Singapore 2025

What of Singapore towards 2025? Thoughts of a Singaporean.

Parliament: Budget 2012 (Pritam Singh) – 29 February 2012

Mr Speaker, Sir, I support many of the initiatives proposed by the Government, particularly measures directed at the social well-being of Singaporeans, especially the elderly and the disabled. I am going to speak on two issues covered in the Minister’s speech.

Firstly, the measures introduced to unlock the wealth older Singaporeans hold in their HDB flats. I note the Finance Minister’s concern about the older generation of Singaporeans who have very limited cash savings and low CPF balances because wages were much lower 20-30 years ago, and because of the lower Minimum Sum then. I would however caution that low CPF balances ought to remain a permanent concern of the Government as future wage increases look likely to be moderated by inflation and the cost of living.

More importantly, the high cost of public housing relative to wage growth is likely to result in mortgages that are marked by a longer pay-back period, inevitably compromising the ability of Singaporeans to grow their nest-egg. Nonetheless, I commend the Government for raising CPF contribution rates. While I empathise with SMEs who already face short and medium term difficulties with regard to labour-related overheads, the national interest dictates that the post-retirement well-being of all Singaporeans, including those very employees that keep SMEs competitive, must remain a primary social objective of any Singapore government.

I am encouraged by the Silver Housing Bonus of $20,000 which will be extended to older Singaporeans who wish to sell their existing flats and downgrade to other flats. I do ask that the Government consider extending the policy to all HDB households, so as to give retiring Singaporeans more options. Equally, it is also noteworthy that the Government has sought to make the Lease Buyback Scheme more attractive by doubling the incentive from $10,000 to $20,000.

I see the enactment of policies that allow older Singaporeans to monetise their flats as a central pillar in ensuring Singaporeans live out their retirement years with reasonable dignity, as they stand to receive a larger CPF LIFE payout.

Like many Singaporeans, I am disturbed when I see older Singaporeans having no choice but to work because they cannot afford to retire. Their health may not allow them to stay on their feet for hours on end, but they have no choice, as they need the money to survive. While I admire the drive, determination and self-respect of such Singaporeans, I feel the Government need to introduce more policies that ensure as many of our elderly live out their retirement with a sense of accomplishment, with full-time post-retirement employment – a choice and not a necessity. For that reason, I think the Government has done well with the Silver Housing Bonus and the Enhanced Lease Buyback Scheme.

However, I am not certain how these two schemes will work out in practice. In fact, I note that the initial response to the HDB Lease Buyback Scheme was not encouraging. Introduced in March 2009, the take-up rate has been low – in fact, according to HDB statistics, it stands at 2% of all total eligible households, or 446 households. Mr Speaker, Sir, the Government may want to keep an extra close watch on both the Silver Housing Bonus and the Enhanced Lease Buyback Scheme and consider publicising a yearly report card on the take-up rate of both initiatives. The public character of such a report card, apart from signalling a robust attitude to accountability, would also reinforce and institutionalise the importance of the Government’s elderly policy in the public consciousness.

Greater awareness of the Government’s elderly policy is also likely to have positive effects on nation building and our national identity. If the take-up rate is poor, it would be clear that the Government would need to do more, and I for one would support the Government wholeheartedly in this endeavour. If the take-up rate is good, it would simply reflect positively on the Government’s 2012 Budget. I sincerely hope both the Silver Housing Bonus and the Enhanced Lease Buyback Scheme are closely tracked as their success potentially portends how Singaporeans can expect to live in their retirement years, especially in terms of financial security, in a Singapore that is already one of the most expensive cities in the world.

Moving on to the second issue, Mr Speaker, I would like to register my concern for the Bus Services Enhancement Fund, as announced by the Minister. No one I have met since the Minister’s Budget Speech really disputes the benefits of additional buses on the road, particularly if, in the Minister’s words, it will serve to reduce crowding and waiting time. But there nevertheless remain some very serious questions about this $1.1 billion “one-time” commitment to help fund the purchase of 550 buses.

Mr Speaker, many Singaporeans are asking why the shareholders of our publicly listed bus operators are being extended this unusual generosity by the Government. According to both their 2010 Annual Reports – both of which are available online – SBS Transit has a market share of 75% and around 3,000 buses on the road, while SMRT has slightly less than 1,000 buses. In the case of SBS Transit, the top five shareholders of the company hold 83% of all shares of that company. The largest shareholder of SBS Transit is ComfortDelgro which owns 75.11% of the company, while the four next largest shareholders of SBS Transit are BNP Paribas Securities Singapore, DBS Nominees Private Limited, United Overseas Bank Nominees Private Limited and Citibank Nominees Singapore Private Limited.

The public unhappiness over the Bus Services Enhancement Fund since Minister Tharman’s Speech has been very apparent. Part of the reason for this, I hazard, is because this Government has traditionally been quick to urge Singaporeans to choose the path of self-sufficiency, reminding ordinary Singaporeans that there are no free lunches and no one owes us a living. It would be useful for this House to remember that both SBS Transit and SMRT pay their top management market-rate salaries, pay their shareholders regular dividends, while operating in near-monopolistic conditions. By any stretch of the imagination, these are not broken-back companies.

In particular, the SBS Transit 2010 Annual Report also stated the company’s intention to purchase new buses in addition to funding additional capital expenditure. For that purpose, it launched a note programme in May 2010, issuing a $100 million fixed rate note, which is due in 2015. So not only is the company not a broken-back entity, it clearly knows how to raise money too. And in FY 2010, SBS Transit paid it shareholders dividends amounting to $27 million, while SMRT paid out $102 million to its shareholders. SMRT, as I mentioned earlier, 75% of its operations comes from rail operations so that dividend figure probably needs to be put in perspective.

Unsurprisingly, discerning and sensible Singaporeans have been quick to eschew the Government’s $1.1 billion windfall for SBS Transit and SMRT Corporation. While I appreciate the Government’s intentions to put buses on the road quickly, I would urge it to claw back the $1.1 billion of taxpayer money expended on these bus operators over a fixed period of time, but after consultation with SBS Transit and SMRT. There ought to be nothing unusual about clawing back taxpayer money as the Government already extends many direct and indirect financial subsidies to both these profit-generating private operators.

For example, they are exempted from bidding for Certificates of Entitlement, and they are also exempted from the Additional Registration Fee, the main vehicle tax and the duty on diesel. In addition, both these operators are allowed to keep their buses on the road for 20 years, twice as long as almost all other vehicles. They are also charged a nominal rent for space their interchanges take up, while reaping the profits their advertising revenue generates.

Mr Speaker, Sir, I am reminded of a resident who runs a SME, who spoke to me at one of the Aljunied Constituency Committee’s Lunar New Year Dinner celebrations earlier this month. He implored me to petition the Government in Parliament to reduce or subsidise the COE of goods vehicles for SMEs. As Members would know, the COE for goods vehicles and buses are classified under Caegoryt C COEs. While our two profit earning operators do not pay a cent for their COEs, this small time businessmen will pay in excess of $50,000 for his COE based on today’s market rate. While this is not an apple for apple comparison, I would say. It does say something about the perception the man on the street has about this Government’s apparent lack of desire to communicate why our bus operators are being extended this $1.1 billion gift. I understand the Transport Ministry will address this issue in the upcoming COS debates and I certainly hope it fully addresses the genuine misgivings many Singaporeans have over the Bus Services Enhancement Fund.

Mr Speaker, Sir, I have a second query about the figure of $1.1 billion for the Bus Services Enhancement Fund. I had to learn from the media that the figure includes the total operating cost for the vehicles for 10 years, and it also includes the salaries of bus drivers. According to the 2010 SBS Transit financial report again, in that Financial Year, SBS Transit placed an order for 600 buses, more than what the Government has committed to, comprising 300 award-winning Euro-5 compliant Mercedes Benz low-floor single deck buses and another 300 Volvo double-deckers, all for the price of $268 million. Taking into account inflation over the two last years, I hope this Government gives the public a detailed breakdown of the operating costs and the salary component that was set aside for the Bus Services Enhancement Fund, in addition to all other components that may not have been publicly revealed so far. Too much of this dispensation of taxpayer dollar to these two profit generating quasi-monopolies is currently unknown to the public beyond the big figure, and some transparency would be very helpful.

Mr Speaker, Sir, a third concern I note that dominated the online media in particular, concerns the unspoken of implications of 800 additional buses on the road. The routine questions are – is the Government planning for another spike in immigrant arrivals, if so how many are being planned for? And what sort of planning parameters is the Government working with? Is this $1.1 billion a harbinger of things to come, in terms of an even larger population size? It would be apposite for the Government to answer these queries because there is already a sense of an over-crowded Singapore where public space is at a premium.

Other questions also dominate the public realm about this $1.1 billion. What will this cash injection do for bus fares going forward? Are both operators going to use the profits generated and invest them overseas? Should Singaporeans anticipate similar ostensibly one-time gifts to other publicly-listed entities or companies of national consequence such as companies in which Temasek Holdings or GIC own a stake? And can the taxpayers now demand greater transparency from all companies like SMRT and SBS Transit which receive taxpayer injections? Beyond just educating the public on how their taxpayer dollar is spent, I believe such accountability would generate greater trust between citizens and the Government.

Mr Speaker, Sir, $1.1 billion is a whopping sum by any stretch of the imagination. This Government should clearly set out how the figure was arrived at and what this policy move of extending cash injections to publicly-listed entities that perform a public function implies for policy-making going forward. Mr Speaker, I support the motion.

Written by singapore 2025

29/02/2012 at 9:24 am

Posted in Parliament

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