berthahenson

The G spot – on PIC

In Money, News Reports on March 3, 2015 at 4:49 am

Some people want it to be permanent. Some want it tracked more closely to prevent abuse. Some people think it hasn’t achieved its aim at all. I’m talking about PIC or the Productivity and Innovation Credit introduced in 2011. Actually, it looks like a windfall for companies which want to restructure or innovate.

Who doesn’t want a 400% tax deduction or 60% cash payment on up to $400,000 expenditure per year? All you need is to spend some money on IT and automation equipment, employee training, intellectual property, R&D, and design projects. In fact, a whole consulting business sprouted up advising businesses on how to make PIC claims.

Then, in 2013, the G boosted PIC by raising the expenditure limit to $600,000. It also announced the PIC Bonus scheme gave businesses a dollar-for-dollar matching cash bonus for year of assesment 2013 to 2015, subject to an overall cap of $15,000. The G announced in Budget 2015 that PIC Bonus is no more.

So how much has been claimed by businesses? One figure reported was $1.8b as of August last year. Last year, 54,000 companies made PIC claims. Construction businesses were big claimants, but the sector achieved productivity improvements of only 0.8 per cent annually from 2009 to 2013.

If PIC is intended to spur productivity, it doesn’t seem to have worked. Labour productivity, which measures the amount that each worker produces, grew by 11.6% in 2010. Then it started falling: by 2.2% in 2011, then by 1.4% in 2012 and fell a further 0.2% in 2013. Last year, labour productivity rose by 0.8% in the first quarter, and then fell by 1.4% and 0.8% in the next two quarters. (Of course, the flip side is that the figures might have been worse without PIC)

One academic who looked at data from the Inland Revenue Authority of Singapore (Iras), which administers PIC, thinks that only about 3 per cent of PIC claims are related to innovation, such as licensing and registration of intellectual property rights, and investments in design or R&D.

So what have businesses been doing with the money? Buying handphones for all its employees? Buying machines which don’t seem either to have cut labour numbers or at least make them more productive? I can foresee the G saying that no one can draw a straight line between PIC and productivity and there are many other support structures that would have a role. Even people agree, that is not a reason not to give a sectoral breakdown of PIC claimants.

The tax claims or rather, the cash payouts, make it a magnet for abuse. Three companies have been hauled up to court for  making fraudulent claims. Anecdotal evidence seems to suggest that abuse is rather more widespread than that.

Here’s another point from a poster regarding PIC eligibility rules, which say employers have to declare that they have at least three Singaporean employees:   Most have conveniently picked their relatives, neighbours, Tom Dick and Harry. But, there is no corresponding productivity increase ! Can MOF publish how many companies who used the PIC are actually profitable and productivity has gone up ?

While the PIC Bonus scheme has ended, PIC will go on till 2018. Clearly, people expect a more robust monitoring of PIC.

Here’s what another poster said about productivity. I think he makes eminent sense which is why I am producing it in full. I hope an MP takes up the point although I wonder how the G can coerce companies into sharing productivity gains. Isn’t this something for the National Wages Council and the NTUC?

One reason why productivity is not gaining speed is the overtime pay structure of low wage/ workers. As productivity is at the expense of overtime, low wage workers will not embrace productivity as it will mean substantial cut in their monthly take home salaries. Unless we make changes to the labor law to revamp the overtime pay structure, workers who are entitled to over time pay will have no incentives to improve their productivity. 

So my question to the G: how can we strike a balance between over time pay and productivity at the same time if the workers are not rewarded for productivity? Workers’ goals are short term, they will not look at the long term competitiveness of companies for achieving better productivity. Workers care more about their takehome salaries with overtime allowances to ensure that they have enough cash to pay their bills. Not many companies would share their productivity gains with their workers as the companies need to invest in capital expenditure to buy more machines and the companies need the productivity savings to justify the return of investment.

Finally, to all MPs, here’s to a fruitful debate in Parliament!

The G spot – on town councils

In News Reports, Politics on March 3, 2015 at 1:37 am

So we were treated to a spectacle in Parliament recently with the Workers’ Party having to defend its management of the Aljunied-Hougang-Punggol East town council in the wake of the Auditor-General’s findings. The WP is being cajoled into pursuing its own investigation into the supposed shenanigans of its managing agent. The G has warned darkly about criminal charges.

A repeat performance can be expected when the MND’s budget comes up for debate with more details on a review of the Town Council Act. Perhaps, all will be unveiled to tighten the practices of town councils to subject them to more regulatory oversight. Among the expected rules : town councils won’t be able to decline submitting reports to MND, such as on its service and conservancy charges arrears. But whether WP committed a big or small foul, criminal or civil, some people want to know if the infrastructure in place for a changeover of town council operations is robust enough.

What a poster said: Can we confirm that citizen’s monies are not wasted in having to come up with a completely different accounting system that has to be set up from scratch when GRCs change hands, and the old system abandoned? Can we assure that no such wastage occurs in future, including man hours spent in parliament debating such wu-liao things that should not have happened in the first place if system was not changed?

There’s some sympathy for the WP which singled out the difficulty in getting a new software/computer system set up to reconcile S&C accounts after it pulled Aljunied and Punggol East under its fold. The withdrawal of the PAP’s AIM company left a gap. Software glitches, manual counting led to mistakes in its arrears reports, so WP said.

Netizens have a point about the transfer process. What sort of time frame is adequate for handover processes that involve thousands of dollars? What if the current managing agent pulls out or terminates its contracts? Was the Town Council Act conceived without safeguards for a handover in the expectation that town councils will not change hands? What is the role of the G (as opposed to a PAP-controlled G) in ensuring that voters’ choice is respected and their interests – despite their political inclinations – safeguarded?

Another poster said: Should all Town Councils be de-politicised and centrally administered so that there will be minimal or no handover/ mis-management issues? The welfare of residents must always come before politics.

Some have called for a return to the HDB days when it managed estates. But it seems too late to roll back time. Imagine the politicians having the ground cut out from under their feet literally. Town council management was supposed to display their ability to run the small stuff. If you can’t manage an estate, can you manage the country? Such management was supposed to keep them close to the ground, instead of merely seeing their duty as talking shop in Parliament. But is there a level playing field or are there obstacles, wittingly or unwittingly, put in the way when a new group takes over?

It is my fervent wish that should there be a review of the Act, it would be submitted to a parliamentary select committee to gather more views.

The roles and responsibilities of MPs in town councils brings forth another point on their relationship with the grassroots groups.

The same poster asked: On a related matter – there are many posters, placards etc in my estate from the Town Council / Residents Committee featuring the picture of our elected representatives – who pays for these materials? And if it is the “town council” is it an appropriate use of S&C funds. If it is the PA, is it an appropriate use of non-partisan funding?

It is an old issue raised even in pre-Town Council days. The alphabet soup of grassroots groups run by the People’s Action Party in constituencies are G institutions. The G is the PAP. Hence, the PAP is in charge of grassroots groups. That’s how the logic goes for the opposition politicians and their fans.

Personally, I don’t think the groups painstakingly built up by the G should be handed over simply. The deal was the town council changes, not the constituency groups. My problem is whether the authority of the grassroots groups are on a par or even over-rides that of the elected MPs. It is something the WP tried to raise in court in the saga over whether its trade fair was held legally. It had, among other things, chafed about having to gain the support of the Citizens’ Consultative Committee, the key grassroot group in the constituency.

So here is my own question:  Please explain the role, responsibilities and powers of the appointed members of the Citizens’ Consultative Committees and how they compare to those of the elected members of the constituency they serve in.

The G spot – on education

In News Reports, Politics on March 2, 2015 at 12:26 pm

I like reading G replies to MPs’ questions. Sometimes, the questions are asked orally and since the G gets up to answer and take followup questions, the answers get air-time or print space. But there are also questions which ask for written replies, and unless there is a big news point, it usually gets ignored by the media.

I have been trolling/trawling through the MOE website to take a look at some past questions and answers because I have asked those who follow me on Facebook to send me questions they have for the debate during the Committee of Supply. This is the time when the G talks about its work for the coming financial year and take questions from MPs. It takes the form of a “cut’’ in the budget. MPs say they want X ministry’s budget “cut” by $10 or $100 and then asks questions. Okay, there has never been a real “cut’’ in recent memory; it’s more like a formal excuse to raise questions.

Anyway, I was looking what has been said about foreign students in Singapore schools, including the tertiary students.

This is the question I posed which got the most number of Likes:

There is a concern that the G is subsiding the education of foreigners with more and more scholarships. Can the G give the breakdown of how much has gone to who in recent years and what sort of benefits we, the nation, has reaped from the scheme. Besides goodwill, that is.

Now, it seems they’ve been asked a number of times, especially by Hougang MP Png Eng Huat and NCMP Yee Jenn Jong, both of the Workers’ Party.

In fact, Mr Png asked more or less the same question twice, in 2013 and in January this  year on the spread of foreign students here.

The answer in May 2013: The vast majority of university places have gone to Singaporeans. In AY2012, Singaporean students comprised 79%, while International Students and Permanent Residents comprised 16% and 5% of the universities’ intake respectively

The answer in Jan 2015: At the tertiary level, in each year, IS make up around 1% of the Institute of Technical Education’s (ITE) intake, around 10% of the Polytechnics’ intake, and around 15% of the Autonomous Universities’ (AUs) intake. PRs make up another 3-5% of the cohort.

As for the mainstream schools which Mr Png also asked for, these are the figures: Out of the total enrolment in our national schools (Primary Schools, Secondary Schools and Junior Colleges), around 9% are PRs and another 5% are IS

So the numbers been pretty consistent at least at the tertiary level, with the proportions the biggest in the Computing, Science and Engineering departments.  With the expansion of university places and a decision to cap the foreign intake at 2011 level,  the proportions are likely to fall.

The question of foreigners in the education system is a perennial one, even though places for Singaporeans have been increased. The replies by MOE revolve on the need to add “vibrancy’’ and “diversity’’ to the system and I believe every parent with school-going children know what sort of competition their foreign peers pose.

The other big question is not so much the number of places the foreign students take up but the amount of subsidy given to these students which could have been diverted to locals.

Here’s where there is this thing known as the tuition grant, which is a subsidy that tertiary students get so that they don’t pay the full price of study.

In January, the G told Mr Png:  The number of international students who receive tuition grant in each of the matriculation cohorts has decreased over the last few years from 2010. Currently, international students who receive tuition grant in each matriculation cohort comprise about 6% or 1,700 in the polytechnics, down from 9% in 2010. In the publicly-funded universities, they make up 13% or 2,200, compared to 18% in 2010.

International students in our tertiary institutions pay higher fees than Singaporean students. The tuition grants for international students total about $210 million per year, which is less than 10% of the total annual subsidies to our tertiary institutions.

So there you have it. It’s $210million. Even with the grant, they still pay higher fees than Singaporeans, with IS paying 70 per cent more and PRs paying 25 per cent more.

In return for this subsidy, they are obliged to work  in Singapore for three years unless they got approval to defer service because they want to pursue further studies. Apparently, eight in 10 start work immediately.  Here’s where the numbers get wonky. It seems an average of 250 defer service. So are there bondbreakers? Or not?

Here’s what MOE said: MOE has been enhancing tracking efforts to facilitate more immediate and closer tracking of tuition grant recipients who had not yet started work upon graduation, or who have not sought formal approval for deferment. As the work is in progress, the final figures are not currently available. Action will be taken against those who default on their service obligations by pursuing liquidated damages from these individuals. Where liquidated damages cannot be recovered, their status as bond defaulters will be taken into consideration should they subsequently apply to work or reside in Singapore.

That sounds quite lame. It does make one wonder what sort of tracking device the MOE has given that the tuition grant scheme has been in place for a long time. No figures at all? As for escaping without paying liquidated damages, and the penalty is not being able to work or live here…hmmm…why would they?

Looks a case for ….the Auditor-General?

—————————————————————————————————

Is every school really a good school? It’s been a couple of years now and there’s still some perception problem going on. How do you separate a designer school from a neighbourhood school? I guess the difference will be grades. Parents still look at which schools got the most number of A students no matter how hard schools obey the MOE directive not to disclose too many numbers or rankings.

Thing is, every school being a good school is not about every school having the same (top) grades. It’s about having more good teachers spread around more schools which will try to specialise in certain areas beyond the academic side.

The G said that it employs 30% more teachers than a decade ago, with “academies” set up to share best practices. There’s a STAR or Singapore Teachers’ Academy for the Arts and even PESTA or PE and Sports Teachers’ Academy.  Then there are “niche’’ areas established by schools, such ase Design Thinking, Outdoor Education, Applied Learning and Aesthetics. In 2013, 73% of secondary schools and 66% of primary schools have already established a niche.

But too many people have been asking why the G leaders themselves do not walk the talk, by sending their own children to an “ordinary’’ good school. Is this more a question of letting everyone be happy thinking that their kids are in good school, while they are actually being prepared earlier for a skilled job?

One poster said: “I feel they lose the moral authority when they send their own children to top and foreign schools. If they can make that distinction, then the mantra should be changed to “every school is good, but some are better than others”.

Perhaps it is time for an update and to see if these “niches’’ have done anything to advance a student academically or otherwise. A parent would ask about the use of Design Thinking in their child’s future – and how that would fit into his educational future. As well as whether with better teachers, has Ah Boy’s grades got better?

———————————————————————————————————————————————————————People are still wondering if teachers are really teaching or doing all sorts of other things besides teaching. This is not withstanding the publicity about Allied Educators who are meant to lighten the teacher’s load over the years.

One poster said: “I’ve gathered a lot of feedback from friends in the teaching line that most of their effort is spent on administrative and event management, than actual teaching and curriculum planning for the students. They’ve feedbacked this numerous times to MOE, proposing employment of staff whose job portfolios specialise in this to assist or even take over, so that they’d be able to devote more time and effort to duties with direct relevance to teaching instead. However MOE seems very adverse to this proposal till this day. Am curious to find out their rationale behind this.’’

Now, there are school counsellors as well as another group who specialise in Learning and Behavioural Support, helping teachers manage students with mild special needs such as  dyslexia and attention-deficit/hyper-activity disorder.

The third group supports teachers both within and outside of the classroom, including the conduct of co-curricular activities and remedial classes. In May last year, the G said that since allied educators were introduced in 2009, their numbers have been raised from 600 in 2009 to more than 2,500 today. MOE said it had “largely achieved’’ its staffing targets, with an average of seven such allied educators in each Primary and Secondary school.

Perhaps the question is how it sets the targets in the first place and whether what schools need is really more administrative support, that is, clerks, rather than the fancily named allied educator.

———————————————————————————————————————————————————————-

There is a new term parents have to get used to. It’s the Pupil-Teacher-Ratio.

Nope, it’s not about class size which is something most of us are used to.

One poster said: Please publish statistics for actual class size in actual classroom setting throughout the years. (Don’t just count total number of teachers to total number of students.) My observation: class sizes of 40+ are still a norm.

 The good news is that the ratio of the total pupil enrolment to the total number of teaching staff in schools has been going down over the years, from one teacher to 26 pupils in 2000, to one to 17 for primary schools. In secondary schools, it’s from one to19 in 2000 to one to 14. And that, by the way, is comparable to the OECD average of 15 and 14 for primary and secondary schools respectively.

The bad news is that people still think in terms of class size. It’s no longer the case where students are divided into equal numbers and stuffed into classes with a teacher coming and going for different subjects. MOE said in a letter in July last year that learning support programmes in literacy and mathematical skills at Primary 1 and 2 are conducted in classes of eight to 10 students. “Some schools may also choose to deploy two teachers to a class of 40 students where one teacher guides the class through the curriculum while the other teacher assists specific students who may have greater learning difficulties.’’

Given the tremendous interest in “teacher’’ time and the amount of autonomy schools have, perhaps schools should publish its class size statistics on their websites? Or can the G furnish more detailed figures?

NEXT BATCH: On town councils/HDB/estate planning

Follow

Get every new post delivered to your Inbox.

Join 881 other followers