Singaporeans’ rights to social security and public housing
Singaporean workers have to make mandatory contributions of up to 34.5 per cent of their wages to their own individual pension accounts (the Central Provident Fund accounts).
The government issues non-marketable government bonds at 2.5 and 4 per cent to take over CPF funds, by matching the interest rates of 2.5 and 4 per cent paid by the CPF Board to the various types of CPF accounts.
There is no transparency as to how the government uses CPF funds. Presumably, most of these funds end up in the coffers of the Government Investment Corporation (GIC) and Temasek Holdings (TH).
We know that GIC and TH have indicated historical shareholder returns of 6 and 18 per cent per annum respectively. Yet the CPF Board pays only 2.5 per cent on Ordinary Accounts (generally about two-thirds of CPF contributions) and about 4 per cent (about one-third of CPF contributions) on Special and Medisave accounts. This discrepancy undermines Singaporeans’ access to adequate social security.
This access is regarded as a component of people’s economic and social rights by the United Nations, as provided under Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).
In November 2007, the Committee on Economic, Social and Cultural Rights clarified its interpretation of what constituted the State’s obligations with regards to ICESCR’s Article 9. It said in paragraph 45 of its General Comments 19: “The obligation to protect requires that State parties prevent third parties from interfering in any way with the enjoyment of the right to social security. Third parties include individuals, groups, corporations and other entities, as well as agents acting under their authority.”
“The obligation includes…adopting the necessary and effective legislative and other measures, for example, to restrain third parties from denying equal access to social security schemes operated by them or by others…arbitrarily or unreasonably interfering with self-help or customary or traditional arrangements for social security that are consistent with the right to social security…”
GIC and TH, being sovereign wealth funds, are third parties under the government’s authority. Their apparent access to CPF monies for the purposes of investment could result in interferences to the disbursement of returns on CPF accounts. Indeed, the discrepancy in the returns enjoyed by GIC and TH shareholders and the CPF members can be regarded as interference.
The Committee added on paragraph 46: “To prevent such abuses an effective regulatory system must be established which includes framework legislation, independent monitoring, genuine public participation and imposition of penalties for non-compliance.”
The absence of transparency on the access enjoyed by the GIC and TH to CPF monies is arguably in contravention to these obligations.
The ICESCR was first adopted by the UN General Assembly in December 1966 and came into force in January 1976. To date, there are 160 parties and 69 signatories to the treaty. Singapore is neither.
The Government has consistently refused to provide the break-down of the costs of building public housing (HDB flats), despite questions being posed in Parliament and newspaper forums almost every year.
By pricing new HDB flats under a “Market Subsidy Pricing” policy, which pegs prices of new flats to a purported discount to resale market prices, the affordability of public housing has increasingly become an issue.
Singapore has arguably one of the highest public housing loan delinquency rates in the world, with about 7 per cent of public housing loans being in delinquency of over three months, as well as one of the highest public housing prices in terms of the ratio of prices to median wages.
The lack of transparency over the pricing of public housing and the amount of profit made by the government has undermined Singaporeans’ access to affordable public housing. It is also a failure with regards to the accountability and transparency of the national housing policy.
The access to affordable public housing is regarded as a component of people’s economic and social rights by the United Nations, as provided under Article 11 of the ICESCR.
In December 1991, the Committee on Economic, Social and Cultural Rights clarified its interpretation of what constituted the State’s obligations with regards to ICESCR’s Article 11. It said in paragraph 8 of its General Comments 4: “Steps should be taken by States parties to ensure that the percentage of housing-related costs is, in general, commensurate with income levels.”
The UN’s definition of the right to adequate housing is further explained in its fact sheet, produced by the Office of the UN High Commissioner for Human Rights.
The following are some of the key definitions and clarifications on the right to adequate housing as stated in the fact sheet, and our clarification as to how Singapore’s public housing policy may be infringing on this right:
(from page 4 of the fact sheet)
I A – “Affordability: housing is not adequate if its cost threatens or compromises the occupants’ enjoyment of other human rights”
Rising public housing prices could in some cases force people to make choices between housing and other basic needs.
(from page 33 of the fact sheet)
III B – The obligation to fulfil – “The obligation to fulfil requires States to adopt appropriate legislative, administrative, budgetary, judicial, promotional and other measures to fully realize the right to adequate housing. States must, for instance, adopt a national housing policy or a national housing plan that: defines the objectives for the development of the housing sector, with a focus on disadvantaged and marginalized groups; identifies the resources available to meet these goals; specifies the most cost-effective way of using them…”
(from page 37 of the fact sheet)
IV A. National accountability and monitoring – “Accountability compels a State to explain what it is doing and why and how it is moving towards the realization of the right to adequate housing for all as expeditiously and effectively as possible. International human rights law does not prescribe an exact formula for domestic mechanisms of accountability and redress. At a minimum, all accountability mechanisms must be accessible, transparent and effective.”
The government’s lack of transparency in terms of pricing policy fails to meet this obligation to be accountable.
(from page 38 of the fact sheet)
Administrative, policy and political mechanisms
“Administrative and political mechanisms are complementary or a parallel means to judicial mechanisms of accountability. For instance, the development of a national housing policy or strategy, linked to work plans and participatory budgets, plays an important role in ensuring Government accountability. Human rights-based indicators support the effective monitoring of key housing outcomes and some of the processes to achieve them. Furthermore, assessments of various kinds, such as human rights impact assessments, offer a way for policymakers to anticipate the likely impact of a projected policy and later to review its actual impact on the enjoyment of the right to adequate housing.”
“Political mechanisms, such as democratic processes, and monitoring and advocacy by independent actors also contribute to accountability. Civil society organizations and others are increasingly using monitoring methods based on indicators, benchmarks, impact assessments and budgetary analysis to hold Governments accountable in relation to the right to adequate housing.”
The government’s lack of transparency in terms of detailed housing data – such as detailed figures on COV levels, costs of constructing public housing – fails to meet this obligation to allow democratic processes and independent actors to participate in policy monitoring. The result is a lack of accountability.
By: Leong Sze Hian