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?
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)
In the past, I understand that the labour data did not have two data sets ((including and excluding Employer CPF Contributions). It is only in recent years that we tend to see outcomes given solely on the basis of “including Employer CPF Contributions”.
In the section on “Population Growing at a slower Pace“, I cannot find any mention of the increase in the foreign population, although there is a graph showing the increase for citizens, permanent residents (PRs) and foreigners.
It also said “The number of new citizens and permanent residents each year depends on various factors, including the number of applications and the profile and calibre of applicants. Applicants are assessed on whether they can contribute to and integrate well into our society, as well as their commitment to sinking roots in Singapore”.
259,040 new PRs granted last 5 years?
Although the number of citizens grew by 5.1% from 3.13 million in 2007 to 3.29 million in 2012, how much of this growth was due to the 92,310 new citizenships granted during this period?
Foreign population grew 47.5%
In contrast, the foreign population grew much more by 47.5% from 1.01 to 1.49 million, and PRs grew by 17.8% from 450.000 to 530,000.
The graph on page 24 of the SPOR report indicates that the total number of PRs granted was 259,040. So, with 259,040 new PRs granted, why did the PRs population only grow by 80,000? Even if we assume that all the 92,310 new citizens were all PRs, which is not possible because some become new citizens without being PRs first, we are still missing 86,730 PRs. Could it be that more than 86,730 PRs gave up their permanent residency? And of course PRs who leave may sell their HDB flats for a profit and withdraw their CPF too.
So, what does this tell you about “Applicants are assessed on whether they can contribute to and integrate well into our society, as well as their commitment to sinking roots in Singapore”?
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 are we still repeating the consistent rhetoric that the lower-income’s wages can only go up with productivity growth?
Can replace 70% of income when retire?
As to “An MOM-commissioned study confirmed that for those who work consistently, the CPF system will provide adequately for retirement, provided they choose their housing prudently and use their CPF savings wisely. Among entrants to the workforce today, the median male earner should be able to replace 70% of his wages when he retires”, from the graph in the study, it appears that real earnings start to decline from around age 38, for males at the 50th percentile for earnings.
So, my understanding is that at age 55, which is the age used to compute the Income Replacement Ratio (IRR), the real earnings would be about the same as that at around age 33.
So, does this mean that we are assuming that one would be earning at age 55, the real earnings equivalent of what one earned at around 33? Had the study not used age 55 earnings for the retirement age of 65, the drop in real earnings growth may continue to age 65. (“Retirement study: High IRR?, Nov 15)
With regard to “On average, Medisave and MediShield cover more than 90% of a subsidised hospital bill”, with the increase in MediShield deductibles and premiums from 1 March, will the out-of-pocket cash medical expenses of Singaporeans go up? (“MediShield: Deductibles increased by 5 times historically for elderly?“, Nov 12)
In respect of “One-off Medisave top-up to help with MediShield premiums”, we have been calling for top-ups to go directly to paying premiums, as much of it may be consumed by medical expenses leaving patients without any funds to pay for premiums.
As to “In 2011, the Debt Servicing Ratio for first-timers buying new flats was 24%. These are well within the international benchmark of 30% to 35% for affordable expenditure on housing.The Debt Servicing Ratio refers to the proportion of the monthly household income set aside for housing instalments and is calculated based on a 30-year HDB concessionary loan, factoring in the various housing grants. Data is for non-mature estates which form the majority of HDB’s new flat supply”, using such a measure of affordability based on buyers’ incomes may be quite meaningless because only those who can afford would buy.
A more appropriate benchmark may be the rise in HDB prices versus incomes. (“HDB flats seem to be priced many times my annual income. How can I afford one?, Oct 1)
I would also like to point out that “the international benchmark of 30% to 35% for affordable expenditure on housing” does not just refer to mortage payments, but also include other expenditure related to housing like property tax, maintenance charges, etc.
Also, why not also give the affordability data for mature estates and resale flats, in order to give a more complete picture of public housing affordability?
Recidivism rate still high?
With regard to “In 2011, recidivism rates for ex-offenders and juveniles improved to 26.7% and 16.6% respectively after creeping upwards in the last few years. With repeat offenders forming the majority of the prison population, more effort will be required to break the cycle of crime. Several initiatives have been put in place, including the Community Befriending Project, a government grassroots initiative, and the Community Outreach Project where community groups render support and assistance to ex-inmates and their families”, the fact is that the recidivism rate for ex-offenders has increased from 24.2 in 2007 to 26.7 in 2011.
Perhaps an encouraging statistic that we need is how many ex-offenders are being employed by the public sector?
More drug abusers
I also find it alarming that “The number of drug abusers arrested has increased by about 50% in five years, from 2,211 in 2007 to 3,326 in 2011. In particular, new youth abusers below the age of 20 have increased from 155 in 2010 to 228 in 2011”.
Crime rate fell, but still a lot of loan sharking?
Although “The overall crime rate per 100,000 population fell from 653 cases in 2010 to 608 cases in 2011, the lowest level in 20 years”, we should also be concerned about the large number of loan sharking cases. (“Singaporeans mired in debt? – 65,804 loan sharking cases last 4.5 years”, Dec 23)
Budget surpluses contiue to rise?
Since the “Average Overall Budget Balance* over the Business Cycle as a Percentage of GDP” continues to grow from 0.41 in FY2007 to 0.68 in FY 2011, why is there a need for the relentless rise in the prices of public charges, goods and services? (“HDB rentals up 10%, but property tax up 118%?”, Nov 27)
Leong Sze Hian