Questionable increase of HDB's deficit to $797m?
By Leong Sze Hian
I refer to the article “HDB constructs more flats; records higher net deficit before Government grant in FY 2012/13” (Straits Times, Oct 16).
HDB’s deficit increase?
The article states that “The Housing Board (HDB) recorded a higher net deficit in the last financial year, amid the ramping up of a supply of new flats and programmes to upgrade heartland estates.
According to its latest annual report released on Wednesday, HDB had a higher net deficit of $797 million before a Government grant in the year ending March 2013, compared with $443 million the year before.”
It received a $1.04 billion Government grant in the same financial year. The ramped up building program saw more HDB flats under construction last year. Some 72,737 flats were constructed last year, a 23.8 per cent increase from the 58,731 flats the year before. But fewer flats were completed: 11,541 flats were finished last year, or 35.7 per cent down from the 17,947 the year before.”
Costs of sales was $3.3b?
According to the HDB’s annual report 2013/2013, sales proceeds and costs of sales for the financial year was $3.1 and $3.3 billion, respectively.
From $2b deficit to … ?
The previous National Development Minister said that HDB’ deficit in a year was $2 billion;, the current MND Minister said shortly after he took over that it was $1 billion, and now the deficit has now dropped to $797 million which was an increase of 80 per cent over last year’s $443 million?
No breakdown of costs of sales?
I was not able to find any breakdown of the $3.3 billion costs of sales into construction costs, land costs, etc, in the 80 page annual report.
Without such information, how can we analyse whether the HDB loses money on every flat that they sell?
High ratio of operating expenses to sales proceeds?
The operating expenses was $1.6 billion, including manpower costs of $548 million.
Isn’t the ratio of operating expenses to sales proceeds, at 0.52 ($1.6 divided by $3.1 billion) rather high?
Manpower costs increase 9%?
Manpower costs has also increased by about 9 per cent from about $502 to $548 million in the last financial year.
In this connection, about a decade ago in 2003, it was reported that the HDB had manpower costs of about $55,000 per head, at a total of about $500 million for about 8,000 staff, before it was split up into today’s HDB and other privatised units. (Source including See Leong Kit’s article “Critique of PAP govt“, Mar 31, 2006)
CPF Housing Grants decrease 24%?
With all the hooha in the last financial year about increases in housing grants and more liberal criteria to enable more flat buyers to qualify, why is it that CPF Housing Grants decreased by about 24 per cent from $235 million in FY2011/2012 to $178 million in FY2012/2013?
Never spend a single cent on public housing?
In the final analysis, as long as we continue to not have transparency and accountability on our HDB, we may have to assume that in a sense, from a cost-plus cashflow perspective – we are not spending a single cent on public housing.