Cut off a few heads

There was an interesting feature in The Sunday Times today about COE prices by ex-ST editor Han Fook Kwang. In essence, he recounted how various changes to Singapore’s car ownership story has caused the explosion in COE prices. The earth should have moved within the G ranks, he said, when COE prices shot up. It didn’t.

Here is his list of how this happened:

In 2003: car loan restrictions which had been in force from 1995 lifted.
In 2002: ARF reduced from 140 per cent of the open market value of a car to 130 per cent, part of a planned reduction in the tax which was brought further down to 100 per cent in 2008.
In 2009: COE numbers reduced to slow down the growth rate of the car population from 3 per cent a year to 1.5 per cent, and to 0.5 per cent this year.

“Should anyone be surprised then that COE prices exploded, hitting the $90,000 mark?
“In its defence, each of these changes could be justified on its own grounds, as indeed they were. But taken together, it was a recipe to break COE price records. It shows how important it is for policymakers to be clear about what they want to achieve and to be wary of unintended consequences.’’

What he wrote sounded a bit like what National Development Minister Khaw Boon Wan said about housing policy during the budget debate. So many tweaks over the years that we’ve lost sight of what is the G’s role in providing public housing – hence high HDB prices.

In 1971: HDB flats can be resold for a profit.
In 1989: HDB flat owners can keep their flat, even when they buy a private property.
In 1993: Buyers can take loans based on the prevailing market value of the flat,instead of HDB’s historical selling prices.
In 2003: HDB flat owners can sublet their flats.

In between, the housing policy is used as a social tool for everything from making sure families stay together, encouraging the formation of families, raising the value of housing assets by subsidising upgrading, catering to the accommodation of foreigners and PRs, ensuring the spread of races…You name it, the housing tool can be used to fix everything so much so that the myriad renovations might well damage the supporting beam structure.

So Mr Khaw as well as other MPs are asking for a back to basics look at housing policy.

The trouble is, the genie is out of the bottle. Going back to basics and first principles mean that some groups which had benefited from the changes which made housing policy so complicated will be affected.

Mr Khaw raised the example of the income ceiling for HDB flats.
Should it be lowered, raised or lifted. Should executive condos continue to be offered? (Now we have to remember that ECs were in response to the housing needs of a sandwiched class who were priced out of both public and private property.)

Another example he gave was whether the HDB should return to pre-2003 days of strict owner-occupation. Then what would happen to the many retirees who rely on income from subletting or the younger homeowners who use it to help support their lifestyle?

A third example: Return to pre-1989 days when HDB flat owners have to sell off their flats when they buy a private residential property. What to say then to Singaporeans who aspire to live in a private condo and use their HDB flat for additional rental income?
Mr Khaw has been fighting fires (his words). He’s delinked BTO flat prices from the resale market to make them more affordable although he very cleverly said that those who want to figure out the discount should do the sums themselves (which property analyst will do this please?)

So housing will now be part of an in-depth conversation within the National Conversation. Mr Khaw’s back to basics re-look should apply to other policies as well. For example, have we lost sight of the G’s role in public transport (why should it subsidise transport operators?) and education (with calls now to nationalise pre-school education)?

In fact, one important facet of this discussion is what we, the citizens, want from the G in these areas. Our record is not good – we want the G to do everything. Every segment of the population wants something different that is in its interest, and policies are tweaked to cater to demand. The result is a many-headed monster of a policy. It is a Hydra that will eat the next generation, not mine or my parents’ – since we probably would have got most of what we wanted over the years.

Maybe, we should just do this: Come to an agreement on the G’s role in each area and state its mission and vision in the provision of housing, transport, education and healthcare, plus the underlying principles that will underpin its operations to fulfil its vision. Then we should look at the monster with a view of cutting off some of its heads and making sure they don’t grow back. It’s easier said than done of course.

But it would be an interesting political and intellectual exercise.

Directions on Day 3

Two weeks ago, I was quizzed by undergraduates doing seminar series on biomedicine about the Government’s handling of the Sars crisis in 2003. Did its efforts go against the need to protect civil liberties? Did it go too far? I replied that civil liberties wasn’t much of an issue with Singaporeans who were facing the prospect of being wiped out by an infectious disease. Sure, there were quarantine orders and penalties for flouting them and plenty of rules and guidelines and tourist “suspects’’ being herded into government chalets, and I added: “You know, I don’t think we really cared.’’

I told the students that in such a crisis, the people expected leadership, strong leadership. We were grateful to be told what to do.
That was my take anyway.

I was reminded of my experience of Sars when Emeritus Senior Minister Goh Chok Tong raised it in Parliament as an occasion when the government and the governed acted as one. Now, we are told that we are facing yet another crisis – a population crisis that could explode our infrastructure and implode our economy. We are looking at the figures and dissecting every paragraph – but you know what? We can’t see the crisis because it isn’t here yet.

(And it doesn’t help to have dark scary scenarios – emptied villages in Japan – painted to help us imagine the crisis. Why couldn’t Lee Yi Shyan put up positive more positive examples of villages which overcame the population dilution? Why has no one brought up examples of Canada’s population White Paper or Japan’s White Paper for reference on how other countries try to solve their demographic problems?)

The debate on the White Paper is an occasion for strong leadership, but it is also a good time for the leaders to get the followers on board because they want to, and not because they have to. It is a unique time for a broad consensus to be forged between the government and the governed – yet it looked to be in danger of being fractured because of the focus on a few things.

When old war horses get up to speak in Parliament, I always find them worth listening to (although some will say that the PAP must be desperate if old warriors had to be brought in from “semi-retirement’’.

A consistent thread in both Mr Goh and Mr Mah Bow Tan speeches seem to be: Let’s not get too fixated by that 6.9 million number and proportions of locals and foreigners. In fact, Mr Goh said he was personally not comfortable with the figure. (His predecessor, by the way, said much the same thing about a lower population number a few years ago)

Mr Goh also said: “What the optimal, stable and long-term population should be is a legitimate question, an important question. What the proportion of citizens and foreigners should be is another important question to resolve.
“But this is not the time for us to resolve this. We should debate this in the future.’’

Now, that is a very useful thing to heed. I mean, what are now discussing? Whether projected population should be 6.9m or 5.9m. Whether productivity can go beyond 2 per cent. Whether 15,000 new citizens every year is ok. Whether we can have a higher TFR. Looks like we are competing in some Mathematics Olympiad….

Mr Goh brought it back to three points:
a. Whether we can agree that we should grow slower economically. And, I suppose, to also realise what slower growth would mean in real terms after the grow at all cost stress in the past.

b. Whether we should have a calibrated slow down in the expansion of foreign workers. Which, I gather, is to see if some sort of middle ground can be found between the screaming employers and the huddled masses and to come to terms on what sort of foreign workers we should bring in.

c. Whether we should be expanding the infrastructure and housing programmes to meet needs. I think this is a no-brainer. Of course we will agree, except that we will also have to think about the loss of green spaces and how this should be financed.

I think the three points is a good way to get our minds off specific numbers. It will lead to an agreement on principles and strategy rather than a quarrel over tactics. (I wonder though why he didn’t raise a fourth: Do we agree that every effort must be made to get Singaporeans to reproduce themselves.)

Mr Mah, on the other hand, injected a dose of realism into the debate. Face it, not many of us like this idea that we are just inputs for a GDP growth figure, but the money must come from somewhere to finance our standard of living.
From three days of debate, it seems that MPs want to see something done now to fix the problems we have now, before the people would put their faith in the G for the future.

You know, maybe the G shouldn’t have released the report and just quietly ramp up the infrastructure…That population target/projection can be classified as an official secret. We go with central planning. No discussion.

I say this in full expectation of being flamed and derided: Let’s not be too hard on the G.

Clarity is King

I wish the media would focus on explaining policy changes first before getting reactions from the usual suspects. I had to read ST, BT and Today to get a grip on the changes to get the elderly to “unlock’’ their housing asset. (Okay, I’m stupid) Times like this I just wish the media would put out two boxes on the Silver Housing Scheme and the Enhanced Lease Buyback scheme. Just tell me :

a. Who’s eligible for which scheme and how many of them are in this potential pool. I got a big picture number from BT on the number of elderly households in four and five-room flats who would be eligible for the Silver Housing Scheme, but not for those living in the smaller flats.

b. Take-up rate: applications and approvals which would give an idea of popularity. I gather the Silver Housing Bonus scheme hasn’t been implemented yet despite being announced in February. That’s nice – G listening to feedback ? In any case, why is this scheme better than selling on the re-sale market and then getting a smaller flat?

c. Pay-outs under the current and new scheme. There were 466 cases of people who sold their leases back to HDB. I wonder what they say now about missing out on the “enhanced’’ scheme…

d. Each box accompanied by a case-study, and in the case of lease buyback – a real case (someone who actually did the act then and what he would get if he waited)

I’ve always wondered about getting reactions from the ordinary folk. Their views are important of course but I would wonder about anyone who can give a considered response after a chat on the phone on the implications and complications of the policy changes. If it were me, I would want to look at my CPF numbers first.

Then there was the page 1 story on an exclusive interview with Health Minister Gan Kim Yong. I suppose because it was an exclusive, it was given more prominent play than the housing policy changes. But then again, it’s rather thin on the details no? So the G is likely to take a bigger share of the patient bill. Welcome news indeed! But what are we talking about here? What is the G share of the patient bill anyway? One example would do. Or are we lumping healthcare spending – operational and capital expenditure as part of the G share? Or just pure subsidies and grants that go into a patient’s hospital? Medishield premiums have already been raised – so I guess the patient share has gone up?

Anyway, it’s coming to the end of the year – and we can wait I guess.

Housing options

We have two suggestions now on how to solve the public housing problem. Or rather, how to make sure the prices aren’t going through the roof so much so that those who really need them can afford them.
1. Han Fook Kwang suggested that the resale market be closed to PRs, who already form 20 per cent of HDB resale transactions. That’s a big enough proportion to affect the prices of flats, he argued. I suppose if this gate is closed, PRs will be moving into private property, and pushing up the prices over in that segment. I suppose that’s okay, since private property isn’t a major segment. Except you know what will happen…people will start grumbling that they are stuck in HDB flats and not given a chance to “upgrade’’ into private property. Everything’s topsy turvy these days. With the supposed squeezed middle class able to afford $1million resale executive condominiums – or are they being bought by PRs?
2. The Singapore Democratic Party suggested having “non-open market’’ HDB flats that start from $70,000 and capped at $240,000. I wish there was more information on this. I don’t read in the ST report about how many or what proportion of flats this should take up and who would qualify for them. Also, whether this is a better proposal than building more rental flats.
I think it’s great that people are coming up with suggestions and I hope policymakers will respond to them – in a measured way. I am kind of glad that this is not election time when the ruling party might feel it has to give a “robust’’ response because it can’t be seen to be upstaged by others. While I am on this issue, I also think that’s why opposition politicians should get involved in the Singapore Conversation. There is no seat to lose, no votes to gain – at least not for a while. This is for the long-term – so can’t we all just get along in the meantime?

Home sweet home

This is not about National Day, despite the headline above. It’s about that physical thing – the brick and mortar place we live in.

A couple of open secrets are now, ahh, out in the open. So a parent complains in the ST Forum pages of the rent-and-register gambit of parents desperate to get their kids into a school. They rent a place near the school and go under the phase that favours children living near by. It’s been happening for some time now. Should we be worried? I suppose one worry is that it favours parents who can afford to do this over those who can’t.

Is it a big problem? Seems to me it can be easily checked out. Like getting the school to not just ask for place of residence, but whether it’s a rental. Then again, sounds a lot like infringement of privacy. No business of the school to ask if I own a home or rent one or merely squatting in one. Another way is to find out what sort of rentals those nearby homes can fetch. I mean, if it’s good, I might be tempted to do the same and rent out my place! Have a very very short term lease, rent it out for a bomb, and later move back into home sweet home. Very entreprenuerial…..

We’ve been closing one eye on this, just like we close one eye on the “lock one room” gambit that HDB flat owners resort to when they want to sub-let their whole place but haven’t met the minimum five-year occupation period. So long as tenants play along, there’s not much the HDB can do even if the locked room hasn’t been unlocked in months. (Unless HDB can demand that it be “un-locked”?)

It’s interesting to read in ST that one man is taking the HDB to court over this, claiming that he wasn’t given a full hearing before he got booted out of his own place. What’s more interesting is whether the court has the power to review decisions by the HDB. Legislation is approved by Parliament and if there’s a problem, the courts can look at the intent of Parliament. At least, that’s my layman’s reading…But there’s a whole tonne of regulations that accompany the law that’s entirely under the Minister’s control and discretion. Ministers have plenty of executive power. People always get surprised when they get fined, penalised etc for some rule being broken. Too often, they forgot to read the fine print. Then they go to their MPs to get their fine waived etc…and they thank the politicians if they manage to do so.  Sometimes I wonder if anyone looks over the regulations before they become regulations. Or do we simply trust that the G and its civil servants will get them right. Still there have been instances when public opinion has played a part. Just ask the poor transport operators….

Anyway, it will be interesting to see whether the courts can weigh in someone else’s behalf and look at whether the process is fair. Or whether the last word belongs to the executive.