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The Budget – and my two cents worth

In Money, News Reports, Politics on February 24, 2015 at 3:51 am

First, an announcement: Sin taxes have NOT been raised. I guess that’s a small reprieve for those who smoke and drink, especially those who are unhappy at not being able to drink in public places after-hours…There’s nothing on property either, so your home is safe…

Okay. That was just an attempt at light-heartedness.

So what is it about the Budget that will make anyone, including me, happy? I am UNhappy that my CPF contribution rate is going up, although the euphemism used is “normalised’’. Having enjoyed a little bit more take-home pay for a few months after turning 50, that little bit is going to go back into CPF. The plus point is that my employer also has to pay its 1 per cent portion. Yes, yes, I know all the big picture arguments about retirement adequacy…Still I was hoping that only the employer contribution rate went up, not mine!

That’s the trouble isn’t it? We’re all looking at what’s in it for us.

Drivers are fuming at the extra duty on petrol, after enjoying lower petrol prices over recent months. Even though the higher duty isn’t going to push pump prices back up to where it was, it just seems like a little windfall has been taken away. Then comes the argument: What is all this about taxing road usage, rather than ownership then? Point to ponder: The G needn’t have upped petrol duties, but upped ERP rates instead – and earn curses everyday from drivers who have to pass through gantries. Petrol duties are….well…subtle.

Actually much of Budget 2015, dubbed the Jubilee Budget even by the PM, was anticipated:

– The CPF review panel and the NTUC recommended the “normalisation’’ of CPF contribution rates for older workers, and so it happened.

– The panel also suggested raising the CPF salary ceiling from $5,000 to $6,000 while  NTUC wanted it in two steps – in $500 increments. The G did it in a single bound.

– The NTUC wanted some kind of training account to encourage workers to upgrade. It happened. The SkillsFuture credit is going to be set up with $500 in the first instance. And those aged 45 and above can get up to 90 per cent of their continuing education courses subsidized. I suppose we’ll hear more about how this “credit’’ will be administered. Maybe a sort of Edusave account for workers?

– Businesses wanted a moratorium on foreign worker levies. It happened. They are “safe’’ for two years although Finance Minister Tharman Shanmugaratnam made it plain this was no rewind, just a pause.

– Businesses wanted more restructuring support, such as the continuation of the Productivity and Innovation Credit scheme and Wage Credit Scheme. They’re still alive, although the co-funding portions have been lowered. Nothing was said about monitoring or tracking the usage of PIC which, I suppose, will be raised by the MPs. Nor was more said about driving up our dismal productivity figures, which I thought would feature majorly…

– The Silver Support scheme announced during the National Day rally was fleshed out, with about $600 going to seniors and up to $750 to the really badly off group every quarter. Now, that’s a windfall. The G seems to be conscious about how people will grumble about eligibility criteria and has decided on a mix of past income, household type, level of support. The Manpower ministry will sort this out. I wonder why. Shouldn’t this come under the Ministry of Social and Family Development?

Now for what’s not anticipated:

At the low end:

Although the CPF review panel had suggested raising the salary ceiling and older worker contribution rates, it didn’t dwell very much on the issue of retirement adequacy. It’s been getting some brickbats for this. After all, there’s no point tweaking the nomenclature surrounding the Minimum Sum if people don’t have a minimum sum to speak of. Now, the G has loaded another 1 to 2 per cent interest for those with low CPF balances. I wonder how this will pan out in concrete terms – how many people will achieve the minimum sum levels when they hit 55?

At the high end:

The higher personal income tax for top earners hadn’t been expected, and seems to be bucking the trend of lower income taxes worldwide. It has always amazed me that so many people here do not pay tax at all. BT says 90 per cent of the people here account for just 20 per cent of direct taxes (GST is an indirect tax). I guess some people will sniff and say that the G “taxes’’ in other ways, through levies and fees ecetera.

With these changes to make the system more progressive, I had expected the term income inequality to be used and references made to the Gini co-efficient. Instead, Mr Tharman took a big sweep of history talking about the rise in median incomes since 1965 and how they compare with other countries. Conclusion: We’re better-off. The “median Singaporean worker’s wage” (Mr Tharman didn’t say how much) is now the highest among the Asian newly industrialised economies and just 10 per cent lower than Japan. Over the past decade, “median household income per person” has increased, in real terms, by 36 per cent, he said.

I am no economist but I gather there is some concern about Temasek Holdings being included into the Net Investment Return framework. In case you don’t know what this means, here’s, hopefully, an accurate idiot-proof version: Currently, when MAS and GIC invests money, there is a return on investment that is projected/calculated. Half of this “projection’’ – whether it comes through or not – can be used by the G. Now, the concern is whether Temasek belongs in the same category as MAS and GIC which both invest conservatively. Temasek is supposed to be more “adventurous’’ – so you can’t be that sure about returns. I guess it’s a way to bolster our revenues and, another guess, to show detractors that Temasek’s money is being put to public use.

As I said, I am no economist but it does look like a lot of long-term thinking went into the budget. Some will say it is the work of civil servants. Even if so, I would think they would need some political direction. I frankly don’t care if it’s an election budget or not – oh, we’re all still getting GST cash rebates – but it does make me ask myself if any other political party will be able to produce a Budget that is so wide-ranging and finely-calibrated.

Anyway, let’s see how the MPs do during the debate on the Finance Minister’s statement. I hope they will cut to the chase and raise pertinent issues rather than merely laud it with nice-sounding adjectives. In other words, I hope to see, in productivity parlance, some “value-added’’.

Relating to the related third parties

In Money, News Reports, Politics on February 14, 2015 at 2:59 am

I wonder what sort of Valentine’s Day Mr Danny Loh and Ms How Weng Fan are having today? It can’t be comfortable for the husband-and-wife team to hear themselves being mentioned so many times in the august chamber of Parliament. What’s worse are all the innuendoes and sometimes blatant charges levelled against them by the People’s Action Party ministers and MPs.

Like,

  1. How they took advantage of their membership in the Workers’ Party and their friendship with its chief to set up a money-spinning commercial vehicle in the form of FM Solution and Services.
  2. How they over-charged the town council for managing fees, by about $1.6million a year.
  3. How, despite their double-hatting, it was not clearly stated in documents for all town councilors to know.
  4. How they were invoicing, approving and signing cheques from the town council to themselves.

The WP, to give its due, tried to defend its agent.

Like,

  1. How the couple stepped in when nobody else wanted the job.
  2. How they went from employees in Hougang town council to setting up a company because the entity made it easier to manage a town council which now had to deal with Aljunied and Punggol East as well.
  3. How the fees were settled via open tender.
  4. How they had no say in other tenders and that it was the WP MPs who co-signed cheques anyway.

Needless to say, the WP’s position cut no ice with the PAP side, who used words such as integrity, honesty, pattern of denial and deflection and even (gulp!) unlawful to describe the WP’s relationship with their managing agent. The WP said it wasn’t as though no one knew of the managing agent’s antecedents. Everything was out in the open (just not in the books…) But the PAP’s reply is that this is not the way things should be done, not by Financial Reporting Standards required by law anyway.

The G ministers keep asking the WP if it would sue the managing agent. The couple, as well as fellow shareholder Yeo Soon Fei must be wondering what their political masters will do now.

If the WP sues, then it would be like caving in to the PAP and turning around to slap a friend who had helped in time of need, as Mr Low Thia Kiang had described them. If it does sue, who knows what else would be unearthed that would do the party more harm than good? The trio might well hit back to protect themselves.

What about that “forensic’’ audit that the PAP side keeps calling for? The Auditor-General Office didn’t do a full audit, but a partial one over a limited period, which was why it could only say that it didn’t have enough information to ascertain if there was any wrong-doing.

One definition forensic audit: An examination and evaluation of a firm’s or individual’s financial information for use as evidence in court. A forensic audit can be conducted in order to prosecute a party for fraud, embezzlement or other financial claims. In addition, an audit may be conducted to determine negligence or even to determine how much spousal or child support an individual will have to pay.

So the PAP is calling on the WP to get someone to comb through its finances and, presumably, make good its boast that no money is missing. It is not unlike the case of the National Kidney Foundation, when auditors KPMG produced a report for the new NKF board which led to the civil suit with the old board and T T Durai. National Development Minister Khaw Boon Wan, who was Health minister at that time, referred to this yesterday, adding: “I’m not sure if this may happen in the case of the town council.’’

Precisely. Why would the WP investigate itself? Or are we talking about the “new’’ town council after the next general election?

Hmmm… what new regulations the G will come up with now that Parliament has unanimously approved a motion for stricter oversight over town councils? Besides having the authority to compel town councils to submit reports, I wonder if it will include giving the G the authority to order a forensic audit (if it already does not have the power).

I hope the media aren’t waiting for the Committee of Supply debate next month to give us the next instalment of the saga. In fact, the people behind FMSS should have been chased down way long ago. What are they up to now? They are no longer managing the town council right?

What saddens me is that this is really a grassroots saga and there seems to be little movement on the grounds of Hougang, Aljunied and Punggol East. One resident asked WP’s Yee Jenn Jong about the report a couple of nights ago “but he didn’t answer and walked away quickly’’, according to Education Minister Heng Swee Keat. (Wow. PAP’s got ears peeled in opposition territory.)

Nobody else deluging the town council with email? Crowding Meet-the-People sessions for an answer? Calling for a meeting with their MPs, just like the Sengkang residents did when they heard that a columbarium was coming up?

Is that why WP MPs could tell the PAP side in Parliament that they were only answerable to residents – because residents couldn’t be bothered? I would be surprised if residents think that all is okay in their town council. At the very least, they should get a full accounting of how the town council intends to pull up its socks. Residents don’t need to be PAP or WP supporters to ask questions of their elected representatives. They would simply be exercising their rights as citizens.

Fire crackers and poppers in Parliament

In News Reports, Politics on February 12, 2015 at 3:40 pm

When I was growing up in a kampong, every household would have a long bamboo pole or galah with a string of gigantic fire crackers which we would let off at midnight on CNY. They would go BANG! BANG! BANG!!!!! BANG!!!!!!!!!

That was the sound that Law Minister K Shanmugam made in Parliament earlier today. Workers Party Low Thia Kiang, on his part, did what the little girl who was me did. He lit a cracker, threw it on the floor and it went POP!

Yep, there were fireworks today in Parliament. Plenty of noise and smoke. But was there light?

I think the G ministers who spoke managed to cut through the Auditor-General’s report on the finances on the Workers’ Party town council to get to some key points. Of course, as politicians, they used some pretty choice words in layman’s language rather than the bean counting bureaucratese of an auditor.

So the WP was incompetent – yes, that can’t be denied. The town council was in a shambles as Mr Shanmugam described it. Even the WP did not deny that it wasn’t up to scratch managing one of Singapore’s biggest town councils. Of course, it was left to the PAP to point out that it had made big promises during the general election, of being able to run an operation as well as any team of People’s Action Party MPs. Those promises have now turned out empty.

The Big Question: Would those who had voted the party believing in its competence ask themselves if they had been deceived? Or would they be willing to give the party a second shot?

Then again, Mr Low’s reasons (or excuses) for the incompetence were beguiling. Nobody, at least no professional body of estate managers, wanted to work for the opposition, he lamented. He cited the times the WP put out tenders but got no bidders. It is an argument which would be met with some nods. Why would a business want to associate itself with an opposition party with one town council when the other side had more business to give? At the back of the minds would be this fear that the all-powerful PAP G would seek some kind of retribution…

You would have expected Mr Low to reject the motion which calls for stiffer penalties in a tighter framework. But he didn’t. He said that the framework review should protect residents’ interests even when town management changes hands from one party to another. Implicit in Mr Low’s statement is that there is deliberate hobbling by the State or previous town council and obstacles put in the way of a smooth handover. “If an opposition aspires to be the next government, perhaps, it may need to build an army of civil servants first. This is a strange political situation for any democracy,” he added.

Mr Shanmugam described the argument as playing the “victim card’’.

The thing is, Singaporeans, by and large, quite like victims. They are small, powerless and easily bullied. Turning victims into villains would take some doing. It would take, errm, falling resale prices, uncleaned corridors and extremely high service and conservancy charges.

The Big Question: Would people want to wait for that to happen or is there enough evidence to show that the WP is capable of digging itself out of the hole it is in? Or would they agree that the WP was unnecessarily hobbled by a thicket of rules and bureaucratic inertia?

Plenty of big figures were bandied around today, of overpayment and cosy relationships between WP partisans who worked in the town council. Mr Shanmugam went to great lengths to show that money “lost’’ isn’t money lost in the normal sense of the word. Here are two ways he cited:

FIRST, the lost money could be found, in the pockets of the managing agent who approved, verified, certified payments – to itself. There were 84 cheques in just the period of audit for FY2012/13, amounting to $6.6million. Yes, there was a counter-signing party, who is Ms Sylvia Lim, chairman of the council. She was aware of the double-hats the managing agent was wearing but did she do more to ensure no conflict of interest? There was no transparency, no clear processes in place, Mr Shanmugam fired. The point, of course, is whether the managing agent was making more money than it should…

Ms Lim acknowledged one case of overcharging for lift service and maintenance and claimed it was not intentional as             the agent had used  the wrong unit multiplier” to compute prices. “There was absolutely no intention on the part of the committee nor the contractor to approve higher payment rates,” she said, adding that some of the money had been clawed back.

Said Ms Lim: “The town council has no issue with disclosing the value of related party transactions. Moving forward, we have suggested that the Ministry make it clear which parties are considered related in the town council context.”

In other words, you never said what was needed to be disclosed. So how would anyone know? Hmm. I wonder how what she said squares with fiduciary duties and compliance with Financial Reporting Standards…

SECOND, the money was lost through “inflation’’ of the managing agent’s fees. The total fees paid by the town council to the managing was nearly $22 million over four years, way more than what other managing agents charged. Tampines town council, for example, paid its agent $16.85 million, for over five (not four) years.

This meant that every residential and commercial unit under the WP’s charge was paying way more than what those in other town councils were. Like, how a shop in Aljunied would be paying $14.92  compared with between $4.80 and $6.65 elsewhere. In July last year, even as noises were made about its finances, this sum was raised to $15.82.

Mr Shanmugam had an interesting way of putting it: “Maybe there was no one taking money, through the backdoor in the dark of the night. Because the money was going out in broad day light, through the front door.’’

I can’t help but think that if a PAP MP had been on the receiving end of the firing squad, there would be plenty of calls for heads to roll. In fact, National Development Minister Khaw Boon Wan talked of how CEOs in Japanese companies would have committed hara kiri. (Methinks he’s put a step wrong.  Surely, he realized that this is not something that should have been said by the Bigger player? )

The pity is that attention would be diverted to his choice of words rather than the painstaking attempt made by Mr Shanmugam to show that there was some deliberate mischief (or pattern of non-disclosure) going on. Like, why should the managing agent set up FM Solutions & Services when they could have been employees of the town council? Why wasn’t it made clear to all town councilors and in documents that the managing agents who doubled as key officers of the town council actually owned the company? Why doesn’t the town council ask the agents to produce bank accounts so that it’s clear what sort of money they had made from the TC? (I wonder if there is any law which can compel the managing agent to disclose its bank accounts. ..)

The Big Question: Mr Shanmugam dropped plenty of ominous words such “unacceptable’’ and “unlawful’’ which seemed to presage some kind of legal action although I’m not sure undertaken by whom? He also kept on about how the town council seemed reluctant to answer questions on the managing agent’s work and finances, and how the AGO was only auditing a segment of the TC’s work and not a “forensic audit’’ of everything. What is this all leading up to?

Obviously, the G and the PAP wants the WP to eat humble pie and prove it is not beyond taking action even against its own partisans. Mr Khaw even asked if it would sue the managing agent for return of money lost. (This was in reference to how the agent was being paid 20 per cent more than the previous managing agent that ran Aljunied)

He added this: “MND is studying what other legal recourse the aggrieved parties may have.” Intriguing. Who are the aggrieved parties? The residents? The G will sue on its behalf? Or will some resident take up the cause?

Then comes the threat: Until the town council “cleans up its mess”, the Government will also withhold from it an annual service and conservancy charges grant of several million that MND gives to every town council. ST reports that for the WP, it amounts to about $7 million each year.

You know what? I keep wondering what the various grassroots bodies in Aljunied, Hougang and Punggol East are up to. Where are the citizens’ consultative committtees? The residents’ committees? The hawker associations? They purport to represent the residents. Why hide behind the G? They can’t be happy about the grants being withheld. Why not come out to attack or defend your elected representatives?

Anyway, the fireworks continue tomorrow. Maybe instead of fire crackers, some dynamite will be exploded…

Tomorrow’s pre-CNY fireworks

In Money, News Reports, Politics on February 11, 2015 at 2:42 am

I wish I could be in Parliament tomorrow to watch the fireworks. So the National Development Minister will be moving a motion to discuss the governance of town councils, in the wake of a pretty damning audit of the Workers’ Party town council’s finances conducted by the Auditor-General’s Office.

I have been wondering why the AGO was taking so long to make its audit public since it got the job from the Finance Minister early last year. Now, I know why. Seems plenty of time, energy and manpower was needed to locate the mountain of documents, match figures and get answers from various parties involved in the management of Aljunied GRC, Hougang and Punggol East. And it seems that that still wasn’t enough…

The motion itself looks pretty innocuous, at least the first part, about upholding standards of governance and the like, and to express “concern’’ over the AGO’s report. The second limb, about getting MPs’ support for stiffer penalties for those in charge, seems to indicate that the G already has some kind of legislation in the works to tighten up the Town Council Act. Which again makes me ask: Whatever happened to the town council review that Senior Minister of State Lee Yi Shyan was supposed to lead?

In any case, the ST reported that the National Development Minister can only intervene in a failing town council “only when a certain threshold is crossed’’. It didn’t say what. But there is this in the Town Council Act on the occasions when the Minister can appoint someone to work in the town council:

(a) that a Town Council has failed to keep or maintain any part of the common property of any residential or commercial property in the housing estates of the Board within the Town in a state of good and serviceable repair or in a proper and clean condition; or

(b) that any duty of a Town Council must be carried out urgently in order to remove any imminent danger to the health or safety of residents of the housing estates of the Board within the Town.

Going by the annual audit reports of town council work, the estate that the WP runs doesn’t seemed to have reached such a state in which rubbish has been piled up storeys high in the chutes or the lifts are death traps…

BT reported that only three offences attract fines under the Town Councils Act: the wilful withholding of information from an auditor, the misuse of council funds and contraventions of the rules of the lift-upgrading programme. The first offence attracts a fine of up to S$1,000; the other two offences have maximum fines of S$5,000. Nothing is said though about being able to compel town councils to submit information. That’s why the WP Town Council was able to keep the data on service and conservancy fee arrears to itself for a couple of years….

The premise, I believe, is that the town councils are supposed to be directly accountable to their residents.

Looks like we have been nurturing a strange animal. Town councils were set up to decentralize management of estates and link the people’s vote to the ability of candidates to run their surrounding environs.

I can’t help but think that the Act was formulated on the basis that the People’s Action Party will always be in power, hence the limited controls over the town council MPs. Or maybe, the legislators then believed that voters would take a more active part in the work of TCs to exercise oversight – remember how there was so much talk about getting residents to sit on committees etc and have town hall meetings? Much like the way private estates are run?

I don’t think this is happening. As an activist grassroots experiment, my guess is that it never took off. Instead, we now see the MPs as people we hired on a four or five year contract which we can renew or terminate. The question now is whether four or five years in between elections is too long (or too short) a time to let town councils decay to the point when it has an impact on residents’ lives – and on their vote.

Evidently, the G and other experts think more oversight is needed. And it would probably be put in the hands of the National Development ministry.

BT reported NUS Business School associate professor Mak Yuen Teen as saying that clearer and stronger penalties for non-compliance is only half the equation; the independence of the enforcement body must be scrutinised too.

He said: “We currently have a convoluted governance arrangement (for) town councils. With MND supervising the town councils, it’s a bit like how people say the SGX (Singapore Exchange) has a conflict of interest in regulating listed companies … If we do strengthen the legislative framework (of the Town Councils Act), the independence of enforcement becomes very important.”

Associate Professor Lan Luh Luh at the National University of Singapore (NUS) Business School and Faculty of Law was also quoted: “I don’t think passing (a more stringent) Act is very difficult – the difficulty is in finding a legitimate, independent body to control the town councils. Which organ should oversee the town council because of its political nature? If it’s any ministry, it would be a bit odd because (these are helmed) by the ruling party. I think that’s the key thing that has to be resolved.”

Yup, the town council is a political animal. The G might swear that it is the G, and not the PAP, and that it has a duty to safeguard the interests of residents regardless of their political inclinations. But you can bet that more G intervention would lead to charges that it was intervening in places where it had no business to be.

In fact, one view could be this: Residents have to live with the consequences of their vote. One day, they will wake up and find their rubbish hasn’t been collected and lifts can’t work because they haven’t been thinking very much over the way their town council is managing their finances. Serve them right! This was a warning in the past remember?

The other view is that the country is too small a place to let things deteriorate to such a stage for even one GRC and two single-seat wards with thousands of households. Just think of the “cleaning up’’ that will have to be done by whoever takes power next. Better to over-protect the residents even if they don’t care.

One issue that deserves focus during tomorrow’s session is the business of double-hatting. A husband-and-wife team seem to have pretty much full rein over the finances because they are both managing agents and office-bearers. Some have pointed out that managing agents in PAP town councils are also office-holders in the councils. But it seems that these people are employees and not owners, as in the case of the WP TC. Nor do these employees have the kind of authority as the duo in terms of authorizing payments – to themselves.

The WP has said it is well aware of the double-hatting and it wasn’t as though something surreptitious was going on. But it does seem to me that some demarcation should be drawn so that all transactions are clearly above-board.

The AGO has not said anything about whether it uncovered dishonesty or criminal behavior (which might lead to CPIB or CAD investigations). In fact, it keeps telling the WP that it can’t tell based on its audit. But the way the WP TC works and its shoddy practices surely invites dishonesty or, at the very least, loss of funds through negligence.

I know nothing about auditing but there is something I really like to know which hasn’t been explained. How in heaven’s name did an operating surplus of $3.3million in 2010 become an operating deficit of $734,000 in two years?

Are these figures correct?

The magic number is 65

In Money, News Reports, Politics on February 6, 2015 at 12:21 am

The problem with trying to please people is that you end up pleasing no one at all. And so the CPF review panel is finding itself in this conundrum almost immediately after its proposed changes were made public. How come?

  1. People had expected some changes to the rate of interest, which is now at 4 per cent for Special Account. Hey, the fund manager, GIC, sometimes makes more than this so how come it’s not higher?
  2. People thought that when there was talk about a lump sum withdrawal, it would be at age 55, not 65. After all, it wasn’t not too long ago that people can withdraw as much as half, instead of the measly $5,000 if you don’t have enough in the Minimum Sum.
  3. People thought that the draw-down age was set at 62, which is the retirement age. Sure, there are the re-hiring laws but it’s no guarantee that you would be re-hired right?
  4. People thought that more will be done for those with low balances but there’s nothing in the proposals about helping those with less than the minimum sum raise the amount. Nothing new at least.
  5. People thought that they could make a property pledge to make up half of the minimum sum. But it seems the property pledge which had people worried about having their homes taken away from them isn’t a big deal at all. It’s unnecessary. That’s good news but sheesh…why even have it in the first place?

Notice I use the word “people’’ – so yes, I’m generalizing here. “People’’ were expecting some massive changes to the CPF system but it looks like tweaks here and there. That’s because “people’’ forgot about the parameters that had been set for the review panel.

To recap: The panel was supposed to see

  1. How the Minimum Sum should be adjusted beyond 2015, in order to meet the objective of delivering a basic monthly retirement payout for life;
    (So it depends on what you mean by “adjust’’. Looks like there is no way the sum can be lowered unless we experience deflation. The panel hence came up with a three-tier Minimum Sum, now to be called Retirement Sum. And a 3 per cent increase – it’s $161,000 now- until 2020)
  2. How to enable CPF members to withdraw more as a lump sum upon retirement, and the circumstances for their doing so, taking into consideration the impact on retirement adequacy for different groups;

(It doesn’t say at what withdrawal age, whether at 55 or 62 or 65. The panel decided on 65 so I think we can presume that the retirement age will go up to that in the near future….Also, we can withdraw 20 per cent of whatever is in our retirement account in 10 years time. If we don’t, we could have bigger monthly payouts.)

So the panel’s proposals revolved on those two parameters. To come are its recommendations to do with:

  1. How to provide an option for members who prefer CPF payouts that are initially lower but rise with time to help with increases in the cost of living; and
  2. How to provide more flexibility for members who wish to

    i. Seek higher returns while balancing the higher investment risks involved, through private investment plans;

    ii. Invest in private annuities when they retire as an alternative to CPF LIFE

I know I sound like the panel’s mouthpiece but seriously, there is little it can do when the parameters set by the Prime Minister are so tight. In fact, that was the grouse when PM Lee Hsien Loong first announced the panel’s formation and its work. It means that we won’t be looking at the CPF system as a whole, such as whether housing is playing too big a role. The CPF system, the G maintains, is fundamentally sound. Providing for housing is good as it is an asset that can be monetized for retirement needs – although it would take quite a mindset change on the part of CPF members for that to happen. With such a narrow focus, the panel would be hard put to assure  ” retirement adequacy’’ for CPF members. For that, you need a jump in CPF contributions in some way, or higher interest rates paid out to Ordinary and Special accounts.

The panel did say something about making the CPF pot bigger, framing them as suggestions that the G might want to take up.

There were two ideas that could fit the “financial adequacy’’ portion.

  1. The proposal to equalize the CPF contributions of those aged between 50 and 55 to the same level as younger workers.

Now, I have to declare my interest in this. I was flummoxed to find that my take home pay had gone up, until I realised that my CPF contribution rate had been lowered, from 37 per cent to 35 per cent. So I’m getting one per cent of my money back to spend and my employer saves on the other one percent. I know employers will grumble about having to pay the extra money if the rate goes up. They will say it will make it less attractive to hire older workers. But with the retirement age at 62, those aged 50 aren’t exactly THAT old. Also, if the rates are equalized, I too will miss that one per cent spending money. I don’t suppose there’s any way to just have the employer’s 1 per cent go into the CPF without touching the worker’s pay? Like I said, I have an interest in this.

2. Raise the salary ceiling for CPF contributions now set at $5,000. The NTUC wants it to go up to $5,500 and later, $6,000. I rather wonder about this because those at the top of the salary ceiling will probably have more than the minimum sum already by the time they hit 55. I guess the idea is to increase the collective pool to raise payouts further. Could some kind of transfer be effected at this stage to help those with low balances?

And there was one idea to ensure more people are covered

  1. Allow spouses to top up or set up CPF LIFE accounts for their non-working partners. The worry is that women outlive men and not all women work. And there may not be any money in the spouse’s account by the time he leaves the world. This will probably be the case if his balances were low in the first place. o while he gets a payout until he dies – which might be even more than he had initially in his account like any annuity– there’s just no money leftover for his dependents.

What, however, to make of the panel’s recommendations? Take your pick.

  1. It is caving in to populist pressure, yet not quite. Those who want all their money at 55 will still be unhappy. There will still be charges of a “nanny state’’ seeking to control the money of its citizens or worse, allegations of some mischief by the G in retaining the CPF money.
  2. It is making the prudent worry that most people will withdraw that 20 per cent, and end up with less money for their old age never mind how carefully the sums are calculated now. Are we able to say” You reap what you sow’’? Or will there be pressure for yet more support structures for them?
  3. It is likely that those who can’t afford it are those who will withdraw the money, leaving them with even smaller payouts – so how is this serving the neediest group? The  answer: plenty of financial counselling – and some as-yet-to-announced incentives.

The thing is, the CPF system has been deemed a sacred cow. It can’t be slaughtered although we can tweak its innards. We’ll have to live it. Going by the systems in other countries, ours doesn’t look bad at all. In fact, I am inclined to leave my money in it because the interest rate is simply un-beatable – and I am not sure I can do better.

The trouble is this magic number: 55. Several cohorts and generations have passed and it’s still age 55 that we cling to. It’s even more deep-rooted than another number, 6.9 million. To accept the CPF system is to accept a new number: 65. Howe Yoon Chong tried and failed some years ago to shift this number; I guess he was way ahead of his time. We have got to start thinking about the meaning of retirement – at a later age. We have to accept that most of us will live way longer than 55, or even 65.

Like previous generations who looked forward to hitting 55, we should think about hitting 65 and then kaboom! Money! Yeah!

Unless future cohorts live to be 100-plus years old. But that’s not our problem….right?

CPF minimum sum – in Small, Medium and Large

In Money, News Reports, Politics, Society on February 4, 2015 at 1:54 pm

I was thinking of doing a listicle, a brainless but, hopefully, funny way of conveying information. Except that the CPF review panel’s recommendations have left me brain-dead and I am not feeling terribly funny. Bear with me please because I think this is too big an issue not to destroy some brain cells over.

Now, the panel wants us to leave this gawdawful term “minimum sum’’ alone for the moment and work backwards. Let’s not think about how much money we have in our CPF when we turn 55, it says, but what we hope we will get when we turn 65, when monthly payments kick in.

Here’s how the panel wants the changes framed:

If you are 55 now, in 10 years, you’ll need about $650 to $700 a month. The panel has factored in inflation AS WELL AS rising standards of living. So it’s not just for bread and water, but kaya and kopi as well.

To get this kind of payout means leaving $80,500 in your CPF. That is, if you own your home. Why? You can rent it out if you need money. If you sell it because you prefer to rent a home, the CPF money you used to pay for it will still go back into your CPF – so it’s back up again. (Forget everything that has been said about being able to pledge your property ecetera. Serious.)

If you do not own property, that $80,500 is doubled to $161,000 (Yup, that’s the minimum sum for those turning 55 next year) It means higher payout which is also to cover for expenses like rent, which a homeowner wouldn’t have to worry about.

If you actually want to put in more money into your CPF, you can. Up to $241,500. Now, why would anyone want to do it? Because, hey, the CPF pays better returns than the banks or even commercial insurance companies. And yes, even higher payout of close to $2,000 a month

So that’s why the panel doesn’t want to use the term “minimum sum’’ anymore but RETIREMENT SUM. Besides sounding like a ransom demand, it now applies to three different S/M/L sizes – Basic, Full and Enhanced.

To recap:

Basic is $80,500

Full is $161,000 (doubled)

Enhanced is $241,500 (tripled)

In case you’ve forgotten everything about what happens at 55…

  1. You can take out everything in excess of Basic if you own your home. If you don’t even have a Basic, you can take out $5,000. Yup, nothing has changed.
  2. What’s new: that Basic sum will increase by 3 per cent a year so that you wouldn’t be so suddenly surprised by an announcement when you’re 54.

But quite a lot can happen in 10 years time when you hit 65.

  1. You can decide to withdraw 20 per cent of the sum you left inside. It’s been accumulating interest after all (and you need to pay for your son’s wedding or your daughter’s overseas education). Remember though that getting a lump sum early means smaller monthly sums later on. So you can expect some incentives from the G to get you to leave your 20 per cent alone. Now, for those with really really low balances, it’s no-go.
  2. You can decide to leave your money in there because you really don’t need it yet. Instead, you can accumulate even more interest and get a bigger pay-out – about 6 to 7 per cent more – later. You can do this at most for five years. (The CPF isn’t supposed to make your fortune but provide for retirement after all.)

Okay, so far, the panel hasn’t said anything about those with not enough to meet even the Basic. First off, they aren’t going to be penalized or have their homes taken away from them. They will still get an income until they die, albeit a smaller sum. Still, what can be done to help them?

There are some things in place already such as an extra 1 per cent interest for those with $60,000 in CPF balances. Plus there is the Work Income Supplement for the lower paid which also goes into their CPF. (I guess we have to see what the Budget will bring but there is a Silver Support in the offing in which the G is expected to give cash/CPF bonuses to older folk)

The good news is that increasingly over the years, more and more people will be able to meet the Basic sum. Right now, 55 per cent of CPF members can. And by 2020, 70 per cent will be able to do so. Hey, that’s what the panel says okay…!

Those are the panel’s key recommendations but it also raised other matters for the G to consider. For example, the panel…

  1. Agreed with the NTUC’s suggestion to bring back up the CPF contribution rates of those aged 50 to 55 who are working. This was cut to encourage employers to employ older workers and it’s working well enough already it seems.
  2. Like the NTUC, it wants the salary ceiling for CPF contribution, which is now $5,000, raised. In two swoops, voila! More CPF money! (Although how employers will react to this I don’t know)
  3. Wants spouses to be allowed to start CPF Life accounts for their non-working partners.

As you can tell, I am not commenting on the changes because I am still trying to wrap my head around them! At first glance, they seem populist, a bid to satisfy as many differing demands as possible (except the Return my CPF at age 55 lobby). Or it can be framed as a matter of choice and giving people a bit more control over their money. The panel prefers to use the word “flexibility’’. Flexibility is so complicated isn’t it? And that’s just Part 1 of the recommendations. Part 2 will be about “flexible’’ payouts.

Don’t forget that there isn’t just one CPF Life plan, but a few…you pick one. I’ll bet anything that most people have forgotten this.

Over-REACHing

In News Reports, Politics, Society on January 31, 2015 at 7:45 am

If the G’s REACH people had rung me to ask about the Liquor Control legislation, I would have answered this way:

  1. No, I do not support the restrictions.
  2. No, the restrictions, if imposed, would not affect my lifestyle.
  3. Then comes the third question: Whether I consider public drunkenness a serious problem that has to be countered. I would have said yes…Because on PRINCIPLE, I would have to agree. But then I would have stopped to ask: You mean public drunkenness here? Now? Is it a serious problem? This country with the lowest alcohol consumption in the world? Seriously?

So we finally get to hear some statistics about public drunkenness – at the second reading of the Bill. Just about the last chance for anyone, or rather only MPs, to reflect on them and ask questions.

Last year, there were 47 cases of rioting linked to the consumption of liquor. There were also 115 cases of serious hurt, which were related to drinking. These cases included stabbing, cutting using dangerous weapons, and inflicting severe bodily pain. Nine in 10 occurred after 10.30pm.

Please let me hiccup a few times.

Hic! The rrreview over liquor consumption was started in 2012, and brought into focus after the Little India riot the next year. And all this while, public consultation was going on without the benefit of some numbers to ascertain the seriousness of the problem? What kind of rrrreeeeview is this? Hic!

Hic! We don’t know if these rioters and slashers were all drinking takeway beer after 10.30pm or had emerged sloshed from a licensed premises or got booted out by bouncers onto the public space. But, hey, hic!, So what rrrrright? All the crimes were committed after 10.30pm. Therefore it makes sense to make sure all “public’’ drrrrinking – whether or not it becomes public “drrrrunkenness’’ – stops at 10.30pm….

I have been trying to find the overall statistics on rioting and can only refer to an ST report, released on Thursday, the day before Parliament approved the Liquor Control Bill, saying that rioting involving youths had gone up from 283 arrested the year before to 322 last year. Please note that these riots involved only youths who may or may not be old enough to drink.

So what’s the BIG, national statistic?

I know what some people will think: Why am I nit-picking? Isn’t enough that people are hurt after some people had one too many? Didn’t you hear all those MPs going on and on about the pee, the vomit and the noise? You are in no position to speak because you don’t live in those places where there is public drunkenness.

Really? If it were me, I would be calling the cops all the time and insist that they do their job instead of asking for an omnibus law that affects everyone. My question would be: “Why aren’t the cops doing anything???!’’ Not: “We need yet another law.’’

So I hear this from a lawyer-MP who said that “of course’’ the law is a curb on personal liberties. But the “right to drink where and when you want is not a fundamental liberty’’ if it affects the public interest.

Because it IS a curb on personal liberties, this requires us to be rather more circumspect in imposing the law. This is not like a quarantine order to confine people in their homes to stop the spread of infectious disease. In fact, while others in developed countries might balk against such orders, we’ve shown ourselves pragmatic enough to deny ourselves freedom as was the case during Sars. That was a BIG problem that should be solved. The citizens here agreed.

Then you have the G saying this: “When does the Bill stop being blunt and over-reaching, and when does it start being comprehensive and effective? We can have a lot of rhetorical flourishes and pose interesting questions, but at the end of the day, we need to make a decision, and that decision applies not just to general principles, but also to specific steps that need to be taken on the ground.”

I really think that was not a nice thing to say. Rhetorical flourishes and interesting questions? When it comes to fundamental rights, the questions are merely “interesting’’? Or is the word “academic’’? I suppose the subtext is that this is merely the concern of liberal loonies who put Western ideals of fundamental freedoms above the heartlanders’ law and order concerns.

By the way, hic,,..I am not a liberal loonie, I am a member of the hic! HIC!.. intelligentsia – a term which is practically un-used in Singapore. And it is normal everywhere that the much despised intelligentsia would raise such uncomfortable questions especially if it touches on the extent of State power

As for that REACH survey. So the G denys that it governs by polls, never mind its feedback arm had the poll done. I guess it had to be done to counteract the ST online poll which had more people against the restrictions. The REACH poll, which is “scientific’’, mind you, showed otherwise. In fact, you have the usual suspects saying that the online views are just those of a vocal minority while the REACH poll is a REAL reflection of public sentiment.

I am really quite sick and tired of such dismissals of contrarian views. The G should give us the FACTS, not the views. And give us the FACTS early, not at the last minute.

Isn’t the key question this: Is the state of public drunkenness such that it is beyond the ability of the police to cope? Are there not enough specific laws in place to handle this?

I have said it before and I’ll say it again: I cannot help but recall how the Little India Commission of Inquiry had repeatedly asked for statistics on public drunkenness in the area and whether the Miscellaneous Offences Act was being enforced against those public drunks who became a nuisance. These statistics were given out then: 60 arrests in 2013 and 27 in 2012. Then nothing heard.

If rioting cases fuelled by drinking had gone up over the years, I certainly didn’t know this despite being an avid follower of local developments in the media. The only time liquor became a problem was the Little India riot, which left the police black-and-blue in the face.

MPs of affected resident say it is about giving back the residents their “space’’. I don’t suppose affected residents think that getting back their “space’’ also means restricting their own and that of other people? Why aren’t they asking where the law is during those times? All those cameras everywhere and it can’t be used to direct officers to clear drunken loiterers or put them behind bars under the Miscellaneous Offences Act?

Then comes this cop-out from the G: Let’s not worry because the law is really about nabbing the really very bad drunks. The police won’t bother to strip search you (even though they can) or break up your beach barbeque (but please get a permit) or arrest you because you were drinking a can of beer at 11pm (but please bin it when told to) In other words, light touch. Or another decorative piece in the law that will be utilised with utmost discretion by the executive. Which sort of begs the question of why the law is there in the first place.

Also there is this crazy point about how the definition of workers’ dormitories as “public places’’ is really just a “technical’’ thing to conform to another piece of legislation. Pttfff…Dismissed.

Sheesh. Shouldn’t we be more careful about protecting ourselves against over-reach by the G? Or should we laugh it away in a drunken fit? Maybe we should say: For more than 20 years, we’ve always had no problems with the G abusing any process. We assume that everything is done according to our expectations. Now this (fill in the blanks) has happened. But never mind, we can always unwind the process. Let’s drink to that!

But now that the Bill is LAW, I can only suggest this for licensed premises to consider: Please start your happy hour earlier.

A deadly serious business

In News Reports, Society on January 30, 2015 at 2:12 am

So Eternal Pure can’t build its temple-cum-columbarium in Sengkang after all. National Development Minister Khaw Boon Wan said the G didn’t know it was a purely commercial company and had nothing to do with religion. Here’s a peek at what happened from the point of view of the company 

They were dead on the money. What could be better than going into real estate in Singapore? Shoe-box apartments for the living might go empty, but a shoe-box for the dead? Everybody needs a shoe box sooner or later, unless they prefer to be set adrift in the sea. And in Singapore, with its ageing population, people will be queuing up to see the showflat. Plus, this niche property development won’t be subject to the vagaries of G controls, or debt servicing ratios. Yep! A columbarium it is!

The members of the Living or Dead company based Down Under congratulated themselves on hitting on the idea. Their underground cavern shook. Claws were sharpened. Bones jangled. Saliva dripped. Until someone intoned zombie-like that private columbariums were already in existence and buying land would drain the company’s coffers. It might prove a dead loss. What the hell!

There was a deadly silence, until a bony one suggested bidding for land intended for a religious purpose. Why not build the shell and rent it out to a religious organization? And then build a columbarium on the side?

Somebody guffawed, clapping his paws. What a heaven-sent idea! These temples and churches don’t have much money (and City Harvest is busy in court), they could out bid any one of them for the land. A small, cautious voice piped up: Is this allowed? Won’t the G check to see if a religious group was bidding for the plot? Then it would a dead end…

The fanged one looked up from his red liquid diet. Private companies were already allowed to bid for land for religious purposes, he said. These G fellas assume that the companies are set up by the religious organisations or in some kind of joint venture…

“Assume? They don’t check?’’ asked a clawed one.

“Naah. Haven’t done so in 20 years…’’ replied the fanged one.  “But we will need a name that sounds religious…’’

After some brain-storming which did not include the headless one, they decided on Heavenly Life. They dug into their pickets and unearthed $20m, setting aside $5.2 m for the bid. Of course, they won. The Living or Dead members thought they would be safe for all eternity, drawing an income from Singaporeans’ obsession with real estate. They didn’t reckon that their plot would be undone by….Singaporeans’ obsession with real estate.

The members met a second time to discuss the dark forces massing to attack their proposed columbarium. The living was unhappy about living next to the dead. The homes of living were their places of rest, the living said, and they can’t rest easy next to the resting places of the rest. Plus, the value of their homes would go down.

The fanged one, draining his cup, insisted that the Singapore G was good in the way that it would refuse to climb down despite the noise. “It is not in its DNA,’’ he said knowingly. “I’ve had a taste of it.’’

The clawed one wasn’t so sure. He preferred to slash the residents and accuse them of nimby-ness. “Let’s attack that front, and hopefully, we will keep our plot and our other plot won’t be discovered.’’

But things were not to be.

It wasn’t nimby-ness that killed the plans of the Living or Dead. Residents had discovered the plot and raised a stink to high heaven about the G awarding the plot to a commercial company.

The G said it had never intended the plot to go to commercial companies. It just hadn’t caught up with private sector’s dark and nefarious ways of making money and didn’t think to ward it off with any garlic, wooden stakes or special incantations. You know, it’s like how you wouldn’t expect a woman disguised as a man to attend a function that is clearly for men. The word most commonly used: ASSuME

Plus the religious groups were pushing back – and they were people that the G could not afford to antagonise.

The Living or Dead had to stop its shares trading on the stock market Down Under. They re-grouped. There was much wailing and gnashing of teeth. Their underground cavern shook. The fanged one demanded blood. The clawed one broke up the furniture. Only the zombie remained unfazed. He intoned: They could pick a religion – Taoism, Buddhism or any Chinese diety – become converts, start a religious organisation and bid for the land legitimately.

The rest looked up, be-witched by the idea. Until a small, cautious voice piped up and said that the nimby issue would still be an issue. Did the Living or Dead want to waste precious time combating these would-be neighbours? It would drain the life out of them…

The headless one nodded with his foot.

The fanged one picked his teeth.

The clawed one started his manicure.

The bony one rattled.

They wanted revenge.

They turned to the small, cautious one.

With one voice, they said: “Go infest the place.’’

Dear PM, can you pass me your minister?

In News Reports, Politics on January 24, 2015 at 4:21 am

I wonder which country in the world has a labour movement which writes to the head of Government to ask that he release an office-holder so that the man can vie for office in the…labour movement. But I guess it’s better than the parachuting of an unknown into a big office on someone’s say-so.

It says much about the symbiotic relationship between the G (or is it the People’s Action Party?) and the NTUC, that no one has said anything about the above “poaching’’ process. One guess is that the concept is so in-grained or well accepted  that nobody talks about it anymore. The vision of the union and the G is aligned, and leaders move in and out. They even maintain offices on both sides of a (non-existent) fence!

So Mr Chan Chun Sing is the man of the moment. The PM has said okay and Mr Chan has to win the votes of delegates in October to get the top job of secretary-general. We all know that the head of the NTUC has to be politically acceptable. As well as the ability to win the hearts and minds of workers. So both have to go together.

There is a precedent in the form of Mr Lim Chee Onn, once the flavor of the month and among the front-runners for the premiership. Although he got the top job with the blessings of the political leadership, he was removed as the secretary-general because his leadership style rankled on the rank-and-file. I’m basing this on memory because I’m having a hard time researching the background. I’m not sure if he was removed at a conference or simply told to step aside in favour of someone more palatable, in this case, the late president Ong Teng Cheong.

I am among those who were surprised at the choice of the NTUC central committee. MSM reports that even unionists were surprised. In fact, I am more surprised that there has been no successor groomed for Mr Lim Swee Say’s job after all these years. Nobody knew that Mr Lim was going to turn 62 soon and has to retire? Its current crop of deputy/assistant sec-gens not good enough?

As for the choice of Mr Chan, the surprise is that a career civil servant whose only experience has been in one “unique” sector, the military, should have been the choice of the key union leaders. Perhaps, it is because he heads the Ministry of Social and Family Development, which deals with bread-and-butter issues of the less privileged that makes top union leaders think he is a good choice? It cannot only be because he drinks coffee with taxi-drivers; he’s an advisor to the taxi drivers’ unions. Or because he can adopt as folksy a manner as Mr Lim?

All I can say is that we seem to have an amazing paucity of talent, so much so that established institutions here have to raid each other, like companies poaching in the private sector. Or is there a bigger, long-term objective in sight, such as Mr Chan is being tested for an even bigger job. Much as Mr Lim Chee Onn was. Getting the endorsement of the labour movement, which has nearly one million members, is a big deal. Given that Mr Chan is a first-term MP, you might call this “hot housing’’.

Okay, I am rambling. Sorry.

Anyway, I have always liked Mr Lim Swee Say, since the days he was an officer in the Economic Development Board. Power and position hasn’t changed him one bit. I liked him even more in the past few years for what he was doing for the labour movement. For too long, I’ve always thought the NTUC was placing too much focus on the “social’’ aspects of its mission, such as setting up its “finest’’ supermarkets and pre-skools which it can’t spel, instead of the “organising’’ aspects of a trade union. It should be looking at wages, recruitment and workplace practices. I blame the union for not detecting the long stagnation of wages at the lowest levels.

But I can see more “organizing’’ work done in recent time. It has managed to pry open the two integrated resorts and unionized their workers. It has tried to rectify the low wages of some sectors by combining a wage floor with a productivity ladder. It has pushed for $50 salary raises within the National Wages Council. And it has finally managed to get PMEs under the labour movement’s umbrella. I still think it needs to do a better job of selling the “re-hiring’’ of older workers to the people. That is not about working till you drop dead, but about being able to work beyond a certain age if you want to.

It has also always been a source of wonder to me that the NTUC does not have its own labour experts in a strategic policy unit who can crunch the numbers on wages and employment. The labour movement should be leading the charge, rather than depend on the statistics and pronouncements of the Manpower ministry.

If Mr Chan does get the vote in October, I hope that he will carry on the organizing aspects of the movement. After all, he has headed a big organization like the military and is now the PAP organizing secretary. Perhaps, under his charge, the NTUC will be the first thing that comes to the minds of workers who feel they have been short-changed in some way. And that it is not just a place to buy groceries.

It remains for me to wish Mr Lim and Mr Chan all the best!

CPF – Complicated Problem to Fix

In News Reports on January 23, 2015 at 1:58 am

TODAY had an interesting way to describe one of NTUC’s proposals to tweak the CPF system. It described the suggestion to let those with less than the minimum sum take out 20 per cent on top of the $5,000 that they are allowed to when they turn 55.

Eye-catching indeed and doubtless welcomed by those who want their CPF returned to them to fund other expenses or even a holiday. But what happens then to their monthly payouts under CPF Life? Much smaller than before? And what happens to the payouts for the rest of CPF members who kept their money in the fund?

The NTUC suggested “incentives’’ to get people to keep their money in the CPF but one labour economist said this would have “marginal utility’’. People would be expecting more and more incentives over time. And frankly, can’t the money be better used to bolster health care or pump up the wages of those who need the money?

I guess you would expect the labour movement to weigh in on behalf of the working class. It has tried to do so, but like all policies, any change would have an impact on some other part of the whole. And you can’t ever satisfy all the people all the time.

I was also thinking about another “eye-catching’’ proposal – shave off the 2 per cent difference in CPF contributions between those below 50 and the 50 to 55. I have to confess that I was flummoxed when I realized that my take-home pay as gone up. And then realized is because I had just turned 50 and hence do not have to contribute as much to CPF. Then again, neither does my employer. So wonderful. I’m glad that I don’t need my CPF Ordinary Account to pay for my housing…

Here’s the problem: The rates were shaved to make old(er) people employable because employers won’t have to pay them as much – something which the labour movement surely welcomes. Then again, the labour movement wants people to have more money for retirement. What a conundrum!

Of course, this eye-catching proposal is viewed as “hair-raising’’ by businesses who see only a rise in wage costs at a time of restructuring.

Then there is the proposal to raise the cap on wage contributions from $5,000 a month to $6,000 and to do this in two $500 parts. The reason is because the 80 percentile of wage earners have been designated as the ceiling. And that hit $6,000 in 2012. Hmm. Interesting. I didn’t know about the 80th percentile factor and the proposal looks like simply a logical adjustment. But what is the impact really of the rise? I wish the labour union elaborated on this. More money for future retirement and less money for present needs? What sort of impact will this have on people who have to pay off housing loans?

There is also the 1 per cent extra interest given to those with balances of less than $60,000. NTUC wants the cap reviewed. According to ST today, it wants it doubled, to $120,000? I don’t think anyone minds more money. But do we really need to do more for those who are better-off – or give more to the lower income? How many people are we talking about with balances between $60,000 and $120,000 anyway?

Policymaking is quite an interesting exercise especially when there are so many good but conflicting priorities. I can’t wait to see what sort of proposals the CPF review panel will come up with that will satisfy all, or at least most, CPF members.

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