HDB’s lease decay issue should rank high on national agenda as we cannot continue ignoring ‘the elephant in the room’, says WP’s Louis Chua

Member of Parliament (MP) for Sengkang GRC Louis Chua Kheng Wee on Thursday (3 Sept) called on the government to evaluate its success of policymaking holistically, noting that it should take into account the overall well-being of Singaporeans and the vulnerable group.

Speaking in Parliament yesterday, Mr Chua addressed the unprecedented challenges that arise from the COVID-19 pandemic, adding that the crisis has exposed “the weakness in Singapore’s economic structure and lack of social protection” for the vulnerable group.

“I call on the government to evaluate its success not just purely based on a narrow set of economic terms, but to take a more holistic, multidimensional approach in measuring the progress of our nation.

“We should base our policy decision making on not just maximising financial value, but on maximising the overall well-being of all Singaporeans, particularly the most vulnerable among us,” said the Workers’ Party (WP) member.

Mr Chua highlighted four areas for reform to build a stronger and more resilient Singapore in the current pandemic-induced crisis.

Workers need direct support and financial buffers

Referring to the second-quarter employment change numbers, he pointed out that giving subsidies to companies and the past approach of “moral suasion” will not help to prevent job losses.

Mr Chua added that the ratio of job vacancies to unemployed individuals reached a historical low of 0.71 per cent as of March this year.

“With the demand outlook remaining poor, and the worst of retrenchments and unemployment ahead of us, many more workers will be without a job, despite their best intentions to be employed,” he noted.

Rather than providing blanket wage subsidies to companies, the workers themselves are in need of direct support and financial buffers in the event of unemployment, said Mr Chua.

“The Singapore government has taken pride in creating a pro-business environment, through its economic and manpower policies. It is now time in my view, however, to strengthen our employment laws to better support and protect workers, and raise the standard of work for all.”

HDB’s lease decay issue should “rank high on our national agenda”

Mr Chua went on to highlight the lease decay of HDB housing as the second area for reform, noting that it has “serious implications for the retirement adequacy of Singaporeans” due to their assets are being tied to their primary residences.

Noting that over 80 per cent of Singaporeans live in HDB flats, the Sengkang GRC MP noted that the majority of them are relying on their Central Provident Fund (CPF) ordinary account balances to pay their mortgage.

This issue potentially becomes “a significant source of mental stress and insecurity”, knowing that their HDB flats would lose value “ as they approach the tail end of their leases”.

“The government has said earlier in 2019 that it will consider all alternative suggestions and ways to manage the expiring leases of HDB flats.

“We cannot continue to ignore the elephant in the room, and this is an issue which I firmly believe should rank high on our national agenda,” he remarked.

Employees should be given legislative rights to flexible working arrangements

On the third area for reform, Mr Chua stressed the need for more family-friendly policies.

He highlighted that the country’s total fertility rate stands at a record low of 1.14 per cent in 2019, and the pandemic-induced economic downturn might lead to delay in marriage and parenthood plans among couples.

“We need to recognise that family-friendly policies boost, rather than reduce productivity, and reject the notion that dedicating time for our care-giving responsibilities, hurts the employment prospects of workers,” Mr Chua asserted.

He described the institutionalized flexible work arrangements at workplaces was “the silver lining” to the circuit breaker period, and it has shown that “economic competitiveness need not come at the expense of our families”.

That said, Mr Chua noted that employees should be given the legislative rights to flexible working arrangements, rather than simply non-legally binding advisories and recommendations.

He added that the government should “lead by example and demonstrate to companies what progressive HR practices look like”.

“We need to take bold and decisive steps and provide greater financial and non-financial support to Singaporean families, recognising that the stresses on families and our low fertility rate, if not urgently addressed today, would have significant long term socioeconomic costs on Singapore,” he said.

The use of reserves

While Mr Chua agrees with the policy that states the government’s expenditure levels cannot – and should not – exceed its revenues for long term sustainability, he said national policy proposals that tap the reserves must be seen in the context of Singaporeans’ needs in healthcare, ageing and retirement adequacy.

As such, there needs to be a thorough evaluation of alternative sources of revenue that remain untapped, he noted.

“Currently, some government revenues including land sales are excluded from the official budget. However, capital receipts from land sales represent strong, recurring cash revenues that are actually received by the Government – particularly with land being sold on a leasehold basis.

“As such, one of the ways that the revenue shortfall can be met is by tapping no more than a fifth of the approximately $15bn[billion] per year in land sales that the government typically collects,” Mr Chua explained.

He also suggested increasing the Net Investment Return Contribution by up to 10 per cent as an alternative source of revenue.

Though Mr Chua acknowledged the need to safeguard the nation’s reserves for potential contingencies, he noted that increasing the percentage of returns generated from the net assets will vary the pace of the reserve growth, and not cause them to fall.

“Arguably, deploying our reserves into more productive uses by investing them into our people, our human capital, could generate far superior returns in the long run, and boost the future sustainability of our nation.”

https://web.facebook.com/workersparty/videos/326862368519911/

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