SINGAPORE — Senior Minister of State (SMS) for National Development, Sim Ann invites Non-constituency Member of Parliament Leong Mun Wai to file a Parliamentary Motion to debate the issue of Build-To-Order (BTO) flats, in the latest exchange of social media posts between the two Members of Parliament.
Ms Sim made the invitation to Mr Leong from Progress Singapore Party in a Facebook post on Tuesday (20 Dec), where she said that it was incorrect for him to say that BTO flats are not subsidised.
She explains that Housing Development Board’s BTO flats are sold at a significant subsidy, and many buyers also get grants on top of that.
When homeowners sell their BTOs on the resale market, this subsidy is realised, wrote Ms Sim.
In his Facebook post on 16 December, Mr Leong clarified that he did not claim HDB flats have been subsidised.
“This is because the government has net positive cash flow from each HDB flat it sells disregarding land costs. Nevertheless, since the government has adopted a certain accounting method, we have no choice but to accept this and continue the discussion based on these methods.” wrote Mr Leong.
The NCMP, however, notes that even based on the government’s definition of the subsidy, it is not clear how the government has priced and subsidised HDB flats over the years.
Based on the research by PSP of the HDB’s financial statements over the past 20 years, the “net government subsidy” has fluctuated significantly over the years as a percentage of the total cost.
Mr Leong pointed out that, for most of that period, the “net government subsidy” was a positive percentage.
He adds that there were times during the 2000s when it was negative, which means the government made a gross profit by selling flats at prices above its total cost.
Ms Sim also addressed Mr Leong’s proposal for the Government to price BTO flats much lower, disregarding land costs if necessary.
Responding to Ms Sim’s statement in an earlier Facebook post on 11 December, where she commented that taking out the land cost in pricing HDB flats will require the government to draw from the national reserves, Mr Leong argued that if public housing is treated as public infrastructures like schools and hospitals and not charged with land costs, there will be no drawdown of reserves.
He asked if the land used for HDB flats was truly “disposed” by the government since HDB flat owners only own the rights to their flats and not the common areas and amenities. Further, nothing that the government can re-acquire the land at any time under the Selective En bloc Redevelopment Scheme (SERS).
He also questioned if flat owners are arguably paying a fixed monthly rent for 99 years in today’s dollars upfront when they purchase their flat.
Ms Sim, in her latest Facebook post, wrote that the Government has been actively listening to the public, especially through ongoing ForwardSG conversations and are focused on maintaining the affordability of BTOs and will continue to do so.
She claims that Mr Leong has mixed up the questioning of the accounting of land value as part of Singapore’s Reserves with the discussion on BTO prices.
“Mr Leong is far from being the first Government critic to have over-confidence in the adequacy of our Reserves and to call for Government to use more investment returns to fund current spending.” wrote Ms Sim.
“Like his predecessors, Mr Leong wants Singaporeans to believe that we should save less in our Reserves for future generations, and can afford to draw down more of our Reserves for today’s needs.”
Criticising Mr Leong’s proposal as a wrongheaded proposal which carries serious consequences, she invited Mr Leong to go beyond social media posts and file a motion in Parliament, so that a full debate can be held.
In response to Ms Sim’s post, Mr Leong shared her post on his Facebook page with no comment.
