By Alex Au of Yawning Bread
In late January 2010, Finance Minister Tharman Shanmugaratnam, in announcing the increase in the Additional Housing Grant from the previous S$30,000 to S$40,000, said that with the increase, some 8,000 households annually would benefit.
What does “8,000 households annually” mean? What percentage of Singaporeans would qualify for the Additional Housing Grant? Is that a large percentage or not?
In attempting to grasp the significance of this figure, I tried to compare it to the annual demand for ownership flats as reported by the HDB in their Annual Report. Over the last three years, this has averaged about 10,000 flats per year. The HDB defines “demand” as “bookings received by HDB for 2-room and bigger flats under the various allocation exercises, as well as bookings for Design, Build and Sell scheme flats.”
At first glance, 8,000 eligible out of an annual demand of 10,000 suggests that even the Additional Housing Grant is a scheme that throws money like confetti to all and sundry.
However, the details complicate such a simplistic conclusion. The Additional Housing Grant can be used for resale flats, but not for second-time purchases, whereas HDB’s 10,000-figure for demand includes second-time purchases, but excludes resale transactions. Hence, it is not possible to compare the two figures. Nevertheless, one is left with the distinct impression that not only do all Singaporeans’ first-time flat purchases get an assist from the first grant, perhaps a majority also get the Additional Housing Grant.
It is hard to avoid the conclusion that the great majority of Singaporeans depend on subsidies to get a roof over their heads. We’re breeding a culture of dependency.
This cannot be tenable. I’m not against subsidies in principle, but it should only be for a small percentage of the population to mitigate extremes of poverty. Dishing out subsidies — and the schemes are permanent — to well over half the population cannot be fiscally responsible.
Unless…. they are not subsidies.
Read the entire article at Yawning Bread