Dr Chee Soon Juan, Secretary-General of the Singapore Democrats, responds to Prime Minister Lee Hsien Loong’s National Day Rally speech delivered on 29 August 2010. Dr Chee noted that Mr Lee avoided talking about how the flooding of foreigners in Singapore was causing grave social and infrastructural problems for Singaporeans.
We are glad to hear the Prime Minister addressing the various key problems that we have been raising for the past one year in his National Day Rally speech.
However, at closer examination, we have the following key points to make:
$60 billion for MRT infrastructure over 10 years
1. Where would the government get the funding of $60B from?
2. Will the PAP government increase the GST to 10% or raise other taxes to get additional funding? Will the public transport fares increase to finance this expenditure?
3. Will the PAP government keep to the promised time frame of 10 years? The PAP government has delayed various important infrastructure projects, like the building of hospitals as well as the Downtown line, which have resulted in the increased cost of construction. Will the PAP government promise to keep to the budget of $60B instead of allowing it to balloon out of control, just like what happened to the YOG budget?
Measures to keep Housing Affordable
1. We are very confused by the various contradictory signals that the PAP ministers have sent within these few months:
a. Late last year, Minister Mah Bow Tan claimed that housing was still affordable, and that the influx of immigrants was not a main factor causing the rise in resale prices. But now the Prime Minister has acknowledged that the influx of new immigrants has contributed to the rise in resale prices.
b. When Minister Mah put up the first few measures in March 2010 to curb rising resale prices, some Singaporeans questioned the inadequacy of such measures. Minister Mah defended his ministry’s decision and said no other measures would be necessary. But just 5 months down the road, Minister Mah has introduced more drastic measures to curb property prices.
c. In March 2010, Minister Mah claimed that the supply of flats was more than sufficient to meet any surge in demand. However it seems that his ministry must now go into overdrive to ramp up the supply of BTO flats.
d. In March 2010, Minister Mah raised the minimum occupation period for resale flat owners who take bank loans from 1 year to 3 years. Barely a few months later, the ministry is now further pushing it up to 5 years. It seems that HDB is unable to provide any policy stability at all.
e. On 26 June 2010, MM Lee said there probably isn’t any property bubble. But now, Minister Mah admits that a property bubble is in the making.
2. In December 2009, after admitting to being “caught off guard”, Minister Mah reassured us of the ministry’s ability to keep this problem of “unexpected” rise in property prices in check. Yet the contradictions as noted above clearly signal that his ministry continues to lose sight of the severity of the problem.
3. The latest drastic measures have caused unwarranted shocks to the whole system. Those who have based their purchases of HDB flats or private properties on the past policies will face great financial losses. The frequent policy changes will erode investor’s confidence in the government’s competency in dealing with such problems.
4. As long as there isn’t any fundamental change in the pricing mechanism of new HDB flats and the increasing demand of new migrants (Permanent Residents) is not effectively met by other means, we do not see how prices for both new and resale HDB flats can become affordable. NSP reiterates our stand that new HDB flats should be sold at cost price to citizens. HDB should also consider selling new flats to PR at market price so to ease the demand due to unusual increase in PR population.
1. We do not think that the Prime Minister understands the real problems caused by the huge influx of foreign labour on the ground.
2. PM Lee has raised the example of coffeeshop owners unable to find Singaporeans who are willing to work until 12a.m. and thus they need to employ foreign workers. But the truth is, to ask workers to work 14 hours or more in a day is an act of exploitation. The labour law should be applied equally on both local and foreign workers. We cannot allow employers to exploit foreign workers just because Singapore workers are unwilling to be exploited.
3. We also notice that there are firms putting up recruitment advertisement which discriminate against either Singapore citizens or races. The liberal FT policy that the PAP government has adopted is partly to be blamed for this discrimination of local Singapore citizens by businesses. This practice has to be stopped and NSP urges the government to set up Commission of Equal Opportunity and setting laws to outlaw discriminatory employment practices.
4. PM Lee has ignored the severity of the depression of wages of both middle and lower income earners due to the influx of foreign labour. There is no mention of any concrete plans to deal with this problem.
5. PM Lee may think that foreign labour will help to create jobs for Singaporeans but the reverse is also true. Many Singaporeans’ jobs have been displaced by foreign labour. The problem is so severe that engineers and managers are now becoming taxi drivers. We have invested lots of money in the education of our citizens but such displacement of jobs of foreign labour has effectively made our investment wasted. Here again, there is no mention of any concrete plans to deal with this problem by PM Lee.
6. Raising workers’ levy alone will not help much in preventing engineers and professionals being displaced by foreign labour. Raising workers’ levy will not prevent exploitation of foreign workers nor save jobs for citizens.
7. Last but not least, this liberal immigration policy has caused a serious problem of income disparity within our society. Wages of both middle and lower income earners have been depressed while some have basically lost their jobs and face underemployment or even unemployment. The widening of income gap and the diminishing of middle class are great concerns to social stability but the Prime Minister has not addressed it either.
Although we feel that the Prime Minister has put up a very good pre-election National Day Rally speech but we still find that the solutions that his government has provided are generally inadequate.
We must bear in mind that all the problems and issues addressed by the Prime Minister are mostly the result of oversight by the various ministries under the charge of the respective ministers. All these problems are not new and have been raised by many people including NSP over the year. These problems could be long anticipated as it is the direct result of PAP government’s deliberate policy of opening the floodgates for foreign workers and migrants to come to Singapore. These “caught off guard” ministers should be responsible and made accountable for their deficiencies.
We also note that the Prime Minister did not resorted to giving out goodies or red packets to citizens as a populist tactic to win support. We would be impressed if PAP decides to abandon its past undesirable election tactic and choose to contest the elections based on its policy views, ideas and plans instead. We would be even more impressed if PAP could put up the boundary report way before the impending general elections. It will open up a new era of healthy political competition and engagement for Singapore.
Goh Meng Seng
National Solidarity Party
The Reform Party was disappointed with the PM’s speech. This was an opportunity for the PM to address some of the pressing issues facing this country and his failure to do so has demonstrated once again that our government is out of touch with the people. Here is the Party’s view on some of these issues and our proposed solutions.
The PM praised Singapore’s economic performance this year. However this has been built on the back of a vigorous US recovery, which is now fading fast. Singapore’s performance is just a leveraged version of what most of the other Asian economies have experienced. Given that imports subtracted 2.4% from US GDP growth in the last quarter it is clear that we are fast approaching the limits of what can be achieved by reliance on US demand. There are few signs that Asia has replaced the US as a source of final demand. So we can expect a dramatic slowdown in growth for the second half of this year and perhaps even a technical recession where growth is negative over two quarters. And let’s remember that while unemployment may have been contained
Singapore workers have suffered real wage cuts that are a long way from being restored.
The wage guidelines for next year of a 3% pay rise would still be lower than expected inflation of 3-4%. In other words real wages will continue to fall.
The Reform Party is of the view that our level of net saving is unnecessarily high and we would do more to stimulate domestic consumption by reducing taxes or increasing transfer payments to the less well-off.
Foreign worker/Immigration policies
Buried in the PM’s speech was the eye-opening detail that 400,000 Singaporeans (or about 20% of the domestic labor force) are receiving workfare of an average $1,000 each (most of which goes into CPF). This is the segment of the population which has suffered most from the PAP’s open-door foreign worker policy, yet there were no policy measures announced to help them.
The PM relied on isolated anecdotes to downplay the level of anti- foreign worker sentiment that threatens to spill over into xenophobia. He provided no reassurances on immigration policy and no evidence of how the PAP policies have benefitted the ordinary Singaporean or older retrenched workers. The folksy stories of aunties do however concur with our experience that Singaporeans are not xenophobic by nature but have been pushed that way by PAP policy.
The Reform Party supports the policy of allowing easy access to foreign workers with special skills, but we should ultimately be looking to provide Singaporeans with the skill sets to take their place over the longer term. We do not agree that this country needs foreign workers to compete directly with Singaporeans on all levels of the workforce.
It is difficult to see how Microsoft’s need for skilled software engineers translates into the necessity of having foreign chambermaids or shop assistants. Nor indeed why any MNC (such as Microsoft) if it lacks skilled engineers should not reciprocate for the benefits of being based in Singapore, by running training courses to bring our local engineers up to the specification that they require. It is difficult to see why we should fight so hard to retain industries that employ 80-90% foreign workers as it just increases the competition for domestic inputs whose supply is inelastic, such as land.
The Reform Party is pleased that the PM has responded to our call for the need to raise productivity. Unfortunately PAP policies such as the current excessively liberal foreign worker policy are antithetical to productivity growth as they only serves to keep cost of labour low. The government has yet to show any real commitment or clear cut long term strategy to increasing productivity.
The only concrete initiative was to reward NS men with a grant of $9,000. Few details were provided other than to say that it could be used to pay for further education (which the Reform Party would make free for NS men) and for housing (where sky-high prices are the result of deliberate government policy in restricting the supply of land and growing the population at an unsustainable rate).
The Reform Party believes that $9,000 in a restricted account does not come close to reflecting the economic cost Singaporean NS men face with two years of lost earnings. Furthermore, the PM said that future education fees will have to rise, presumably to cover this additional expense.
The Reform Party continues to propose, in this regard:
Lower taxes for NS men
Obligation on foreign students on Singapore scholarships wishing to work here to serve NS
Cutting the NS period down to a year at maximum within 5 years
A target for zero death in training
On education, the Reform Party has repeatedly called for a reduction in the weighting given to PSLE in order to provide a more holistic education. We have also called for an abolishment of streaming at the early stages of education, between N levels and O levels as we want to offer opportunities for late bloomers who do poorly at PSLE to move up if they do well.
The party is disappointed with the PM’s 30% target for enrollment and his excuses for not expanding further. Again the PAP demonstrate their inability to formulate any long term innovative strategy for increased enrollment in institution where learning is targeted at the skills required in the workforce. The Reform Party has also called for the need to increase the percentage of university enrolment up to advanced nation standards.
The PM failed to touch on any measures that would ensure all of Singapore’s children receive an equal right to an education, including the physically challenged, those with learning difficulties, or other issues such as familial economic hardship.
It is interesting to see yet again how much Reform Party thinking is now reflected in Government policy but this begs the question of why we need a PAP government in the first place. In response, I reproduce below the Reform Party’s 19 policy pledges so the electorate can judge who has the welfare of ordinary Singaporeans at the heart of their policies. It is all very well to talk of the Singapore spirit but this is a government which continues to insist on running Singapore as a business and has downgraded Singapore from Sovereign Nation status to International city status.
1. Providing Cheaper and Better Lower-Income Housing by releasing more land for house-building and allowing the private sector a greater role
2. Universal health insurance to be funded through current CPF contributions replacing current Medisave and Medishield schemes
3. Basic Old Age Pension payable to all provided they have worked and paid into CPF for a sufficient number of years
4. Reform of CPF to make contributions above those necessary to fund health and unemployment insurance and basic pension voluntary
5. Universal child benefit scheme (as part of Guaranteed Minimum Income) to replace current tax breaks that heavily favour women on higher incomes
6. Guaranteed Minimum Income for those in work to replace current Workfare system and to be integrated with child benefit and tax system
7. A Minimum Wage to encourage businesses to raise productivity
8. Reforms to Foreign Worker Policy to ensure that business gets the skilled labour it needs but that our own citizens come first
9. Reductions in or exemptions from GST for certain categories of goods like food that form a higher proportion of total expenditure for those on median incomes and below
10. Universal free and compulsory education from pre-school through to secondary level
11. Expanded university enrolment and increased investment in improving quality of education for everyone
12. Increased assistance for older workers and women re-entering the labour market to retrain and acquire new educational qualifications
13. Reduction in NS to 18 months initially with aim to reduce it to one year as soon as feasible
14. Requirement for new citizens and PRs to do NS or to pay lump sum tax instead
15. Privatization of Temasek and GIC and distribution of equity to Singaporean citizens of more than five years standing
16. Continuing Business and Foreign Investment Friendly Environment coupled with low tax rates
17. Greater help and support for local SMEs to grow world-class companies
18. Abolish restrictions on freedom of expression to encourage creativity and innovation necessary for a 21st century knowledge-based economy
19. Reduce waste and inefficiency in government starting with slashing ministerial salaries and replacing it with performance-linked earnings tied to indicators directly related to your welfare
Released by Kenneth Jeyaretnam on behalf of the Reform Party, August 30th 2010