (investment fund's expense ratio plus CPF agent bank's charges) of
existing investment vehicles included in the CPF Investment Scheme.

128

Investments | 7
I understand that in the United Kingdom, a cap on the expense ratio of
pensions was introduced about two years ago, after a study showed that
consumers were paying higher investing costs than a decade ago.
I believe it has been suggested that Singapore follow Sweden's low-cost
pension system. I understand that Sweden is the worst-performing stock
market in Europe, having lost 62 per cent since its record high.
Why is the country having one of the best low-cost pension systems in the
world also the one with one of the worst-performing stock markets?
In this connection, I would also like to suggest that, perhaps, the consultant
could also look at the likely impact and implications of low-cost pension
funds on the stock market, financial services industry, unemployment, and
the economy, in addition to the merits and mechanics of such pension
funds.

129

7 |

,2002 11 22
(11 14
) Genevieve Cua 11
20

$2
$2.50$2 $2-$5
5% 0.8% 5.6%
6%
20%

130

Investments | 7

Have CPF Investors Fared Better Since 1993-2002?

st

The Straits Times, 1 October 2004

I refer to the articles, 'New rules give CPF investors more legal protection'
th

(The Strait Times 29

September 2004) and CPF sounder way for

th

retirement (The Straits Times 15 September 2004).

According to the CPF website (www.cpf.gov.sg), the number of people
investing their CPF under the CPF Investment Scheme (CPFIS) has increased
by 103 per cent, from 359,675 in 1996 to 729,666 this year. The total
amount invested has increased by 195 per cent, from $8.2 billion in 1996 to
$24.2 billion this year.
How has CPF investors fared over the years?
Last year, I wrote to the Forum, asking for the cumulative rate of return for
CPFIS investments. The CPF Board replied that 65 per cent of CPF investors
did not beat the 2.5 per cent interest rate on the Ordinary account, on a
cumulative basis for nine years, from Oct 11, 1993, to Sept 30, 2002.
Now that another year has passed, and the CPFIS crosses its 10th
anniversary, I would like to ask whether the statistics have improved.
While a fully self-reliant retirement system has its merits, it would seem
that the majority of Singaporeans may not have done well, relying on the
CPFIS.

131

7 |

1993-2002
, 2004 10 1
9
29 -9 15

(www.cpf.gov.sg)(CPFIS)
103% 1996 359,675 729,666
195% 1996 82 242

CPFIS
1993 10 11 2002
9 30 65% 2.5%

CPFIS
?
, CPFIS

132

Investments | 7

Disclose Singapore's Returns On Reserves

th

The Business Times, 5 October 2004

I refer to the article HKs investment strategy beats Singapore's: S&P by
st

Daniel Buenas (The Business Times 1 October 2004).

Standard and Poor's estimates that the Singapore Government's annual
returns on its assets averaged between 1.7 and 4 per cent from 1999 to
2003, in contrast to Temasek's compounded annual rate of return of more
than 16 per cent over the past 30 years, and the Government of Singapore
Investment Corporation's ( GIC ) annual returns which have exceeded the
targeted 4-5 per cent above inflation, since the agency was formed in 1981.
The Economist magazine (issue dated Aug 14-20) said that Temasek's
return was 1.7 per cent, in its article for which it paid $390,000 for
defamation on the issue of nepotism.
So, is the return 1.7-4 per cent, 16 per cent, 5.5-6.5 per cent (if inflation
was 1.5 per cent), or 1.7 per cent?
I wrote to the press on Aug 12, suggesting that the Monetary Authority of
Singapore (MAS) change the policy of not disclosing the return on
Singapore's foreign reserves. MAS replied on Aug 14 that 'our policy of not
disclosing the annual rate of return on the reserves is to avoid undue
emphasis on year-to-year variations in returns that would detract from
MAS's core objectives'.
Like all Singaporeans, I am very proud of our achievements and reputation,
and am dismayed whenever I see organisations like S&P and The Economist
poking fun at Singapore's returns and the issue of non-transparency.

133

7 |
This may affect others' perception of Singapore globally, and make it harder
to attract business and investment into Singapore.
Since the Prime Minister's National Day Rally speech on Aug 22, many
'sacred cows' have been slaughtered, like the five-day week for the civil
service and schools.
Perhaps it is time to kill the 'sacred cow' of not disclosing the returns,
because in a sense every Singapore has a stake in the reserves. This
underscores the PM's call for the need to change and adapt, for the sake of
Singapore's future.

134

Investments | 7

,2005 10 5
Daniel Buenas
10 1
Standard and Poor 1999 2003
1.7% 4% 30 16%
1981
(GIC) 4-5%
8 14-20 1.7%
$390,000 1.7-4%16%5.5-6.5% 1.5%
1.7%?
8 12
8 14

8 22
5

135

7 |

How About A Committee On CPF Returns?

th

The Business Times, 25 September 2007

I refer to the article, 'Longevity Insurance committee may report in 6
months' (BT, Sept 21), and the debate in Parliament on CPF returns. In reply
to a question by opposition MP Low Thia Khiang (Hougang) on whether the
GIC uses funds from the CPF funds to invest, Dr Ng said: 'The answer is no.'
Using a banking analogy, Dr Ng said: 'You put money in a bank and you
agree that you put it there and you get 2 per cent. The bank publishes a
report and says of all its earnings, it earned 8 per cent. You go to the bank
and say, 'I want 8 per cent'. It doesn't work.'
He said that the government bears the liabilities in the same way the bank
does. 'The Ministry of Finance has taken our liabilities. What the Ministry of
Finance does with its money is (its) consideration. But . . . the CPF Board . . .
promises a risk-free rate to (CPF) members. And that is how it works.'
The analogy used may not be very appropriate, because the bank's
customers and shareholders are two different groups of people, who in
many ways are on different sides. In contrast, for CPF members and the
(ultimate) shareholders of Temasek , they are the same, the citizens of
Singapore. We are all on the same side.
If Temasek (or GIC) do not use CPF funds to invest, where do CPF funds go
to, since the budget is in surplus for most years?
Also, unlike the bank analogy, Singaporeans are not asking for the entire 8
per cent - just some of it to enable more of us to retire with enough money.

136

Investments | 7
Since a committee on Longevity Insurance has been formed, why not also
form a committee on CPF returns, or have the same committee study CPF
returns too. We should be studying the causes of the problem, instead of
just the solutions to the problem of Singaporeans not having enough CPF to
retire on.

137

7 |

,2007 9 25
9 21 6

GIC

2%
8%
8%

GIC

8%

138

Investments | 7

Questions Remain After Review On Annuities

th

The Straits Times, 28 December 2007

I refer to the article, Annuities: Return of capital under study (Straits
th

Times, 8 Dec 2007).

Since it took six years of comprehensive review to come up with the CPF
reforms, why were independent actuaries not used in the first place?
The minister in charge of ageing issues, Mr Lim Boon Heng, said a report
given to him on the CPF changes was 22 pages long. Why not make such
reports and studies available to the public, for public feedback?
By offering more options like capital return, earlier annuity payout and so
on, the scheme may be skewed to benefit poorer Singaporeans less. This is
because the cheapest premium option at age 55 may be the original age 85
life annuity, which most poorer people may choose because I estimate the
median CPF balance at age 55 is only about $20,000 plus.
As to the scrapping of the private pension plan ('Private pension plans - the
one that got away'; ST, Dec 8) because 'the probability of getting below 2.5
per cent over a 20-year period was 10 per cent, this meant that one out of
10 would get less than what they are getting today in their Ordinary
Accounts. Is that risk worth bearing?' - I understand the historical
probability of getting below 2.5 per cent over a 20-year period is less than 2
per cent, for a globally diversified portfolio of 50 per cent equities and 50
per cent bonds.
As cited by the Finance Minister, such a portfolio returned 5.9 per cent per
annum over the past 30 years.

139

7 |
In this connection, I would like to ask what asset mix and methodology
were employed in the simulation study on CPF returns?
Isn't it worth the risk to have a less than 2 per cent chance of getting less
than 2.5 per cent, against the average return of 5.9 per cent, instead of the
current state of affairs whereby the median CPF balance at 55 is only about
$20,000 plus?
In this regard, to illustrate the effect of compounding on higher returns, a
25-year-old Singaporean earning $1,450 a month, with CPF contribution of
$500 which is assumed to remain at the same amount, from age 25 to 65,
will grow to $412,567 at 2.5 per cent, and $973,906 at 5.9 per cent.
Finally, according to the Department of Statistics, life expectancy at age 85
is 4.7 years, and at age 55 is 26.8 years.

140

Investments | 7

, 2007 12 28

22

20,000
12 8
20 2.5% 10%10
2.5
50% 50
20 2.5% 2%
30 5.9%

5.9 2%
2.5%

141

7 |
25 $1450
$500 2.5%
$412,567 5.9%
$973,906
85 4.7 55
268

142

Population and Employment | 8

8. Population and
Employment

143

8 |

Review Policies To Help Ordinary Singaporeans Cope

With Rising Prices
th

The Straits Times7 January 2008

I refer to the letters, Basic needs: Prices up far more than inflation rate by
rd

Mr Koo Seng Cheong (Straits Times, 3 January 2008), Rising living costs:
Spare a thought for the middle classes by Ms Kamala Dewi Poologanathan
rd

(Straits Times, 3 January 2008) and the report 13,969 new S'poreans
(Straits Times, Dec 30).
According to the National Population Secretariat, the whole of last year saw
13,209 foreigners taking up Singapore citizenship and 57,310 taking up
permanent residency.
In the first 10 months of this year, Singapore attracted 13,969 new citizens much higher than the average of 9,600 in the past five years - and 53,011
new permanent residents (PRs), a 21 per cent rise compared with the
average of 43,600 in the last five years.
Earlier media reports said that about 7,300 Singapore citizenships were
granted in the first half of this year, and 46,900 foreigners were granted PR
status in the first nine months of this year.
Dividing 13,969 (new citizens in the first 10 months) by 7,300 (new citizens
in the first 6 months) gives 1.91. So, does it mean that the number of new
citizens grew by 91 per cent in the last four months?

144

Population and Employment | 8

Similarly, dividing 53,011 (new PRs in the first 10 months) by 46,900 (new
PRs in the first nine months) gives 1.13. This means that new PRs grew by
13 per cent in the last one month.
At these growth rates, the number of foreigners and PRs may exceed
citizens in about 10 years' time.
Our foreign labour, citizenship and residency policies to grow the economy
and population to 6.5 million may have contributed to inflationary
pressures on prices, pushing the Consumer Price Index to a 25-year high.
Despite a record number of new jobs created, lowest unemployment in a
decade, record number of investments and robust economic growth of 7.5
per cent, about 30 per cent of workers have not had any real increase in
wages over the last six years or so.
Also, the number of ComCare beneficiaries, Medifund applications,
Polyclinics Medical Assistance Scheme patients, and HDB one- and tworoom rental applicants have all increased to record highs.
The above statistics may be a call for policies - like the broadening of the
criteria for citizenship applications in 2004 - to be reviewed to balance
population and economic growth with more help for Singaporeans to cope
with rising prices and the competition for jobs and housing.
In this connection, I would like to echo and support the remarks: 'Success is
more than GDP - What is needed are new benchmarks to measure how we
as a society fare, based on how effectively the gains of growth are being
distributed, especially to the weakest and neediest', which appeared in the
report, 'My three hopes for the new year' (Straits Time, Jan 4).
145

8 |

, 2008 1 7
Koo Seng Cheong
1 3 Kamala Dewi Poologanathan
1 3 13,969
12 30
13,209
57,310
13,969
9600
43,600 21% 53,011
7,300 9
4690
4 91%
13%

6 50
25

7.5% 30%

146

Population and Employment | 8

ComCare
Medifund

- 2004

1 4

147

8 |

Retraining Low-Wage Workers: Let's Be Realistic

th

The Straits Times, 25 June 2008

I refer to the article, Contract workers: Caught in the pay squeeze (The
th

Sunday Times 8 June 2008).

The Building Custodian Job Re-design Programme, an initiative supported
by the Workforce Development Agency and National Trades Union
Congress, seeks to enhance the skills of cleaners to value-add in work such
as changing light bulbs, clearing blockages and 'custodial checking', such as
sighting and reporting defects, pests and killer litter.
This job of building custodians or multi-skilled cleaners comes with a $1,000
starting wage, compared to a cleaner's $700 to $800.
As I understand most cleaners are elderly with low education, how realistic
is it to expect them to undergo re-training to expand job duties and
responsibilities?
How many companies have sent cleaners on this re-training programme?
How many of the 37,000 contract cleaners have so far been sent for retraining?
As most cleaners are employed by contractors which have to bid for
contracts at the lowest competitive price, how likely is it that one paying
the lowest wage of $700 will pay the $1,775 course fee and allow time off
for the 112-hour course?
With regard to the advisory to all companies and contractors on
responsible outsourcing practices issued by the Ministry of Manpower in
March, I have come across an elderly road sweeper, an 84-year-old
148

Population and Employment | 8

Singaporean man who works 55 hours a week for $650 a month, and an
elderly woman who works 24 hours a week as a housekeeper at a
community club for just $300 plus a month - no wage increment, bonus and
so on.
Government agencies, statutory boards, government-linked companies and
so on should take note of the very low wages of workers on their premises,
and try to influence their outsourced contractors to pay decent wages.
For example, they could follow the example of the PAP town councils,
which have recommended a $1,000 starting wage for full-time workers and
$500 for part-time workers, in new cleaning contracts since April.
Although no minimum wage is imposed, cleaning companies are required
under the new contracts to send their workers to the National Skills
Recognition System Clean Residential Estates course.

149

8 |

, 2008 6 25
The Sunday Times6 8

1000
700 800

37,000

$700 $1,775
112

84 55 $650
24
$300

150

Population and Employment | 8

$1,000 $500

151

8 |

More Residents Working For An Income That Has Not

Changed For 10 Years
th

The Straits Times, 23 February 2007

I refer to the article, 'Singapore gearing up for 6.5m population ' (Straits
Times, 10 February 2070).
National University Sociologist Associate Professor Pauline Straughn said
that Singapore needs to assure its people that growing the population will
not result in more competition for jobs, housing and places in school so
that tension does not arise in the community.
The Manpower Ministry (MOM) said last year's figure for jobs creation was
the largest number recorded and the highest ever at 88,200 for locals. In
percentage terms, the percentage of jobs created to locals appears to be
the lowest ever, having declined from 90 per cent for the period 1997-2002
to 70 per cent, 56 per cent in 2004 and 2005, and now 51 per cent last year.
According to the MOM Report on Labour Force in Singapore 2006, which
covers the period 1991-2006, the number of unemployed for residents
(Singaporeans and PRs) was 28,000 in 1991 and 69,600 last year. Against an
increasing population, a more significant statistic is the Unemployment
Rate (Non-Seasonally Adjusted) for residents, which increased from 2 to 3.6
per cent, from 1991 to 2006.
While the resident labour force increased by 27 per cent for the 15-year
period from 1.373 million to 1.737 million, unemployed residents increased
by 149 per cent from 28,000 to 69,600. This means that the resident labour

152

Population and Employment | 8

force increased by 1.6 per cent per annum, while unemployed residents
increased by 6.3 per cent per annum.
'Although the median gross monthly income of full-time employed
residents has grown 2.9 per cent a year in the past decade to $2,040 as of
June 2006', the number of part-timers has more than doubled over the
decade from 51,400 to 112,300, expanding their share of employment from
3.5 per cent to 6.3 per cent.
The median monthly income for all employed residents (full-time and parttime) stagnated at $2,000 for the years 2001 to 2004.
This means that income grew by only $40 from 2001 to 2006, or 0.4 per
cent per annum. Income growth may have been negative, after adjusting
for inflation for the last five years.
The median monthly income for part-timers is still the same at $500
compared to 10 years ago.
In view of the 118 per cent increase in part-timers for the last decade, more
residents are working for an income of $500 that has not changed for 10
years.

153

8 |

2007 2 23
650 2 10

Pauline Straughn

2006 1991-2006
1991 28000
69000 1991
2% 2006 3.6%
15 137.3 173.7
27% 149% 28,000 69,600
1.6% 6.3%
2.9%
2006 6 2900 51400
112300 3.5% 6.3%
2001 2004 $2,000
40 0.4%

10 500
10 118%
10 500
154

Population and Employment | 8

Disclose More Information On Foreign Labour

th

The Business Times, 9 February 2006

I refer to the article Employment hits all-time high of 2.3 million by Anna
nd

Teo (The Business Times 2 Feb 2006).

It has often been asked whether the inflow of cheap, low-skilled foreign
workers into Singapore over the years has depressed wages at the bottom
end.
This may have been a contributing factor, according to National University
of Singapore economist Basant Kapur, who said greater clarity will only be
possible if the government releases more data on the size and skills makeup of the foreign-worker workforce in individual industries.
The government has maintained that this is sensitive data kept secret for
reasons of national interest. It does not want to expose Singapore's
vulnerability in terms of its dependence on foreign labour.
Keeping data secret may be disadvantageous to Singapore, as we may in a
sense be letting others draw the conclusion that we are so dependent on
foreign labour that we are afraid to reveal it.
I support the workfare proposals as they encourage self-reliance by
working, and would like to suggest that we explore more measures to help
Singaporeans to get jobs vis-a-vis foreigners who may be competing for the
same jobs.
According to the Department of Statistics' latest data, the total population
grew from 4,240,300 in 2004 to 4,351,400 in 2005 - an increase of 111,100.
155

8 |

Singapore residents, comprising citizens and permanent residents,

increased by 66,600, from 3,486,900 to 3,553,500. This means that the
increase

in

the

population

due

to

foreigners

was

44,500.

As total live-births were 37,174 and total deaths were 15,860, the net
increase in the resident population was 21,314.
Does this mean that the increase due to new permanent residents was
44,686 (66,600 minus 21,314)?
If this is the case, then the increase due to foreigners and permanent
residents was 89,186 (44,500 foreigners plus 44,686 new permanent
residents).

This is 80 per cent of the 111,100 increase in the total population.

If Singaporeans accounted for only 20 per cent of the population increase,
in order to get a more detailed picture of the unemployment situation, it's
necessary to know the proportion of the 110,000 new jobs created in 2005
that went to Singaporeans vis-a-vis non-citizens.
Which is the bigger problem? Not letting others know how dependent we
are on foreign labour, or helping the 64,000 unemployed?
The seasonally adjusted unemployment rate for Singaporeans and
permanent residents was 3.3 per cent last December, down from 4.4 per
cent in September and 4 per cent in December 2004. The question that may
be on the minds of some Singaporeans is: what is the unemployment rate
for Singaporeans?
156

Population and Employment | 8

I think we need to balance the need for foreign labour data secrecy with
more transparency to enable all stakeholders to work together to help the
300,000 people who earn less than $1,200 a month.

157

8 |

,2006 2 9
Anna Teo 2 2
230

Basant Kapur
Basant Kapur,

2004 4,240,300
2005 4,351,400 111,100
66,600 3,486,900
3,553,500 44,500
158

Population and Employment | 8

37,174 15,860
21,314
44,686 (66,600 21,314)?
89,186 44,500
44,686 111,100

2005 110,000

64,000

12 3.3% 9
4.4% 2004 12 4%

3
1200

159

8 |

Show The Numbers To Dispel Notion That Foreigners

Take Away Jobs From Singaporeans
th

The Straits Times, 22 December 2006

th

I refer to the editorial The forgotten retrenched (Straits Time, 19 Dec

2006) and the article 'Singapore's population and the quest for foreign
th

talent: When statistics give the lie to perceptions' (Straits Time, 9 October
2006).
The editorial says that there is a need to study the issue of prolonged
unemployment of older executives, and over-reliance on foreign manpower.
In the latter article citing the recent study conducted by journalist Mafoot
Simon, it revealed for the first time in Singapore that the Indian and Malay
minority races have done better than the majority Chinese population , in
terms of proportional population mix, educational attainment, increase in
monthly household incomes, against popular belief.
This debunks the perception of Singaporeans and puts to rest the questions
of marginalisation of the minority races by our neighbouring countries,
about whether Singapore's foreign talent policies favour the Chinese.
What this study has highlighted is that sometimes, the incomplete or nonavailability of statistics, particularly on a hot topic affecting a large segment
of the populace, may lead to perceptions, rumours and unjustified
grievances.
One example is the profusion and continuing debate in the internet blogs,
emails and coffee-shop talk on what is the unemployment rate for
Singaporeans, and what is the percentage of new jobs created that went to
Singaporeans.
160

Population and Employment | 8

This controversy need not arise or continue if the labour statistics do not
refer just to locals, who are defined as citizens and permanent residents.
If the study had not disclosed the race statistics in Singapore, some
Singaporeans, our neighbours, and the opposition political parties may
continue to perpetuate the myth that the minority races are being
marginalised.
With the bouyant economy, job creation at a record high, very low level of
unemployment, and the percentage of foreigners and permanent residents
at an all time high of 20 per cent and 11 per cent respectively of the total
population, perhaps now is the time for the authorities to give a breakdown of the employment statistics of the locals, to dispel the notion once
and for all that foreigners are taking away jobs at the expense of
Singaporeans.
Some 55 per cent of new jobs created last year went to locals. The latest
statistics for this year do not have this number.
Telling more is better than telling less.

161

8 |

,2006 12 22
12 19
10
9

Mafoot Simon

20% 11%
162

Population and Employment | 8

55%

163

9 |

9. Transport

164

Transport | 9

Explain Reasons For Bus Fare Increase In Detail

The Straits Times, 14th September 2007
I refer to the reports, Bus fares to go up by 1-2 cents next month' and
th

'100,000 needy families to get $30 transport vouchers (Straits Time, 12

Sept 2007).

Can the Public Transport Council (PTC) explain the reasons and the criteria
it used to reject the application for train fare increase and approve that for
a bus fare hike?
Do more Singaporeans generally take buses more often and spend more on
bus rides than on train rides? Also, why are fares for senior citizens being
increased? What criteria did the PTC use to grant that?
Aren't senior citizens generally more adversely affected by fare increases,
relative to the general population?
The minutes of the PTC's deliberations should be made public, like that of
the Federal Reserve Board in the United States.
Instead of just announcing the decisions to approve the increase in fares,
the public may like to know the criteria, reasons and process in the
determination of fare increases - be it bus, train, feeder, student, or senior
citizen concessionary - and how the quantum of hike was arrived at.
As for the $3 million set aside to help the needy cope with the impending
bus fare hike, since each transport voucher is worth $30, the number of
transport vouchers will be 100,000. It was reported that those who need
more help can also tap into the Citizens Consultative Committees' ComCare
Fund.

165

9 |
As I understand that there are more than 100,000 households with monthly
household income of below $1,500 - the bottom decile of non-retiree
households alone has an estimated 90,000 households with per capita
monthly income of only $160 - with an estimated 400,000 residents, will
the vouchers issued be enough?

166

Transport | 9

2007 9 14
9 12
1-2 10 $30

Public Transport Council

-
-

$30

Citizens Consultative Committees' ComCare Fund

1500

160

167

9 |

The Poor Will Benefit Most From Transport Fare Cap

The Straits Times, 30th November 2006
I refer to Jason Chiam Chiah Sern's letter "Much to learn from HK public
transport system" (Straits Time, 28

th

November 2006) and SMRT's reply

th

"Fare cap will benefit only few passengers" (Straits Time, 30 September
2006).
The latter states that less than one per cent of passengers pays a fare of
$1.90 or more. Therefore, having a fare cap would benefit only a small
proportion of passengers, while transferring the cost to others."
SMRT's reason for not having a fare cap like in other countries is somewhat
illogical because the fact that less than one per cent pays more than $ 1.90
means that a fare cap would have very little impact on the other 99-plus
per cent who may have to share "transferring the cost to others".
It goes against the basic principle of public transport, which is the sharing of
costs, so that a minority will not be penalised, since public transport is a
necessity for those who cannot afford private transportation.
The main reason why there is normally a fare cap in other countries is to
protect the small number of needy, who may be affected most if there is no
fare cap.
If we ask the other 99-plus per cent of Singaporeans, I believe they would
not mind sharing the cost for the benefit of the needy among the "less than
one per cent". Why not conduct a poll of Singaporeans?

168

Transport | 9
In the "Report of the Committee on the Fare Review Mechanism" last year,
it noted that average fares in Singapore were lower than in New York,
London, and Hong Kong.
However, all these cities have fare caps and monthly passes, which
Singapore does not have. The monthly pass recently introduced by SBS
Transit is only for travel on SBS buses, and the price is high relative to other
cities of the developed countries. Monthly passes in other cities are
typically multi-modal or multi-operator, if there is more than one operator.
The reports also cited the Household Expenditure Survey (HES) 2003 data
that the lowest 20 per cent and second quintile group of household income
had average monthly household income of $1,279 and $2,651 respectively.
However, the Department of Statistics (DOS) puts the two statistics at $795
and $2,059.
Why does the report's statistics differ from the DOS's?
How has this discrepancy impacted on the computations on the
affordability of transport fares?

169

9 |

, 20061130
Jason Chiam Chiah Sern
1128(SMRT)
930,

1%$1.90

SMRT1%$1.90
99%
SMRT

99% 1%

SBS

170

Transport | 9
200320
2040%$1279$2651
$795$2,059

171

9 |

Let Firms Link Their Names To MRT Stations

th

The Business Times, 16 March 2005

I refer to the articles SMRT looking to expand into retail sector (The
th

Business Times, 24

February 2005) and SMRT Q3 profits boosted by

lower taxes and costs (The Business Times, Jan 29-30).

In Kuala Lumpur, the Monorail stations have names like Bukit Bintang Coca
Cola and Titiwangsa Telecom because companies pay a lot of money, which
I believe is in the millions, to have their names associated with a station.
I would like to suggest that we explore the possibility of having a similar
scheme in Singapore, allowing companies to bid on an annual or periodic
basis for their names to be announced whenever a train stops at a station.
With tens of thousands of commuters seeing daily the station's name with
the company's name, it may generate revenue which may be used as a
cushion against future MRT fare increases, or may even reduce current
fares.
In this connection, SMRT has indicated since the fare increases in 2002 that
it may have to raise fares again in the future. Its profits for 2002 and 2003
rose 27 and 24 per cent respectively, and for Q3 2004, it climbed 25 per
cent.
I think the sky is the limit in view of the novelty and impact of the
advertising value potential.
For example, I understand that a company is paying the Land Transport
Authority (LTA) more than $200 million over 15 years or so for the right to
build and manage the advertising panels at some bus and taxi shelters.
172

Transport | 9
If some of this money is given back to bus operations, it may also act as a
cushion against future bus fare increases, or even lead to a reduction in
current fares. After all, in a sense, this money is derived from bus
operations in Singapore.

173

9 |

,2005 3 16
(,2 24 )
',(
,1 29-30 )
, Bukit Bintang Coca Cola Titiwangsa Telecom
,,,

,
,
,
,
, 2002 ,
2002 2003 27% 24%2004
25%

,,,

,,
,

174

Transport | 9

Why Not Give Cash Refunds?

th

The Straits Times, 16 May 2003

I REFER to the commentary, Drop the Parf system, and the scams may go
th

too (Straits Time 8 May 2003), and the article, Dealers offer 5% discount
on scrap papers, in which it was stated that 60,000 cars were taken off the
road last year and that faster turnaround of certificates from exportprocessing zones was causing a glut.
It was stated that for a $50,000 certificate, the savings are as much as
$2,500. A spokesman for Singapore Secondhand Motor Vehicle Dealers'
Association said: 'At the end of the day, it's the consumer who suffers.
When we sell low, we also buy low.'
In a sense, does it mean that the 60,000 Singaporeans who sold their cars
have lost on the average about $2,500 each? The total amount is about
$150 million (60,000 x $2,500). Would it not be better if cash is paid for a
deregistered vehicle, instead of a certificate? By having a certificate, it
artificially creates a secondary market for a commodity that need not exist.
The certificate system is an inconvenience, and causes delays and risks to
the consumer; the discount on the certificate was as much as 13 per cent in
1998.

The article also states that the Land Transport Authority is currently setting
up a $40 million intelligent online system that will do away with practically
all forms of paper transactions and documentation, and is expected to plug
all loopholes when it is up in 2006. Is it possible to save some of this $40
million of taxpayers' money, by doing away with the Parf?

175

9 |
I understand that a record 96,000 vehicles were scrapped last year and 62
per cent of cars are less than five years old, and 85 per cent, less than 10. If
each car scrapped has a value of, say, $5,000 if it continues to be used, the
sum in a sense destroyed last year was about $480 million.
What is the impact on the economy? Can the economic experts give us
their views?

176

Transport | 9

,2003 5 16
Parf
5 8 5%
60,000

$50,000 $2,500

60,000 ,
$2,500? 1.5 60,000 X
$2,500,

1998 , 13%

2006

96,000
62% 5 85% 10
$5,000

177

9 |

Why Is Monitoring Taxis So Costly?

st

The Business Times31 January 2003

I refer to your report, Meter ticking for taxi operators (The Business
th

Times 28 January 2003).

The Land Transport Authority (LTA) has announced that taxi operators will
have to pay a new monthly licence fee of $25 per vehicle. With almost
19,000 cabs here, that's $470,000 a month.
It was reported in the media that LTA charges SBS Transit and Tibs only
$10,400 a year to monitor service levels of buses. Why does it cost 540
times more to monitor taxis?
Is it possible for the LTA to give a more detailed breakdown of how it costs
$5.6 million a year to monitor taxis? Also, what is the annual surplus
(profits) of the LTA?
May I suggest that some of the surplus be used to reduce the new $25 taxi
monitoring fee?
I believe it was reported in the media last year that the LTA had changed its
mind about moving to a new building. Could cost savings, if any, from this
change of plans be used to reduce this $25 fee too?
The LTA said 'the fee is less than $1 a day a taxi, so we don't think it will
affect fares'. If the LTA is wrong, and fares are increased, I would like to
suggest that the new fee be adjusted to offset any fare increase, so that the
consumer does not end up having to pay more.

178

Transport | 9
Under the new monitoring system, errant taxi operators could be fined up
to $100,000 for each contravention.

If fares are increased, is it possible for the LTA to use any fines received to
reduce the $25 fee too, so that the impact on consumers is lightened?

In my opinion, there is also another issue. If, whenever the public

complains about the poor service of an essential good or service, and the
solution is for the relevant authority to charge a new fee to monitor the
service in order to improve it, the costs of living and doing business in
Singapore may continue to rise.

Perhaps Singaporeans should not complain too much if the result is having
to pay more.

179

9 |

,2003 1 31
1 28

LTA
25 19,000
470,000
TIBS 10400
540

560

25

25

100,000

180

Transport | 9

25

181

Conclusion

Conclusion
In this book, we have examined some of the most common issues faced by
Singaporeans. We hope that readers would gain a deeper insight and
develop alternative perspectives regarding policies that matter to them.
We also hope to encourage our readers to read between the lines, evaluate
the policies and not accept what they see or hear at face value. As no policy
is perfect, being well informed of the possible problems that may arise may
help us avoid facing the same dilemma in the future.
Valuable feedbacks occasionally surface in the mainstream media, such as
letters to the editor. However, there is generally a lack of lively debates
about policies in the mainstream media. Sometimes, we see replies to
readers enquiries by the various authorities which are far from convincing,
yet the flame dies down without much follow-up coverage.
It is hard to pinpoint whether the publics lack of interest in policies has led
to an unhappening media, or vice versa. However, it is highly certain that
without a vibrant environment where people are passionately voicing their
views and questioning the norm, it is difficult to induce the people to step
into the shoes of the policymakers and think about the public interests.
This is especially relevant in the face of globalisation, as people are no
longer confined to their native country. A tempting job offer from overseas
may be all it takes for some to uproot themselves and settle abroad. A
nations foundation can only be built upon its sons and daughters, who take
ownership of the countrys issues, and whose role cannot be consistently
replaced by foreign talents.
Just as children of the home will not watch and do nothing when things
happen in the family, Singaporeans should voice up when they disagree
182

Conclusion
with any policies or issues that may affect their fellow countrymen, rather
than keep it to themselves and care about their personal interests only.
Hence, it is crucial that people actively discuss about topics such as those
covered in this book. Not everyone may agree on the same point, but the
very fact that people are talking about it shows that they care for the
nation. They day people stop talking about these issues also means that
their interest for the nation has died. Which is a greater problem? Having
too many opposing views or no interest at all?
A meaningful citizenship is more than satisfying personal needs and desires.
As responsible citizens, we need to take ownership of the issues of the
country, and not just leave it all to the policy makers. Citizens, as
stakeholders in the country, and rightful owners of the land, should actively
voice their views and suggestions for the benefit of the people.
Finally, we hope that this book will be a step forward in shaping a country
full of responsible citizens.

Tan Yunyou

183

184

185

Appendix
Contact Us
If you would like to send us your thoughts, please feel free to contact us at
the email below:
tia.conferences@gmail.com

Access Replies To The Articles

Note: To retrieve the replies to the articles in this book, please refer
to www.nlb.gov.sg. (Under e-resources)

186