Opinion
The elephants in the room
by James Lee
Today I lunched with my colleagues at the nearby Ghim Moh Hawker Centre, where the famed Ah Seng Durians were found. Today’s topic isn’t about the thorny fruit, but the issue is definitely no less thorny. While I was queuing for a rather famous Teochew porridge stall, I had the chance to observe this elderly couple going around selling tissue paper packs at 3 for a dollar. The elderly lady was blind (judging from her cane and her dark glasses), and her husband (I presume) was holding her other hand guiding and navigating her through the crowds of hungry office workers and patrons to the hawker centre. They would approach each table, and the elderly lady would ask in a gentle voice “帮auntie买纸巾好吗?” This translates into “Would you help auntie by buying my tissue papers?”
In that 15 minutes of standing in the queue, whilst most Singaporeans are busy catching up with their Facebook and Instagram feeds, I observed that many patrons bought tissues from the couple. Most, in fact, would give them a $2 note, and only take two or three packs of tissues, when they could have taken six. Some even refused to take the tissues. After each sale, the elderly man would give a slight bow or two. I never heard him speak from where I was, so I could not ascertain if he was mute or not.
I never thought much of that scene, until I came home today and I read two other articles. “What happens when politics becomes a stepping stone to riches”, followed by “Oral reply to PQ on cost of living“.
The first article is an opinion piece by Augustine Low, who regularly writes to ‘The Online Citizen’. I particularly like to read his pieces as his views are generally balanced and objective and not merely rants by an anonymous keyboard warrior. He opined that the recent speech that Minister Chan gave on the costs of living in Singapore was nothing more than motherhood statements, and I quote:
“When Minister Chan Chun Sing starts giving his usual motherhood spin this week in Parliament about cost of living being a “multi-dimensional issue,” and amounting to a gap between people’s aspirations and their ability to fulfill them, you know that either he just doesn’t get it or he tries to turn something simple into something incomprehensible.”
That led me to the second article, where I decided to read for myself what Minister Chan actually said, to determine if what Augustine said was true. Sad to say, I agree with Augustine. The problem with government speeches is that sometimes it is like a donut–full of sugar on the outside, but with an empty centre. You have to look beyond the frosting and see how big the hole is. Thus, the title of this piece–the elephant in the room.
What I would like to point out in this piece are the obvious questions that have not been answered. I only hope that in time, these will be answered. I am no economist, but I know for sure that Minister Chan isn’t one either.
GST hike
This is the biggest elephant in the room that has not been addressed. In para 3 of Minister Chan’s speech, he noted that “some price items, while not the biggest in absolute impact, can have a disproportionate psychological impact on consumers. Water and transport fares are such examples because they are items consumed daily.” It then befuddles me that the government was still trying to slide the pamphlet for GST hike to 9% under our doors like a desperate real estate agent trying to get me to sell my flat. If it is recognised that daily consumables would have an impact on consumers, especially the lower income group, wouldn’t the GST hike make it worse for them? If the intention was to get more money into our coffers, why not a progressive tax that taxes the rich, rather than the GST, which is a regressive tax by nature?
I do not know the extent which Min Chan is in touch with the ground, but the lower income groups have just been buffeted with a slew of price increases – electricity prices, water prices, transport fares.
The GST hike to 9% is only going to be a nail in the coffin. If a progressive tax is not feasible, then how about a luxury tax? COE that costs two times for owners with a second car, 3x for a third car, 4x for a fourth car etc. Supercar owners pay 5x COE per supercar they own. Back in Jan 2018, I proposed this COE framework which I submitted to REACH.
Inflation
In para 6, Minister Chan stated that the inflation “over the past 5 years (between 2012 and 2017), at an average of +0.6% a year, was significantly lower than the preceding 5 years (between 2007 and 2012), which averaged +4.0%.” Although the inflation rate is lower, there IS STILL inflation. By simple calculations, based on 4% compounded over 5 years, followed by 0.6% compounded over the next 5 years, an item that costs $1 in 2007 would cost $1.25 today. That is a 25% increase in prices.
Comparatively, I am not sure if real wages increased by that amount, especially for the lower income group. In para 15, Minister Chan provided data that “Median resident household income from work per member grew by 4.2% per annum in real terms between 2012 and 2017, while that for the lower income deciles rose between 4.2% – 4.6% per annum.” What was glaringly omitted was the data from 2007 to 2012 where inflation averaged 4% per annum. Was that data on real household income growth deliberately omitted because providing it would have contradicted the rosy picture Min Chan intended to portray?
Jobs
Min Chan said in para 15 that keeping the economy competitive was one of the strategies to keeping costs of living affordable. I recall that the gripes of many Singaporeans PMETs were unhappy that their jobs were being taken up by foreigners. To tackle that, the government launched the Jobs Bank to much fanfare in 2014.
It was reported that “employers with businesses of 25 or more people must post job vacancies on the website for at least 14 days before applying for an Employment Pass.” I would like to ask Minister Chan now, to provide an answer as to how effective the Jobs Bank has been, in terms of job matching, statistics of how many Singaporeans secured jobs through this portal, whether these jobs listings were ‘real’.
By this, I mean that the job posting has some job requirements that are unachievable so that the job posting can survive 14 days on the Jobs Bank and the company knows that nobody can meet those requirements. Once the 14 days are up, they simply apply for an EP. Taxpayers’ money is spent on this so it is our right to have answers on how effective this measure has been. As far as I know now, I see many Singaporeans now plying the streets as private hire drivers. Perhaps the displaced PMETs are not complaining since they have a source of income now, but consider this: since Lee Kuan Yew’s time, we have been selling the idea to foreign investors that Singapore’s greatest resource is its people. As I look at the increasing number of Singaporean private hire drivers, I wonder if this is still true. Will it end up one day as Singapore’s greatest resource is its foreigners, while its people are taxi/private hire drivers? I certainly hope not.
In conclusion, Minister Chan’s speech does not reassure me. Perhaps it will sell well with those who are impressed with typical government infographics, nice Powerpoint presentations etc. But to me, many questions remain unanswered, especially the pertinent ones.
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