Wednesday, 4 October 2023

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How many unfair treaties has the Singapore Govt signed?

by Foong Swee Fong

Not surprisingly, the Americans are outpacing the Chinese when it comes to buying properties in Singapore.

According to Ms Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics, “Mainland Chinese were the largest group of foreign buyers in Singapore from 2017 to 2022 and in the first quarter of 2023. However, this changed in the second quarter of 2023 as 56 condo units were bought by Americans, surpassing the 51 units purchased by mainland Chinese buyers.”

The reason it is “not surprising” is because Americans, along with citizens of Norway, Iceland, Switzerland and Liechtenstein are exempted from paying Additional Buyer’s Stamp Duty (ABSD) of 60% applicable to all other foreigners, due to the Free Trade Agreements (FTA) we have signed with them (US-Singapore FTA and the European FTA).

The Americans and these Europeans are thus enjoying a huge discount compared to other foreigners.

The ABSD is meant to prevent foreigners from chasing prices up and thereby making property unaffordable for Singaporeans. However, the exemption as stipulated in the two FTAs compromises our ability to manage our own affairs and thus our sovereignty.

As it is, despite the 60% ABSD, it will have no effect on the Americans and some Europeans. Of course, property developers, banks and other related businesses here, will be happy with the ABSD exemption as they are good for business, but for Singaporeans in general, it is a sell-out.

The state press is keenly aware and tries its best to gloss over the inconvenient fact.

Instead of stating “Americans and some Europeans are exempted from ABSD”, it states that they are “subjected to the same ABSD as Singaporeans” (Bear in mind Singaporeans are not subjected to ABSD for their first property).

I believe using the latter phrase is the standing order, from way up, because the same phrase was used in a previous Straits Times article by another reporter.

These treaties legally bind all Singaporeans and, once signed, are extremely difficult to extricate. Some segments will lose out, while others will gain.

In this case, homebuyers will lose out, but property developers, banks and other related businesses here will gain, as well as the Americans and the Europeans.

In the long run, the differences do stack up.

Given that they are legally binding and have long-term consequences, treaties have to be ratified by parliament, ie, studied, debated and voted on. Did they take place? Did any MP ask what has housing stamp duty got to do with Free Trade Agreements?

But alas, even if they did, it would have been moot; parliament would have to agree regardless, given that the ruling party controls more than two-thirds of the house.

I hope people still remember the India – Singapore Comprehensive Economic Cooperation Agreement (CECA), which let in hordes of Indian professionals to the delight of businesses and is still displacing many Singaporeans in white-collar jobs.

Given that our government is pro-business to a fault and that parliament is generally toothless in fighting for the interests of the people, I shudder to think how many treaties have been signed that benefit big business but disadvantage the people and are slowly but surely sucking their blood dry.

This was first published on Foong Swee Fong’s Facebook page and reproduced with permission.

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