by Chris Kuan
National Day Rally navel gazing on housing policy. Yours truly is gratified to be proven correct not just me of course, – the Prime Minister said the 99 year non recourse lease is to allow the governnent to recycle land. That means the government earns land sales revenues over and over again but what he is not saying is that if the 99 year HDB lease allow the government to do this, why then the sheer reluctance to use part of the remaining 50% of inflation adjusted earnings from the reserves to fund stuff like healthcare, financing of social security like Careshield and Medishield, Comcare and Silver Support Schemes?
In other words, if recycling of land allows the reserves to continue to grow why is there a need to retain the remaining $15b of earnings in face of urgent social security needs? No picture, no sound. He skips this.
The PM also said that the 99 year lease is also fair to future generation because had they been freehold, then owners can pass to their descendants and eventually society will be split between owners and those who cannot a property. He added that would be “most unequal, and socially divisive.”
This is true of course which is the reason yours truly argued to leave the issue of HDB lease alone, and that existing monetizing schemes would suffice, But the money earned from selling HDB leases are predominantly from retirement savings.
This is why I also argued these monies ought to be returned in the form of social security funding to lessen the negative impact of hocking retirement savings for housing. Again why retain the remaining inflation adjusted earnings from the reserves since CPF and household savings transferred into government coffers via the medium of housing is a major contributor.
However on the question of fairness, inequality and social division, what the PM does not acknowledge is that we are really exchanging one form of fairness for another form. The HDB lease may be “fair” to future generation but this is causing unfairness and social division between HDB leaseholders who face the certainty of their property reacquired by the state with no compensation and freeholders who does not face this risk and are able to hand their property to their descendants.
This is creating haves and have-nots anyway and you have to wonder what’s the reluctance to reimpose estate duties given the PM’s concerns over “fairness”. So being “fair” to future generations should not be taken at face value. Besides the future generations will be smaller given the demographics.