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12/17/2008

A cut in CPF?

This is a deadly proposition. We are hearing news of layoffs and retrenchments. Anyone caught in such a situation is going to be dead meat. How are they going to pay their bills and mortgages? A cut in CPF will affect at least 80% of the population who are paying their mortgages and more in the heartland. Many have bought their HDB flats by maxing out on what they have in their CPF and their monthly CPF contributions. Get the biggest one can afford as the property prices are sure to go up in the future. A cut in CPF, if big enough, is going hurt everyone of them. This is one of the good things of our property ownership class, or flat ownership class. And everyone is so happy with asset inflation and blindly went ahead with bigger and bigger housing loans. Hope the CPF cut does not become a reality.

13 comments:

Anonymous said...

A cut in CPF is better than losing ones job. However to those who depend on CPF to finance mortgage they will find it difficult. Well maybe they should have thought about it when they bought their propeties. They should buy only the flats they can afford. Well, if they cannot pay mortgage due to CPF cut, then downsize.

Daniel Ling said...

Hi Anon,

I just wonder if it's the only option. Cutting down on CPF contribution by Employers yes will lower their Operating Cost, but is tat the only way?

If rental is cheaper, tat's a reducation in Operating Cost right? (But i forgot tat SG Property Price is bloody high)

How about electricity? (Tariffs has went down so i assume cost has went down)

I'm sure there's other ways to reduce cost instead of just making Locals cheaper to employ... Tat's so Tunnel Vision.

Matilah_Singapura said...

This is madness. Actually the CPF contribution should be increased to 99% by employees.

Then the govt can redistribute or hoard the money according to what the social engineers have planned.

People cannot be trusted with money. Only the government can. The government is run by very smart people with god-given unique intellects and rare skills. These include the ability to predict the future, and design society to the finest detail for the best political and social outcome.

As far as economics go, there must be TOTAL and ABSOLUTE economic nationalization.

Then we will be perfect.

Anonymous said...

There are more ways of reducing cost and Daniel Ling just said that reducing rental is one of them. In fact I would say that rental is one of the biggest factor contributing to cost, outside of wages.

But with property prices at this height, the Government knows that lowering rentals will have an effect on land bid prices and they are not going to loose out on this. So die die must keep property prices high by keeping land prices high and HDB prices high.

As for cutting CPF, well, they can always just extend the repayment period to maybe, 40 years or more? After all, they can always argue that a persons lifespan is getting longer by the year, so you can work longer and continue paying well into your seventies. I love that argument.

redbean said...

a stall operator in a foodcourt in a new town has to pay $13,500 for rental. and there are labour and material cost. wonder how many bowls of noodles must he sell before breaking even.

raising rental and property prices are different versions of the pyramid game. it is not sustainable in the long run and will break down as the base cannot keep expanding.

many land tycoons in japan got burnt badly. the US subprime is another example. the next example will come from paradise.

Anonymous said...

Say that to the supertalents and they will tell you that they have everything under control, so don't worry. We will not be like Japan or America.

I sometime wonder whether they have such talented people in Japan and America?

redbean said...

japan may not have the quality of our super talents. but wall street got much better ones, being paying in hundreds of millions. bernard madoff is one of them.

hey, it requires super talent, extraordinary talent, to con so many great financial minds around the world for US$50b. great man.

Anonymous said...

CPF contribution must be reduced for Singapore to be competitive. In last recession, CPF was cut so businessman look forward to another cut this time round. Businesses need to survive to maintain jobs and keeping people meaningfully occupied with work. Those who cannot afford to manitain cost of their homes should down-size.

It is not natural to manitain high CPF just to help ppl keep their homes. In fact the state should buy those who cannot afford and in turn rent it back. So these properties becomes State properties. The State is the Landlord for homes.

redbean said...

hdb flats were once priced according to affordability. this means how much the people can afford or have in their cpf. so how much is left in the cpf?

today, it is even worst. it is priced according to market prices, not according to cost or affordability. the cpf saving is going to be depleted much faster.

this is a very clever policy. good for the people. good for retirement, if there is any more left for it.

Matilah_Singapura said...

What I failed to illustrate was that the business (employer) contribution to CPF should be zero.

The employee contribution to CPF should be raised to 99%.

That would make S'pore very competitive because the business people (special folks chosen by god) need the government to be on their side, as the government derives tax revenue from business activity.

The lowly workers need to be looked after by the govt, and therefore a 99% CPF contribution is FAIR and JUST. If you let the worker take home 100% of his money, he will blow it all on frivalous nonsense.

The safest way is for TOTAL GOVERNMENT CONTROL of the workers' money — except for 1%, because it is important for the government to show some compassion and consideration.

i.e. a worker earning $1500 a month can be proud that he has $15 a month of his own to spend on whatever he wishes. So in a sense, there is a good measure of economic freedom for the worker — and he knows that by giving up 99% of his pay to the govt, he will be looked after.

This is a terrific deal and a win-win situation all round: worker, business and government.

Anonymous said...

Cut in CPF....will it'll make the "i feel rich every month" minister CRY again??..sob sob

Anonymous said...

The funny thing is the last cut in the CPF, the gahman did not restall back the CPF employer's contribution in FULL AMOUNT even when the economy is good!!! When time is bad, they want to cut again. I do see that low income workers are always taken advantage of.

redbean said...

i just got this feeling that how much we got or contribute to the cpf is being planned to the extent that whatever goes in will be taken out to pay for something or to be put away, untouchable.