A rebuttal to Shanmugam’s statement that it is wrong to blame foreigners for driving up costs
January 19, 2010 by admin
Filed under Columnists, Letters, Ng Kok Lim, Opinion
Dear Mr Shanmugam,
I refer to your comments as reported by Straits Times on 18 Jan 2010.
You said that it is a misconception that there are five million people putting pressure on all of us because the 1.3 million here on temporary work permits impose no burden on the public housing system. That unfortunately, is the real misconception.
Even as workers on temporary permits aren’t allowed to buy flats, they are allowed to rent flats or rooms. The flats that they rent becomes unavailable for sale to the people and thus puts presure on the availability of units. Also, land that could otherwise have housed Singaporeans are being used to house workers like those in Serangoon Gardens.
On what basis do you brush aside the 500,000 PRs as being too small a number to impact prices? You said the number of BTO flats to be launched this year is 12,000. If every one of these 500,000 PRs were to buy a flat each, it would take 40 years to build all the flats to accomodate these PRs.
While Singaporeans may be the ones who are forking out top dollar for certain flats, are there cheaper alternatives for the same locations? And for flats that are much more far flung, are they really that much cheaper?
Instead of imposing limits on resale flat prices, the Government can impose limits on the price of new flats sold by the HDB. In a climate of spiralling prices, the Government should not join in the fray but should hold flat prices steady instead. That way, the government does not end up making one person happy at the expense of another. It only makes itself less happy. Is the government willing to do that?
The concessionary loans and grants of $40,000 pale in comparison to the $100,000 to $200,000 increase in flat prices over the last three years.
While 8 in 10 Singaporeans pay for their flats entirely through their CPFs, they will have to keep paying for the next 30 years and would have nothing left in their CPF for retirement. You call that affordable?
Politics is, first and foremost, about satisfying the needs of the people. All popular revolutions and uprisings stem from inadequate provisions from the government. The art of communication cannot change the feelings of hardship that the people has to endure.
Thank you
Ng Kok Lim
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Jules on Tue, 19th Jan 2010 8:59 am
Shanmugam, Mah Bow Tan, etc…The PAP gang is all in cahoots.
They already know about the problem but they do not care!
Every time we bring up an issue, this is what they do:
(i) Pretend to be blur.
(ii) Twist the facts
(iii)Keep silent and try to stall until everyone forgets
This is the PAP standard operating procedure
zero on Tue, 19th Jan 2010 9:06 am
I totally agree with all the points raised by Mr Ng Kok Lim above who had written an excellent summary of the salient points. I wish that this message be directed to Mah Bow Tan as well. In the first place i am utterly confused why Shanmugam as Law Minister is now talking about HDB policies and giving unsubstantiated comments that half a million (HALF A MILLION!) PR’s won’t affect prices because it is too small? … Singapore population is not like 1 billion so half million would have been really peanuts in that case….
Perhaps the message may be copied, duplicated en masse, in any media, and send by email on regular basis, on daily basis, to any minister with facebook accounts, any govt departments, etc. This is the law of the jungle, a Law Minister rattling nonsense about HDB policies, i just don’t believe it. Tomorrow you will see the Foreign Minister telling us to please go for H1N1 jabs. Crazy government heading to self destruction.
zero
Shanmugam Tio 'Blasted' on Straits Times Forum on Tue, 19th Jan 2010 9:43 am
Shanmugam Tio ‘Blasted’ on Straits Times Forum
http://www.straitstimes.com/ST+Forum/Story/STIStory_479074.html
Dane on Tue, 19th Jan 2010 9:49 am
Sensible and clear article that does not have any biasness to any party. I like it. More people should read the rebuttal.
I especially agree with the point that the concessionary loan and grant does not grow in tandem with the spiralling prices.
Perhaps, HDB should look into it, and deal with it not just from the economic point of view but with a big heart.
What are the cons of:
1. pegging the concessionary loan rate to -2% of CPF interest rate?
2. Doing away with HDB property tax?
3. lowering the conservancy fees for HDB flat maintenance since the labourers, cleaners are mostly “less expensive” foreigners?
4. Upper limiting the number of years to repay the HDB loan to 20 years?
MAINSTREET CITIZEN on Tue, 19th Jan 2010 9:50 am
Sound reasoning, bravo, and as an ordinary Singaporean, I say thank you!
Multi-tasking Minister on Tue, 19th Jan 2010 10:13 am
Won’t be surprised if he delivers Budget 2010 and take over Tharman. Shanmu might make a better Finance Minister than Tharman with his vast experience about law in singapore.
LeeKeeSee on Tue, 19th Jan 2010 10:32 am
just let them talk what they want because “no need money ” only buy require money.
whether they talk or shut up just Vote PAP OUT.
citizenofSG on Tue, 19th Jan 2010 11:21 am
@Multi-tasking Minister – Pardon me for my ignorance, why do we need a lawyer to be a Finance Minister?
lalaland on Tue, 19th Jan 2010 1:43 pm
Did the writer Ng Kok Lim provide IC no to Shamu chap? If not, there will be NO reply. Typical PAP do not disturb me unless you have IC no and I can check up on you first before I reply.
Multi-tasking Minister on Tue, 19th Jan 2010 1:51 pm
To citizenofSG,
So he can protect the legal rights of the Prime Minister for squandering the nation’s reserves without accountability. With his expertise in law, as a Finance Minister, he can help with circumventing all legal issues pertaining to access to the nation’s reserves perhaps by transferring more power to the Prime Minister.
Boboshooter on Tue, 19th Jan 2010 2:08 pm
@CitizenofSG – Yeah, me too would like to ask that question? In what way would he make a great finance minister?
From his comments Mr. Law guru is very clever in saying things but from an economic standpoint makes no sense.
He implied that Singaporeans are the main driver of HDB prices. And gave the example of a Singaporean buyer buying HDB flat at a big premium over valuation.
A valuation is an estimate of the market value of an asset in the absence of a transacted price of the exact same asset at a particular point in time. When the market transacted price (on a willing buyer willing, seller basis) is consistently higher than the valuation, let me suggest that the market price is correct and the valuation done by whatever professional valuer is wrong, not the other way round.
Furthermore, saying that Singaporeans are the main cause of HDB flat rises, is as good as saying that most people who need a flat in Singapore are Singaporeans (duh).
HDB flat prices are determined by demand and supply of housing in the island. According to WSJ article recently, the population is growing at 150k per annum. Given the severe limits of our land area (hence the supply of houses), if the price of private homes surge (as they have), could it be that some Singaporeans who could previously afford private homes now turn instead to HDB flats, therefore also increasing demand (hence more Singaporeans willing to pay more for HDB flats above)?
And on the supply side, given the knowledge that the population has been growing over the last 10 years, why has HDB not kept supply in pace with population growth, given that 80% of all Singaporeans live in HDB flats, and virtually all young Singaporeans buying their first home buy HDB?
Clearly someone up there has been sleeping (again) or basically the left hand and the right hand is not talking to each other.
Either case, instead of owning up to their deficiency in planning, they put the blame on Singaporeans (again).
On another related topic, and at a more big picture level, would the Minister like to comment – given our severe limitations of physical space, is it prudent for the government to increase the population to its physical limits in pursuit of GDP growth “at all costs”?
Also, is it also prudent for the government to have the expectation that Singapore be “cheaper, faster and better” given that our cost of living (of which a big chunk of our salary goes to service loan mortgages) is amongst the highest?
Can we continue to make up for not being “cheap” by being “faster and better”, given that Singaporeans are already working some of the longest hours in the world, such taht people are amongst the least happy (despite their apparent wealth) and even have no time for basic things like procreation? Is the Singapore growth model sustainable?
Mr.Robot on Tue, 19th Jan 2010 3:44 pm
So, 500k PR is same as 500k houses?
PR family size = 4 (say)
So for 500K PR, you need to provide 500k/4 =125k homes, assuming only 80% of them buy, ~100k
Stop spreading fear and wrong facts Mr.Admin
Chucky on Tue, 19th Jan 2010 6:35 pm
I agree with these folks… PAP’s downfall could be brought by Mah Bow Tan after all. Public housing is our only hope for working class Singaporeans who make ends meet. Incomes are just to meet monthly expenses and obligations, rather than paying mortgages for our entire lives! If we are hit by another financial crisis, which seems inevitable after all looking at world governments printings trillions of paper money at a phenomenal rate, we will all be doom. Remember the depression Germany went through after WWI? It was depression by “inflation”. That means if average Singaporeans paying 80-90% mortgage loans with interest inflating, we are definitely doom! Because our pathetic CPF’s interest and income cannot keep pace not even mentioning today’s inflation is going at around 5% in Singapore. Singaporeans are fools in general (I used to be one), poorly read and exposed and don’t really know what’s going to happen in the near future. Many think recession is over and IR is coming, things will be better. Not true. Once China drop the US dollars, which one day it’ll happen once they achieve domestic independence and do not require western markets anymore, storm will rise again. So PAP guys really have to do something before all Singaporeans get really fed up and start a revolution!
abs on Tue, 19th Jan 2010 8:52 pm
A blatant liar hoping no one bring up the fact.. 500,000 PRs is not enough to impact public housing price ??…
zero on Tue, 19th Jan 2010 8:56 pm
To chucky 6:35 pm
You are absolutely correct. I have been stressing a couple of times in Tan Kin Lian’s blog, the financial crisis of 2008, it was caused by SubPrime Loans which gone awry and mass default. Have you seen the excellent Youtube video:
http://www.youtube.com/watch?v=Q0zEXdDO5JU
Subprime loans means loans given to any tom dick or harry who may not even have a decent job. USA banks and politicians corrborated prior to 2008 and liberally grant huge loans which couldnt be repaid by the borrowers – they had no money and they thought the prices would rise and they could upgrade (remember Ponzi) but didn’t. Due to Credit Creation concept of Banking system, the impact is multiplied many times over when the bank loans are defaulted. To prevent this the bad debts were disguised into CDO’s and swaps complicated products. But with more and more foreclosures, the system could no longer support it and even Lehman crashed and AIA, citigroup etc.
Granting 30 year loan to citizens is just like SubPrime loan, only that it is timebomb subprime many years later. How can you be assured of a job for 30 years. In time to come a lot of these loans default and even our big banks here will collapse and the government will have to bail them out, using YOUR CPF money (not mine, i’ll be dead and gone maybe in 30 years time)- if there is any left by that time.
It is extremely irresponsible to promulgated the principle of 30 year loan and then tell everybody that “HDB flats are affordable”. This is absolutely unforgivable mistake of the government.
The solution to this matter is very simple, the hdb prices are all artifically propped up. We all know, “market subsidy” is a dirty word they use to con and swindle the citizens. The hdb flats should only be sold at a certain % above the cost price, it cannot be pegged to market and float downwards from that position. It is not fulfilling the duty of a government.
In order to stop this cheating, and reduce the hdb prices by decree… one starting solution is, to get the ministers salaries to take an 80% pay cut, that should be able to solve everythng for good, and the ministers still won’t die after 80% pay cut. Right now, a lot of taxes and duties has to be paid because every month you have to pay the old man $200,000 and all his eunuchs a high proportion of it thereof.
zero
abs on Tue, 19th Jan 2010 8:59 pm
100,000 resale purchases by PRs… quarterly transaction is 6,500 on average.. so is this “small impact” as what the pap minister is saying ?..
In the wake of the falling prices, resale transactions rose by 4.2 per cent – from 6,186 cases in the previous quarter to about 6,446 cases in the first three months of this year. Compared to the same quarter a year ago, the increase is slightly lower at 1.4 per cent.
#
[QUOTE]
Mr.Robot on Tue, 19th Jan 2010 3:44 pm
So, 500k PR is same as 500k houses?
PR family size = 4 (say)
So for 500K PR, you need to provide 500k/4 =125k homes, assuming only 80% of them buy, ~100k
Stop spreading fear and wrong facts Mr.Admin
[UNQUOTE]
abs on Tue, 19th Jan 2010 9:06 pm
To rebutt the pap minister attempted distortion of fact.. an average 36,000 PRs per year.. use 3 per family = 12,000 families per year.. and using a forumer here of 80% buying resale flats.. thats a 9,600 purchases a year.. 2,800 flats a quarter purchases by PR..
Average resale flats is 6,500 units… “small impact” ??.. utter bullshit !!
[QUOTE]
“Over the last ten years i.e. from 1997 to 2006, an average of about 36,000 persons were granted permanent residence (PR) in Singapore annually…
“Over the last ten years, an average of about 8,500 Singapore Permanent Residents became Singapore Citizens annually…”
http://www.getforme.com/Immigration_PermanentResidence.htm
[UNQUOTE]
Foreigner on Tue, 19th Jan 2010 9:52 pm
PRs buy HDB units from the open market. This group of people will have to buy at prices whatever the sellers charge them.
As Singaporeans do you want to sell the property cheaply to the PRs? It is a smart move to not let the PRs benefit from the property (HDB) market boom. Surely the majority of the sellers in this market are Singaporeans and not PRs.
As prices of the private houses have gone up so much it is also necessary and fair for the valuation of HDB flats to go.
Also please do spare a few thoughts for those families (which make up the majority of Singapore citizens) who own HDB flats: they need to see their assests to appreciate according to the market trend.
As for the first time HDB flat buyers, you only compete among Singaporeans. And it is hard to expect the Housing Board to sell at prices similar to what your parents had.
And finally you don’t expect your minister to tell you the truth, if you just can’t understand the reality. It is hard for him to do.
abs on Tue, 19th Jan 2010 10:26 pm
I don’t think he does not understand the reality.. the pap ministers are one of the best paid ministers in the world so as to match their hypocriscy, they have to distort the truth.
#
Foreigner on Tue, 19th Jan 2010 9:52 pm
And finally you don’t expect your minister to tell you the truth, if you just can’t understand the reality. It is hard for him to do.
rc on Tue, 19th Jan 2010 11:05 pm
PRs buy resale flats right? i wonder whether the majority of people who sell these flats are Singaporeans or PRs? likely Singaporeans. so while there is a group of disgruntled Singaporeans, there would be a group of Singaporeans happily laughing their way to the bank, no?
CruEL on Wed, 20th Jan 2010 3:31 am
rc nope. Coz the group of sillyporean will require a place to stay too. So if all the prices are hiked up, their so called ‘earnings’ / ‘profit’ will be pump down the next house.
Unless of course they are the smarter ones who quit singapore and manage to get the money in their hands before the greedy familee do.
SBTL on Wed, 20th Jan 2010 4:35 am
PAP ministers are living in their own world without knowing what is happening on the ground. They are continuing to deny the aggressive immigration problem created by the PM to safeguard their job. The root of the problem is that the Lee family is too powerful, just like those royal family in the ancient history, where nobody dare to challenge on their mistakes.
Above the law on Wed, 20th Jan 2010 10:48 am
We also have a rule – I’m the exception to the rule: I’m 86. But I’m not doing the work, I’m just forecasting, I’m the radar over the horizon. -LKY
Yes some people has become too powerful, exception and find themselves above the law…
Better "he" goes and... on Wed, 20th Jan 2010 12:00 pm
Wake up his damned ideas with their pappy MBT and their pappy-daddy before ever coming out to try and SIDE-WIND US ALL YET AGAIN. As with all their smoke-screen brain washing for their pappy and GAHmen enrichment schemes which with have other FALLout effects like their OTHER WELL-Known FAILED ones like babies, graduate mother stuff NOT WORTH revisiting by listing again!!!
views on Wed, 20th Jan 2010 12:50 pm
What Would You Do If You Were The HDB Minister?
known facts:
a) we got a heck of a lot of foreigners who want to stay somewhere
b) our Dear Leader and Great Leader wants more foreigners / population. still not enough.
c) we have on hand THE WORST housing crisis in history – since when have flats been priced at such levels? since when has oversubscription of existing flats been this crazy? (people say when u have to queue up to buy a home, u’re dumb to buy at this time cos it’s the time of the worst pricing for you)
so if you were the brilliantly-paid HDB minister, what would you do? ok, make it simple for you, since u’re only paid 5 peanuts a year. multiple choice.
1) i will slowly build more flats and test water, i very scared i kenna over supply like last time, nobody buy my flat.
2) i will suddenly build a lot of flats. since my Great Leader and Dear Leader say they will (b) import more people in future, i not scared nobody stay my flat. build liao, don’t sell now, can sell next time. this sudden action to build a lot of flats shows the people i take their concerns seriously, have a feel for the obvious statistics and ground situation, and am not to reverse a policy error which i have generated by going the opposite direction.
we all know which option is being taken right now.
can u imagine what if the other option is taken? i know you all are not very bright, otherwise u’ll be ministers already. but i’m sure with your intelligence, u can imagine which option will have a better end result, for now, as well as for the years to come when we invite another 1,000,000 people to come enjoy our sunny island and don’t do NS.
truly singapore on Wed, 20th Jan 2010 4:50 pm
Mr Robot,
the article says ” If every one of these 500,000 PRs were to buy a flat each”, so the author has stated his assumptions, nothing wrong here. other contributors here have stated their assumptions of 4 persons per household but we really do not have the data. as can be seen, even with 4 persons per household, the situation doesn’t seem as negligible as shanmugam has made it out to be.
onion on Thu, 21st Jan 2010 12:59 am
It is right for us to blame the government for importing such large number foreigners. PAP should be 100% responsible for our suffering !!!
All the craps on Thu, 21st Jan 2010 2:47 pm
I just don’t understand what craps this Law Minister is spouting!
First, he told the whole world that Singapore is still not a country but only a city.
Second, he took over the Education ministry, by telling us that the young citizens must be indoctrinated with PAP politics from primary schools.
Third,he took over the National Develpoment ministry by telling us that the sky-rocketted prices of HDB flats has nothing to do with the foreigners.
For how long more must we Singaporeans endure these type of craps?
List here are some of the infamous ones.Some of you may want to add to the list.
1.It has happened, what to do?
2.The increase of 2% GST is to help the poor Singaporeans.
3.There is no collation between the increase in bus and train fares and the price of oil.
4.To increase the salaries of the workers is not the way to go.
5.Foreigners come here to create jobs for Singaporeans.
6.Old and useless Singaporeans can go to J.B. old folks homes the charges are cheaper there.
7.The prices of HDB flats will always remain ‘affordable’.
8.This is not a pledge, but only an aspiration.
9.I’m just a forecaster,I’m not doing the work.
10.Singaporeans will ALWAYS come first!!!
.
Weil Ng on Thu, 21st Jan 2010 5:57 pm
HDB has failed in its basic objective…to provide affordable housing. The day the common people use HDB flats as a form of speculation, the whole concept fell through the roof.
A few fundamentals which were manipulated by speculators: -
* Owners using the flats as rental income by subletting the entire unit whilst living in private apartments. (Apparent breach of contractual agreement with HDB)
* Continually raising the selling price of new flats without reviewing affordability. (30% of gross income over 30 years is not considered affordable)
* Open public housing to 1st generation PRs
* Utilization of CPF to finance housing loan and downpayment (Gave the public a perceived perception that they have wealth which in fact they are using their future retirement fund to offset an inflated balloon)
SayCheese on Fri, 22nd Jan 2010 1:32 am
All the craps,
“For how long more must we Singaporeans endure these type of craps?
List here are some of the infamous ones.”
THE BIGGEST CRAP is No:10 from Chee Humped By Me, Siam – promising “Singaporeans will always come first.”
A Francis on Fri, 22nd Jan 2010 6:15 am
//All the craps on Thu, 21st Jan 2010 2:47 pm
“For how long more must we Singaporeans endure these type of craps?
List here are some of the infamous ones.Some of you may want to add to the list.
1.It has happened, what to do?
2.The increase of 2% GST is to help the poor Singaporeans.
3.There is no collation between the increase in bus and train fares and the price of oil.
4.To increase the salaries of the workers is not the way to go.
5.Foreigners come here to create jobs for Singaporeans.
6.Old and useless Singaporeans can go to J.B. old folks homes the charges are cheaper there.
7.The prices of HDB flats will always remain ‘affordable’.
8.This is not a pledge, but only an aspiration.
9.I’m just a forecaster,I’m not doing the work.
10.Singaporeans will ALWAYS come first!!!”
.
Yes, I totally agreed with you. Its all rubbish.
The Acriomony is clearly that... on Fri, 22nd Jan 2010 7:28 pm
Pappy has paid themselves 4-5 times higher than in any government in the world. And at the same time increasing HDB prices while depressing PMET’s salaries through FT plus FWs. And in addition exacerbating even PMET’s earlier demise via retrenchments. Including being brutal that “Retrenchments is good for Singapore. If there’s no retrenchment I’ll be worried” – (GCT). And in addition seeking us to be “Cheaper, Better, Faster” – LSS.
Truth, partial truth or not, who is their right minds being lambasted from Top,left, right and their bottoms to won’t be HOPPING MAD???
WE DON’T THINK THEY GOT IT – HAVE THEY??? As they mostly look at the ‘big’ picture of the economy and of course their own astronomical and insane WALL STREET TYPE SALARIES IN THE Main Street of OUR TINNY-Weeny ISLAND WITHOUT ANY NATURAL RESOURCES – JUST TO QUOTE THEM FOR THAT BOOTY!!!
It is as if WE AREN’T NATURAL RESOURCES – Albeit the Human Kind and not those material kinds they harp about!!!
adventurebusa on Wed, 27th Jan 2010 11:27 am
my friend said he will vote for pap cos where else in the world can he be given the opportunity to move up the social ladder drive a bmw and stay in landed property.
i’m waiting for the day when he’s not staying in landed property and not driving the bmw to ask him the same question.
single on Sat, 30th Jan 2010 12:33 am
I am very very worry. My neighour is a family of 4, CHINA PR whom bought a resale hbd flat about 4 years ago. The price they paid for about $2xxk. They rented the flat to 6 tenants while still occupying. Therefore, they are 10 occupiers crowding in the 3rm corner HDB flat. Both CHina couple very hardworking always work very late. The only son is schooling in the nearby primary sch with another granny at home. Their plan for furture, when the child completed the education here, the whole family will go back to China………Well,
1) Do they have a sense of belonging?
2) What is their purpose of staying in Sg?
3) What will they do with thier current HDB flat?
I am worry for myself as well, I am a single lady,I can buy only from resales market under single housing scheme. BUT with the escalating HDB price, it really make me think thrice to pay $3XX for a 3rm flat.with high COV and I am a singaporean , I cannot even have enjoy the privileged of applying new HDB flat. WHY……