Affordable has destroyed our retirement plans

SG+ is a new programme very similar to Talking Point. Last week’s topic was about CPF and whether Sinkies have sufficient money left for retirement. After the two experts gone through with Melanie, the host, it was a glaring admission that many Sinkies will be in deep shit when they retire. The only hope to survive those greying years is to downgrade their homes, provided they have one and is down gradable.
 
The two were talking about having more savings and more schemes to bolster the existing schemes which would not be enough due to high inflation and the huge amount of money sucked into housing and medical insurance. The recommendations are something like another CPF to cover for the shortfalls in the current CPF and more insurance schemes to cover for the inadequate schemes that the people are paying now. 

The assumption is that the people have a lot of spare cash to pay and save. My ballpark figure to ensure that these people have enough to retire, to live well and to pay for their medical is to save 70% of their current income. Madness is another word.
Don’t blame the recommendations or the experts. Basically our retirement savings through the CPF are screwed. Despite being one of the biggest savers in the world, we don’t have enough for retirement. No joking. If the planners would have their full proof schemes, everyone must earn 3 times what they are earning today or save 2/3 of their incomes if they want to be safe.
 
What went wrong? Affordable is the word. By declaring everything is affordable or priced to be affordable, the savings of everyone is at risk, to be just enough for the day, for all the schemes, including housing and medical but somehow retirement was forgotten. They computed everything to be affordable, ‘gum gum ho’, and nothing left for retirement.
 
How did it start? It goes back many years ago when housing was priced to one income and to be paid off by 15 years. At this kind of affordability, many people’s savings started to grow. They genuinely smiled when they looked at their CPF statements, I mean the average workers. They would have paid up their housing loans and started to save everything they put into their CPF. And better still, if the spouse is also working, the whole CPF contribution would be in the CPF, and growing at 4 to 6% pa.
 
Then someone must have noticed the big and bigger savings in the people’s CPF. Heheh, they got plenty of money. Public housing prices must be made affordable to these people. They can afford to pay more. The prices became affordable for one income from 15 years to 25 years. Still got a lot of money leh. Make it even more affordable, with two incomes and 25 years. And then even more affordable to stretch it to 30 years or more. They called it market pricing or market subsidy or something like that, but very affordable.
 
Today, the first 30 years of CPF contributions by both spouses would be just enough for the affordable public housing. The real savings will come after 30 years of working, when both are about to retire or already retired. How to have enough for retirement? And there are the minimum sums to set aside, and now another great scheme, the Medishield Life is going to make retirement a less stressful time without the fear of big medical bill, but would tax on whatever is available in the CPF. The premium sure affordable, to who?

Best for HDB not to declare its losses or deficits

The latest $797m deficit that HDB said it has incurred due to the building of more flats is going to be disturbing to many readers. It was $2b a few years back, then it was $1b of losses. In these three announcements, a total of $3.797b has been lost by HDB on behalf of the MND. Can the ministry really believe that the people will be convinced by these numbers without questions asked? Can the ministry blame the people for doubting the validity of these numbers given the market pricing of the flats sold?

What is the purpose of the ministry declaring that it made such colossal losses? Is the ministry telling the people that the govt is so generous in absorbing the huge losses that should otherwise be forked out by the buyers of the flats? Is the ministry trying to tell the people that they should be grateful to the govt for carrying the losses? Or is there any other purpose or reason for wanting to show the people such drastic sums of money lost for building HDB flats?

Whatever is the agenda, it is going to boomerang and instead of gaining some goodwill or sympathy and understanding, it is raising many eyebrows. Pardon the people for saying, ‘How can it be?’ Throw a straw poll or a proper survey and I can guarantee that most people would not want to believe the numbers. They are just so difficult to believe to the point of absurdity. Don’t blame anyone for thinking this way.

If the ministry thinks it fit to throw out such numbers, it must be prepared to give the details to remove all doubts. If it is not prepared to do so, this could be a failed PR exercise that makes thing looks even worse. It is better not to issue such claims and probably the people would not even think about it. Saying it only invites a lot of unnecessary questions and even anger and cynicism from the people.

So, MND, what do you think?

HDB incurring $797m deficit

It is unfortunate that the HDB has incurred a $797m deficit, a jump of $354m from last year. This is caused by the ramping up in the building of HDB flats. 72,737 units are in various stages of construction. HDB has to spend $5.2b just to acquire the land for the flats. Some of the deficits were due to higher subsidies for the new flats. The people, or those eligible to buy HDB flats must be grateful to the govt for absorbing the higher prices, a whopping $797m.
 
Assuming an average price of $300k for each flat, the 72,737 units of flats should fetch $21.8b of revenue. I hope my numbers are as close to the real numbers. I only have 10 fingers and it is a bit touch trying to use the toes as well. With this revenue, I am wondering what would be the final deficit when all the flats are sold. Last year about 10,000 units were sold. I am not sure how the $797m deficit is derived, but the deficit for 72,737 units must be at least 5 to 7 times more when all is done.
 
I am afraid the govt is going to run a loss for building so many flats. But it is good for the people with such affordable priced flats. Just hope that there will be no more schemes to cover up for this deficit.

Singapore a truly rich country

We held parties called Singapore Day for our citizens and their friends abroad in cities like New York, London, Melbourne, Shanghai and the latest in Sydney. Each event could see near to 10,000 Sinkies being feasted with our local favourites to remind them of home, all free, paid by our govt. And the cooks and their foodstuff were flown there from home to ensure authenticity. We even flew a real minister and several big shots there to really make them feel at home. See how hardworking our ministers are. Each event would probably cost a few peanuts at most. Good value for the money. Our overseas Sinkies will be so happy and their guests will be impressed. I don’t think the Americans or the Japanese could afford such parties.
 
It is one of those events that Sinkies really feel like Sinkies and being surrounded by Sinkies. You can’t even find such a gathering and atmosphere back home except in Hong Lim when Gilbert Goh threw a party. And this is what a Sinkie, a Anthony Sim, in Sydney said, ‘… he had never seen so many Singaporeans congregating in the one place.
 
“It is quite heartwarming to know we are not alone. Everyone of us were on the same page,” he wrote.
 
"There were no PRCs, India Indians, Bangla or Pinoys to annoy us.” Ahem.
Sinkies back home would not have many chances to be in the company of just Sinkies.'

Unfortunately this Sinkie event has attracted the wrong gatecrashers who demanded to be invited. And when failed to get in, they accused the organizers of racism. KNN, how can our govt be accused of racism when they invited all foreigners with their open arms here? Typical outback country bumpkin mentality! It is unbelieveable but it is true. The two hungry and hard up white Australians said on a talk show that they were refused entry to a private party for Sinkies. I hope the Australian govt is not going to demand an apology and for SIA to fly the two men for a two week fully paid vacation in Sin City to appease them.
 
Actually since we have so much money to spend, the Singapore Day could be open to all and sundry. It can’t cost that much more than the F1 or the synthetic garden in Marina and another one coming up in Changi. It is goodwill money and will be money well spent. And the hard up Aussies will be blowing our trumpet happily on how generous we are and how good are our hawker cuisines, and all the good thing about Sin. Ya, good PR value for tourism money.

Asia Asean partied in the absence of the gangster

The Asia Asean Summit came and gone, cordially and with many economic issues addressed and advanced. The Asean states and their Asian partners locked themselves up in Bali and Brunei to discuss and chart their path for economic cooperation and trade. The climate was conducive and dignified and befitting of a platform of national leaders in conference. The enmity and hostility were totally absence. There were no thumping of the table and no gangster was there to set the agenda for Asean. It was Asean taking the lead as host to other Asian leaders. It was all about moving forward for their mutual benefits. No gangster was there to seize the moment, to hijack the meeting for its hideous motives and agenda.
 
The recent Asean Asia Conference and Summit were marked by the absence of tension and big power rivalry and big power agenda. The gangster was not there to stoke tensions talk about instability and threats of war where there were none. The gangster was not there to agitate and incite interstate rivalry and hostility when there was none without the gangster behind pulling the strings.
 
The meeting was one of the most productive and least contentious that Asean and Asia have had for a long time. Whenever the gangster was around, it was the gangster that set the agenda, for more bickering and for creating fears and threats of war.
Thank God for keeping the gangster away, for keeping him busy and no time to cause mischief in the region.