Over the last few days childcare centre cost has gone up by $75 pm. And taxi fares up. Flag down fare up by 30c plus other charges also up. The comparison for a 9 km trip during peak hours is $14.35 against Hongkong's $14.30. Very compatible as if the commuters can switch to Hongkong cab if local cab is too expensive. A substitution idea.
Then the mandatory comparison with Sydney at $28.70 and London at $51.60. So we are cheap, very cheap.
How about comparing lemon to lemon? What is their average income compare to an average Singaporean?
The increase in cab fares is a given—it had to happen sooner or later. And yes, compared to other developed countries, it's still ok.
ReplyDeleteThe highest cost in just about any enterprise is human resources, and that stand to reason: all businesses are about PEOPLE—people doing stuff or making widgets for the benefit and satisfaction of the needs of other people.
In a booming economy (tipped to grow 6% next year), human resources tend to take on a "scarce goods" character as workers, quite understandably seek the "best deal" usually in the terms of higher wages. Thus there is an exodus of labour into the sectors which are paying the best money. Since these sectors need to attract human capital, they'll also offer lots of perks: medical, bonuses, overseas trips, stock options, career prospects etc.
Other sectors who also need human life to run will then have to bid for workers in the free labour market, and offer similar "incentives".
S'pore, despite it having silly-billy's in government, is a country with one of the highest growing number of high net worth individuals. And many of them are YOUNG. Unless you inherit it or win it it, the only way to legally become wealthy is to serve as many customers as you can better than your competition, and many of these folks are doing just that.
S'pore provides a GREAT environment for individual wealth creation — just make sure you keep the govt out of your life as much as possible, and don't get entangled in the local bickering and futile politics, and you'll be alright. In short, just be a self-interested, socially apathetic (but engaged) individual, highly motivated and focused on achieving YOUR goals and YOUR success.
Allowing prices and wages to fluctuate with the level of economic activity is a GOOD thing. It shows that the market is essentially FREE. When economic activity declines, prices and wages follow suit (as we have seen in the past).
Western central banks however run on the policies of price stability and employment. They like "price stability" and so they manipulate the money supply (aka "monetary policy") to attempt price stability. So when prices (and wages) increase too much, that is a sign of to much money in the economy. To bring the levels down, the enact monetary policies which reduce the amount in the money supply. They do this by increasing the commercial banks reserve ratio, increase the official interest rate among other things.
Thus in western countries, when inflation gets out of hand, interest rates go up, some businesses stop expanding and reduce their labour force as consumer demand falls. People lose their jobs, but no problem, every western country is a welfare state with social unemployment insurance schemes (The Dole) to look after poor-little-'ol-you when you've lost your job. To fund this elaborate "social safety net" however, when one is working, one is taxed like hell. In fact, nearly every human activity is taxed.
If we can believe them, Singapore's MAS (the "defacto" central bank) under Goh Chok Tong has a "hands off" approach, and have indicated that they'll leave the market alone. Are they telling the truth?
I (sort of) believe so—not because these are "honourable" trustworthy people. HELL NO. They are keeping a hands-off to TO COVER THEIR OWN ARSES.
Firstly, those foreign folks who love economic freedom and like making money nearly all DON'T TRUST central banks. So when MAS is labelled a "defacto central bank", it looks "better" to these foreign capitalist mavens. But no one falls for that shit any more—when you see an ex-prime minister as head of the bank, you already know it has political connections...and thus you know MAS (like HK's central bank) interferes, even though minimally.
...BUT, LKY and his sales team have for years lauded S'pore's "hard money" structure—the strength of the SGD and its stability in value and purchasing power on the global currency market. To achieve this the central bank has to be very clever in what it does, so it gets the govt to legislate LAWS. e.g. you can only get a credit card if you earn more than $X, car loans cannot exceed $Y and n years, to finance a property you need to but A% down and so on. If queried the govt says "We're looking after the people. If we leave it up to them, they'll get into financial difficulty". Ahh.. such is a paternalistic government!
So far tempting MAS has not interfered with attempting "price and wages stability", although they are (supposedly) quite kia su on inflation. I say supposedly because the S'pore money supply has grown substantially over the last few years.
In the US, there are groups of people called "Fed Watchers". Are there similar groups in S'pore? I don't know. 2 days aga China's Central Bank increased the domestic banks reserve ratios (> 14%) i.e. China is reigning in its money supply growth. WHY? I'd like to find out.
The RBA (Reserve Bank of Australia) has increased the money supply in Australia by over 20% according to this article.
Oh yes, and some greedy Australian financial institutions have lent this "new money" created by the RBA for "better returns" on the US Sub Prime lenders' market.
Money is a fascinating subject, one of my pet interests (oh, you noticed?).
But money is nowhere near as fascinating as the human behavior which results mostly from a misunderstanding of money, or a belief that money is the be-all and end-all of a person's identity. When that happens, the comedy has started. :-))
Bring it on!
Redbean - Good point about the income comparison. 'They' shld also compare the OVERALL transport structure in Hong Kong and not just compare the taxi fare just to back its silly argument.
ReplyDeleteconsidering the size of some countries and depending on its geography, their people can quit the rat race and live in the desert and still survive. the singaporean can quit and live in hdb void deck before the police haul you in.
ReplyDeletenot just the salary difference which is crucial of course. but in bigger countries, there other ways for you to adjust.sometimes, you don't have to be a rat or sell your soul or identity to survive.
actually we are such a big country. we can stuff in another 10 million people here. no problem.
ReplyDelete