30 July 2011

Freezing Bus and Rail Fares to Fight Inflation

The recent application by the two public transport operators for a 2.8 per cent upward revision to bus and train fares has met with scathing criticisms by the public.

There are two main areas of complaint.

Firstly, the service is not up to expectations.  I will deal with this in a later post.

Secondly, raising bus and train fares will add to already high inflationary pressures, especially when wages are not keeping up with inflation.  The consumer price index in June was 5.2 per cent higher than that 12 months ago.  CPI inflation is expected to be between 4 and 5 per cent for the whole year.

Earlier this year, many vendors of cooked food were persuaded not to raise their prices to fight inflation.

Large supermarket chains committed not to raise the prices of their housebrands for several months.

At that time, I wrote [link] that it was unfair to expect any business, big or small, not to raise prices of the goods and services that they provide if the cost of their inputs had risen and was continuing to rise because they were subjected to a profit squeeze.

Why have there been no calls to landlords (especially the statutory boards such as JTC and HDB) not to raise rentals, nor to Inland Revenue Authority of Singapore not to raise the annual value of properties (the precursor to higher property tax), nor to Energy Market Authority not to allow electricity tariffs to be raised, nor to CityGas not to raise the price of town gas, nor to the oil companies not to raise the price of petrol or diesel?

The public transport operators have to give their employees wage increases and bonuses.  They have to contend with higher energy costs.  They have to buy new buses and equipment.

It is unfair to deny them an upward fare revision so as not to contribute to more inflationary pressure for commuters.

29 July 2011

A Painful Silver Lining if the US Defaults

In the run-up to the general election in May this year, the ruling People's Action Party and the opposition The Workers' Party traded arguments as to whether Singapore would be better served by having one and only one political party in Parliament.

Members of the public joined in and cited the US political system as an example why a strong opposition might lead to deadlocks.

The US political system is very different from the Singapore political system, and I wrote that it was not a strong opposition that was bad, but the very structure of the US political system [link].

The US's system is a bicameral system, which makes it more difficult to adopt legislation when the Senate and the House of Representatives are controlled by different parties.

Singapore has a unicameral system.  Once a bill is passed by Parliament, it is presented to the President for his assent.  The President must act in accordance with the advice of the Cabinet when exercising his functions under the Constitution or any written law, other than in the performance of certain limited functions.

The US president and his cabinet are not members of Congress.  Neither the president nor the leader of the Senate or the House can compel any Senator or Representative to support the president's policies.  In a parliamentary system, however, the party whip is seldom lifted to allow Members of Parliament the discretion to vote as they wish.

Candidates for US Congress have to raise campaign money, collect signatures to get their names on the ballot, and personally appeal to registered voters of their party in primary elections.  Thus, local issues may be as important as, or more important than, national issues to individual Congressmen.  In many other democracies, the party controls whether to allow candidates to run, and actually puts their names on the ballot.

Significant authority is also vested with the legislatures in each of the constituent states of the US, and each of them can facilitate or impede the implementation of federal programmes.

The fragmented and diverse interests of the members of Congress may explain why it has been so difficult to reach an agreement on raising the US federal debt limit, a simple matter (many countries don't even have a debt limit that they are not permitted to exceed) which has now been inexplicably linked to balancing the budget, reducing spending and increasing taxes.

If no agreement is reached to raise the federal debt limit by 2 August, the US will default.

It is difficult to imagine a country that faces a debt default not because of economic factors nor world events.  Incredibly, it is self-inflicted.  Raising the debt limit does not empower the government to spend more; it only allows the government to borrow what is necessary to ensure that the programmes previously approved by Congress are funded.  It is an unfair tactic to use to curtail such programmes.  It is not the appropriate tool to use.  It is a dangerous and reckless tactic.

The US is in this bizarre situation because its politicians do not have sufficient courage or will to do what is right for the country.  Perhaps, everyone thinks only his proposal is right for the country, and no other proposal will do.  But if everyone sticks to his guns and does not compromise, the country will grind to a halt and trigger a default.

There appear to be three options.  One, a combination of mostly spending cuts and some tax hikes; but Democrats are against spending cuts that will affect the vulnerable (and not every Democrat agrees with President Obama on the cuts) while the Republicans are against tax hikes for the wealthy which they say is bad for the economy.  Two, spending cuts only (which many Democrats do not agree with).  Three, neither spending cuts nor tax hikes, but giving President Obama the authority, and the blame, for raising the debt ceiling.


According to a recent Washington Post-ABC News poll [link], there is considerable agreement among Democrats, Republicans and independents on many of the specifics, contrary to what may be inferred from political posturing by the politicians in Washington.
























Will the US avoid a default?

No sane person wants to see the US defaulting.


But in the worst case scenario if the US does default, its leaders and its people may look at it as just the catalyst for the country to address not only its growing debt but also its political system which is proving to be dysfunctional.  No one, no faction and no party should hold, or should be allowed to hold, the country to ransom — by threatening to destroy the country and the economy, doing to the country what its worst enemies would only dream of doing.

May God bless America.

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This post was previously published on 23 July 2011.

17 July 2011

Clean and Fair Elections in Malaysia

I didn't pay much attention to media reports of Bersih's calling for electoral reform in Malaysia until a few weeks ago, when authorities there detained 30 individuals under section 122 of Penal Code, and accused them of conspiring to overthrow the Government and to revive communist ideologies.

Apparently, reviving communism is tantamount to waging war against the King, a crime for which the punishment is imprisonment for life or a term not exceeding 20 years, and a fine.

Isn't communism effectively dead and buried?

Certainly, many countries are ruled by autocratic regimes that deal harshly with political opposition, but they hardly practise communist philosophy or principles.

China may be governed by a Chinese Communist Party, but its economic philosophy and policies are hardly communist or socialist.

Russia has long given up communism.

Maybe Cuba?

So, communism in Malaysia? Who wants it? Who will support it? Surely not Ms Ambiga Sreenevasan, the former president of the Malaysian Bar Council and leader of Bersih.

Bersih, the Coalition for Clean and Fair Elections, comprises civil society organisations which have come together to campaign for clean and fair elections in Malaysia. It says it is non-partisan, although opposition parties naturally yearn for cleaner and fairer elections.

Bersih's calls for electoral reform include inter alia cleaning up the electoral roll, reforming the postal ballot, using indelible ink, having at least 21 days of campaigning, allowing free and fair access to the media, strengthening public institutions, stopping corruption and stopping dirty politics.

Bersih planned a rally on 9 July 2011 in the heart of Kuala Lumpur.

Perkasa, a Malay rights group, and the youth wing of the ruling UMNO planned rallies of their own on the same day in an attempt to counter Bersih's rally.

After the King intervened, Bersih accepted the Government's offer to hold the rally in a stadium, instead of on the streets.

Then the Government said that Bersih was an illegal entity because it was not registered, and needed a permit from the police to hold its rally in a stadium. In the end, there was no agreement and no compromise, and the street rallies proceeded as planned.

Perhaps, the Government should have let Bersih proceed with its rally in a stadium, with the police standing by to ensure that there was no violence nor unruliness.

The police met Bersih's demonstrators with tear gas and chemical-laced water cannons. About 1,700 of them were arrested.

Malaysian Prime Minister Najib Razak said that the Bersih protesters represented a minority of Malaysians but even more people opposed it. UMNO could have called up one million of its 3 million members to conquer Kuala Lumpur, if it wanted to. He said that he enjoyed the support of most Malaysians.

Mr Najib advised Malaysians to shun street demonstrations, and use the ballot box instead if they were unhappy.

Bersih's objective is electoral reform, a precursor to the next general election.

Why would anyone not want clean and fair elections?

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Notes

1. Malaysia Protest Backers Accused of Communist Plot The Straits Times (Breaking News) (27 Jun 2011).

2. Bersih Rally to Move from Streets to Stadium TODAY (6 Jul 2011).

3. Merdeka Stadium Rejects Application for Bersih Rally TODAY (7 Jul 2011).

4. Police to Bar Rally Organisers from KL TODAY (8 Jul 2011).

5. Najib Slams Bersih TODAY (11 Jul 2011).

6. Najib Calls Malaysians to Shun Street Demonstrations TODAY (16 Jul 2011).

09 July 2011

Space for MPs to Meet Constituents

Housing and Development Board ("HDB") introduced a new rule on 10 June 2011 that allows political parties to rent space on the ground floor of public housing blocks for members of parliament to construct offices for their meet-the-people sessions.

When the space is no longer required, it must be reinstated to the original condition by the members of parliament at their own cost.

Rental of the space is at the concessionary rate of $1.50 per square metre per month, similar to that for non-profit social communal facilities run by voluntary welfare organisations.

It is puzzling why the Government does not provide suitable premises free of charge to members of parliament for them to meet their constituents.  Members of parliament are, after all, individuals elected by the citizens to represent them in parliament.

HDB is Singapore's public housing authority and a statutory board under Ministry of National Development.  About 80 per cent of Singaporeans live in HDB apartments.

04 July 2011

Wasting Ministers' Time

Minister for the Environment and Water Resources Vivian Balakrishnan officiated at the opening of Punggol and Serangoon reservoirs on 3 July 2011.

Deputy Prime Minister Teo Chee Hean was also present.

I am surprised that someone considered it necessary to involve even one cabinet minister in such an event — or non-event, which it really was.  If neither of the ministers had more important or better things to do, perhaps they should have spent their Sunday with their families or friends.

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Notes

1. Two New Reservoirs to Boost Singapore's Water Supply TODAY (4 Jul 2011).