7/07/2007

higher cost? have no fear

'Costs are always important but we are not going to allow costs to prevent us from growing. You do want the standard of living of Singaporeans to go up and a higher stand of living means more income in real terms.' Goh Chok Tong Recently we are seeing all kinds of increases, the euphoria of property prices and the jubilant cheers of property developers and beneficiaries of en bloc sales. We also hear some grumblings from the foreign business communities and the lower grade foreign talents that it is no longer feasible to work here and have their families with them. Can the rentals of office spaces and shop spaces continue to go on without somebody paying for the increases? High costs mean higher standard of living provided the income is growing as fast or faster. How many Singaporean's real incomes are growing? The 2% GST increases means that income has gone down by 2%. Period. The rebate is only a short term stop gap measure. And if the goods and service providers just add up their costs and transfer to the consumers, as many have seen recently, the increase in prices are more than 2%. Effectively cost of living is up and real income down. Then the surge in property prices that will filter down to the heartlanders. Real income must come down when buying a flat is now that much more. The en bloc hordes with their overflowing cash windfall can only benefit one time by downgrading. Unless the en bloc phenomenon can go on and on. But that does not change the fact that many first time flat buyers are going to pay more for their new flats. And if their incomes do not run away as fast as the prices, they are going to face the squeeze. We believe that our standard of living can go on the upward climb despite the high costs. Maybe the top 20% could do so. Do we believe that the general masses are that much smarter, productive and efficient that they deserve that much more for their effort and services than people around us? Many in India and China have proven that they could do as much and as good as us for lesser. The competition from these seas of humanities will not allow our workers' salaries to go on rising in line with the rising costs. I wish that I am wrong, that this island is really a pool of talented people that can command exceptionally higher remunerations for the quality of their work vis a vis the Asian giants. And we can continue to push up our cost and standard of living at will.

3 comments:

Matilah_Singapura said...

People in govt dun give a shit about inflation—because they can always raise their pay to compensate for what the Average Joe and Jane Blo have to contend with.

You ain't seen anything yet. Prices will continue to rise, until the inevitable CRASH.

Solution: don't worry, be happy :)

matilah_singapura said...

P.S.

There is definitely cause for concern. WHY? Because the govt has taken great pains to allay any fears of a BUBBLE BURSTING.

The 7-page transcript o SM Goh's interview is put out by the PM's office—all this is geared to 'reassure' people, especially foreigners that there is nothing to worry about.

Here is the pdf of the transcript:
http://www.straitstimes.com/STI/STIMEDIA/pdf/20070705/smgoh.pdf

Nothing to worry about?

YEAH, RIGHT...

... but then there are those who have an unswerving trust in their government. Not me, though. Not as long as there is a hole in my backside :)

Anonymous said...

Had the malaysians been more totful and friendly, many singaporeans may have considered moving across the border as the HK people has done with shenzen to rein in the high costs of living.

Ironically the IDR may be the solution to put a brake on our maniac property speculations. Becos if IDR becomes successful there may be all kinds of economical leaks that may adjusted the living standards in spore to more decent and livable standards.