28 February 2011

Singapore Government Securities — An Alternative to Time Deposits?

When asked what could be done to help Singaporeans get more returns on their savings, Minister for Finance Tharman Shanmugaratnam told Parliament on 10 January 2011 that the prevailing low level of interest rates reflected loose global liquidity conditions.

The Singapore government did not make official forecasts of interest rates, but market analysts believed that the low interest rate environment could persist for some time in view of the weak recovery of the US and other developed economies.

Singapore's capital markets were developing, he said, and offered more investment alternatives including instruments that yielded better returns than savings deposits but without overly high risk.  Retail investors could participate in Singapore Government Securities ("SGS") auctions.  By mid-2011, they would be able to buy and sell SGS on the Singapore Exchange.  Well-rated corporate bonds were also becoming more widely available, as high quality borrowers were turning more to the bond market to meet their financing needs.  Some of those companies had begun to issue bonds aimed at retail investors.

Are SGS an alternative to bank deposits?

The prevailing yields on 5-year and 10-year benchmark SGS are approximately 1.2 per cent and 2.6 per cent, respectively, while the interest rate for 12-month time deposits is 0.5 per cent.  The yields on safer SGS are higher because of the longer time to maturity.

Unlike the interest rate of a floating rate note, however, the SGS yield is locked in at the point of purchase, so the yield advantage of the SGS vis-à-vis time deposits is eroded as interest rates rise.  Whether an investor is better off with SGS or time deposits depends on time deposit interest rates over the life of the SGS, but this is not something that he will know in advance.

An investor does not have to hold the SGS to maturity, however.  He can sell his SGS if there is a market for it.  If interest rates have risen, the price of his SGS may fall below the price at which he had bought it.  Generally, the longer the remaining time to maturity and the lower the coupon of the SGS, the more sensitive the price of the SGS is to movements in interest rates.  If an SGS is no longer a benchmark issue, demand for that SGS may be weaker than an otherwise similar benchmark SGS, and this may depress the price.  Finally, even in the best of circumstances, the bid price is lower than the offer price, and a buyer/seller also has to pay commission.

There is a place for SGS or investment grade corporate bonds in an investment portfolio, but probably not as an alternative to time deposits unless one is considering those with very short time to maturity.  Even then, the yield of a two-year benchmark SGS is comparable to, or (as is the case now) may even be less than, the interest rate of a 12-month time deposit.

The best time to buy an SGS or an investment grade corporate bond is when interest rates are high and expected to fall and remain low for an extended period thereafter.

Another possibility is to invest in a series of SGS (or investment grade corporate bonds) with staggered maturity dates so that in every period (for example, six months), an investor has an SGS of approximately equal principal amount maturing.  By so doing, he diversifies his yield risk and may outperform time deposit placements, though there is no assurance that any individual SGS will outperform a series of sequential time deposits during its life.

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Notes.  "Inflation and Declining Interest Rates: Impact on Singapore households", Singapore Parliament report, 10 January 2011.

27 February 2011

Waiting for New HDB Apartments and the Procreation Goal

The average waiting time for a build-to-order ("BTO") HDB apartment is supposed to be three years.  But TODAY journalist Ong Dai Lin found that 17 of the 21 BTO projects launched in 2010 are estimated to be completed only in 2014 or 2015.

Responding to TODAY's queries, HDB said that —
  • The estimated completion dates took into account factors such as the size of the project and complexity of design.
  • The estimated completion dates for last year's BTO projects took into account the time needed to call the tenders for construction, which was about six to eight months.
  • The estimated completion dates were provided at the launch of the BTO projects to help buyers plan ahead, and were updated once construction started.
  • Processes had been streamlined to allow buyers of HDB apartments to collect the keys to their apartments about six months earlier.  (It is not clear whether this means that the completion dates have since been brought forward by six months or the completion dates mentioned in the TODAY report would have been six months later had this streamlining not taken place.)

HDB (Housing and Development Board, Singapore's public housing authority and a statutory board under Ministry of National Development) has been building apartments for the past 50 years.

Minister for National Development Mah Bow Tan told Parliament on 11 January 2011 that typical BTO projects comprising five blocks of not more than 20 storeys took an average of 32 months to complete in the last two years.  More time was required for taller blocks or if construction was affected by factors such as poor soil conditions, site constraints or complex design features.  The longest construction time for a typical BTO project over the last 20 BTO projects was 42 months, and the shortest construction time was 26 months.

HDB apartments were already highly standardised and functionally designed to facilitate buildability. Nonetheless, HDB was working with its contractors and suppliers to shorten the construction period through other means.  By increasing resources, enhancing and streamlining work processes, and raising site productivity, HDB was confident that its contractors would be able to build and deliver most of the apartments in about 2.5 years (30 months), without compromising quality and structural safety.

Beyond shortening construction time, HDB had explored other ways to help buyers to get their new apartments faster after booking their apartments.  For example, HDB would bring forward activities such as preparing building designs for tender so construction could commence soon after the project launch.  Mr Mah estimated that buyers of typical BTO projects launched in mid-2011 onwards would generally need to wait for 2.5 years to collect their keys after booking their apartments.

Member of Parliament Ho Geok Choo had asked the Minister for National Development (a) how confident HDB was of its ability to complete the building of apartments in two-and-a-half years when some projects took more than five years to complete; (b) how much room HDB had to change strategy by concentrating on building apartments without frills; and (c) for the last 20 BTO projects completed by the HDB, what the shortest and longest time taken to complete building the new apartments were.

Any couple waiting for a new BTO apartment is not concerned about construction time nor whether their BTO project is or is not typical.  What only matters is the time from the point of booking an apartment to the time they receive their keys.

For one 24-year-old applicant of a BTO apartment, the completion date is in Q2 2015.  Although she will be getting married in December, the couple will live apart until the apartment is ready.  They do not intend to start a family until then.

For another applicant, aged 28 years, the completion date is Q2 2014.  She has been married for two years, and is living with her in-laws.  The couple started balloting for an apartment in 2008.  Having children might affect her in-laws due to space constraints.

Hopefully, neither they nor any other newlyweds have to wait too long to move into their new HDB apartments.

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Notes

1.  "The Average Waiting Time for BTO Flats is Longer than 3 Years", TODAY, 17 February 2011.

2.  "Building of HDB Flats Duration of BTO Projects", Singapore Parliament Report, 11 January 2011.

26 February 2011

Owners Renting Out HDB Apartments

Senior Parliamentary Secretary, Ministry of National Development, Dr Mohamad Maliki Bin Osman told Parliament on 10 January 2011 that about 34,800 apartments or 5 per cent of the total HDB apartments eligible for subletting are being sublet.

It is not clear if the 34,800 apartments that are sublet include the 27,256 "active cases" of the entire HDB apartments being sublet (as at probably 31 March 2010).

Owners of HDB apartments who wish to sublet their apartments must (i) meet the minimum occupation period; (ii) obtain HDB's approval; and (iii)  and comply with the terms and conditions for subletting, such as ensuring that the sub-tenants do not disturb the neighbours, and that the number of sub-tenants does not exceed the maximum number allowable for the different types of apartments.

The approval to sublet is given for a maximum of three years.  It may be extended or renewed subsequently.  The average subletting period is about 20 months.

HDB conducts half-yearly regular inspections and spot checks to ensure that owners do not infringe the subletting rules.

In 2010, HDB took action against 98 owners for unauthorised subletting and seven owners for overcrowding.

HDB received a "small number" of complaints from residents regarding the subletting of apartments, usually concerning noise.

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Notes

1.  HDB is Housing and Development Board, Singapore's public housing authority and a statutory board under Ministry of National Development.

2.  "Renting Out of HDB Flats by Owners", Singapore Parliament Report, 10 January 2011.

3.  Housing and Development Board annual report 2009/2010.

25 February 2011

Labour Shortage in Singapore

The media reported that coffee and kaya toast chain Ya Kun was trying for four months to recruit eight waiters and cleaners for an outlet it wanted to open at Singapore Flyer, but without any success.  As a result, it was unable to commence operations there.

Driven by Singapore’s rapid and robust economic recovery, job vacancies rose to 50,200 in September 2010 from 45,100 in June 2010 and 36,900 in September 2009.  (The seasonally adjusted vacancies in September 2010 were 44,600, down from 45,400 in June 2010.)  43,400 of the vacancies in September 2010 were from the private sector, while the remaining 6,800 were from the public sector.  Job vacancies were 2.8 per cent of total manpower demand in September 2010.

The highest number of vacancies was for service and sales workers (10,330), professionals (8,270) and associate professionals and technicians (8,230).

In terms of the three broad occupational groupings, employers were most looking to hire professionals, managers, executives and technicians (44 per cent), clerical, service and sales workers (29 per cent) and production and transport operators, cleaners and labourers (27 per cent).

Companies such as Ya Kun which cannot find enough workers should firstly ask themselves whether they are paying enough and whether working conditions are good enough.

For too long, Singapore has relied on importing hordes of cheap (relative to Singapore wages) foreign workers to fill the ranks of its labour force.  But, it cannot continue.

Labour, just like capital and facilities, is a factor of production.  Companies that cannot obtain enough new capital to grow have to generate capital internally or grow more slowly or not at all.  Companies that want land or premises for their buildings must compete with other companies to bid for them.  There is no reason why labour should be an unlimited, or an almost unlimited, resource.  If a company cannot raise its wages or make working conditions more appealing or do whatever is required to secure the employees that it needs, the choices that it faces are clear — do something else or slow down, shut down or move out.

No businessman blames the government or anyone else if he cannot obtain funding or land or premises for his operations.  There is no reason to blame the government or anyone else if he cannot recruit enough employees.

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Notes

1.  "Job Vacancies Soar to Record Levels", The Straits Times, 29 January 2011.

2.  "Job Vacancies 2010", Ministry of Manpower.

Slower Inflation Does Not Mean Lower Prices

Headline CPI (or Consumer Price Index) inflation averaged 2.8 per cent for 2010.  Rising inflation in Q4 2010 was driven by higher costs of private road transport and accommodation.

These two factors, along with higher food prices around the Chinese New Year period, would push up headline inflation to 5 to 6 per cent in the first few months of 2011, said Monetary Authority of Singapore ("MAS") on 17 February 2011.  Thereafter, headline inflation was expected to moderate, especially in H2 2011, as the base effects dissipated.

MAS projected CPI inflation in 2011 to average between 3 and 4 per cent, driven by four factors, each accounting for roughly about a quarter of the headline number —

a.  The recent surge in COE premiums would result in private road transport contributing significantly to headline inflation in the early part of 2011.  However, lower demand for cars would cap further sharp rises in car prices.

b.  Residential property rentals had risen sharply since Q3 2010 and would continue to have an mpact on headline inflation in H1 2011.  The tighter housing market situation, however, should ease in H2 2011 as more supply came onstream.

c.  The recent spike in prices of some food commodities was likely to feed into domestic food prices in the short term.  Barring further supply shocks, global oil prices were likely to rise moderately in line with the gradual global economic recovery, from about US$90 per barrel to around US$100 towards the end of 2011.

d.  Services inflation would have a larger impact on CPI inflation than in 2010 due to the strong wage pressures amidst the tight labour market.

Minister for Finance Tharman Shanmugaratnam had told Parliament on 10 January 2011 that about half of the headline CPI inflation rate in 2010 was due to the sharp rise in premiums for Certificates of Entitlement ("COE").  However, that did not mean a similar increase in actual cash outlays by the majority of Singaporeans, as only 3 to 4 per cent of households, or 7 per cent of all car owners, purchased new COEs in 2010.  The majority of car owners held existing COEs.  If COE premiums stayed high, however, everyone who purchased a new car or renewed a COE in the future would face higher prices eventually.  However, such purchases would take place over a period of years, and the impact on cash outlays for households as a whole would be spread out over a few years.

Anyone who did not buy a car or renew a COE would have escaped approximately half the headline CPI in 2010.  Anyone who bought a car or renewed a COE in 2010 probably would have suffered more than what was indicated by the headline CPI.  Firstly, CPI is a composite basket of goods and services supposedly representative of the consumption patterns of the population at large, in which some individuals or households consume a particular good or service but others do not.  The fewer the percentage of individuals or households that consume a particular good or service, the larger the impact on them.  Secondly, CPI is a year-on-year figure, but few people buy a car or renew a COE every year.

Finally, it is important to note that even if CPI inflation eases in 2011, it is due to the dissipation of base effects.

Easing of CPI inflation simply means that prices (of goods and services constituting the CPI) are not rising as fast as they have been rising.  This does not mean that prices have reverted to previous levels.  And unless they do, consumers will pay more than they used to pay previously.

Consumers may be relieved if CPI inflation falls to 1 per cent in 2011, for example, but they will still pay more in general for what they consume in 2011 than they did in 2010.

-------------
Notes

1.  Presentation by Monetary Authority of Singapore in conjunction with the release of "Economic Survey of Singapore 2010" on 17 February 2011.

2.  "Inflation and Declining Interest Rates: Impact on Singapore Households", Singapore Parliament Report, 10 January 2011.

Helping the Poor Deal with Inflation

The topic of inflation was raised at an event organised by National Trades Union Congress for its members on 23 February 2011.

In response, finance minister Tharman Shanmugaratnam said that the majority of Singaporeans, including those in the lower income group, would receive "far more [from the budget] than the increase in inflation this year".

He gave the example of a family of four with a monthly household income of $2,000, which would receive $3,500 (or approximately $290 a month), four times the increase in the cost of living faced.

First, the median household income from work in 2010 was $5,000.  A household with a monthly household income of $2,000 is very poor.

Second, there are a large number of households with monthly household income less than $2,000.  10.5 per cent of households did not have anyone who worked.  In another 11.9 per cent of households, the monthly household income was less than $2,000.  Taken together, in 22.4 of households, the monthly household income was less than $2,000.  (The minister was reported to refer to Singaporeans, i.e., citizens.  The data from the Census Of Population 2010 relate to residents, i.e., citizens and permanent residents, as a group.)

Third, probably many if not most of the households in which the monthly household income is $2,000 or less need financial assistance to meet the cost of living, not just for the expected increase in the cost of living.  There is a difference between the cost of living and the increase in the cost of living — the latter is only the incremental amount.

Based on the numbers provided by the minister, inflation in 2011 will increase that family's cost of living by $875 ($3,500 / 4).  Taking average inflation in 2011 as 3.5 per cent (Monetary Authority of Singapore forecast Consumer Price Index inflation to average between 3.0 and 4.0 per cent), this means that the said family's cost of living in 2010 was $25,000.

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Notes

1.  "Inflation, Worker Levy Key Concerns of Unions", The Business Times, 24 February 2011.

2.  Census of Population 2010, Statistical Release 2: Households and Housing.

3.  Remarks by Monetary Authority of Singapore at the presentation of the "Economic Survey of Singapore 2010", 17 February 2011.

21 February 2011

How Fast Should the Singapore Economy Grow?

Singaporeans' reactions to the wave of foreigners coming here to work are a key reason for the slower growth being forecast for this year after a 14.7 per cent growth (advance estimate; the preliminary number is 14.5 per cent) in 2010, Minister Mentor Lee Kuan Yew said on 11 February 2011.

"To keep up our strong performance, we needed more (foreign) workers.  This caused some disquiet.  So we are slowing down the numbers of new permanent residents.  We must accept slower growth as a result," he said.

Still, the 4 to 6 per cent growth projected for 2011 is "very good" for Singapore's mature economy, he added.

Not only is the 4 to 6 per cent growth projected for 2011 very good, it is faster than the government's own assessment of Singapore's medium-term trend rate of growth of 3 to 5 per cent.

Annual GDP growth of 3 to 5 per cent is healthy for an economy at Singapore's stage of development, and exceeds that of most advanced countries, which typically grow by 2 to 3 per cent.  Growth in any one year may be higher or lower.  Average GDP growth over the current decade is unlikely to match the 5.0 per cent achieved over the last decade.  Nevertheless, it will generate the resources needed for social investments in health, education and schemes to help lower income citizens move up, and to safeguard security.

Most of the 5.0 per cent GDP growth over the past decade (2000-2009) was achieved by importing foreign labour.  Productivity improvements accounted for only one-fifth of GDP growth.

Singapore cannot afford to maintain the 14.5 per cent economic growth achieved in 2010, unless it is the unlikely result of further productivity improvements.  But no one should agonise over it.  14.5 per cent is exceptional, maybe even extraordinary.

Singapore cannot afford to be greedy, salivating at and pursuing growth rates much above its medium-term trend rate if it requires importing more and more foreign labour.  (Whether such immigrants should be granted permanent residency is another matter.)

If over an extended period, the short-term economic growth rate exceeds the medium-term trend rate and shows no sign of abating, the government should review its policies and programmes to slow it, however tempting it may be to take a hands-off approach and regardless how unpopular such measures may be with businesses.

Governments strive to achieve economic growth to create enough jobs for their citizens and to generate enough resources for social programmes and security.

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Notes

1.  "Fewer Foreigners, Slower Growth: MM", The Straits Times, 12 February 2011.

2.  Remarks by Ministry of Trade and Industry and Monetary Authority of Singapore at the presentation of "Economic Survey of Singapore 2010", 17 February 2011.

3.  "Report of the Economic Strategies Committee", 2010.

19 February 2011

Will We Recognise the Singapore of the Future?

Citizens, permanent residents and non-residents [1]

The numbers do not include Malaysians living in Johor, Malaysia, and commuting daily to work in Singapore.

The sudden and rapid influx of permanent residents (i.e., nationals of another country) and foreign workers has changed the nature of the small city state of Singapore.

Residents born outside Singapore [2]
Among residents aged 15 years and older as at June 2010 —
  • 75.2 per cent were born in Singapore.
  • 11.4 per cent were born in Malaysia.
  • 5.1 per cent were born in China, Hong Kong or Macau.
  • 8.3 per cent were born in other countries.
Among residents aged 15 years and older born in Malaysia —
  • The ratio of females to males was 136:100.
  • 25.6 per cent could speak the Chinese language only.
Among residents aged 15 years and older born in China, Hong Kong or Macau —
  • The ratio of females to males was 142:100.
  • 37.3 per cent could speak the Chinese language only.

Population density
The population density was 7,022 per square kilometre in 2009.  The population density in 2010 is estimated to be 7,147 per square kilometre.

There were 11.6 million international visitor arrivals in 2010.  Based on 45.6 million visitor days, there were on average 125 thousand international visitors in Singapore every day. [3]

Overseas Singaporeans [4]
As at 30 June 2009, there were 180,700 Singaporeans who were overseas for a cumulative period of six months or more in the preceding 12 months.

Marriages [5]
26,081 marriages were registered in 2009.

22,060 were registered under the Women's Charter.

4,021 were registered under the Administration of Muslim Law Act.

Marriages between residents and foreigners
20,620 resident marriages, being those in which either the brides or the grooms were citizens or permanent residents, were registered under the Women's Charter in 2009.  (The number of resident marriages registered under the Administration of Muslim Law Act in 2009 was not published.)

Among the 21,667 marriages registered in 2009 in which at least the brides or the grooms were citizens [4]
  • In 59.2 per cent of the marriages, both the brides and the grooms were citizens.
  • In 31.8 per cent of the marriages, only the grooms were citizens.
  • In 9.0 per cent of the marriages, only the brides were citizens.
  • In 10.6 per cent of the marriages, the non-citizen brides or grooms were permanent residents.
  • 3.0 per cent of non-citizen brides were from outside Asia.
  • 33.3 per cent of non-citizen grooms were from outside Asia.
Inter-ethnic group marriages
Marriages between individuals of different ethnic backgrounds accounted for —
  • 18.4 per cent of marriages registered.
  • 15.7 per cent of marriages registered under the Women's Charter.
  • 32.8 per cent of marriages registered under the Administration of Muslim Law Act.

Births [6][7]
Of the 37,978 live births registered in 2010 —
  • In 54.6 per cent, both parents were citizens.
  • In 79.4 per cent, at least one parent was a citizen.
Of the 39,570 live births were registered in 2009 —
  • 36,925, or 93.3 per cent, were resident births.
  • In 55.7 per cent of total births, both parents were citizens.
  • In 80.4 per cent of total births, at least one parent was a citizen.

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Notes:

A Singapore resident is defined as either a citizen or a permanent resident.

1.  Estimates of Singapore's population by Department of Statistics from 2003 onwards exclude Singapore citizens and permanent residents who have been away from Singapore for a continuous period of 12 months or longer as at the reference period.

2.  Census of Population 2010.  Statistical Release 1: Demographic Characteristics, Education, Language and Religion.

3.  "Tourism Performance for Jan-Dec 2010", Singapore Tourism Board.

Visitor days are the total number of days that international visitors stay in Singapore, whose main purpose of visit is other than the exercise of an activity remunerated from within Singapore.

Visitor Days = International Visitor Arrivals x Average Length of Stay.

4.  Population in Brief 2010.

5.  "Statistics on Marriages and Divorces 2009" Department of Statistics.

6.  Singapore Demographic Bulletin December 2010.

7.  Population Trends 2010.

16 February 2011

Increase in Tuition Fees at Universities and Polytechnics

The three universities, five polytechnics and Institute of Technical Education announced in January that they would raise tuition fees for the academic year starting this year.

The fee increase at the polytechnics and Institute of Technical Education will affect all new and existing students.

The fee increases at the universities will affect new students only.  (Fees for students who applied for places before their national service will be pegged to the date of their applications.)

Member of Parliament Josephine Teo (Bishan-Toa Payoh) asked in Parliament on 14 February 2011 if the polytechnics could follow the universities' practice of applying the fee increases to new cohorts.  That would assure parents whose children are already enrolled in polytechnics, she added.

Senior Minister of State (Education) S Iswaran replied that —
  • It would be unfair for the latest fee increases at the polytechnics to be applied only to the new intake.
  • Fee hikes have traditionally been applied to new and existing students.
  • There was a "magnitude of difference" between polytechnic and university tuition fees.  The latter is at least three times the former.
  • The fee increase for polytechnic students was marginal.
  • Help would be provided to polytechnic students who had difficulties because of the fee increase.

Ms Teo's point was a simple and unambiguous one.  In light of an inconsistency in applying fee increases between polytechnic students and university students, should the status quo not be reviewed to align their practices?  Her question did not require a justification of the status quo — that is, do nothing.

Mr Iswaran did not explain why he thought it was unfair for fee increases at the polytechnics to be applied to new students only, nor to whom it was unfair.  It was not reported whether he was asked to explain.  In any case, if he considered it to be unfair at the polytechnics, is his ministry planning to make it fair at the universities by applying the fee increases there to both new and existing students?

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Notes

"Fee Hikes at Polys, ITE and Universities", The Straits Times, 15 January 2011.

" 'Unfair' to Apply Poly Fee Hikes Only to New Intake: Iswaran", TODAY (online), 15 February 2011.

10 February 2011

Government Policies and the Procreation Goal - Part 2

Many people agree that the state should give couples financial assistance in bringing up their children, but some miss the point that parents are primarily responsible for their children.

Discounted HDB flats, subsidised mortgage rates, free medical care, free transport etc.  What is next?  Children may soon wonder whether financial considerations motivated their parents to bring them into this world.

That said, the existing incentives should be refined, to give full effect to the underlying objectives.  There is no place for half-hearted measures.

Consider the Baby Bonus Scheme.

At the National Day Rally 2008, Prime Minister Lee Hsien Loong said, "It's a significant expense to bring up children . . .  [I]t's right for us to help women to lighten the burden of having children.  And that's why we had the baby bonus."

The bureaucrats, however, seem to have a different notion of generosity when implementing the Children Development Account ("CDA").

Parents have to co-pay to qualify for matching contributions by the state.  One likely inference is that those who can't afford to co-pay should not have children.  But these bureaucrats have forgotten that Singapore is desperate for more babies.  The government should be encouraging just about everyone to have babies, not just those who can afford to co-pay.

CDA funds may be used for prescribed purposes only.  It's bad enough when this applies to the state's contribution.  It's ludicrous when it applies to one's own contributions too.

Given the intention to lighten the burden of bringing up children, CDA should be an outright cash grant without requiring co-payment by parents.

Similarly, basing child tax relief on a parent's income is an outdated concept that irrationally skews the benefits toward the higher income earners when it is the lower income earners who truly need it more.  Instead, it should be a uniform, outright cash grant of a realistic amount.

Timely availability of new HDB flats is very important, as I mentioned in an earlier post.  Ensuring that new HDB flats are affordable, or more affordable as the case may be — for example, by reviewing how prices are set — is also important, not just for families with children but also for all citizen families.  The budget surplus may shrink a little, but our people will have lighter mortgage burdens, and they will have more money for themselves, especially when they retire, and for their children.  It is a socially correct balance.

Finally, many couples fear that their children may be mentally or physically handicapped.  Even middle-class families worry about how they can cope.  It is not a short-term problem that will go away, given time.  Unfortunately, there is no insurance they can buy to protect themselves, whether before or after their children are born.

The state should provide those with congenital conditions with comprehensive financial and non-financial assistance, including but not limited to Medifund support.  Means testing should be waived to the fullest extent possible.

08 February 2011

Street Demonstrations and Democracies

Malaysian prime minister Datuk Seri Najib Tun Razak warned against any attempt to usurp power in Malaysia, using demonstrations such as those in Egypt to oust president Hosni Mubarak.

"Don't think that what is happening there must also happen in Malaysia.  We will not allow it to happen here," he reportedly said.

When hundreds of thousands of ordinary individuals overcome their fear of repression and seemingly insurmountable odds to unite behind what they believe to be a just cause, how does their government stop them, other than with more brutal suppression?

The flip side of the coin is this — a political leadership that is legitimately elected by its people in free and fair elections does not fear street demonstrations seeking to overthrow it, because if it doesn't perform or it is not responsive to the needs of its people, it will be removed quickly via the ballot box.