Tag Archives: PAP

Kenneth’s questions to PM Lee matter – here’s why

The separation of public power and private benefit is essential for transparent, effective and honest governance. The Chairman of NEA cannot ask his staff to go and clean his kitchen, or the premises of his sister’s hawker stall, when it gets dirty. The Commissioner of Police cannot ask his officers to set up a road block at the end of his street because he finds the traffic too noisy. The Minister of Community, Culture and Youth cannot just instruct a local museum to display his daughter’s art work. So can the Prime Minister ask a civil servant to write letters on his behalf, and in his support, on the very personal topic of his defamation case against Roy Ngerng? This question matters, and it is the reason Kenneth Jeyaretnam of the Reform Party is quite right to seek a full accounting of public funds spent on a case the PM has clearly stated he is bringing in his personal capacity.

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Has it come to this, freedom to burn effigies?

Is effigy burning allowed?

Is effigy burning allowed?

My initial reaction on hearing that Gilbert Goh had planned to carry out the burning of an effigy of transport minister Lui Tuck Yew was shock and disappointment. There’s got to be a better way to express one’s dissatisfaction with the government and their increasingly authoritarian system. A pile of ashes is not going to contribute much to nation building, not least if it distracts from much more important questions around an economic model of state control in key industries that leaves citizens short-changed. I’m still glad that the act didn’t go ahead, but when The Online Citizen reported that the government had gone so far in 2008 as explicitly stating that burning of effigies would be legal at Hong Lim Park, it became clear that there is another side to this story.

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Singapore Inc. and the brain drain

Down the drainIf you could leave Singapore, would you? For many Singaporeans, especially from the younger generations, the answer apparently is yes, in large numbers. This doesn’t seem sustainable, not least because the brightest individuals with the most to contribute will inevitably find emigration overseas easiest. While the negative effects of a so-called brain drain on Singapore’s economic strength will take years to manifest, the bad news is that this trend has already been going on for years. We may be suffering the results already.

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Immigration – “Plan C” for Calvin Cheng

I originally wrote the below article as an exclusive for The Online Citizen under the title “False dichotomy of Singapore’s options”. I am reproducing it here with their permission.

Calvin Cheng’s recent article for Yahoo on the fate of immigration policy in the wake of the Little India riots is thought-provoking if not a little condescending. In it he juxtaposes the current plan for a population of 6.9 million, driven by the population white paper, with his own “Plan B” – a vision of Singapore with almost no immigration. In framing the debate thus, Calvin presents a false dichotomy between ultra-liberal and ultra-conservative immigration and it should be obvious that there is a third way, a more sustainable “Plan C” which balances the demographic challenges facing Singapore in coming years, with a more productive economic model less reliant on foreign workers who are often exploited.

The problem with the white paper

Calvin claims to have “seen the statistics, the facts” and states that current immigration policy is “anchored on irrefutable facts and figures”. In the context of his article, it is clear that he is referring to the population white paper and the path it lays out towards a population of 6.9 million. Yet both Calvin and the white paper make the same very peculiar mistake, and their conclusions are anything but irrefutable. The supposed link between demographics and the need for immigration relied on by both is actually extremely weak, and the “facts and figures” in the white paper make this point very clear. While it may be true that without immigration Singapore faces a shrinking citizen workforce, the demographic trends charted in the white paper state that this will not happen until 2020. So the “bleak” future described by Calvin is actually quite a long way off, and cannot be seen as a valid justification for the policy of today which he nonetheless supports. Furthermore, there is still no obvious reason why Singapore’s population should need to increase as dramatically as planned. To offset a shrinkage, one obviously only needs to add enough resources to maintain things at their current level, and for this reason the case for 6.9 million was never supported by the demographics arguments made out in the white paper. To put it simply, there is almost no correlation between the demographic challenges upcoming and the immigration policies concocted in response. This weak link between policy and its justification leaves many sceptical as to the real motives behind this most controversial of government schemes.

The problem with plan B

The plan B Calvin describes as an alternative to the population white paper appears to be not much more than a practically zero immigration straw man argument which almost no one has previously spoken for. It describes a relatively unpleasant vision for the future with Singaporeans working in construction, as well as doing “all the other manual work” now done by foreign labourers, and is a plan we are informed comes with “painful” social costs. We are warned that bus fares would have to increase if Singaporeans are to work as drivers, yet does anyone remember fares going down as Chinese drivers have been hired in increasing numbers? Conversely, no mention is made of the jobs Singaporeans do not shun, such as working as cabin crew for Singapore Airlines, but which are done increasingly by immigrants as locals are discriminated against by government-owned companies in the local labour market.

Clearly this Plan B is extremely flawed. Dependent as it is on apparently negligible levels of immigration, it is one which has apparently been plucked from the opposite end of the policy spectrum from the white paper and has been garnished with various unpalatables in the hope that Singaporeans will reject it in favour of current policy. Yet the false dichotomy presented between these two options of extremely high and extremely low immigration should be obvious. Clearly, there is a third path, one with some immigration required for example in construction as well as to offset demographic changes, but not so much that Singapore’s population balloons unsustainably towards seven (or even eight) million.

Plan C for Calvin Cheng

A more moderate and balanced immigration plan C can be characterised with a simple phrase – “steady state normality”. Steady state means we don’t need to keep growing the population indefinitely into the future, a more sustainable idea might be to plan for overall population numbers to remain steady in the long-term, and the current population can become the “new normal”.

The first immediate outcome of not endlessly inflating the population is that we do not need to continually import more construction workers to build more houses for more people. While today there may be a shortage of housing which needs to be addressed, in the long-term this need should tail off. A similar argument can be made for malls and MRT lines if not perhaps for hospitals in an ageing nation. In planning for steady state normality therefore we effectively pull the plug on some of the biggest drivers of immigration, hopefully alleviating some of the major social costs at the same time.

The flip side to not continuing to pump up the population is that the economic balloon called Singapore Inc will also not be inflated. Yet apart from government ministers with GDP linked bonuses, it is not clear who really loses out in that case. Singapore is already an extremely rich country, in GDP terms one of the richest in the world, but it is also one with an extremely unequal distribution of wealth. The challenge for Singapore today should be much less about making the pie bigger, and much more about sharing it more equally. There are obvious ways to achieve this, many of which are unrelated to immigration, but one idea would be to bring back estate duty which may have the added benefit of encouraging a few Ferrari driving wealth managers off the overcrowded roads.

In fact, if we accept a long-term steady state population plan, many of the concerns raised in Calvin’s article are diminished or removed. There won’t for example be lower tax revenues, certainly not while the local workforce continues to grow until 2020, and not after 2020 either, because we should allow some immigration to make up the difference. Even if there were a smaller tax base, the difference is likely to be tiny compared to the billions in surpluses typically collected every year, and would be further offset by a proposed estate tax. Obviously then there would also be no need to dip into the reserves.

Surely there are gaps and flaws in this plan C, but it is just a starting point. The most important thing to bear in mind is that current policy together with Calvin’s plan B represent an obvious false dichotomy which should be rejected. There are other more sustainable options available to us, which chart a path somewhere between those extremes of very low and very high immigration. I don’t claim any unique insight into exactly where that path should lead, but it is a direction that should definitely be explored.

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Structural problems doom Progressive Wage Model to failure

I originally wrote the below article as an exclusive for The Online Citizen. I am reproducing it here with their permission.

Zoom2Launched and promoted to great fanfare by the ruling party, the progressive wage model looks good as a press release, but is hamstrung by the twin flaws of obviousness and impossibility. Obviousness, in the sense that it describes a relatively straightforward career progression ladder that employees should be encouraged to climb toward greater salaries – an idea that many would suggest does not require a million dollar minister to think up. But also the impossibility of the system is glaring, because there appears to be no way to actually require employers to give their staff the chance to climb this skills ladder. In fact, one look at an example “wage ladder” reveals another truth which should have been obvious – a company staffed with employees who have all reached the highest rung would be very “top-heavy” and probably unsustainable as a business.

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Closing the circle with govt organised civil society conference

Patronage and institutionalised power protect the inner circle in Singapore

Kenneth Jeyaretnam used an interesting phrase to describe the nature of political power in Singapore recently – he described it as a “closed circle“. To me, this seems apt. From institutionalised patronage, to co-opted public bodies, and through the crushing of independent centres of influence, power in Singapore has been successfully arranged to support and promote the position of a core group of self-anointed leaders, while at the same time marginalising and excluding critical or alternative voices. An emergent alternative force – civil society – has started to (re)take root in recent times and poses a threat to the ruling party’s monopoly of influence by pushing back on the walls of the hard-state. It should come as no surprise then that the ruling party would seek to reclaim its turf, and we got a glimpse of that this week in the form of a somewhat incongruous government organised civil society conference.

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Tan Chuan-Jin, this is not a threat

Does Tan Chuan-Jin betray a sense of entitlement in framing the fact that someone may choose not to vote for him as a threat?

In Merriam-Webster, a threat is defined as “an expression of intention to inflict evil, injury or damage”. Other definitions exist, but they are usually quite negative and tend to imply harm. I’ve never heard of someone threatening to do me a favour.

So why does the (acting) Minister for Manpower make it all so dramatic? Does he see the default position as being that everyone should vote for him, and any suggestion that one may not, is an implication of impending “injury or damage”? I’m afraid Mr Tan’s years in the Army may have conditioned him to expect everyone around (or beneath?) him to do as he wishes. This may be a valid approach when encouraging young conscripts to run up a hill, but it is the antithesis of representative democracy. As an MP Mr Tan should have realised by now that the tables have turned. His job – more or less – is to represent the wishes of his residents in parliament, and he should further realise that a vote has to be earned, it is not an entitlement.

As readers may know, I have e-mailed the minister myself once or twice recently. Of course, I received no reply, but I did not take this personally, I just assumed he is either lazy or rude. While the polite thing to do might be to at least send out a stock response or a simple acknowledgement – probably delegated to a secretary or assistant – this apparently is a level of engagement still beyond the ruling party.

There are many valid reasons why one would choose not vote for the PAP. I for one will not be doing so, in no small part due to the mess that is our labour market under the negligent oversight of Mr Tan’s MOM. But this is my right, and in saying so, I am exercising my own free will, not issuing a threat. Rather than fretting over the fact that someone may choose not vote for him, Mr Tan should knuckle-down, do the best job he can, and hope that it is enough to win the trust of his residents in 2016.

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[Updated 1] Triple confirm. “Tightening on foreign labour” was a lie.

Updated: The editors at TRE pointed out quite rightly that the increase in the number of foreign workers coming to Singapore is on target this year to be less than in previous years. Whether this “reduction in the increase” represents a tightening rather than a “slower loosening” is debatable. The chart below appears to show that the overall trend is mostly unchanged. However, the most important questions still remain. In light of increasing unemployment and decreasing wages, can the government be said to have delivered policy results that benefit Singaporeans? Despite lots of noise around a “tight labour market”, it would appear not.

Government claims to have been tightening on foreign labour could never be reconciled with a population white paper that laid out a path to GDP growth through massive immigration. As I wrote at that time, propaganda rather than policy changes appeared to be driving the debate. The truth – that the government is not tightening the inflow of foreign workers – has recently been revealed by three pieces of information released by the government itself. These revelations leave many in government with some explaining to do – why so much focus on the problems associated with a labour shortage when one does not appear to exist. On the contrary, the problems caused by an over abundance of cheap foreign labour – stagnant wages and increasing unemployment – are very much still present and, if anything, worsening.

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OurSGConversation finds majority favour preservation of Bukit Brown

A majority of Singaporeans prefer preservation of green spaces over infrastructure development

A majority of Singaporeans prefer preservation of green spaces over infrastructure development

Bukit Brown has won the hearts of many visitors, particularly amongst those who either discovered or re-discovered its peaceful charms after it was gazetted for significant redevelopment in 2011. While a small but vocal group of dedicated fans and concerned citizens rallied at that time to save Bukit Brown, the perception was that they did not enjoy the support of a significant number of Singaporeans. However, polling conducted as part of the Our Singapore Conversation project appears to show otherwise. Whether viewed as a part of our heritage, or merely as a green space, a significant majority of Singaporeans prefer preservation of such sites over infrastructure development. While the government claims to have been listening during the national conversation, not everyone is convinced. A decision to preserve Bukit Brown before exhumations and development begin would be a significant step towards showing Singaporeans that their concerns and desires were given an honest hearing.

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PM tweaks troublesome policies, underlying problems remain

“Major turning point”, “strategic shift” and “an epochal speech”. These are some of the terms used by the PAP and their supporters in an attempt to make out that after a year of “National Conversation”, the government had listened and was willing to make drastic changes to improve the lives of Singaporeans. Others however were less impressed – myself included – not least because the policy announcements clearly did not live up to the hype, but most importantly because the superficial changes announced did nothing to address the root causes of the problems facing ordinary Singaporeans.

The policy changes announced came under three predictable headings – housing, healthcare and education. The changes to education policy – forty places at every primary school reserved for P1 students with no ties to the school, and quoting PSLE results as grades rather than raw scores – seem particularly inconsequential. To housing and healthcare however PM Lee dedicated the majority of his speech and it was in these areas that the government’s inability to identify or address the real problems facing Singaporeans was most obvious. Two phrases used by the PM in particular caught my attention – to help people “level up” and to “share the risks”. But in neither housing nor healthcare policy do these phrases rings true, in fact the opposite is closer to reality in Singapore, and therein the supposedly “game-changing” qualities of PM Lee’s National Day Rally speech are quite underwhelming.

Housing – Leveling Up?

PM Lee dedicated a large portion of his speech to playing the role of a HDB housing agent, trying to convince listeners that flats are affordable. Being the good salesman that he is, he repeated the phrase that housing is “affordable” or that we can “afford” it no less than nineteen times. Is the provision of affordable housing suddenly a “major turning point” for the PAP? It seems unlikely, since the government has ostensibly been providing such a service for decades. In his role as HDB housing agent, PM Lee dutifully reeled off a list of grants and benefits available to purchasers, but one would have to try hard to distill a “strategic shift” out of what was mostly a PR exercise in reminding Singaporeans of the numerous schemes already in existence. Only after re-reading the transcript of Lee’s speech was I was able to detect one new policy announcement – an increase in the Special Housing Grant (SHG) of $10,000.

Existing, just the present arrangements, you will have $45,000 of grants already, various things. But now because we have changed our SHG, you will get an extra $10,000 of grant
PM Lee, National Day Rally Speech, 18 August 2013

This couldn’t possibly be the game changer, could it? Increasing existing grants of $45,000 to $55,000? It sounds exactly like “more of the same” rather than a strategic shift.

Ironically, if one wanted to find a strategic shift in housing policy, one would only have to look at PM Lee’s NDR speech from 2011. It was on that occasion that Lee announced an increase in the HDB income ceiling from $8,000 to $10,000. While that $2,000 increase is not in itself a large amount, this policy change was actually much more drastic than it seems, simply because the ceiling had not been increased for seventeen years previously. Accounting for inflation, that $8,000 income ceiling was worth over $10,000 seventeen years ago, but the question to consider is whether or not someone earning that much in the 1990s needed help from the government to purchase a home. “Condo” used to be one of the “5 Cs of Singapore”, and it was surely the expectation of the government in those days that anyone earning more than the income ceiling would be able to afford private housing in an ostensibly rich country like Singapore. Furthermore, by chosing to keep the income ceiling fixed for almost two decades, there was likely an implicit expectation that more Singaporeans could “level up” as their wages increased over the $8,000 threshold to move into private housing.

In fact however, housing and other cost of living factors have outstripped wage growth in recent years, so more and more Singaporeans who earned over the old income ceiling found themselves stuck – earning too much to buy a HDB but not enough to “level up” and buy a condo. This is the underlying problem that PM Lee ignores in his NDR speech – he has done nothing to address the fact that Singaporeans’ wages lag inflation. By instead chosing to give out more government grants, he merely kicks an increasingly painful can down the road. Without solving the problem of low wage growth, what can PM Lee possibly have in mind for 2015 or 2020? Increase government grants, again and again? Similarly to the short-sighted policies of the population white paper, this is a thoughtless non-solution to one of the biggest challenges facing Singaporeans.

Healthcare – Sharing the Risks?

It’s well documented that healthcare spending in Singapore is funded disproportionately out of the pockets of citizens rather than through general government spending, and this reflects the fact that the risk of falling sick here is borne mostly by citizens as opposed to being shared with the government. According to WHO figures from 2011, the proportion of healthcare spending met by the government was 31% in Singapore compared with an OECD average of 61.4%. Even more shockingly, the Singapore government appears to use this predominantly patient funded healthcare system as a source of revenue. If you only learn one thing this week, let it be this: between 2001 and 2010, MediShield collected over $2 billion in premiums and paid out less than $1.3 billion in claims, for a net revenue gain of $850 million. That in Singapore, a supposedly rich country with vast financial assets and reserves, the government not only forces the burden of healthcare spending onto residents, but then in fact sees significant net revenue generation from the healthcare system is inexplicable.

In light of this, it is obvious that MediShield can take on greater responsibility, but the policy announcements made were again underwhelming and neglected to address the root cause of Singaporean’s concerns. As noted by others, extending MediShield to become MediShield Life is an improvement, but an obvious and long overdue one at that. Further changes to increase the circumstances in which MediSave funds can be used to pay for outpatient treatments are also welcomed, but cannot be seen as an increase in government risk sharing, rather these changes merely allow one to use ones own accumulated funds for healthcare spending rather than paying out-of-pocket.

The most telling change announced to healthcare policy however was a commitment to provide “better protection for very large hospital bills”, although in announcing this, PM Lee went to great lengths in asserting that “very very few” people suffer such large bills under the current scheme. One wonders if he himself didn’t see the irony in launching a scheme while at the same time trying to assert that almost no-one would benefit from it – less than 1 in 140 patients if PM Lee’s own MPS are a statistically valid sample. Of course, the details of how this change will be effected were not spelled out, so it is not clear how much increased risk the government will bear, but it is assumed that this will involve an increase to the “claimable limit”. In fact, the very existence of this claimable limit betrays the fact that the entire risk (although not the entire cost) of healthcare funding in Singapore is borne by patients. Once the cost of treatment exceeds this “claimable limit” threshold, the patient is responsible for 100% of the cost. So while the government may assist up to some pre-calculated point, the unbounded upper limit on expensive treatments is in fact borne completely by the patient.

To be truly game-changing the PM’s speech would have needed to address two areas – the profit element and the risk element. Firstly, MediShield should not be a revenue generating operation – as it has been over previous years – but Lee did not appear to address this point.

But because it does more, because the benefits are better, therefore, the MediShield Life’s premiums will have to be higher. It has to be, because it has to break even and I think for most people that will not be a problem.
PM Lee, National Day Rally Speech, 18 August 2013

Of course, there was the expected rejoinder that MediShield premiums would have to go up to reflect the enhanced coverage offered, and PM Lee did make reference to breaking even, but this does not appear to be a statement of budgetary policy so much as an attempt to manage expectations – don’t think you are getting these MediShield enhancements for free. Certainly, PM Lee made no mention of a move away from net revenue generation and no mention of the hundreds of millions in premiums MediShield has accumulated to date, so it would be presumptuous to assume such a significant shift will occur unannounced.

Secondly, on risk, it is hard to avoid the conclusion that residents shoulder an unreasonable share of the cost and risk of falling ill. A more helpful, more significant change would be a commitment to increase the government’s share of healthcare spending much closer to the rich country average (61.4%) when it current languishes at a level almost exactly half that. For a country as wealthy as Singapore, there is no obvious reason (other than political ideology) for healthcare spending to even be less than the average of other rich countries because Singapore is in fact much better off than those other “rich countries”. But unfortunately there is no commitment to make a long-term change in spending policies, no intention to shift the burden from the individual to the state, no hint that revenue will not continue to be generated by MediShield and no clue as to what will happen to the premiums already collected. And most tellingly, while there may be changes to the claimable limit, it appears that MediShield Life will continue to abandon those patients with the highest bills just when they need their insurance coverage the most, so when it comes to “sharing the risks”, the ruling party in fact continues to shirk their responsibilities.

* * * * *

Despite the great fan-fare of a national conversation, and the extraordinary hype of this speech being both a major turning point and a strategic shift, the truth is that nothing much has changed. The government appears to have no policies in the pipeline to solve the underlying problems of low wage growth and the ever-increasing cost of living. While increased grants are likely to be popular today, failing to solve the root cause means the exact same issues will inevitably recur year after year. The government can’t surely see this as a long-term, sustainable plan, but it appears to be all they have. There was also no real indication that the government intends to make an ideological move away from revenue generation. MediShield has accumulated hundreds of millions over the years, but the announced increases in coverage were tempered with a predictable warning that premiums would have to increase in line. “It has to be” said PM Lee. And still, the majority of the risk and cost of falling sick will fall on residents rather than be covered by government policies. Under the PAP, it has to be.

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