Town councils’ report: More cash-strapped families in opposition wards?

I refer to the report “Town councils graded on corporate governance in new report card” (Channel NewsAsia, Dec 15).

Only Aljunied-Hougang failed S & CC score?

It states that “Aljunied-Hougang was (also) the only town council to get a red band for its management of residents’ arrears in their Service and Conservancy Charges.

Ms Lim said: “We have actually been issuing notices, even legal notices to our residents (who have been in arrears to facilitate their payment.) At the same time being fairly new to the area, I think it’s also important for us to try to understand our residents’ circumstances. Why is it that some of them have not been making payments promptly. In fact the MPs and town councils have been spending quite a lot of time looking into the reasons.”

Potong Pasir was the only other town council to miss the green band for arrears, scoring an amber.

When contacted, its MP Sitoh Yih Pin said the arrears situation was something the town council inherited from its previous management, and it’s something that has to be dealt with a soft touch as it involves the lives of residents.”

So, does the above mean that families that live in the opposition wards are in greater financial difficulties than the other constituencies?

According to the report, “The Town Council is banded Red for S&CC arrears management. More than 5% of their households had S&CC arrears overdue for 3 months or more. Also, more than 50% of their monthly S&CC collectible is overdue for 3 months or more.”

More compassion or better score?

Or does it mean that the opposition wards may be more compassionate towards families who are unable to pay?

So many cash-strapped families?

As S & CC are generally only around $50 a month, is it not rather alarming that more than 5% of households cannot pay for more than three months?

Why is there such a high percentage of HDB households that may be in financial difficulty?

Financial assistance?

The problem in Singapore is that when families are in financial difficulties, such as losing one’s job, you can seek financial assistance under ComCare, but your S & CC will still accrue.

If you can’t even feed your family, pay your mortgage or utility bill, is it any wonder that your S & CC would be in arrears.

Less cash-strapped families in all other wards?

Actually, a more interesting question may be why is it that all the other constituencies seem to have so much less cash-strapped families?

When you can’t pay … ?

Well, I understand that if you can’t pay your S & CC, the penalty used to be just 50 cents or a dollar or so.

Now, I believe it is 2 per cent per month of the amount owed or a fixed penalty of a few dollars, whichever is the higher.

2 per cent is the highest charge for all financial transactions allowed in Singapore, and only credit cards charge such a high rate.

If you can’t pay your S & CC, you are slapped with penalties. If you still can’t pay, you get a legal letter for which you have to pay the legal cost. As it’s a standard letter for which thousands are sent every month, why charge $20 as the legal fee for such a letter?

If you still can’t pay, you are charged in court, and slapped with a fine.

Well, here’s the paradox – if you can’t pay for your S & CC, how can you afford to pay the fine?

If you can’t pay the fine, you may end up in jail.

By the way, how many people in Singapore have been to jail?

The Town Council Act also empowers the Town Council to sell your HDB flat to recover unpaid S & CC.

Can write-off?

Also, do town councils write-off their S & CC arrears to get a better score?

In this regard, for example, the article “Only a few arrears are written off” (Straits Times, Jun 17, 2010) said “Aljunied’s annual report shows that it wrote off only $40,000 in the last financial year, 0.12 per cent of the $32 million to be collected.”

When I looked at the annual report, the Conservancy and Service Receivables Provision for impairment’s balance at the beginning of the year was $2,237,334.

Less the Provision no longer required of $885,078, the Balance at the end of year is $1,357,093.

Why was the provision for the year only $4,837, which is about 99 per cent less than the previous year’s (2007/2008) $467,922?

What does “Provision no longer required” mean?  That the $885,078 have all been paid up or that this was written off?

Considering all of the above, does the good score for S&CC management still stand?

In the final analysis, are town councils more interested in taking care of residents’ concerns and financial difficulties, or are they more concerned about looking good in the report?

Leong Sze Hian

About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.