## Dipped into past reserves only once? 1.9% real NIR?

I refer to the article “Reserves: ‘No’ to dipping into coffers” (Straits Times, Apr 19).

Dipped into the past reserves only once?

It states that “The Government has dipped into the past reserves only once. In 2009, it obtained the President’s approval to draw down \$4.9 billion from past reserves to fund special schemes in the light of Singapore’s worse recession since independence. In 2011, it put back all the money – \$4 billion – it used into the reserves.”

Used more than 27 times, but nobody knows?

Contrary to the above, “President Nathan revealed recently (August, 2011) that the past reserves have been used more than 27 times since 2002, for projects like land reclamation and the Selective En-bloc Redevelopment Scheme (Sers)”. (“President guards Reserves: Really?“, Aug 24, 2011; “How much of the Reserves has been really used?“, Aug 10, 2011)

Alas – a clue?

The amount of our reserves has never been revealed. But we may now have a clue, because of the remarks – “Under the NIR (Net Investment Returns), the Government can draw up to 50 per cent of the long-term expected real rate of return on the reserves invested as well as dividends.

For instance, if the reserves generate a “reasonable” 4 per cent in returns, the Government can take up to 2 per cent of these returns”.

NIRC \$7.7b?

As I understand that the historical long-term rate of inflation is about 2 per cent, and the NIRC (Net Investment Returns Contribution) was \$7.7 billion for the last year (estimated FY2013), it means that the real NIR was \$15.4 billion (\$7.7 billion times 2).

Nominal NIR \$23.1b?

So, if \$15.4 billion is 4 per cent, does it mean that the nominal return (plus 2 per cent inflation) is about \$23.1 billion.

Only \$385b reserves?

This works out to a total reserves of about \$385 billion (\$23.1 billion divided by 6 per cent).

Temasek & OFR already over \$503b?

Surely our reserves can’t be so little as the combined assets of Temasek and the Official Foreign Reserves,  which  is public information, is already over \$500 billion (\$503 billion as at 31 March, 2012).

GIC is secret?

It is only the GIC’s amount which is not public information.

Estimated \$800b reserves?

Even the last estimated total reserves as reported in the Straits Times was \$800 billion.

1.9% real NIR?

Using this \$800 billion estimate, it seems that the “long-term expected real rate of return on the reserves invested as well as dividends”, used to calculate the NIR may only be about 1.9 per cent (NIR \$15.4 billion divided by \$800 billion).

Isn’t this a very low rate of return?T

Temasek 17%, GIC 6.8% returns?

In this connection, Temasek has reported 17 per cent average annualised (Total Shareholder Return (TSR) since inception, and GIC has reported 20-year annualised nominal returns in USD terms of 6.8 per cent

“Mystery” of the reserves?

So, perhaps the figures seem to be best described as – “do not compute”?

To solve the “mystery of the reserves”, we really need to know what is the “long-term expected real rate of return on the reserves invested as well as dividends”, used to calculate the NIR.

Like a “Sherlock Holmes” mystery – there are clues, but the case remains unsolved, until such time that we have transparency on the reserves!

Leong Sze Hian

## Budget surplus: \$3.9b or \$36b?

According to the Singapore government’s latest budget statement (http://www.singaporebudget.gov.sg/budget_2013/revenue_expenditure/index.html), the government’s budget surplus was SGD 3.86 bn (SGD 3.61 bn before Net Investment Return Contribution (NIRC) and top ups to endowment and trust funds) for 2012. However, according to the “Monthly Digest of Statistics Singapore” (http://www.singstat.gov.sg/publications/publications_and_papers/reference/monthly_digest/mdsfeb13.pdf) published by the Department of Statistics (DOS), the same is reported as SGD 36.26 bn (Table 14.1 on page 77 in the section on Public Finance). This would represent almost 12% of GDP.

Difference between DOS Monthly Digest of Statistics & Budget?

The footnote below the table seems to indicate that the difference arises because the SGD 36 bn budget surplus is based on International Monetary Fund (IMF) standards whose definition of “revenues and receipts” is broader than that used in the Singapore budget. The wording of the explanation in the document is as follows:  “Note : Presentation format of the table follows that of the National Summary Data Page (NSDP) for Singapore, which disseminates the data prescribed by the International Monetary Fund’s Special Data Dissemination Standards (SDDS). Data in the table represent a broader definition of Government revenues and receipts than the fiscal position presented during each year’s Budget under Singapore’s Constitution as it includes the revenues and receipts accruing to both the Government’s current and past reserves.”

IMF Standards?

The next two notes under the table:-

Accrues to both current and past reserves and does not reflect budget fiscal position of the current term of government.

Includes land sales and capital receipts (which accrue primarily to past reserves) in additional to taxes and other revenues.”

seems to suggest that the IMF standards include revenues from land sales and capital receipts (which accrue primarily to past reserves). Our understanding is that the Singapore budget does not include revenues from land sales while return on reserves is only to the extent of NIRC (see http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid=%7B965551822-9862-9257013200%7D).

Large difference in Revenue?

So, when you compare the budget figures as presented in the Monthly Digest with that presented in the budget (http://www.singaporebudget.gov.sg/budget_2013/revenue_expenditure/index.html), you see this difference in the revenue line (around SGD 82 bn as per IMF standard versus SGD 55 bn in the budget statement). Table 14.3 (page 78) of the Monthly Digest shows that the “operating revenue” of the government is almost the same as the total revenue shown by the government in the budget document. Table 1 shows the differences.

Table 1: Comparison of revenue, expenditure and surplus numbers presented under the budget and DOS documents

 Reported under SGD bn Singapore budget IMF standards Operating revenue 55.18 54.28 Land sales / return from reserves Not included 27.97 Total revenue reported 55.18 82.25 Operating expenditure (4) 37.21 34.81 Development expenditure 12.90 12.46 Others (1) 0 1.86 Total expenditiure 50.11 49.13 Lending minus repayments (2) Not included -3.14 Special transfers excluding top ups 1.47 Not reported (3) Reported budget surplus 3.60 36.26 Notes: 1. Others included in IMF standards to account for difference between reported expenditure in Table 14.1 and reported operating and development expenditure in Tables 14.4 and 14.5 2. Not explained as to what this is in the IMF standards reporting. This increases the budget surplus due to it being negative 3. Assume this does not need to be netted off under IMF standard 4. IMF Standards represent a narrower definition of Government expenditure (such as some transfers to endowment funds) in the Budget Sources: Singapore Budget, DOS Monthly Statistical Digest

Higher surplus in every year

Comparing the budget surpluses reported under IMF standards for past years (http://www.singstat.gov.sg/publications/publications_and_papers/reference/yearbook_2012/yos2012.pdf) with the government’s figures reported in the budget documents, one would find that the surplus reported under the IMF standard in the statistical yearbook is much higher in every year for which data is available (Table 2)

Table 2: Comparison of surplus/deficit numbers presented under the budget and statistical documents for past years

 SGD bn Singapore budget (1) Under IMF standard (2) Difference (2)-(1) 2005 1.49 18.02 16.53 2006 -0.06 18.34 18.40 2007 7.66 35.08 27.42 2008 0.24 21.79 21.55 2009 -0.82 2.91 3.72 2010 0.98 28.25 27.27 2011 4.00 26.62 22.62 2012 3.86 36.27 32.41 Sources: Singapore budget documents, DOS Statistical year book

Table 2 shows that if you include land sales and return on reserves, the government actually made a surplus of SGD 187 bn cumulatively during the eight years 2005-2012 compared to SGD 17.35 bn reported in the budget document.

Conclusions (and questions)?

1.       The Singapore government’s fiscal position as reported in the government’s statistical bulletin which are prepared under IMF guidelines is significantly stronger than that reported in the budget statement. Interestingly, while the statistical bulletin carries a foot note that the revenue numbers are different from those reported in the budget, the budget report does not seem to have a similar note that the revenues presented there are a “narrower” definition and that it excludes capital receipts.

2.       Comparing with other countries?

Why is the surplus/deficit reported in the budget statement the official number that makes the headlines? One would assume that the IMF prescribed method to present the deficit/surplus would be a more representative and comparable number for countries globally. As an example, if you look at Hong Kong’s budget statement for year ending March 2012 (http://www.try.gov.hk/internet/pde_ca12.pdf), you see that the revenue and surplus (page 7 of the report) include capital receipts (page 13) and is consistent with the headline numbers reported (e.g. http://www.rttnews.com/1871769/hong-kong-2011-12-budget-surplus-exceeds-estimate.aspx, among others). Hence it appears that the reported budget number of Singapore only shows a part of the surplus – it seems to include operating revenue, operating expenses and development expenses (which are probably capital in nature) but not capital receipts.

3.       7th highest budget surplus in the world?

If we take Singapore’s 2011 budget surplus of around SGD 26 bn or around USD 20 bn (including capital receipts),  Singapore would have had the seventh highest budget surplus in the world, according to Wikipedia data (http://en.wikipedia.org/wiki/List_of_government_budgets_by_country). It would have been ahead of even the oil rich United Arab Emirates, which reported a surplus of USD 17.9 bn and just behind gas rich Qatar (USD 23.1 bn). Note that even based on the government’s reported surplus, Singapore is a respectable seventeenth on this list. This picture of fiscal strength is not consistent with what the government has said recently. For example, the population white paper says “For society as a whole, a declining old-age support ratio would mean rising taxes and a heavier economic load on a smaller base of working-age Singaporeans.” While the statement may be appropriate, does it have significant implications if we are in such a strong fiscal situation? The point on rising taxes has also been used during the debate on the white paper to justify the need to have a large working population.

Ever have substantive debate in Parliament?

It may help if Parliamentarians can propose a debate in Parliament on the budget surplus of SGD 36 bn in 2012 if the IMF standards are used (in the DOS monthly digest), vis-a-vis the SGD3.9 bn in budget document.

This may help to enable Singaporeans to have a clearer picture of our revenues, expenditure and surplus, and the implications for Singaporeans and the future of our country.

Authors’ note: The authors have used the term “IMF standard” to refer to the “International Monetary Fund’s Special Data Dissemination Standards” as mentioned in the DOS statistical report.

By NG (Concern citizen) and Leong Sze Hian

References:

## Lower & middle-income: low taxes, high benefits?

I refer to the article “Progressivity ‘not for its own sake’” (Straits Times, Mar 8).

Tax system helps Singaporeans have better lives?

It states that “The true test of Singapore’s tax system is not how progressive it looks, but how it actually helps Singaporeans have better lives”.

“Taxes” that are Uniquely Singapore?

I think the problem with the debate as to whether lower and middle-income Singaporeans pay relatively less taxes and get more benefits in return, may be that Singapore may arguably be unique in some of the ways in which we define taxes, or rather what are not taxes, and what constitutes benefits, compared to other countries.

CPF tax?

For example, paying just 2.5 per cent interest on the CPF Ordinary Account, may be considered as the mother of all taxes, since historically, some of our CPF funds may have contributed to Temasek’s 17 per cent per annum returns in the last 33 years, and the Government Investment Government’s (GIC) about six per cent per annum returns in US\$ over the last 20 years or so.

Are there any other countries in the world that pay such a low interest on the people’s pension funds?

HDB tax?

Which other countries in the world makes so much money on its public housing by linking ever rising prices to market prices, instead of the costs of building them?

Is this not like another “indirect’ tax on Singaporeans?

Healthcare tax?

With public healthcare spending at about 1.6 per cent of GDP in the previous fiscal year, which is one of the lowest in the world, isn’t the about 60 plus per cent of private healthcare spending against the 30 plus per cent of public healthcare spending, in an environment of relentless rising healthcare costs, like another ‘indirect” tax?

Other advanced countries may appear to have higher taxes, but the “indirect” taxes described above, would be absent or have minimal impact on the cash-flows of its citizens.

Benefits that are Uniquely Singapore?

Much of what we count as benefits may not be so, in other countries.

Healthcare subsidies?

For example, how can our up to 80 per cent healthcare subsidies be a benefit, when the lower-income end up paying our so called “subsidised” healthcare fees that are even higher than Hong Kong and Malaysia’s “unsubsidised” public healthcare fees?

HDB subsidies?

How can HDB housing grants be a benefit, when the prices of HDB flats invariably rise more than the increase in the grants over the years?

Property tax progressivity?

As to “While the Budget announced last month increased the progressivity of the tax system by raising taxes on the wealthy on property”, is it not somewhat contradictory in progressivity, to have raised the property tax of 3-room HDB flats arguably, by as much as 222 per cent. (“HDB rentals up 10%, but property tax up 118%?“, Nov 27)

CPF Medisave top-ups are benefits?

How can CPF Medisave top-ups be counted as a benefit, when most of it may be consumed by rising healthcare costs? In other countries, healthcare affordability may be maintained such that there may be no need for “top-ups”.

Better lives = world’s unhappiest people?

Perhaps a good indicator of “The true test of Singapore’s tax system is not how progressive it looks, but how it actually helps Singaporeans have better lives”, is the article “Singaporeans unhappiest people in the world: poll” (xinmsn News, Dec 20), which said that “So apparently we’re not just “emotionless”, we’re the world’s unhappiest lot as well”.

Raising incomes is best strategy?

With regard to the article “Best aid strategy for middle-income is rising incomes: DPM” (Straits Times, Mar 8), this consistent rhetoric over the years don’t seem to match the statistics that the estimated real median wage growth per annum in the 1990s was about 16 times more than the last 12 years or so. (“Real wage growth p.a. in 1990s was 16 times more than last 12 years?“, Mar 5)

Reduce charges is “benefits”?

As to “would save \$730 from tax rebates and \$530 through special transfers and other changes, such as a reduction in the maid levy”, since the maid levy is like a tax, how can lowering it for certain families be counted as a benefit? Like this, we can keep increasing all kinds of charges and taxes, and then when we reduce them – count them as benefits – benefits may then appear to be rising all the time!

Leong Sze Hian

## What the Budget means for a lower-income Singaporean? (Part 2)

My name is Jane (not my real name). I am a 33 year old Singaporean worker with a basic pay of \$500 a month. With overtime and allowances, I can earn as much as \$1,900 because my normal work hours are 12 hours a day for six days in a week.

How many low-income workers?

I understand that there are about 400,000 local workers who only earn about \$1,200 or less a month.

How many workers earning about \$1,900 or less and are below age 35 are there, like me?

Not old enough to get Workfare?

I don’t qualify for Workfare because I am not 35 years old or older.

Not old enough to get Medisave top-up?

I don’t get the one-time Medisave top-up of \$200 as I am not age 45 or older.

I don’t get the GSTV Medisave Special Payment, as I am not 65 years or older.

Don’t earn enough to pay income tax?

The Income Tax rebate does not apply to me as I don’t earn enough to pay income tax.

My employer tells us that his labour costs will go up, because of the increase in the foreign workers’ levy.

His transport costs may also go up because of the minimum 40 per cent down-payment and reduction of the maximum car loan period to five years.

Because of the lower foreign worker dependency ratio, he may have to pay more than previously, to get more local workers.

From past experience, he thinks that permanent residents (PRs) may be more willing to work for a lower pay, relative to Singaporeans.

100% local workers can be PRs?

So, I guess I may still end up as one of the very few Singaporeans in my company, because 100 per cent of the local workers can be PRs.

With the population white paper saying that there may be as much as 30,000 new PRs granted per year in the future, perhaps this state of affairs may continue.

Wage Credit Scheme means pay increase?

Existing workers like me may not get a pay rise, if my emoloyer has to pay much more to get new workers.

With all the above problems, I think my employer may be hinting to us that there may be no increase in pay again this year.

Inflation may rise?

With all these talk about rising costs, will inflation rise and make my life even harder?

I also had no pay increase last year because my company lost a contract to a competitor company which tendered a lower bid, as i was told that they were paying their workers even lower wages than our company.

Foreign worker’s levy works?

In the past, whenever the foreign workers’ levey was raised, some employers simply managed to get new foreign workers from countries who were willing to accept lower wages. This, in turn, caused Singaporeans’ wages to be depressed too.

As the recent “bus drivers’ strike” incident has shown – the foreign drivers were still about 25 per cent cheaper than Singaporean drivers, even after accounting for their foreign workers’ levy, accomodation and transports costs. (“A statistical analysis of the SMRT strike? – Balancing Growth, Foreigners & Meritocracy“, Dec 4)

So, I doubt as to whether my employer will increase my pay by much, due to the 40 per cent subsidy under the Wage Credit Scheme.

Dependency or target ratio?

I don’t know why they call it a dependency ratio, as I see so many companies treat it like a dependency target, to max out the non-Singaporeans that they can employ. Everywhere, I see jobs like administration, reception, IT, etc, that i believe Singaporeans are willing to work if the pay is decent or they don’t have to work 12-hour days forever like me.

Still need more time to study?

The budget statement said that they still need more time to study what other countries do – allow foreigners only when employers can show that they have tried and are unable to get citizens to work – this problem has been going on for years – so, how much more time do they need to study some more?

How much more revenue?

The budget statement was very detailed about how much it would cost the Government to give out so many benefits to businesses and individuals, but I don’t seem to be able to find any mention as to how much additional and total revenue are estimated to be collected, due to the increase in foreign workers’ levies.

It may be akin to telling you how much we will spend to help you, without telling you how much more money will be made?

So, the budget statement’s rhetoric that it is for a more inclusive society, may mean very little to me, and others like me.

(Note: Jane is a fictional character)

Leong Sze Hian

## What the Budget means for a lower-income Singaporean?

My name is John (not my real name). I am a 33 year old Singaporean worker earning \$750 a month.

Disposable income drop?

Before the budget announcement, my take-home pay, after my 16 per cent employee CPF contribution was \$630.

After the budget’s changes, with the eventual full restoration of my employee CPF contribution rate from 16 to 20 per cent, my take-home pay will be reduced by \$30 to just \$600.

To me, \$30 less a month may make it even much harder for me to make ends meet.

How many low-income workers?

In this connection, according to the article “Leveling the playing field for workers” (Sunday Times, Dec 9) -

“It is no coincidence that most local low-wage workers toil in industries that depend on foreign migrants.

As of earlier this year, there were around 110,000 locals who earned less than \$1,000 a month – excluding employer’s CPF contributions – despite working full-time, though their numbers have dwindled in the past two years. Some, like cleaners, have quietly battled both rising costs of living and falling wages.”

If there are about 110,000 locals working full-time who earn less than \$1,000, how many workers including part-time workers earning about \$750 and are below age 35 are there – who may be adversely affected by the CPF restoration, like me?

Not old enough to get Workfare?

I don’t qualify for Workfare because I am not 35 years old or older.

Not old enough to get Medisave top-up?

I don’t get the one-time Medisave top-up of \$200 as I am not age 45 or older.

I don’t get the GSTV Medisave Special Payment, as I am not 65 years or older.

Don’t earn enough to pay income tax?

The Income Tax rebate does not apply to me as I don’t earn enough to pay income tax.

Wage Credit Scheme means pay increase?

I doubt as to whether my employer will increase my pay by much, due to the 40 per cent subsidy under the Wage Credit Scheme, as I and most of my fellow workers are paid more or less on a hourly basis.

More or less GST Offset?

As to the GSTV Cash Special Payment of \$250, it seems to be in totality even less than the GST Offset package when it was first implemented in 2007. (“GST Offset much lower now for lower-income?“, Dec 31)

Why give less under the GSTV scheme compared to the original GST Offset package, and then give apparently more now under the budget announcement, which in totality may still be less than the original GST Offset package?

Negative real median income growth?

With regard to the real household income per member (including employer CPF contributions) of Singaporean-headed households with at least one employed person, increasing cumulatively by 10.2 per cent or 1.96 per cent per annum from 2007 to 2012, it may be of little meaning to me as my pay has not been catching up with inflation. Also, why is it that the real median income growth (excluding employer CPF contributions) was negative in 2012, 2011, 2009 and 2008, and only 0.5 per cent in 2010?.

As to “In total, over a lifetime, a young low-income couple with two children can expect to receive more than \$600,000 in benefits in real terms (2013 dollars)”, with my low pay, I doubt if I will ever be able to find a spouse.

I understand that in the advanced countries (and I have been told that Singapore is an advanced country), basic social services like healthcare, education, etc, and decent wages that provide a reasonable standard of living, don’t get counted as “\$600,000 in benefits”!

So, the budget statement’s rhetoric that it is for a more inclusive society, may mean very little to me, and others like me.

(Note: John is a fictional character)

Leong Sze Hian

## Budget 2013: Real wages will increase? Disposable income drop for some?

I refer to the Budget 2013 speech.

Employers will share productivity gains?

The core strategy to increase the real wages of lower-income Singaporeans may be fundamentally flawed, because of the assumption that employers will share most of their productivity gains (even if they are achieved) with workers by increasing their wages.

With rising costs from higher foreign worker levies in some sectors and jobs announced in the Budget, rentals, Certificates of Entitlement (COE), etc, will most employers share most of their productivity gains with workers?

How many times and years have we heard the same story in the Budget, that we will do this and do that and productivity will rise, but it never happen?

Increase foreign worker levies?

With regard to the remarks that since 2010, all the increase in foreign worker levies have been channeled back to help employers and workers, why only channel back the increased portion of the levies, why not some of the rest of the levies too?

By the way, how much do we collect in foreign workers’ levies in a year?

Wage Credit Scheme?

As to “The government will provide more help to businesses to enable them to pay their employees more, with a new Wage Credit Scheme (WCS).

The scheme is part of a three-year Transition Support Package to help companies restructure.

The government will co-fund 40 per cent of wage increases for Singaporean employees over the next three years.

This will also apply to wage increases of those earning up to S\$4,000 in gross monthly wage.

The wage credits will automatically be paid out to employers annually.

The scheme will cost the government about S\$3.6 billion over three years.

Mr Tharman said the scheme will serve as an incentive for companies to share their productivity gains with workers” (Channel NewsAsia, Feb 25), if you are say an employer who intends to pay a \$50 increase to your worker, will you increase the quantum just because of the 40 per cent subsidy, or are you likely to just take it as a bonus from the Government?

And what happens after the three years when the subsidy expires?

So, will most employers increase the quantum of their lower-wage workers’ pay much more because of the WCS?

Increase CPF – less disposable income?

The full restoration of the employee CPF contribution rate to 20 per cent for lower-income workers, may mean a lower disposable income for some workers, and make their lives even harder.

The increase in Medisave contribution for the lower-income self-employed (SEPs) may also have the same adverse impact – those earning an annual net trade income (NTI) of >\$6,000 to \$12,000 will be raised to half of the full Medisave contribution rate relevant to their age group. The contribution rate for SEPs earning a NTI of >\$12,000 to \$18,000 will be gradually phased-in until it reaches the full Medisave contribution rate at NTI of \$18,000..

Singaporean workers even less competitive now?

The full restoration of the employer CPF contribution rate to 20 per cent, may also make some lower-income Singaporean workers, even more expensive now to hire relative to some foreign workers.

Huge budget surplus again?

With regard to “Instead of the expected balance of S\$1.3b (0.4% of GDP), “we now expect higher surplus of S\$3.9b (1.1% of GDP),” says Mr Tharman” and an estimated overall budget surplus of 2.4 billion for the next year, why is there a need to raise taxes, like property and vehicle taxes?

This seems to be the same repeat story that budget surpluses invariably always end up to be much higher than estimates, such that we have huge surpluses in about nine out of every 10 years.

If we count the \$5.6 billion top-ups to endowment funds, which other countries would not count as expenditure, then the surplus may be even higher at \$8 billion.

More progressive tax structure?

With such huge surpluses, a more progressive tax structure need not necessarily mean higher taxes for the higher income or those who stay in higher value homes, as it can also be maintaining the status quo for them, whilst reducing for the less well off.

Also, as the annual value of properties rise in the future, even the middle class may end up paying more taxes in the future.

In respect of the \$600,000 lifetime benefits in real terms that a lower-income family with two children gets, can we be given the breakdown?

Leong Sze Hian

## Budget 2013: Statistics vs Rhetorical outcomes?

I refer to the article “Budget 2013 will be out on Feb 25” (Straits Times, Jan 12).

Key focus on productivity again?

It states thatAmong other things, a key focus of the budget will be on improving productivity levels to help businesses hit by the manpower crunch.”

Same old strategies?

We seem to be hearing more or less, the same strategies and similar policies in the recent years. Let’s look at the statistics of the desired outcomes that we were supposed to have achieved.

So, have all the measures, initiatives, schemes and money poured into improving productivity in recent years worked?

Productivity measures are not working?

With productivity growth failing miserably at 0.2, – 7.3, – 3.6, 11.1 and 1.0, from 2007 to 2011, why have we been continuing to repeat the consistent rhetoric that the lower-income’s wages can only go up with productivity growth?

According to the article “Singapore’s productivity rates in 2012 not very positive: Tan Chuan-Jin” (Channel NewsAsia, Sep 11), productivity for the last year may continue to be poor.

Help elderly in healthcare?

With regard to “It will also take in to account concerns voiced in the ongoing Singapore Conversation, including the cost of living as well as health care for the elderly”, instead of increasing Medishield deductibles and premiums from 1 March 2013 which affects the lower-income elderly more – if we really want to help “healthcare for the elderly”, 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)

Help with 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 labour tightened?

As to “He, however, hinted that the foreign workers policy will remain. “We can’t take a break from the tightened foreign labour policies”, this “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)

Higher wages?

The article “Singapore’s Budget Day on 25 Feb” (Channel NewsAsia, Jan 12) said that “Restructuring – so that we get to a higher level of productivity and wages. Otherwise, five years from now, we will be listening to the same problems. We will be in the same situation.”

In this regard, 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)

Help for public housing?

In respect of “housing, childcare, and healthcare remain important priorities for the government”, why are we implementing measures that may make it harder for particularly lower-income elderly 3-room HDB flat owners to monetise their “asset enhancement” flat for retirement (“‘Property cooling’ or ‘Political heating’ measures?, Jan 11), make it more difficult to qualify for a second HDB Concessionary loan, increase the rental for HDB rental flats when their household income exceeds \$800 a month, etc? (“PAP Transformation Series – 18 suggestions to reform HDB“, May 23, 2011)

Review backed up by statistics?

In the United Kingdom, the Government recently published a mid-term review which is an assessment of what the Government has achieved so far. (“Coalition midterm review: an unhappy exercise with minimal upside“, The Guardian, Jan 9)

In this connection, perhaps Singapore should also have periodic reviews of what we have achieved versus what we set out to do.

Leong Sze Hian

## GST Offset much lower now for lower-income?

I refer to the report “800,000 HDB households to receive S\$90m worth of U-Save vouchers” (Channel NewsAsia, Dec 31).

\$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 below age 65.

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?

Leong Sze Hian

## SPOR: 259,040 new PRs granted last 5 years, but more than 86,730 gave up?

I refer to the report “Real growth in household incomes over past 5 years despite higher inflation: MOF” (Channel NewsAsia, Dec 26).

Real incomes have risen?

According to the the Ministry of Finance’s second issue of the Singapore Public Sector Outcomes Review (SPOR),  “Real incomes have risen in the past five years, driven by good economic growth and a tight labour market.”

However, the above is based on “Real Median Monthly Household Income per Household Member (including Employer CPF Contributions) among Resident Employed Households (in 2009 dollars)”. What is the outcome, if we use the income excluding Employer CPF Contributions?

## HDB rentals up 10%, but property tax up 118%?

I refer to the report “Property tax rebate for most HDB flat owners” (Channel NewsAsia, Nov 27).

One-off rebate?

It states that “For a majority of other HDB flat types, the property tax bill for 2013 will increase by between S\$40 and \$50, after taking into account a new S\$40 rebate.”

Why increase taxes?

Why do governments increase taxes?