The Ministry of Manpower in Singapore has announced an increase in the salary thresholds for employment pass and S-pass workers.

Malaysians form the largest component of non-Singaporean workers in the island republic. However, there are no statistics available on the breakdown of Malaysians holding the different categories of permits, such as employment pass, S-pass and work permits.

The reason given for raising the salary thresholds is to make it harder for employers in Singapore to recruit higher-skilled foreigners such as Malaysians, whom many Singaporeans have complained are competing with the local citizens for the higher paying jobs.

Raising the salary threshold may not alleviate the problems that Singaporeans may face competing with foreigners like Malaysians, as long as employers are allowed to have unlimited hiring of employment pass foreigners and up to 25 percent of the total workforce for S-pass.

Unfair competition against Singaporeans?

How does a Singaporean graduate compete with a younger Malaysian graduate who may be more qualified and experienced, and is willing to work for a much lower wage?

Since employers do not have to make Central Provident Fund (CPF) contributions for foreigners, hiring a Malaysian on a Q1 employment pass at the new minimum salary of S$4,000 (RM9,713) will enable the employer to save S$640 (RM1,554) a month.

Since foreign male workers like Malaysians do not have national service reservist
obligations, the employer does not have to worry about the up to 40 days of reservist training in a year.

Since most foreign female workers may be single and not pregnant when they arrive in Singapore, local employers may be less concerned about the four months of maternity leave and salary costs.

Also, foreigners generally cannot change employers during their typical two-year contract period. So, less turnover problems too for the Singaporean employers.

Increase in minimum wage

By giving employers of existing employment pass holders a one-time renewal of up to two years to meet the salary thresholds, foreigners like Malaysians are effectively being given a 11 and 12 percent pay increase for S-pass and Q1 pass respectively.

However, the locals – Singaporeans and permanent residents – only had a 0.5 percent real median wage increase last year, and negative real median wage increase in 2009 and 2008.

In effect, the minimum wage for foreigners like Malaysians, on employment pass and S-pass, has been increased, even though there is no minimum wage for the locals.

According to the Singapore Ministry of Manpower’s 2010 Labour Market Report, the rate of change in the growth of foreign workers in Singapore last year was about four times more than that for locals, at 59,700 for foreigners and 14,400 for locals, compared with 2009.

These figures may indicate that the playing field may not be level for Singaporeans vis-a-vis foreigners like Malaysians.

Employers can hire 100 percent Malaysians?

It is not uncommon to see a Singapore employer hiring entirely non-Singaporeans, because under the foreign worker quota rules in Singapore, a company can have unlimited employment of permanent residents and employment pass holders.

This can be up to 25 percent of S-pass workers and 50 percent of Malaysian work permit holders in certain sectors, such as the services sector.

For other work permit holders, such as those from China or India, the quota in the services sector, for example, is much lower, at generally 10 percent, compared with 50 percent for Malaysians.

To illustrate this: A company can have 100 percent Malaysian permanent residents, 100 percent employment pass Malaysians, 100 percent mixture of Malaysian permanent residents and employment pass holders, 50 percent Malaysian permanent residents with 25 percent S-pass and 25 percent Malaysian work permit holders.

Are there any developed countries in the world that allow the unlimited hiring of foreigners, like Malaysians, on a monthly salary of just S$2,800 (RM6,801) – which is quite low as it is only around the 55th percentile of wages for locals in Singapore?

Finally, how can a foreign worker who only earns S$2,800 – which is 37 percent less than the average wage of S$4,474 (RM10,869) in Singapore, be called “foreign talent”?

Most Singaporeans may have no issue with highly-skilled and highly-salaried foreigners coming to work in their country.

However, they are concerned about the almost unrestricted hiring of lower-paid and arguably not much higher-skilled foreigners, be they Malaysians or others, who may be competing unfairly with Singaporeans for jobs.

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COMMENT All nine opposition parties – that have announced that they will be fielding candidates in what is expected to be the first general elections in decades whereby all 87 constituencies in Singapore will be contested – have raised the issue of helping lower-income Singaporeans who have seen hardly any real increase in incomes in the last 10 years or so, as shown in data from the Singapore Ministry of Manpower and the Singapore Department of Statistics.

Over the past few elections, the ruling People’s Action Party (PAP) had formed the government as early as nomination day, because of walkovers that gave the PAP the majority in Parliament even before polling day.

PAP’s elections record is arguably one of the best in the world:

1965 to 1983 – won all parliamentary seats since independence

1984 – won 72 out of 74 seats

1988 – won 76 out of 77

1991 – won 77 out of 81

1997, 2001, 2006 – opposition only won two seats

The last two presidential elections were also walkovers in favour of PAP.

This year, as in previous elections, the media has gone on overdrive in the days leading up to polling, to put up stories about how much help the needy in Singapore have been, or will be getting in the near future.

Helping needy with 27 cents?

In this connection, I would like to refer to the article ‘$3m scheme to help 30,000 needy’ (Singapore Straits Times, April 21).

The report says, “(The government) is giving out $3 million worth of discount vouchers – three times the value dished out last year – to about 30,000 low-income members”.

Last year, Singapore’s National Trades Union Congress (NTUC) gave vouchers to its needy union members’ families that were about three times less than this year, i.e. S$30 (RM73).

This works out to about 8 Singapore cents (19 sen) a day per family (S$30 divided by 365 days) for last year, and about 27 Singapore cents (66 sen) per day for this year, to each needy union member’s family who successfully applies.

Since NTUC union membership fees are S$117 (RM285) per annum, one way of looking at it, may be that if you are a needy union member family, you got about 25 percent  (S$30 vouchers divided by S$117 (RM285) membership fee) of your union dues back in the form of discount vouchers last year, and will get about 85 percent back this year.

Why the delay?

The article adds, “The vouchers will be given out by Aug 1. These vouchers will be valid from Aug 1, 2011 till Jan 31, 2012”, citing the NTUC’s web site.

So, when warehouse coordinator Mohamed Ansary Ismail, age 43, who is the sole breadwinner supporting his wife and three teenage children on his S$1,500 (RM3,653) monthly wage, and whose monthly grocery bill is only about S$150 (RM365), was reported to have said, “Normally I try to watch what I spend and stick to the basics like rice and sugar.

“But I can afford to splurge a bit more on my family when I receive the vouchers – and am glad of the helping hand”.

I wonder if he knows that he can only use the vouchers in three months time from Aug 1.

Hopefully, he has not jumped the gun and informed his children already, they may perhaps suffer momentary disappointment when he reads the fine print upon receiving his vouchers.

Can and should needy families in Singapore have to wait for more than three months, when the vouchers could have been effective immediately?

Incidentally, with 580,000 union members, NTUC’s revenue from membership fees alone is about S$68 million (RM166 million) per annum.

If there are 30,000 needy union members’ families out of NTUC’s 580,000 members alone, one can imagine how many needy families there are across Singapore, since the total number of Singapore resident workers is 1,990,700, as of December, 2010.

With NTUC’s profits from its 12 social enterprises over the three-month period until the vouchers are redeemable, not to mention money from fund raising, like the S$6.9 million (RM16.8 million) raised under NTUC’s U Care Fund this year alone, it is hard to understand why the delay till Aug 1 to cash in the vouchers.

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I refer to the front page headlines story “Foreign workers help create good jobs for S’poreans: PM” (Singapore Straits Times, Apr 21) and “Foreign workers help to create more good jobs for Singaporeans: PM” (Channel News Asia, Apr 21).

The former reads, “In his speech, Mr Lee (Hsien Loong, right) noted that six in 10 of the employees are ‘Singaporeans and permanent residents’. Singapore residents also take up two-thirds of the managerial and professional positions, he added.”

The front page headlines story on Singapore’s Chinese daily Zao Bao on April 21 was also on Lee’s remarks at the opening of a S$3.7 (RM9) billion wafer plant, that foreign workers help to create jobs for Singaporeans.

Given the remarks at the end of the Singapore Straits Times article that “the government’s foreign worker policy could emerge as a hot-button issue this election as some believe that it has hurt residents’ job prospects and depressed wages”, I find it somewhat strange that even at this eleventh hour before the Singapore general election on May 7, Singapore’s prime minister is still using ‘Singaporeans and permanent residents (PRs)’ statistics.

For instance, “six in 10 of the employees are ‘Singaporeans and permanent residents’, could mean just one Singaporean and five PRs.

As to “Singapore residents also take up two-thirds of the managerial and professional positions…”, it could also mean, say, one-third Singaporeans and one-third PRs.

Also, according to the CNA report, since “in the technician and manufacturing jobs, two-thirds are foreign workers”, it could mean that as little as one percent of the one-third are Singaporeans and the balance 99 percent are PRs.

Meaningless statistics?

So, the bottom line is that the Singapore PM’s statistics may not tell us much about jobs for Singaporeans, because of the 1,200 workers in the new wafer plant, 480 are foreigners, and as many as 716 could be PRs, with just one Singaporean manager, one Singaporean professional, one Singaporean technician and one Singaporean in a manufacturing position.

So, the $64,000 question may be, how many are actually Singaporeans?

To illustrate the frivolity of the data, if half the locals are PRs, it may mean that only 30 percent of the total work force are Singaporeans, with one-third of the managers and professional positions and one-sixth of the technicians and manufacturing jobs being Singaporeans, respectively.

Surely the data breakdown of the locals into Singaporeans and PRs should be available, as it is only 1,200 people who are all employed in just one company in the island state.

The finance minister has the figures, but not the PM?

If Singapore’s finance minister can present ‘Singaporean only’ workers’ incomes and ‘Singaporean only’ households’ incomes in the budget statement in Singapore’s Parliament in February, albeit that it was one of the very rare occasions that ‘Singaporean only’ statistics  were disclosed, why is it that the Singapore PM can’t now?

Well, your guess is as good as mine!

100 percent foreign staff?

Under the Singapore Ministry of Manpower’s (MOM) employment policies, an employer may be able to hire entirely non-Singaporeans, because under the foreign worker quota rules, a company can have unlimited employment of PRs and employment pass holders (EPs), up to 25 percent of S-pass workers and 50 percent of Malaysian work permit holders in certain sectors like the services sector. For non-Malaysian work permit holders like those from China or India, the quota is much lower at generally 10 percent.

To illustrate the above with some examples, a company can have 100 percent PRs, 100 percent EPs, or 100 percent mixture of PRs and EPs,

Alternatively they may comprise 50 percent PRs and EPs, with 25 percent S-pass, 15 percent Malaysian work permit holders and 10 percent China/India work permit holders, etc, as well as an unlimited number of foreign university interns on typically six-months stay in Singapore, who do not need to be subject to any of the foreign worker quotas.

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Singapore public hospitals in the past did not have a policy of not allowing subsidies when an injured worker, such as a Malaysian permanent resident (PR), is hospitalised in a subsidised ward.

Somewhere along the line, the policy changed to deny subsidies for industrial accidents, resulting in workers having to bear huge medical expenses in excess of the S$25,000 (RM59,728) cap that employers in Singapore are responsible for.

So, for example, if your medical bill is S$150,000 (RM35,838), you will have to foot the balance S$125.000 (RM298,658) yourself.

Is it fair for a worker who, through no fault of his own, is burdened with large medical bills arising from an industrial accident?

Shouldn’t workers have rights to medical expenses arising from a work-related accident? Did Singapore’s unions or parliamentarians object to such an erosion of workers’ rights?

Since the subsidy in class C hospital wards is 80 percent, an injured worker may have to pay up to five times more, out of his own pocket, when his hospitalisation and post-hospitalisation expenses exceed the cap of $25,000 (RM59,728).

In contrast, if you are a Malaysian on a work permit or S-pass, instead of a PR, Singapore employers are responsible for your entire medical bill if you are hospitalised. Singapore employers are required to insure foreign workers, like Malaysians, for S$15,000 (RM35,838) of medical expenses, but have unlimited liability for their foreign workers’ medical bills.

Of course, what usually happens is that the Singaporean employer may cancel the injured Malaysian worker’s work permit so that he will be deported, to avoid having to pay for the worker’s medical expenses.

Hospital bill ‘upgraded’

It is a little known fact that if you are a Malaysian PR who stays in a Singapore public hospital’s intensive-care unit (ICU) for, say, two months under C-class, which is the cheapest ward class, but opts to upgrade to a higher ward class for a few days after discharge from ICU, you will be billed the higher class charges for the entire duration of your stay in the hospital.

Is it fair for patients to be billed the higher charges for their entire hospital stay, when they only stayed in a higher class ward at the end of their hospitalisation?

The Ministry of Health in Singapore should step in to review this unfair practice by hospitals.

Since Malaysians in Singapore who are not PRs  are not entitled to any medical subsidies in public hospitals, they will be billed the full unsubsidised amount when they are hospitalised in the non-subsidised B1 and A class wards.

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As the debate rages in Malaysia, on how to move the country forward, particularly in economic development – will 1Malaysia work? Is it enough? What else should Malaysia focus on?

Arguably, Singapore’s economic miracle has been due in no small way to its policy of attracting foreign talent, even at a very young age, to Singapore on fully funded scholarships.

Many Malaysians arrive in Singapore every year under such scholarship schemes.

Should Malaysia also do it in a big way, like what the island republic has done?

What lessons, if any, are there to be learned from Singapore’s experience? Well, one aspect of the recently released Singapore Census 2010, which I think no media has talked about, is what the profile of permanent residents (PRs) may mean for its citizens.

While I must confess at the onset, that this article is entirely speculative, and rather deficient in statistical veracity (unlike my normal pieces), I think it reflects the sentiments of many Singaporeans in the coffee shops, blogs and so on.

According to the article, “Foreigner numbers mirror economic figures” (Singapore Straits Times, Jan 13), almost half of the PR population last year were degree holders, compared with 18 percent of Singaporeans.

Does this mean that, generally, it may be harder for Singaporeans to compete with PRs for jobs because more of them have received higher education?

Will a similar problem occur if Malaysia adopts an open foreign talent policy like Singapore?

In this connection, Singapore’s Ministry of Manpower (MOM) issues a pass to allow foreigners (including Malaysians) into Singapore for a year to hunt for a job.

Are there any developed countries in the world that allow foreigners to stay for a year to compete with citizens for jobs?

Of course, such foreigners also contribute to Singapore’s GDP growth.

When the MOM was asked as to how many foreigners have been issued with such passes, it declined to reveal the figure.

From my experience, if a request for a statistic is declined, the number may be quite a huge. Because if it’s not a large number, why not reveal it?

PRs – cheaper, better, faster?

The famous quote “Cheaper, better, faster” of Singapore’s National Trade Union Congress secretary-general and cabinet minister, ironically may be really true, in the context of PRs and such graduate foreigners here to look for jobs, because generally, they may be more “hungry” and have no dependants in Singapore to support, or heavy financial commitments like a home mortgage.

If you think this is bad enough for adult Singaporeans, the recent statistics that about 60 percent of top ‘O’ Level students are foreigners may have undesirable repercussions for Singaporean students as well.

By the way, how many of the balance 40 percent of top students are Singaporeans, if we take away the PRs?

Grapevine talk has it that some Singaporean students may be less motivated to study and do well in school because they feel that their chances of beating their “genius” foreign classmates may be quite slim.

Is this perhaps an unintended consequence of giving out so may scholarships to attract the best foreigners (including Malaysians) to Singapore to study – push up our academic standards, help to enhance our workforce competency, grow our GDP?

If Malaysia adopts a open foreign talent policy like Singapore’s, will it push up Malaysian schools’ academic standards, help to enhance workforce competency and productivity and grow Malaysia’s GDP faster too?

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COMMENT I would like to devote my weekly column for this week to the Singapore blog The Online Citizen (TOC).

I have been a columnist for TOC since it started in December 2006, and have written over 300 articles. Recently the Singapore government has emailed TOC to inform them that it will be gazetted a as political association.

That means TOC is now required to declare its owners, editorial team, administrators, and designate a president, treasurer and secretary in accordance with the regulations.

The move also means the website will be barred from receiving funds from foreign donors and from allowing foreigners to participate in its events.

What does this mean for my regular ‘Uniquely Singapore’ column on TOC?

Well, for starters, under the rules for a political association, I will not be able to write, report, analyse or comment about the elections, when the next election expected to take place this year comes.

Since there is a prohibition on affiliating with any political party or supporting any political candidate, does it mean that I cannot write about a political party’s manifesto, or interview a political candidate, etc?

A world’s first

Since TOC is also required to be registered with the Media Development Authority (MDA), does it mean that I will be subject to censorship under the MDA’s rules, and just like say RTM, be wary of putting up ‘undesirable’ content?

TOC has sent an appeal to Singapore’s prime minister Lee Hsien Loong to reconsider the gazetting.

Singaporeans, Singaporean bloggers, and perhaps their counterparts and proponents of freedom of expression all over the world may be holding their breath, as this saga continues.

Will history be made, as a group of citizen bloggers who are all volunteers – with not a single full-time staff member, and no funding – become the first blogging website in the world to be gazetted by a government as a political association? The deadline given to TOC to comply is Jan 24.

As it turns out, TOC‘s appeal to the prime minister has been rejected. The appeal letter is reproduced below.

Jan 14, 2011

Re: PMO’s Intention to Gazette The Online Citizen

Dear Prime Minister Lee,

We refer to the letter of Jan 11, 2011 from Mr Lee Seng Lup of the Prime Minister’s Office (“the Letter”). The Letter informed us that “The Prime Minister intends to declare the owners, editorial team, and administrators of The Online Citizen (TOC), by order in the Gazette, to be a political association for the purposes of the Political Donations Act”.

TOC is familiar to many Singaporeans: we are a website that provides regular Singaporeans with a platform to share their opinions about all aspects of life in Singapore, and we aspire to be the medium through which those neglected by society find their voice. Accordingly, we have run articles about homelessness in Singapore, the widening income gap, migrant workers, civil society, political issues and even have a regular column dispensing sexual advice.

In short, we are a place where Singaporeans can come and talk about what is foremost on their minds. We do not engage in partisan politics, and we have no interest in engaging in partisan politics. TOC is political to the extent and in the exact same way that all ordinary Singaporeans are political: by being interested in, and talking about, political issues that impact us and our country.

We therefore disagree with the intent to gazette TOC as a “political association”, and the determination that TOC is “an organisation whose objects or activities relate wholly or mainly to politics in Singapore”. The determination is unreasonable, arbitrary and incorrect. Accordingly, we request that you reconsider the matter and reverse that determination and the decision to gazette TOC, failing which we trust that you will set out the grounds upon which that determination and the decision to gazette TOC were made.

Mr Prime Minister, TOC has operated without issue for the last four years. We have never accepted foreign donations, nor do we expect or intend to do so in the future. We do not fear the consequences of being gazetted as a political association. But we write this letter because we disagree with the decision to gazette us, and we firmly believe that it will have significant chilling effects on free expression in Singapore.

The vast majority of our contributors write under their actual names and all have chosen to volunteer their time and effort despite being students, professionals, blue collar workers or retirees. None of us do this for money or profit.

All of us, in one way or another, believed your promise of a more open society when you said in your first National Day Rally speech as Prime Minister: “Engage your ideals, your ideas, your energies, build a new generation, build tomorrow’s Singapore … We’ve got to support Singaporeans being spontaneous, being unconventional. We should not put obstacles in their way. We should help them to succeed.”

The TOC team and contributors came forward to play our part in building tomorrow’s Singapore. You may disagree with our views, but you cannot doubt our sincerity and patriotism. This unprecedented attempt to gazette a blog as a “political association”, likely just months before the next general election, is a disappointing retreat from your inspirational words all those years ago.

Mr Prime Minister, if you truly believe in the importance of developing a vibrant Singapore and a concerned citizenry, then please reverse your decision. Otherwise, our nation-building efforts will be set back by years.

Yours sincerely,

Joshua Chiang, Acting Chief Editor
Choo Zheng Xi, Co-founder
Andrew Loh, Co-founder

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COMMENT With the appointment of Idris Jala as a minister in the prime minister’s department to oversee KPIs, should city councils be evaluated by KPIs as well?

In Singapore, town councils get a report card twice a year, on how they have fared in various areas (KPIs) like cleanliness of the constituency, lift maintenance standards, efficiency in the collection of monthly Service and Conservancy Charges (S&CC) from households, etc. A score of level 1 to 5 is given, with 5 being the worst score.

The question in Singapore is whether the ruling government the People’s Action Party’s (PAP) town councils better than opposition ones.

With the looming general election in Singapore, one of the key election issues may be how the two opposition town councils have scored against the PAP town councils. If Malaysia’s city councils have KPI scores, it may also then become an issue in the next election.

In this connection, what is perhaps conspicuous about the latest town councils’ management report in Singapore, is that whilst all but one of the 14 PAP town councils scored level 2 for S&CC Households in Arrears and Amount in Arrears collections, the other 13 all scored level 1.

In stark contrast, the two opposition town councils scored level 5 for both areas. Is there something wrong with the opposition town councils in Singapore in this respect?

As a layman, I think two factors that may influence the S&CC scores is how town councils write-off their S&CC bad debts, and the balance of efficiency and compassion in chasing for arrears.

Indicator of poverty

According to the Swiss-based UBS study on prices and earnings, Malaysians have more purchasing power (Malaysia is ranked two places above Singapore’s 49th place for domestic purchasing power) than Singapore. Singapore is also the 11th most expensive city in terms of price levels (Kuala Lumpur is ranked 68th).

The issue is not so much whose is higher, but rather the implications on ordinary Malaysians and Singaporeans, and in particular lower-income households, in respect of coping with their living expenses.

In this connection, in my view, one good indicator of lower-income households’ financial stress may be how many Singaporean households have difficulty paying their S&CC. The charges are typically only around S$30 (RM71) to S$70  (RM166) a month.

In this regard, I was surprised to see in the annual reports, that opposition ward Hougang wrote-off about eight times more on a proportional basis, in the last financial year, than the PAP ward Hong Kah, that is about eight times bigger than Hougang in terms of total S&CC annual collections.

Hougang and Hong Kah wrote-off S$87,059 (RM206,419) and S$87,532 (RM207,541), respectively.

Despite writing off about eight times more proportionately, why is it that Hougang still ended up with level 5 scores, whilst Hong Kah moved up from level 2 to 1 in both KPIs?

I also find it rather puzzling as to why Hougang’s write-off in the previous financial year was zero, compared to Hong Kah’s S$106,307 (RM252,116).

Inefficient, or compassionate?

As to the other possible contributing factor of efficiency in chasing for arrears, Hong Kah’s interest on late payment of S&CC, at S$267,964 (RM635,500), was about four times more than Hougang’s S$8,719 (RM20,678), on a proportional basis.

Does this mean that Hougang was more lax, or perhaps more compassionate in dealing with arrears?

The scoring is done by civil servants from Singapore’s Ministry of National Development (MND).

Is there a possible conflict of interest or bias when MND staff have to score the minister for national development’s Group Representative Constituency (GRC), along with his four other GRC members of parliament?

Likewise, if Malaysia decides to have KPIs for city councils, the scoring should be done by an independent party.

How Singapore remains pothole free

Finally, have you ever wondered why there are no potholes on Singapore roads, unlike those in Malaysia?

Could it be that Singapore politicians perceive that their town councils’ KPI report cards may affect the voters’ decision come elections?

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I refer to the article, ‘Electricity tariff hike put on hold, says Chin‘ on Dec 9.

Although the Malaysian cabinet had earlier agreed to an electricity tariff revision, Energy, Green Technology and Water Minister Peter Chin Fah Kui has recently announced that electricity rates have been put on hold for now, and the government will review the rates when the environment is more conducive.

In this connection, in the article ‘TNB gains from tariff hike offset by rising fuel costs’, a research house said that the key obstacle to the implementation of a tariff revision is the current political climate, as the government appears to be gearing up for a general election.

In contrast, how does Singapore handle increases in their electricity tariff? How does Singapore manage increases, considering that an election is also looming this year?

Singapore has just announced another electricity tariff increase from Jan 1, 2011, by another 3.3 percent.

Singapore’s electricity tariff is adjusted quarterly, relative to fuel prices and other costs. Every once in a while, the Singapore government gives out rebates to help cushion electricity tariff increases.

Over the last three years, the Singapore domestic electricity tariff increased by 14 percent, from 22.62 Singapore cents (54 sen) on Jan 1, 2008 to 25.79 Singapore cents (62 sen) on Jan 1, 2011.

On the same day that the tariff increase was announced, the Singapore government also announced that about 800,000 Singaporean HDB (public housing) households can expect to receive about S$50 million (RM120 million) worth of Utilities-Save (U-Save) rebates in January 2011 and a second tranche of S$30 million (RM72 million) of rebates  in July 2011.

I estimate the average rebate per household to be about S$100 (RM240) or S$80 million divided by 800,000.

This is a far cry from what almost all Singapore media reports had said, that a Singaporean household may receive up to S$190 (RM456) worth of U-Save rebates in 2011, depending on HDB flat type.

Since the tariff will increase by 3.3 percent this quarter, and SP Services, the only provider of domestic electricity in Singapore, said families in four-room HDB flats will on average pay about S$3.15 (RM7.57) more a month, the average bill may be about S$100.

Media reports have  also cited the example of a three-room flat household having an average bill of $100.

What is the average electricity bill for households in Malaysia?

U-Save enough

If the average monthly utility bill per household is S$100, the 14 percent increase in the electricity tariff means that the increase for this year alone is about S$168  (RM404) – S$100  times 12 months times 14 percent.

So, how do the U-Save rebates help Singaporeans, especially low and middle-income households, cope with the higher cost of living?

In order to truly help Singaporeans cope with the higher cost of living, shouldn’t the rebates be enough to at least cover the increase in the tariff, since the U-Save rebates are part of the S$4 billion (RM9.6 billion Goods & Services Tax (GST ) offset package, when GST was raised from 5 to 7 percent in 2007?

Just like Medisave top-ups that never seem to be able to catch up with increasing medical costs, CPF (Central Providend Fund) housing grants that never catch up with HDB price increases, the U-Save rebates may also not catch up with rising electricity tariffs.

In order for subsidies to effectively help Singaporeans, they must offset price increases as well.  Otherwise, it may just be akin to the left pocket getting more money than what the right pocket is giving out.

How many households in Singapore will get rebates of not more than S$120 (RM288)? How many will get rebates that are enough to offset the tariff increase?

Without such statistics, how do we know whether the majority of households are better or worse off?

How it all began

U-Save rebates were first given out in 1996 to help offset increasing electricity tariffs, and the highest amounts doled out were S$226 million (RM543 million) in 2001 and S$200 million (RM480 million) in 2008 respectively.

I could not find a record of the electricity tariff in 1996.  The oldest that I could find on Singapore Power’s web site was August 1, 2000, at 17.66 Singapore cents (42 sen).

So, if we take 2000 as a starting point, the tariff has increased by 46 percent. And we are just getting S$80 million (RM192 million) of rebates?

In this connection, in the Singapore Budget Speech 1996, it was said that “Singapore Power’s electricity tariffs are too low, and we must raise them gradually over several years, to enable SP to earn an adequate return on its capital… This is the real reason for raising SP’s tariffs.  It is not to raise more money for the government”.

Finally, have you ever wondered why Malaysia and Hong Kong’s electricity tariff at 21.8 to 33.4 sen and 12.30 US cents (38 sen)  respectively, are so much lower than Singapore’s 62 sen (25.79 Singapore cents)?

Profiting from power

By the way, according to Singapore Power’s annual report financial highlights, underlying net profit after tax rose by 18 percent, from S$616 million (RM1,480 million) to S$728 million (RM1,750 million) in its last financial year.

In contrast, Tenaga Nasional Berhad’s net profit was MYR917.9 million in FY2009, a decrease of 64.6 percent compared with FY2008.

All three power generation companies in Singapore that were given to Temasek, Singapore’s government investment holding company, have been sold to foreign companies, including a Malaysian company.

In this regard, have any of Malaysia’s power generation providers, that in most countries are generally prized as important state assets, been sold to foreign companies?

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The Employees Providend Fund (EPF) Account 2 and 1 can be entirely withdrawn at age 50 and 55, respectively.

In Singapore, it’s Central Providend Fund (CPF) requires a minimum sum (currently S$123,000 (RM292,995) and a Medisave Required Amount (MRA) to be set aside at age 55, for those who meet the requirements.

The minimum sum pays a monthly life annuity from age 65 for as long as one lives, and the Medisave Required Amount can be used for approved medical expenses and insurance premiums.

Defer EPF withdrawal?

Some Malaysiakini readers posted in the comments of some of my previous weekly articles, that some EPF members may spend all their EPF after withdrawal at 55, in just a few years. Thus, arguing that Singapore’s system may be better.

So, it got me thinking as to whether Malaysia should consider deferring a portion of EPF withdrawals like Singapore.

On the other hand, it is perhaps ironic, that some Singaporeans are always complaining that EPF is better than CPF, because everything can be withdrawn.

This may often be the case, for those Singaporeans and Malaysian permanent residents (PRs), who may be in financial difficulty, getting a job or earning enough, from age 55 to 65.

Latest CPF policy changes

The CPF announced changes in December 2010, that will also affect Malaysian permanent residents in Singapore, as they also contribute the same 35 percent of total wages to the CPF like Singaporeans.

The Medisave Required Amount will be raised from S$22,500 (RM53,597) to S$27,500 (RM65,507), from Jan 1, 2011.

This is an increase of about 22 percent.

According to the CPF board’s web site, “after adjusting for inflation, the Required Amount (MRA) will increase by S$2,500 (RM5,955, in 2003 dollars) each year until it reaches S$25,000 (RM59,550, in 2003 dollars) on 1 January 2013”.

Since inflation for the year (2010) is only expected to be about three percent, why is the MRA increase about 22 percent?

What this MRA increase means is that for example, if a Malaysian PR CPF account holder has S$150,500 (RM358,502) in his or her CPF Ordinary and Special accounts, but zero in the Medisave account, he or she can only withdraw S$24,600 (RM58,599), 20 percent withdrawal rule from 1 January, 2011 on current minimum sum of S$123,000 (RM292,995), at age 55, regardless of any available property pledge for the minimum sum.

So, Malaysian PRs may like to take into account the above changes in their retirement planning.

Investing: EPF vs CPF

EPF members can invest not more than 20 percent of their credit in excess of Basic Savings in Account 1 in products through approved external fund managers.

In contrast, Singapore’s CPF members can invest the Ordinary Account’s excess of S$20,000 (RM47,641), entirely in a wide range of investments, including higher risk Singapore stocks.

To illustrate the difference with an example:

EPF age 45 of RM100,000 can only invest RM7,200 (20 percent excess of Basic Savings RM64,000)

CPF any age of S$100,000 can invest S$80,000 (excess of S$20,000)

Housing: EPF vs CPF

Only EPF Account 2 can be used to purchase only one house.

The entire CPF Ordinary Account can be used to purchase more than one house.

Since EPF Account 2 is only 30 percent of the total contribution, against 66 percent of total contribution for the CPF Ordinary Account, Singaporeans may generally be able to use a greater portion of their pension fund for housing.

This is the primary reason why many Singaporeans and Malaysian PRs retire with very little CPF, because most of it may have gone to housing, given that Singapore has the highest public housing prices in the world.

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The annual report of Suaram said that despite reforms promised by Prime Minister Najib Razak when he came to power, the ruling coalition “continues to display intolerance towards dissent and free speech”.

The Malaysian government has also been accused of committing rights violations that mark a return to the era of authoritarian former PM Dr Mahathir Mohamed.

In this connection, what is the state of human rights in neighbouring Singapore?

Well, for starters Singapore does not have a national human rights commission, like Malaysia.

To the surprise of civil society in Singapore, Maruah (Singapore Working Group for an Asean Human Rights Mechanism) was gazetted in November as a political association by the republic’s government.

Maruah now has the distinction of being the fourth non-governmental organisation (NGO) in Singapore to be conferred ‘political association’ status.

The other three NGOs previously gazetted are the Singapore Open Centre (spearheaded by former member of parliament JB Jeyaratnam and former secretary-general of the Workers’ Party, and Dr Chee Soon Juan, the current secretary-general of the Singapore Democratic Party), Think Centre and Singaporeans For Democracy (SFD) (headed by former Workers’ Party candidate Dr James Gomez).

It is perhaps noteworthy that both Jeyaratnam and Chee were both made bankrupts due to defamation suits. In the case of Jeyaratnam, it was relating to his remarks during an election rally, and for Chee, it was the remarks in his party’s newsletter.

Jeyaratnam was discharged from bankruptcy after paying his creditors’ debts, and he went on to form a new party, the Reform Party, which is now helmed by his son Kenneth Jeyaratnam as its secretary-general.

His father did not live long enough to fulfil his wish to contest in an election following his bankruptcy discharge.

A political association in Singapore is barred from receiving foreign funding, and not more that S$5,000 (RM11,937) of anonymous donations in a year. Among other requirements, Maruah has also to register its website with the Media Development Authority of Singapore.

Without funding, it may be unlikely that Maruah will be able to repeat some of its activities last year, such as the Burmese film festival, Universal Declaration of Human Rights (UDHR) Day events, many of which were partly funded by the European Union, British Embassy, Canadian International Development Agency (CIDA), among others.

A Malaysiakini in Singapore?

Meanwhile, the Online Citizen is arguably the closest cousin to a Malaysiakini-type online alternative media that is generally respected in Singapore.

It too, I understand, has been under a state of starvation of funds. Its Google Ads were suspended because someone kept clicking on the advertisements, which is a violation of Google’s advertisement rules.

Its founder and chief editor Andrew Loh worked for four years on a full-time basis without any pay.

The Online Citizen has, and continues to be, run entirely by volunteers.

But  without money, how can it ever become another Malaysiakini?

Unlike Malaysia, Singapore is one of the two Asean countries which have signed the least number of the nine major core United Nations Human Rights International Conventions. The other is Burma. Malaysia has signed five.

Unlike Malaysia, the only place where Singaporeans can protest is at the Speakers’ Corner in Hong Lim Park. There are five CCTV cameras there, which may discourage people from organising protests and making speeches.

Currently, only two out of 84 members of parliament in Singapore are elected opposition members.

The law has been amended, such that in the up-coming elections, up to nine will be nominated members of parliament (NMP) and up to another nine non-constituency members of parliament (NCMP). NCMPs are opposition candidates who lose, but garner the highest votes.

Both Malaysia and Singapore continue to have their respective Internal Security Act, which provides for detention without trial.

So, Singapore may have some way to go before its civil and political rights can play “catch-up” to Malaysia’s.

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