Quarrel between transport correspondent and Comfort CEO?

After writing “How much profits should social enterprises make?” (Mar 7), I vaguely remember some controversy about a decade ago, about a newspaper transport correspondent being barred from a company’s functions and all contact with him, because he had written an article about the pay of the  Chief Executive Officer (CEO) being more than a million dollars.

Comfort CEO’s pay was $1.43m?

So, I went to the National Library to search the newspaper archives, and would like to reproduce the following newspaper forum letter on the issue, which may be an interesting read for you:-

“Who is being personal here?

I REFER to Comfort’s boycott of Business Times journalist Christopher Tan because of his reporting of Comfort managing director Goh Chee Wee receiving $1.43 million in remuneration last year.

Comfort is a publicly-listed company, and Mr Tan was merely reporting on information available in its annual report.

It is in the interest of the investing public, Comfort’s shareholders, taxi drivers, employees, and so on, for such information to be highlighted in the media.

In an e-mail to his managers dated Sept 16, Mr Goh wrote: ‘Christopher Tan of Business Times has made a personal and vicious attack against me in his articles.’

If Mr Goh feels that he has been libelled, he should seek legal redress for defamation.

By barring Mr Tan from all functions of, and contact with, the Comfort group, I think it is Mr Goh who is making a personal attack on Mr Tan.

Are we sending a message to Singaporeans that ifone writes on a sensitive issue, one would be taken to task?

Perhaps the media should boycott Mr Goh and the Comfort group instead.

I, for one, will not be taking any Comfort taxi, until Mr Goh gives an apology to Mr Tan.

I think he deserves one.”

How much do social enterprise CEOs get paid?

If the question raised in 2002 was whether a business that was originally founded as a social enterprise paying its CEO $1.43 million a year was excessive, perhaps the obvious question now, may be to ask how much the CEOs of the 12 NTUC social enterprises are paid today?

From social enterprise to now?

Comfort Group merged with DelGro Corporation to form ComfortDelgro on 29 March 2003.

The Comfort Group had its beginnings in 1970 as the NTUC Comfort taxi cooperative. NTUC Comfort was corporatised and subsequently listed as Comfort Group Ltd on the Singapore Stock Exchange in 1994.

Should public transport be privatised for profit?

Since ComfortDelgro owns 75 per cent of SBS Transit which runs part of the MRT system and has the largest bus network, how different would the public transport landscape in Singapore be, if Comfort  had remained as a social enterprise?

Leong Sze Hian

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I refer to the article “PAP leaders: govt is delivering on ge promises” (Straits Times, Jan 19).

It states that “In housing, transport, education and healthcare, the Government had taken the initiative and moved ahead”.

Let’s look at some of the statistics that are related to the election promises and statements.

TRANSPORT

Public transport fares were increased again in October 2011. (“Formula almost guarantees fare increases“, Jul 29, 2011)

This was the ninth fare increase in the 11 years from 2000 to 2011. As it is arguable whether the 2010 change to distance-fares was actually an increase or decrease, it may actually have been the tenth increase.

If we can decide to spend $1.1 billion on buses to help the transport operators, why can’t we spend a single cent to keep fares from increasing?

EDUCATION

Miscellaneous fees in schools have been increased for all students.

Whilst the principle of further differentiating fees by citizenship is a valid one, why is it that when fees are increased – be it for university, healthcare, etc – fees for Singaporeans are also raised?

It appears that the estimated additional revenue from PRs and foreigners may be about 10 times that of the increase in miscellaneous fees for all students.

If that is the case, why not keep the miscellaneous fees for Singaporeans at the current level or, better still, reduce them? (“Why increase fees of local students? “, Jul 25 and “Foreigners’ school fees up, Singaporeans’ too? “, Jul 16)

HOUSING

With 5,500 letters of appeal on HDB in one year in just one GRC, how many letters of appeal were written for all the GRCs and SMCs? – About 99,000? (15 GRCs and 12 SMCs) (“5,500 letters of appeal on HDB in 2012 in 1 GRC?”, Jan 17)

This may indicate that Singaporeans’ housing problems appear to be continuing unabated.

HEALTHCARE

Instead of increasing Medishield deductibles and premiums from 1 March 2013 which affects the lower-income elderly more – if we really want to help, we could spend some money on Medishield.

After all, Medishield does not cost the Government any money, as it is a self- funding scheme paid by policyholders. (“MediShield: Deductibles increased by 5 times historically for elderly?“, Nov 12)

HELPING THE POOR

As to “help for the poor”, according to the CDCs’ annual report for FY2011, the number of applications for financial assistance was 72,700 for the whole year from 1 April 2011 to 31 March 2012.

Is this an all-time record high?

Giving the statistics for only nine months, may mask the stark reality that 72,700 families applied for social assistance under ComCare schemes in a year.

Missing statistics: Successful applications?

it may be somewhat odd, that the ComCare media release does not say how many of the applications were successful, like in the past.

For example, according to the reported statistics in February 2011, 39,500 or 71 per cent of approved applications for financial assistance under ComCare were successful, up from 42,100, or 67 per cent, in 2009. (“Saddest statistic ever: 200,000 families helped?, Aug 22, 2011)

$4b in 2007 for 5 years?

The GST rate increase from 5 to 7% in 2007 was accompanied by an offset package to help Singaporeans with the increase in GST, and which would cost the government $4 billion over five years. (“GST rate to rise to 7% from July 1“, Channel NewsAsia, Feb 15, 2007)

Now $3.6b for next 5 years?

Now five years later, the Government will be spending much less, at $3.6 billion over the next five years (2012 – 2016) under the new GST Voucher package.

Since the GST Offset Package was to help particularly lower-income families offset the GST increase, and considering that the population has increased and inflation has risen by about 19 per cent since 2007, and huge budget surpluses of about $10.5 billion over the last seven years, why are we spending less now?

More help for lower-income in 2007?

When the GST rate was raised from 5% to 7% in July 2007, a household in the bottom 20% had to pay additional GST of $370 per year, but received an offset package of $910 per year, in addition to permanent benefits of $1,000 per year. (“Budget debate round-up speech“, Mar 2, 2011)

Less help now?

So, let’s see how much less lower-income families will get now.

It’s GST Cash of $250 and GST U-Save Rebate of $260 (1 and 2-room HDB) and no Medisave top-up if there are no family members age 65 and above.

For example, family members age 65 – 74, 75 – 84 and 85 and above (staying in homes with annual value not more than $13,000) wiil get a Medisave top-up of $250, $350 and $450, respectively.

In any case, even if a lower-income family qualifies for a Medisave top-up, it can only be used for medical purposes, and is thus not cash that can effectively offset GST expenditure.

Also, in the past, Medisave top-ups were given to those age 55 and above. So, why is the age now increased to 65 and above?

So, are lower-income families effectively getting much less now under the GST Voucher scheme, compared to the previous GST Offset Package?

GST increase to help the poor?

Since the main reason given for increasing GST was to help the poor, why is it that lower-income families are now apparently getting less under the GST Voucher scheme? (“GST Offset much lower now for lower-income? “, Dec 31)

COST OF LIVING

If we really want to help on “the cost of living”, why do we keep increasing basic goods and services, like property tax for 3-room HDB flats and Service and Conservancy Charges (S & CC), etc? (“HDB rentals up 10%, but property tax up 118%?, Nov 27 and “Each town council different, but raise charges together?“, Oct 3)

FOREIGN WORKERS

The tightened foreign labour policies may not be reflected in the full yearly statistics which still show the rate of increase in the foreign workforce at 7.6 and 5.7 per cent in 2011 and 2010, respectively. (“S Pass increased 12.5% last 6 months“, Oct 1)

JOBS

More job seekers?

Job seekers dropped from 100,504 to 24,500?

Between January and November 2012, the number of people approaching the CDCs for training and employment assistance was 24,500, a 3 per cent drop compared to the same period in 2011.

The success rates of those being placed into employment has also been higher in 2012. 11,800 were placed into jobs between January and November 2012, compared to 10,100 for the same period in 2011″

However, according to the Department of Statistics’ (DOS) Monthly Digest of Statistics Singapore June 2012, job seekers attended to by the CDCs and e2i, was 99,608 and 100,504, in 2010 and 2011, respectively, and job seekers placed in employment was 17,732 and 14,223, respectively. (“Easier to get jobs?“, Sep 7 and “Latest statistical highlights: Job placement rate drops to 14%, Jul 17)

So, how is it possible that 100,504 job seekers attended to by the CDCs and e2i in 2011, has dropped dramatically to only 24,500 job seekers approaching CDCs in 11 months (excluding e2i?)?

The latest statistics indicate that in the six months from June to November 2012, the number of job seekers attended to was 57,992. Thus, it may appear that the total for the full year of 2012 may end up to be even higher than 2011′s 100,504.

Declining job placement rate?

Similarly, the 11,800 were placed into jobs between January and November 2012, seems to be much lower than the 14,223 placed in employment for the full year of 2011.

Job placement rate improved from 14 to 48%?

If we take the CDCs’ statistics now, the job placement rate (for 11 months) is 48 per cent, but if we take the DOS’s statistics, the placement rate for the 12 months in 2011 was only 14 per cent?

WAGES

The real median income growth for workers (excluding Employer CPF Contributions) was negative in 2008, 2009, 2011, 2012 (June) and only 0.5 per cent in 2010. (“2012 real income declined – 2.3%?”, Nov 30), and I estimate that the real basic wage growth in the last 12 years or so (1999 to 2011), was negative for 4 of the 8 occupational categories in Singapore, and only around 0.5 per cent or less per annum for the other 4 categories. (“Workers’ rights: 12 years of near negative wage growth for almost all workers?“, Dec 9)

There may be little justification for much of the above pertaining to price increases, with tax revenues being up for the current year, budget surpluses of about $10.5 billion over the last seven years and an estimated over $800 billion in the reserves.

Leong Sze Hian

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I refer to the report “Public transport fare adjustments to take into account bus drivers’ wage increase” (Channel NewsAsia, Dec 6).

It states that “Transport Minister Lui Tuck Yew said on Thursday public transport fare adjustments, due next year, will take into account the need to raise bus drivers’ wages.

Mr Lui was speaking for the first time in the aftermath of the illegal strike by bus drivers from China last week, and said public transport cost increases over the years have outpaced fare adjustments.”

Huge increase in profits?

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I refer to the article “Benchmarks set for taxis to meet demand” (Straits Times, Nov 24).

It states that “From January, they must ensure that at least 70 per cent of their fleets are on the road during the peak hours of 7 am to 11 am 5 pm to 11 pm. The level will go up t0 80 per cent in 2014 and 85 per cent in 2015.”

What is probably the root of the problem?

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I refer to the report “ERP: More downs than ups” (Straits Times, Nov 16).

8 times up, 11 times down

It states that “Believe it or not, Electronic Road Pricing (ERP) charges have been lowered more times than they were raised. Transport Minister Lui Tuck Yew said ERP rates have been cut 11 times but hiked eight times over the past two years”.

This is perhaps another classic example of a reply in Parliament that never answer the question.

ERP rate up or down?

Clearly, the purpose of the question was to ask whether ERP rates have gone up or down, and not how many times it has gone up or down?

Why pick only the last two years to come to the conclusion that ERP came down more times than when when they went up?

Why not tell us for the last year, last three years, etc?

You see, one can always cherry pick a particularly period to come to a desired conclusion.

So, at the end of the 11 times down and eight times up, are the final ERP rates up or down?

ERP aim is not to raise revenue?

As to “But he turned down a call for road taxes to be cut in respect of the revenues generated from the ERP as the aim of road pricing is to manage congestion, not raise revenue”, I find this reply to be really illogical, because how can “it is not the aim of ERP to raise revenue” be used as the reason for not reducing road tax?

ERP revenue up or down?

Precisely, if this is the reason, shouldn’t road tax be reduced if ERP revenue is up?

Of course, the reply also did not say whether the revenue from ERP has gone up or not, and if so by how much?

Reduce road tax?

Since ERP is to help reduce congestion, how does maintaining road taxes at their current level reduce congestion?

COE revenue?

Not to mention that the revenue from the recent huge COE increase, must be astronomical.

Make data public?

Also, it is about time that the methodology of the ERP pricing and traffic speed mechanism, and the data collected, be made public so that we can help to scrutinise and see how the system may be improved.

Wrong KPI?

Otherwise, what incentive is there to reduce congestion, when more congestion means more revenue?

Perhaps the LTA should be fined or penalised in some other way, when congestion increases, because having the right Key Performance Indicator (KPI) may encourage them to work harder and come up with more creative solutions.

Leong Sze Hian

Act 1 of “Parliament: Replies that never answer the question?” is here

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I refer to the article”Downtown line costs soar by more than 70%” (Straits Times, Oct 30).

100 times ComCare spending?

The estimated costs overrun of $8.7 billion is a lot of money. To put this sum in perspective, it is more than double our entire annual public healthcare spending, or more than 100 times what we spend on ComCare in a year to help the needy.

It states that “Half of this $8.7 billion increase was attributed to a sharp rise in construction cost, with the other half linked to a number of changes to the project”.

Let’s look more closely at some of the changes.

1 more MRT station?

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I refer to the article “SMRT bus drivers can return to five-day week – without pay rise” (ST, Sep 29).

Wage increase: Back to square one?

Giving bus drivers the option to return to a five-day week without a pay rise, may be making a mockery of the wage re-structuring exercise.

After all, wasn’t the whole purpose of the exercise to increase the wages of low-wage bus drivers in Singapore?

Negative real wage increase?

Using data from SMRT’s website, I computed SMRT’s Staff and Related Costs per employee (total staff costs divided by number of employees) to be $42,283 in FY2003 and $47,768 in FY2011.

This is an increase of only 13 per cent over the last eight years, or an increase of only 1.5 per cent per annum.

After adjusting for inflation, the annualised real wage increase may have been negative.

Has real basic wage increased?

What is the basic wage per hour of a bus driver now, and in FY2003?

So far, giving the gross wage of bus drivers may not be truly addressing the issue of low wages, as we should focus on the basic wage per hour.

As the current impasse has shown, higher gross pay can always be achieved by getting workers to work longer hours.

More pay because of longer work hours?

In this connection, the trend of low wage workers like security guards, traffic wardens, cleaners and dishwashers, etc, having to work typically 12 hours a day for six days a week, in order to earn a decent wage which is typically less than $1,800, still puts such workers at some of the lowest per hour basic wage in Singapore.

It’s all about profits?

SMRT’s profits after tax increased by 163 per cent, from $13.9 million in 4Q2012 to $36.5 million in 1Q2013.

Despite all its problems like the breakdowns last year, it’s FY2012 profits were $119.9 million, and its FY2011 profits of $161.1 million was close to its historical record profits of $162.9 million in FY2010.

Surely, paying bus drivers a bit more may not put a big dent in its profits.

I hope that the union representing bus drivers will try to do more for them.

Leong Sze Hian

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I refer to the article “Social spending – where will money come from?”
(Straits Times, Sep 4).

How much total reserves?

It states that “If you add the three pools of reserves up, you get
about $800 billion. A very modest 2 per cent return on that comes up
to $16 billion a year.

The Net Investment Returns (NIR) contribution last year was $7.91
billion. And even if we assume that the NIR contribution last year had
hit the 50 per cent cap, activating the other 50 per cent of NIR would
mean an additional $8 billion to the Government”.

Only 2% return on reserves?

Since the total sum of Singapore’s reserves is a secret, even if we
assume that the above conservative estimate of $800 billion is
correct, 50 per cent of the NIR assuming an average annualised return
of say five per cent, would be about $20 billion.

Temasek 17, GIC 6, but NIR 2%?

This estimated NIR is not unrealistic, given that Temasek’s and GIC’s
annualised returns have been reported at 17 (S$ terms) and around six per cent
(US$ terms), respectively.

So, even if we spend a lot more on social spending, just the NIR alone
may be sufficient, without even talking about the huge budget
surpluses in the past, with about nine out of every 10 years in surplus.

Secrets of Singapore?

Of course, the fundamental questions as to why the percentage of the
NIR used in a year, the sum of total reserves or the annualised return
on the total reserves are a secret, remain.

Spend more, tax more?

As to “As Prime Minister Lee Hsien Loong said in his Aug 26 National
Day Rally speech, “nothing falls from heaven”. So taxes will have to
go up eventually to fund higher social expenditures – “not
immediately” but within the next 20 years.

Annual health-care spending will double to $8 billion over the next
five years. This year, the Government introduced the permanent GST
Voucher, which pays out a combination of cash, conservancy rebates and
Medisave top-ups, with more for older and lower-wage Singaporeans, to
offset increases in the goods and services tax. This will cost the
Government $680 million this year.

Also formalised in 2007 is the Workfare Income Supplement, which
supplements low-wage workers’ income with cash and Central Provident
Fund (CPF) top-ups. This cost the Government $260 million last year.

NIR alone enough for extra spending?

Plans are also under way to spend $60 billion over the next 10 years
to improve the transport system.”, even adding all of the above comes
up to a total of only about $15 billion a year.

Don’t include current expenditure as additional spending?

However, on closer scrutiny, one would realise that the above amounts
includes current expenditure that we are already spending. So, the
additional expenditure is actually only about $10 billion a year.

As explained above, the NIR alone may be about double this additional
expenditure in a year.

Thus, the consistent rhetoric that if we spend more means we have to
raise taxes, does not seem to hold water, not to mention that we have
so far not spent significantly more relative to revenue in the last
decade or so.

Accounting treatment of Budget surplus?

With regard to “But the Government also spent $8.58 billion of special
transfers on programmes such as Workfare, and top-ups to various
endowment funds, such as the Medical Endowment Fund”, this may be a
fundamental issue with the way we determine our Budget surplus or
deficit, because almost all countries would fund the social
expenditure as an expense every year, instead of Singapore’s
never-ending annual transfers to top-ups to the various endownment funds.
I understand that an arbitrary four per cent of an endownmwnt fund a year, is
then used to fund MediFund, Workfare, etc.

The result of this may be that the Budget surplus may be significantly
under-reported, compared to other countries.

If we change to what other countries do, there may actually be a lot
more money that we can spend on social spending, on top of the NIR
explained above.

Leong Sze Hian

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