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Resilience package: The year after

by Leong Sze Hian

When I was asked if I could write something about how the $20 billion Resilence Package has helped Singaporeans, the first thought that came to my mind was – I was stumped!

How should I go about analysing the unprecedented Resilence Package to help Singaporeans during Singapore's worst recession in 2009?

Well, the mind sometimes kind of works in strange ways – I remembered the movie “The Day After”, about the lives of ordinary people after a nuclear war.

So, I shall try to write about what is the outcome for ordinary Singapioreans – "The Resilience Package: The Year After".

Just like a company that has committed and spent on a huge new project, there should be an evaluation and analysis of the  results.

Statistical outcomes for ordinary Singaporeans

Incomes

After spending $20 billion of our precious reserves, in 2010 (The Year After), among resident households, the median monthly income from work increased in real terms by just 0.3 per cent.

Among Employed Households by Deciles, it was only $354 and $675, for the bottom first and second deciles.

Since the data is for employed households, what about retired and unemployed households? (There were 64,400 unemployed and 10,900 discouraged unemployed who have given up looking for a job, in December last year.)

Since the number of persons per household has declined from 3.7 to 3.5, from 2000 to 2010, if an adjustment is made for the decline, the per household member income should be better. To illustrate this, dividing say $1,500 household income by 3.7 and 3.5 household members, is $405 and $428, respectively. So, the income of households, if adjusted for the decline in household members, should be higher. In other words, the increase shown in the data, may actually be less.

Among employed households living in HDB 1- and 2-room flats, the median household income in 2010 was only $1,200.

In real terms, its is a decrease of about minus two per cent, from $1,190 in 2008 to $1,200 in 2010.

Singapore workers had only a real median wage increase of just 0.5 per cent last year, despite the 14.7 per cent record GDP growth.

There were 400,100 residents who earned up to $1,200 per month, 64,400 unemployed and 10,900 discouraged unemployed. If the $1,200 is adjusted for inflation, how many more residents are earning an inflation-adjusted $1,200 today?

The 25th percentile gross wage of civil engineering/building construction laborers dropped by 32 per cent from $800 in 2009 to $546 in 2010. Office cleaners and waiters registered a decrease in 25th percentile gross wage from $700 to $697 and $930 to $879 respectively (As these are nominal wages, they would have to be lowered to account for inflation adjustments).

Calls for a minimum wage were rejected, with cleaners, labourers and general workers earnings falling to around $650.

Jobs

The change in the rate of growth in employment for locals grew by about five times less than foreign workers, at 12,400, whereas employment for foreigners grew by 62,500.

Since the number of new citizens and PRs was 48,023 (29,265 PRs and 18,758 new citizens) last year, how many of the 54,200 local employment went to Singaporeans?

The proportion of Singaporean workers continue to decline, with 1,990,700 locals forming 64.2% of the 3,102,500 persons employed in Singapore. The remaining 35.8% or 1,111,800 were foreigners.

The Ministry of Manpower (MOM) continues to issue passes to allow foreigners to come to Singapore for a year to look for a job. When the MOM was asked as to how many foreigners have been issued with such passes, it declined to reveal it.

The average usual hours worked per week among employed residents rose by 1.0 hour over the year to 46.6 hours in 2010 – the highest in the world.

Cost of living continues to escalate

The above statistics appear to indicate that Singaporeans may not be earning more, and may have some difficulty in getting jobs. So, if the cost of living continues to rise, are ordinary Singaporeans lives much better off the year after the Resilence Package”?

2-year high inflation - Inflation hits a 2-year high of 4.6 per cent, in December.

HDB costs increase - The HDB Resale Price Index rose by 14 per cent in 2010.

HDB terminates citizens and PR siblings scheme – this may increase the housing costs of such eligible siblings.

Longer waits for BTO flats - HDB said that flats under the build-to-order (BTO) scheme in the last two years, flats were completed in 32 months on average, but  the Estimated Delivery Possession Date (EDPD) for the last four BTOs in December, November and October, is 66, 58, 53, and 60 months, respectively.

Healthcare costs escalate - Class C hospital bills increase by as much as 100 per cent over the last four years, whilst Singapore’s public GDP spending on healthcare remains at about one per cent - one of the lowest in the world. Medifund had a  surplus of $10 million, which  will be converted to protected reserves when there is a change over of government. This could have provided about one million polyclinic visits for needy Singaporeans, as Medifund cannot be used for polyclinic out-patient visits.

Another huge Budget surplus - The Budget surplus is estimated to be about $6 billion for 2010.

University and polyclinic fees increase - University and polytechnic fees increase by as much as 10 per cent. In 2010

Transport fares increase- Public transport fares increase by about three percent, after the change to distance-based fares in July, 2010.

CPF 55 Minimum Sums increase- CPF Minimum Sum increased from $117,000 to $123,000 and Medisave Required Amount increased from $22,500 to $27,500.

Many apply for financial assistance - An estimated 34,500 new households applied for social assistance through ComCare, in the first three quarters of 2010.

Looking at the above statistics for 2010 (The Year After), it looks like ordinary Singaporeans may not have been much better off. So, perhaps givng the $20 billion resilence package vide $10,000 cash to each of the bottom 200,000 housholds out of the 1.15 million households in Singapore, may arguably have made our lives better, and grow the GDP too.