Archive for May, 2010

Property: Do something drastic or do nothing?

May 29, 2010

Dear Ms Chua,

I refer to your article dated 20 Apr 2010.

You said it is disingenuous to either ‘do something drastic’ or ‘do nothing’ because either action would cause the majority of Singaporeans who are neither first-time home owners nor super rich to be worse off. It is indeed disingenuous of you to think that the majority of Singaporeans aren’t first-time home owners. There are 3.2 million Singaporeans in 900,000 households. That means there are 2.3 million Singaporeans who do not as yet own homes and would thus be first-time home owners sooner or later. In other words, first-time home owners (sooner or later) outnumber existing home owners by more than 2 to 1. Thus, if the ingenuous thing to do is to make the majority better off, it follows that we should ‘do something drastic’ for current and future first-time home owners since they are in the majority.

You said the government’s handling of the property market has been a lot more right than wrong. There is not a lot of truth to what you say unless you can back it up with a lot more fact. HDB prices shot through the roof in 1997 and are shooting through the roof again. Two sudden spikes in a short span of twelve years and you call that a lot more right than wrong? How much more wrong can we get? One spike every other year?

‘Short-term glitch’ is a poor excuse for something that could essentially have been avoided had the government had better foresight.

A lot is not going right in housing, no thanks to the government’s insistence on treating the resale market as ‘free’ but pegging new flat prices to resale flat prices which essentially exposes new flat prices to ‘free’ market price fluctuations.

Yes, the government has turned housing into a social policy that has successfully enslaved the populace into ceaseless working for ever more expensive housing throughout their lives. Home ownership is not just a national objective but also a burden to be borne by all nationals.

It is not necessarily true that pandering to those who have been priced out of the market would be a great disservice to existing home owners. Many existing home owners have children who would someday become first-time home owners. Ensuring that buyers today are not priced out of the market will help ensure that the children of home owners today will also not be priced out of the market in the future. Because if prices keep increasing out of hand, the unaffordability issues of today will become exacerbated and compounded tomorrow. By arresting the unaffordability issues today, we are in fact helping to alleviate future unaffordability issues.

You said we should not disgruntle the majority who are the 900,000 home owners even if it means vexing the 30,000 young couples who set up homes each year. But majority refers not to the 900,000 home owners but to the 2.3 million children of the 900,000 home owners who would eventually set up homes. It is they whom we should not disgruntle, it is they whom we should not vex.

Sudden spikes in HDB prices show that Singapore hasn’t got the big picture right. The socialist provision of mass housing at capitalist prices is a double whammy for Singaporeans. We are forced into ceaseless queuing much like queuing for basic essentials such as bread and butter in previously socialist economies. At least, our socialist comrades paid socialist prices for socialist goods. Here, we are paying capitalist prices for socialist goods instead.

It is not correct to say that 90% of households can afford homes since a significant number of them will have no money left for retirement after having poured all their hard earned money into their homes. These people will be forced to sell their homes back to the government and will be left with no homes in the end. How can you call the home affordable when it gobbles up all your hard earned money leaving you with nothing for retirement? How can a house be affordable if buying it means having to pay for it with money meant for feeding you in old age?

You said new flats are not allowed to soar freely in tandem with a bullish market. That’s bullshit. New flats are pegged to resale flats and soar as freely as resale flats do.

You said market forces allow home owners to realise the value of their assets. But when the price of your asset shoots up by $100,000 overnight without you doing anything to enhance your asset, has your asset changed in anyway? No, your asset hasn’t changed in any way and is still the same asset as before albeit not as new and less pristine. So its value hasn’t increased yet its price has shot up by $100,000. This is no different from the price of rice shooting up overnight due to shortage in supply even though it is still the same rice. This is not realising the value of assets, this is hyper inflation.


PM Lee on nepotism and his father’s legacy

May 16, 2010

Dear PM Lee,

I refer to your interview by Charlie Rose as reported by Straits Times on 16 Apr 2010.

You said our entire system is founded on meritocracy where you get the job because you are the best man and not because of connections. But according to a Straits Times report on 20 Oct 2009, your father said that China’s princelings like Li Peng’s son and daughter may never be recognised if they weren’t well connected because China is such a big place. Considering that the chance of you becoming the prime minister out of about 2.5 million Singaporean adults is a mere 0.00004%, we don’t need to be as big as China to appreciate your father’s belief that meritocracy aside, you need the right connections to stand out amongst so many Singaporeans. So if you share your father’s beliefs, you shouldn’t rule out the importance of connections and you or at least your father has no moral basis to sue IHT for allegedly saying something that your father essentially believes in.

You said you lose credibility and moral authority if people do not think you are the best man for the job. On what basis do you assert that? Just as you require IHT to prove their assertions, so too must you prove your assertions failing which you have no right to assert them. You have no right to say that you lose credibility when people do not think you’re the best person unless you can prove it. You have no right to say that it is a fundamental issue of fitness to govern unless you can prove it. You said it is a basic Confucian precept that you are allowed to make the right decisions only if you have the moral right. But Confucian moral right comes from being virtuous, not being the best.

You said being put in the same list as Kim Jong II is as good as an attack on the moral fibre of your trust with the people. But the list included so many Asian nations, are you saying it is an attack on all those nations as well? Yet none of the leaders in those nations are even half as bothered as yourself. Why are you so especially sensitive? You give the impression that you are very insecure as though your very authority can be easily undermined by people saying you are not the best. What if we conducted a survey and found that 33% of Singaporeans find that you are not the best, would that undermine your moral right to govern? If we concede that there may be 33% who think that you are not the best, then why is it such a big deal that one journalist thinks so too? If your worry is that the other 66% may lose confidence in you when they come across the article saying you are not the best, then wouldn’t that make their confidence in you shaky and weak to begin with?

You said the same journalist and newspaper has done it again. But what the journalist has done this time is to merely state facts and the facts speak for themselves. Unless the facts are erroneous, which they are not, you have no basis to make an issue out of it.

You said the IHT can bring their lawyers to prove what they say is true. That shows your basic ignorance of the basic law concept of presumption of innocence. As Mr Shanmugam would always emphasize, it is never up to the accused to prove that he is innocent. The onus is always on the plaintiff to prove the accused’s guilt instead. As such, the onus is on you the plaintiff to prove what the IHT said is false. The onus is not on IHT to prove what they said is true. If you don’t even understand this basic law concept, how can you even say you are the best?

You said your father made a state where there was none. But the state of Singapore was already in the making for 140 years before your father took over. The system that could run without him was not made by him but was bequeathed to him by the British.

Q&A with Mr Mah Bow Tan

May 16, 2010

Dear Mr Mah,

I refer to your Q&A session with Straits Times as reported on 7 Apr 2010.

You said people who rush to buy $600,000 Pinnacle@Duxton flats do so because they earn close to $8,000 and can afford it. But rushing to buy flats doesn’t necessarily mean that they can therefore afford it. Rushing to buy flats simply means that there is an urgent need for a flat regardless of price. When you are hungry but the price of rice is $5,000 a kilo, would you say you won’t buy because you can’t afford it? You will still buy even though you can’t afford it because you have to eat. Similarly, people will fork out top dollar for flats at ridiculously high prices because they simply need a place to stay.

Also, since flats are normally paid over many years, the issue of affordability isn’t established at the onset of buying but at the end of the mortgage repayment period when buyers realise that they have given all their money to the HDB and have nothing left over for retirement. It’s like the man who happily signs an installment plan to purchase a 42″ full HD LCD TV he can ill afford. The small monthly installments appear affordable to him but are actually eating into his retirement savings.

Also, it’s not true that the flat is worth much more than the price it is paid for. If the price of a bowl of noodles suddenly increases by 40% overnight even though it is still the same bowl of noodles, it is hyper inflation, not an indication that the bowl of noodles was actually worth more to begin with. Similarly, when the price of a flat suddenly increases by 40%, it is hyper inflation. It doesn’t mean that the flat is worth more now because it is essentially the same flat still. So becoming more expensive doesn’t necessarily mean that it is therefore worth more.

You said you can meet demand for new flats but not resale flats which is why resale flat prices have gone up. But resale flat prices cannot increase without the increase of new flat prices since the two are pegged to each other. So you’re not being entirely truthful when you say you can meet the demand for one but not the other, you can control the price of one but not the other. Because when resale flats experience runaway increase in prices, the pegging ensures that new flats will also experience runaway increase in prices. So if you can’t control the price or meet the demand for resale flats, it also means that you can’t control the price or meet the demand for new flats since they are intricately linked together.

You said we should let market forces control COV. But you and your HDB are the market. By virtue of your monopoly of the supply of land as well as the supply of new flats, you determine price much like the monopoly firm determines the price of the good that it monopolises. So stop pushing the buck to the market and start acknowledging the fact that you are the main player in the market.

Mr Minister, a nice home with nice view now please

May 16, 2010

Dear Mr Mah,

I refer to your interview by Straits Times as reported on 7 Apr 2010.

You said that from 1999 to 2001, household incomes rose while home prices fell. However, you omitted to say that immediately after that, from 2001 to 2003, household incomes fell while home prices rose. In fact, given the roller coaster prices, a person who bought in 1999 would have paid more than someone who bought just two years later in 2001. Another person who bought two years after that, in 2003 would also have paid more than the one who bought in 2001 even though it might be the same flat. Because of roller coaster prices, people have ended up paying more for nothing either by buying too early or too late. Is this state of affairs desirable? Are you encouraging couples to time their marriage according to property cycles?

You said household incomes and home prices inched up in tandem from 2001 to 2006. That’s not true, using 2001 as the starting base, from 2001 to 2006, home price indices have consistently been higher than their corresponding household income indices.

You said both indicators rose sharply from 2006 to 2008. Again that is not accurate. Using 2006 as the starting base, from 2006 to 2008, home prices have again outstripped household incomes and by quite a large margin too.

Therefore, what you say is not true. If we break up the decade as you have done so, we find that prices have not moved in tandem with income over the last 10 years. In fact, if we use 2001 as the starting base, home price indices have always been higher than their corresponding household income indices.

You concede that there is some housing demand due to PRs but you have not acknowledged the fact that the great majority of PRs who are renting units or rooms are also contributing to housing demand. You said improving economy leads to higher prices but last year was recession year and prices went up just the same. In fact, during the SARs year of 2003, home prices also went up. These are some of the examples that invalidate the factors you attribute for the huge increase in prices.

You ask whoever can do a better job to come forward. Whoever comes forward, it would be difficult for him to do any worse than you already have.

You said so many things have changed over the last four decades so you don’t want to compare with 40 years ago. You are right, 40 years ago, we had Goh Keng Swee which was why flats were cheap. 40 years later, we have you and now flats are so expensive.

You said 12,000 flats are sold every year but Ms Chua Mui Hoong of Straits Times once calculated that there is a potential 95,600 buyers of HDB flats. The large discrepancy between supply and demand is simply too glaring not to be noticed.

You said the average HDB mortgage is ‘healthy’ because it meets ‘international’ standards. But a recent study by NUS revealed that our housing price to income ratio is comparable only to some of the most expensive cities in the world like Hong Kong and London. Also, time and again, the statistics you provide show that despite meeting ‘healthy’ international standards, buyers of 3-room flats typically have nothing left over whatsoever for retirement. No wonder they are forced to sell their flats back to the government for retirement.

It is clear that you did not tell the entire truth and for some people, that is akin to lying. You do not need to fudge figures to tell lies, you just need to selectively pick figures to distort the truth.

Stop blaming Singaporeans’ rising expectations. Stop blaming Singaporeans for your own inadequacies. Start recognising that prices have indeed went out of control.

No point repeating your grandmother story about your past. The more you speak about your past, the more it contrasts with your current wealth and status, the more it portrays you as someone who has crossed the river and then burnt the bridge.

You said people of your generation started small but upgraded later. It was precisely because prices were much lower then that the burden wasn’t so great so that the realisation of a home was much easier. But with each upgrade comes higher prices with the burden of the upgrade falling upon the shoulders of the next generation. That burden keeps piling and piling onto future generations until it has become totally unbearable. This is like the ponzi scheme that cannot be sustained indefinitely.

You said it is unfortunate that buyers want their ideal flat the moment they get married. Lim Kim San never had qualms about that. He built so many flats so quickly it really puts you to shame.

You said HDB has made many hard choices over the last four decades that have been proven right. With that, you are basking in the lime light of your predecessors. Ask yourself, what have you ever done right as a minister?

You said without a home, we wouldn’t do national service, we wouldn’t fight for Singapore. But you look at the PRs with a home here. Would they do national service? Would they fight for Singapore? So having a home doesn’t necessarily mean that they would therefore serve NS and fight for Singapore.

You said the HDB looks after the whole life cycle. But it is doing a terrible job keeping prices affordable. If the price is affordable to begin with, then there will be no need to sell the flat back to the government, there will be no need for the whole life cycle.

You remind Singaporeans that we used to live in kampungs. Perhaps for some who have found HDB flats exobitantly pricey now, they might prefer to stay in kampungs if that meant much cheaper housing. You said life doesn’t hand things to us on a silver platter. But you and your HDB have been handing Singaporeans IOUs that make us pay for the rest of our lives without having to keep our homes in the end for some.

New HDB flats still affordable: Mah

May 9, 2010

Dear Mr Mah,

I refer to the Straits Times report of your reply to Mr Lim Biow Chuan in the parliament dated 27 Apr 2010.

First, it was incorrectly reported that the annual increase in median household income from 1999 till last year was 3.9% when it ought to have been 3.3%. Next, even though in percentage terms, the 3.2% increase in resale flat price was marginally lower than the 3.3% increase in median household income, in absolute terms, the increase in resale flat price was a staggering $97,373 compared to an increase of only $1,354 in monthly household income. When we annualise these figures, we find that the yearly increase in resale flat price was $9,737 compared to the yearly increase of $1,625 in annual household income. In other words, over the last decade, resale flat price has been increasing at an average of $9,737 every year while the corresponding increase in annual household income is only $1,625. So clearly, in absolute dollars and cents, growth in resale flat price has far outstripped growth in household incomes by a factor of nearly six times over the past decade.

Also, it is not true, even in percentage terms, that growth in resale flat price exceeded income growth only in recent years like 2004. If we were to set our base year to 1998 or 2000, just one year before and after your chosen base year of 1999 respectively, we find growth in resale flat price exceeded income growth as well. In fact, over the last decade, 1999 is the only base year whereby household income growth exceeded growth in resale flat price marginally. If the base year were to be any other year other than 1999 over the last decade, growth in resale flat price exceeded growth in household income. Even if we were to extend back to 1995, there were only three out of fourteen years where household income growth outstripped growth in resale flat price. So by and large, resale flat price has outgrown household income.

You said that what matters ultimately is that first time home buyers can afford a flat at all times. Referring to the table you have provided, the median household income of a 3-room flat applicant is $2,100 and his / her monthly mortgage payment is $528. Currently, the public assistance scheme pays a family of 2 adults and 2 children $1,210. Assuming $1,210 is the minimum sum that a family requires for basic subsistence, if we add to that a monthly mortgage of $528, the family will only be left with $362 for all other expenses including school fees, public transport, utilities as well as saving for two persons’ retirement, hardly what you would call ‘affordable’. Hence, even though the debt service ratio falls below the international benchmark of 30%, by Singaporeans’ standards, the flat is quite simply unaffordable.

You said that the flat is an investment and a significant store of value. But the investment also leads to massive indebtedness that will take a lifetime of toiling to discharge. You said the average Singaporean family has $100,000 in flat asset that can be monetised. If you have to sell your house to pay for your retirement, doesn’t it show that you have never earned enough to keep your house to begin with? Also, two old folks sharing $100,000 leaves each with $50,000 only. Again assuming a minimal subsistence of $360 per month or $4,320 per year per person, the sum of $50,000 will not even last 12 years without even considering inflation. Not a pretty picture at all. You said the government is subsidising 80% of the population. It is the other way round, 80% of the population is subsidising the government instead with their massive HDB monthly payments.

Concerns over plan to increase opposition presence

May 1, 2010

Dear MPs,

I refer to your statements in the parliament as reported by Straits Times on 27 Apr 2010.

Mr Alvin Yeo,

You pointed out that the criticism of the PAP speaking with one voice also applies to the Worker’s Party. But the PAP voice is 82 strong compared to the WP’s voice of only 2. Those 82 voices easily drown out the two lone voices rendering the alternative voice so much less audible compared to the noise and fury of the PAP.

You said having more non-constituency MPs will only add sound and fury, not quality. But who are you to judge sound or fury or quality? Since you share the same stage as non-constituency MPs, you too are part of the sound and fury. It is us citizens who get to judge which MP adds sound and fury but not quality. My advice to you is, don’t worry about others, worry about yourself and show us some quality.

Mr Zaqy and Ms Irene,

You are concerned that there is nothing holding back non-constituency MPs from making provocative comments and populist calls since they do not have to be accountable to their constituents. Logicaly speaking, your concerns have no merit. If you say that an elected MP must refrain from saying things that provoke his own constituents, then he can always say things that provoke people from other constituencies. In other words, his binding to his own constituency does not restrict him from making provocative comments to other constituencies. Similarly, there is nothing stopping him from making populist calls that at the same time benefit his own constituency. Thus, the fear of provocative comments and populist calls apply as much to elected MPs as it does to non-constituency MPs.

You said elected MPs think differently and have to stand by what they say because they have to answer to their constituents. Are you saying that non-constituency MPs do not have to stand by what they say and can say anything they like? You would be most foolish to think that way because there is no reason why MM Lee won’t sue an MP just because he or she has no constituency to answer to. In fact, JB Jayaretnam was not only sued as an elected MP, he was also sued as a non-constituency MP. Thus, there is no difference whether your are elected or non-constituency. As long as you are an MP, you must stand by what you say or represent.

Dr Lim Wee Kiak,

You said voters have reasons not to elect the losing candidate because they do not want him or her speaking on their behalf. But voters don’t choose whom they don’t want in parliament, voters choose whom they want instead. You do not put a cross on the ballot paper to indicate who you do not want in parliament. You put a cross on the ballot paper to indicate who you want in parliament.

Your suggestion does not resolve the unfair situation where a candidate wins a seat even though he only won 55% of the votes while his opponent candidate wins nothing even though he won 45% of the votes. A fairer solution can be found in an improved version of the GRC system.

Suppose a GRC comprises three constituencies with three seats to be won, if the opposition wins at least 33% of the votes, then the opposition should be awarded one of the three seats. If the PAP wins at least 67% of the votes, it should be awarded two of the three seats. If the opposition wins 45% of the votes while the PAP wins 55% of the votes, then the opposition gets at least one seat, the PAP also gets at least one seat. For the remaining seat, we note that the opposition’s vote balance is 45% – 33% = 12% while the PAP’s vote balance is 55% – 33% = 22%. Since the PAP’s vote balance of 22% is higher than the opposition’s vote balance of 12%, the last remaining seat goes to the PAP. This will ensure fairer representation of popular votes within the GRC framework. Since in our examples, the PAP gets two seats, it should be the party to provide the minority candidate.

Cooling-off day sparks heated debate

May 1, 2010

Dear Mr Shanmugam,

I refer to your comments in parliament as reported by Straits Times on 28 Apr 2010.

You reportedly accused the opposition of being unable to come up with a single argument based on principle. That accusation is more suited for yourself. Ever since you became a minister, the arguments you have come up with have hardly ever been based on principle.

You said there is a logical disconnect to the argument that since Singaporeans are rational, they do not need an extra day to think. But there is nothing illogical about it. If you are rational and you have clearly thought through, do you need to ask the house for an additional day to think through while you prepare answers to questions in the parliament?

You said rational people do not suffer from being given an additional day to think. But not suffering is not a reason for anything except to avoid suffering. You do not suffer from becoming a minister, therefore you become a minister? You do not suffer from becoming a lawyer, therefore you become a lawyer? We do not suffer from an additional day, therefore we are given a additional day? How about giving us an additional day of holiday since we do not suffer from it?

You said that Ms Lim has wrongly accused the PAP of saying that voters are irrational because the PAP never said that voters are irrational. You went on to quote PM Lee of saying that the cool-off day allows voters to analyse what is at stake rationally. But if voters are indeed already rational, why would they need another day to analyse rationally? So the fact that the PAP thinks that voters need another day to analyse rationally shows the underlying concern that without the extra day, voters may not analyse rationally. Thus, Ms Lim is right in pointing out the PAP’s underlying concern that voters are irrational.

You referred to Ms Lim’s argument of ‘why now’ as a schoolboy debate. You reply in turn is a schoolgirl cat fight. Your counter question of ‘why not now’ betrays your lack of understanding of the most fundamental law concept that you so often tout – the presssumption of innocence. The onus is always upon the accuser to prove that the defendent is guilty and not the other way round. It is not up to the defendent to prove that he is innocent. Applying that concept to our situation, the onus is on you, the challenger of the status quo to prove your case that it indeed should be ‘now’. The onus is not on Ms Lim to prove that it shouldn’t be ‘now’.

You are a disgrace to the Singapore law profession and a laughing stock to the term ‘top’ lawyer.


May 1, 2010

Dear Mr Calvin Cheng,

I refer to your remarks in parliament as reported by Straits Times on 28 Apr 2010.

You said to allow losers of elections into parliament flies in the face of a democratic election and is a slap to those who voted against them. But voters don’t vote against candidates, they vote for candidates. You do not put a cross on the ballot paper to indicate who you do not want in the parliament. You put a cross on the ballot paper to indicate who you want in parliament. Therefore, your claim that it is a slap to those who voted against losers of elections is nonsense since they didn’t vote against the losers to begin with.

Also, in some wards the PAP may garner some 55% of votes against the opposition’s 45%. In such cases, our so called democratic election leaves 45% of voters without their choice representation. How ironic is that? 45% of voters in a ward are left without representation and that to you doesn’t fly in the face of democracy? Only 55% of voters voted for you and you have the swagger to behave as though you are a through and through winner? You lost, you lost 45% of the votes. How much more emphatic can you be about the fact that you hardly won over half of your electorate? If you lose 45% of your marks in your exam, yes you pass, but nobody’s going to think that you are very smart.

Furthemore, many virtually unknown PAP candidates enter the parliament by riding on the coat tails of heavy weight ministers. They have not proven themselves that they could win on their own merits, yet they have seats. What kind of victory is that?

As My Sylvia Lim have said in parliament, for someone who didn’t even contest, you have no right to criticise the losers and yet you have the cheek to do so.

You are a waste of tax payer’s money.

Balancing a strong govt and a diversity of voices

May 1, 2010

Dear Mr Shanmugam,

I refer to excepts of your speech in parliament as carried by the Straits Times on 28 Apr 2010.

You said Singapore needs a government with a clear, strong majority. Of the many times you have reiterated this, not once have you been convincing.

You said if the nine non-constituency MPs perform well and gain credibility, they will have the potential to form a government one day. But it is also possible that Singaporeans, now happy with more opposition voice, becomes contented and no longer see a need for the opposition to actually win seats. It is hard to see the opposition forming a government one day when they don’t actually win seats. So this circumvents but doesn’t solve the crux of the issue – the unfairness of our political contests which basically undermines our democracy.

While you claim that the government strongly believes in doing what is right for Singapore, I prefer to believe what MM Lee said not too long ago when he unashamedly admitted that his political game is about survival, about maximising his chances and crushing the opposition in all ways possible, fair or otherwise.

‘Cooling off’ day

You said the ‘cooling off’ day is necessary because it helps reduce the risk of disorder due to high running emotions between opposing supporters. But separate election rallies have already been designated for PAP and the opposition which has already limited the chance of opposing supporters meeting each other. So this excuse of yours is not valid.

The countries you listed to have ‘cool-off’ periods include a communist country, a ‘mafia’ country and mostly third world countries, hardly choice countries that would convince Singaporeans that this is the way to go.

You said rational people do not suffer from being given an additional day to think. But not suffering is not a reason for anything except to avoid suffering. You do not suffer from becoming a minister, therefore you become a minister? You do not suffer from becoming a lawyer, therefore you become a lawyer? We do not suffer from an additional day, therefore we are given a additional day? How about giving us an additional day of holiday? That doesn’t hurt, does it?

You said there is a logical disconnect to the argument that since Singaporeans are rational, they do not need an extra day to think. But there is nothing illogical about it. If you are rational and you have already thought through clearly, do you need to ask the house for an additional day to think through while you prepare for answers to questions in the parliament?