24 March 2014

Usman / Harun Revisited

Two Indonesian marines posed as the late Osman Mohd Ali and Harun Said at an exhibition held in conjunction with the Jakarta International Defence Dialogue, a two-day forum that sought to boost collaboration among Indo-Pacific nations.

Osman (or Usman) and Harun were two Indonesian marines who infiltrated Singapore during Indonesia's undeclared war on Malaysia (of which Singapore was then part) and, disguised as civilians, planted bombs in MacDonald House that killed three civilians and wounded dozens others. For their cowardly act of terrorism targeting civilians, they were found guilty and executed in Singapore. They were honoured as heroes by the Indonesian government in 1968.

Singapore's Response
Singapore's Ministry of Foreign Affairs ("MFA") said it was concerned and disappointed over the incident. The Singapore Armed Forces ("SAF") delegation withdrew from the event to which it had been invited.

13 March 2014

CPF Sense And Nonsense Part Two

This is the second part of a two-part article.

CPF interest rate is too low
The interest rate on CPF balances is too low, and many people want a higher interest rate. But is it realistic?

Budget and balance of payments
CPF moneys are invested in special issues of Government securities. The interest rate of these, and other, Government securities is determined by several factors.

The Government budget is usually a surplus. The surplus for the three years FY2011 to FY2013 (ending 31 March 2014) was $13.7 billion. Also, this surplus was or will be achieved after endowment and trust funds are topped up by $18.5 billion, which means that although this amount is expended according to Government accounting, most of it is not spent immediately and ends up being invested in Government securities. Similarly, of the $8.0 billion transferred to the Pioneer Generation Fund, only about half of it will be used over the next 10 years. The result is that the Government is flush with cash and does not need to borrow.

Our country's balance of payments is usually a surplus i.e., there is a net inflow of funds into Singapore. The overall balance was $134 billion over the past four (calendar) years.

12 March 2014

CPF Sense And Nonsense Part One

Much criticism has been levelled at the Central Provident Fund ("CPF").

Let's examine some of them in this first part of a two-part article.

CPF contributions are a tax on members
Income taxes and GST, once collected by Inland Revenue Authority of Singapore, are paid into the consolidated fund that belongs to the State. They no longer belong to the individuals who paid the tax.

CPF contributions are paid by us and our employers into our own CPF accounts and credited to sub-accounts (Ordinary, Special, Retirement and Medisave) in our own respective names. Unlike taxes or the proposed pre-funded portion of MediShield Life premiums, the moneys that we pay into our CPF accounts belong to each of us individually. Even the moneys paid into CPF LIFE, other than the portion that is pooled to ensure (or insure) annuity payments to us after our Retirement Account is exhausted, belong to us.

03 March 2014

Budget 2014 Thoughts

Some thoughts on Budget 2014.

Real Median Wage Growth
Citizens' real median and 20th percentile wage growth in 2013 was about 5 per cent and 7 per cent, respectively.

Citizens' real median and 20th percentile wage growth in the five years to 2013 was about 9 per cent.

The 5-year wage growth data include employers' CPF and refer to full-time employed citizens.

The actual 5-year wage growth is likely lower than that given in the Budget Statement higher because the Ministry of Manpower changed the definition of full-time employment in 2009. Prior to 2009, a person was considered to be employed part-time if his normal hours of work were less than 30 hours a week. This criterion was changed to 35 hours a week in 2009.