4/16/2012

The great subsidy game

In paradise, everything is subsidized by the govt. School fees, university fees, all subsidized. Hospital bills, subsidized. Polyclinic bills, subsidized. Housing, more subsidies in terms of tens of thousands or at least $60k for those earning $1000 pm. Dunno how much subsidies for the bigger flats, but must be big. Public transport, also subsidized, the latest $1.1b to buy buses and pay staff salaries. PUB bills, conservancy bills also got subsidies but called rebates.

If these are subsidies, that means the govt is paying a large portion of the bills. The cost must be genuine and that is why there is a need to subsidise. Can someone work out how much would all the subsidies come to that are paid by the govt? I think it is no small amount. Or this is already provided in the budget under Subsidies?

If one flat is subsidized by $60k, 1,000 flat would mean $60 million. And for bigger flats, the subsidies could be more. Imagine how much the govt has subsidized for 800,000 HDB flats? Add the rest of the subsidies, it could come to billions.

We should call ourselves Subsidy Paradise. I am thinking of setting up a Subsidy Club. Everything in the Club is subsidized including meals, services, retails etc etc for as much as 70%. Membership fee is $200k. Monthly subscription fee is $1000. I think this is an excellent concept. Forgot to add, Membership fee is already subsidized and so is monthly subscription fee. Members no need to worry. This subsidy concept is perfectly sustainable in the long run.

The great subsidy game is one of the key factors that allows the thousands of millionaires to live their normal lives. Without the great subsidies, the millionaires will have to tighten their belts and may go begging. Can our asset rich millionaires survive without the subsidies? This is perhaps the only rich country in the world where millionaires have to live on subsidies.

I remember that a figure was thrown out claiming that an average Sinkie would receive something like half a million dollars of subsidies in his life time. Foreigners must quickly opt to become citizens and become recipients of half a million dollars just by becoming Singaporeans. Where on earth got such a good bargain?

4 comments:

Anonymous said...

The key lies in the definition of subsidy.

1.English dictionary (the type that is written by Western democracies) definition of subsidy is;
Subsidy = Cost - selling price


2. Uniquely Singapore definition of subsidy is;
Govt. subsidy = Market price - Selling Price

What is never revealed to Sinkies is the "actual cost". See below.

Market Price -------> $$$$$$
Selling Price ------> $$$$
Actual cost --------> $$

Selling Price is real. We pay this price.
Actual cost is real. The govt. paid this price.

Market price is not "real".
It's calculated using arbitrary formulas. And the formula is updated only when the timing is good (nudge, nudge, wink, wink).

With a government controlling most of the supply of land, hospitals and doctors.
Who controls the "market prices?"
The "free market" or the government?

Matilah_Singapura said...

In this instance the susidies in question are simply redistribution: tax one sector of the economy, and redistribute to another sector... usually from political pressure to achieve social or political objectives.

It is inefficient. Market prices are severely distorted, so what you get overtime are SHORTAGES. Ie if you subsidise something, you will get MORE of it, leading to a decline in supply somewhere ese, or lossesin producing that supply, and eventually you'll get real, physical shortages of the good.

Chua Chin Leng aka redbean said...

Heard of mismanagement under stupid premises and assumptions?

Christine said...

Heard of mismanagement under stupid premises and assumptions?