Issues That Matter Uniquely Singapore F1 or F9? LEONG SZE HIAN ALEX LEW TAN YUNYOU TAN LI PING LIONEL CHEN First Edition, October 2008. Chief Editor: Andrew LohChinese Editor: Ong Su Kiat Producers: Tan Yunyou, Alex Lew Yan LiangGraphic Design: Tan Yunyou Copyright, Dicken Pte Ltd, Singapore.ISBN All rights reserved. No part of this book may be reproduced or transmitted in any form without prior permission from the publisher. Authors Leong SzeHianisaWhartonFellowandalumnusofHarvard University. He has authored 4 books, beenquoted over1000 times in the media, and invited to speak more than 100 times in about 20 countrieson5continents.HehasservedasHonoraryConsulof Jamaica,andiscurrentlythePresidentoftheSocietyofFinancial ServiceProfessionals.Hehas3MastersdegreesinFinancial Planning&FinancialServices,2BachelorsdegreesinEconomics& Insurance, and 13 professional qualifications. AlexLewYanLiangistheChairmanoftheSocietyofFinancial Service Professionals (SFSP) Student Sub-committee. He is a double majorundergraduateatNanyangBusinessSchoolandis concurrentlypursuingtheCFAcharter.Alexisanactivestudent who takes leadership positions inschool clubs and external bodies. Not only does he have a passion for finance, he is also interested in policy-makinginSingapore.HeisalsothefounderofTIA Conferences and is currently the leader of the group. Tan Yunyou is a third year undergraduate at Nanyang Technological University,majoringinCivilEngineering.Heco-foundedTIA Conferences,whichpartnerssocietiessuchasSFSPtoorganise public forums on investing. He has keen interest in graphic design as well as policy-making in Singapore. TanLiPingistheViceChairmanoftheSocietyofFinancialService ProfessionalsStudentSubcommittee.SheisaBankingandFinance undergraduate at Nanyang Business School and enjoys dancing and participating in community work. Li Ping is also the leader of the TIA Conferences marketing team. ChenYingrenLionelisafinalyearbusinessundergraduateat NanyangBusinessSchool.Hisinterestslieinthehands-on application of processes and the marketing field in business. Editors AndrewLohisthefounderofTheOnlineCitizen(TOC)andis currentlyitsDeputyEditor.Heisastrongbelieverthat Singaporeans,particularlytheyoungerones,needtothrowoffthe shackles of fear when it comes to participating in the political affairs ofthenation.Hepresentlyworksfull-timeonTOC,having previously been involved in a family business. OngSuKiatisakeenobserverofthepolicy-makingarenain Singapore. He is a Hwa Chong Alumnus, and is currently pursuing a degreeinBankingandFinance.Healsohasastrongpassionfor Chinese culture. ACKNOWLEDGEMENT WewouldliketothankMr.TanKinLianforhiskindendorsement andourfellowSingaporeansforidentifyingtheseissuesand indirectly contributing to the creation of this book. CONTENTS FOREWORD ........................................................................................ I PREFACE .......................................................................................... III ............................................................................................... V 1. CHARITY .................................................................... 1 STOP PROFITING FROM CHARITY ........................................................... 2 ............................................................... 3 A DISCREPANCY IN CHARITY FUND-RAISING ............................................ 4 ........................................................................... 5 TRANSPARENCY NEEDED FOR CHARITY SHOW CALL CHARGES ..................... 6 ....................................................... 7 HOW MUCH HAS BEEN PAID FOR CHARITY SHOWS? ................................ 8 ........................................................... 9 LESSON FROM KIDS: STOP PASSING THE BUCK ....................................... 10 ..................................................... 13 2. CPF .............................................................................. 16 INCREASE 2.5% CPF INTEREST RATE.................................................... 17 2.5% .................................................... 19 MANAGE CPF PROPERTY CAP WITH PLANNING ..................................... 21 ..................................... 23 RELAX CPF RULES FOR REAL ENTREPRENEURSHIP ................................... 25 ................................. 27 MEDISAVE A BIG BURDEN FOR THE LOW-INCOME ................................. 29 .......................................... 31 MAKE MINIMUM SUM PAYOUTS LAST LONGER ..................................... 32 ................................................. 35 3. CREDIT ............................................................................. 37 NEW CREDIT CARD MAY LEAD SINGAPOREANS INTO MORE DEBT ............. 38 ................................. 40 NETS FEE HIKE: COMPETITION LEGISLATION SHOULD BE ABOUT PROTECTING CONSUMERS ................................................................................... 42 NETS ..................... 45 BE FAIRER TO DEBTORS BY MODIFYING PLANNED DRS ........................... 48 (DRS) ........................... 51 PITFALLS OF CREDIT-CARD BALANCE TRANSFERS .................................... 53 ............................................................. 56 TIME TO INCULCATE VALUES OF THRIFT, MODESTY IN CHILDREN .............. 58 ............................. 60 4. EDUCATION ..................................................................... 62 WHAT IS THE RATIO OF FOREIGNER TO LOCAL SCHOLARSHIPS? ................ 63 ......................... 65 JOHN HOPKINS UNIVERSITYS-A*STAR BREAK-UP RAISES MORE QUESTIONS .................................................................................................... 67 JHU A*STAR ................................. 70 BETTER TO FAIL AND LEARN FROM IT .................................................. 72 ..................................................................... 75 LIFE-LONG LEARNING BRINGS INTANGIBLE BENEFITS TOO ........................ 77 ............................................. 78 BALANCE USE OF FUNDS, MOE ......................................................... 79 ......................................................... 81 5. HOUSING ......................................................................... 83 SETTLE QUESTION OF HDB SUBSIDY ONCE AND FOR ALL ........................ 84 ..................................................... 86 INCOME CEILING FOR HDB FLATS MAY BE TOO LOW ............................. 87 ......................................................... 89 LET SINGLES RENT VACANT FLATS WITHOUT PAIRING UP ........................ 91 ..................... 93 CAN A BANKRUPT LOSE HIS HDB FLAT TO BANKS? ................................ 95 ................................. 97 'DOWNGRADERS' NEED MORE INFORMATION FROM HDB ...................... 98 ................................. 100 6. HEALTHCARE ......................................................... 102 DON'T RAISE MEDISAVE CEILING ....................................................... 103 ............................................................... 106 RAISING COSTS FOR FOREIGNERS MAY NOT BENEFIT SINGAPOREANS ...... 108 ............... 111 ISSUES HEALTHCARE PANEL SHOULD EXPLORE ..................................... 113 ....................................................... 116 RELOOK MEANS TESTING FOR DISABLED............................................. 119 ............................................... 122 FEE HIKES FOR NEEDY SHOULD BE REVIEWED ...................................... 125 ....................................... 126 7. INVESTMENTS ............................................................... 127 LOOK AT IMPACT OF LOW-COST PENSION FUNDS ................................ 128 ............................................................... 130 HAVE CPF INVESTORS FARED BETTER SINCE 1993-2002? .................... 131 1993-2002 ................ 132 DISCLOSE SINGAPORE'S RETURNS ON RESERVES ................................... 133 ........................................... 135 HOW ABOUT A COMMITTEE ON CPF RETURNS? ................................. 136 ....................................... 138 QUESTIONS REMAIN AFTER REVIEW ON ANNUITIES .............................. 139 ....................................................... 141 8. POPULATION AND EMPLOYMENT ...................... 143 REVIEW POLICIES TO HELP ORDINARY SINGAPOREANS COPE WITH RISING PRICES ......................................................................................... 144 ................... 146 RETRAINING LOW-WAGE WORKERS: LET'S BE REALISTIC ....................... 148 ................................... 150 MORE RESIDENTS WORKING FOR AN INCOME THAT HAS NOT CHANGED FOR 10 YEARS ..................................................................................... 152 ........................................... 154 DISCLOSE MORE INFORMATION ON FOREIGN LABOUR .......................... 155 ....................................................... 158 SHOW THE NUMBERS TO DISPEL NOTION THAT FOREIGNERS TAKE AWAY JOBS FROM SINGAPOREANS .................................................................... 160 ........... 162 9. TRANSPORT ................................................................... 164 EXPLAIN REASONS FOR BUS FARE INCREASE IN DETAIL .......................... 165 ............................................... 167 THE POOR WILL BENEFIT MOST FROM TRANSPORT FARE CAP ................ 168 ....................................... 170 LET FIRMS LINK THEIR NAMES TO MRT STATIONS ............................... 172 ................................................... 174 WHY NOT GIVE CASH REFUNDS? ...................................................... 175 ........................................................... 177 WHY IS MONITORING TAXIS SO COSTLY? ........................................... 178 ....................................................... 180 CONCLUSION ............................................................................. 182 ........................................................................................... 184 APPENDIX .................................................................................. 186 Foreword I Foreword NotmanySingaporeansareasconsistentandpersistent-asSzeHian when it comes to writing letters to the press. Over the years he has written morethan1,000suchletterstoTheStraitsTimes,theBusinessTimes, Today and The New Paper.Known for his ability to "devour numbers" andexplain statisticswith ease, many have consulted him on issues which are difficult to understand or too intricatetowrapone'smindaround.Matterssuchasthechangestothe Central Provident Fund, education and healthcare all of which are close to Singaporeans' hearts.MembersofParliament,privateindividuals,journalistsandreportersall havesoughthisopiniononmattersofpublicconcernandinterest.His manyoverseasspeakingengagementstestifytohismuch-soughtafter status as well. If you are wondering why he gives so much of his time to all these, perhaps thereasonisthatSzeHianfeelsinformationisimportant.With more information,Singaporeanswillbeabletomake betterdecisionson particularissues.Questioninggovernmentpoliciesmayresultinbetter policy formulation as well. The end result is that this benefits Singaporeans ultimately which, I suspect, is his goal. It is thus appropriate that Sze Hian publishes this book of selected letters, in bothEnglishandChinese.Throughthemyouareenlightened,yourviews clarified further and your questions, perhaps, answered as well.Seriousattimes,humorousatothers,butalwayspenetrating,SzeHian's intimate knowledge forged over the last 30 years of his professional life as a Foreword II financial adviser is evident in these letters. Together with his on-the-ground experiencethroughhisvolunteerworkwithvariousNon-Governmental Organisations, the reader will easily relate to the issues raised in this book. Tan Kin Lian Preface III Preface Wewereinterningatafinanceinstitutionawhileagointhecentral businessdistrictofSingaporewhenwemetMr.LeongSzeHianforlunch. Halfway into our lunch, an old blind man, guided by his aged wife, came to ourtabletosellussomepacketsoftissuepaperforadollar.Itwasa startlingencounter.Acrossthestreetwasthebusinessdistrictwheretop globalcorporationswerelocated,butrightinfrontofus,wesawtheface of poverty. Weweretheninspiredtodiscoverthechallengesfacedbytheless-privilegedinSingapore.Askeenobserversofthepolicymakingscenein Singapore,wedecidedtopublishabookthatconsistedofMr.Leongs articles that best represent the problems Singaporeans face. To address the Chinese-educatedpopulationinSingapore,wedecidedtotranslatethe articles to Chinese. ThereisnodoubtthatSingaporehasbeenoneofthemostsuccessful nationsinourregion.Overthelastfewyears,ournationhasachieved consistenteconomicgrowth.However,thereareseveralissuesthatthe common man and the less- privileged citizens face in Singapore. Thisbookaimstovocalizetheproblemsandissuesfacedbythem.We believethatthecontentsofthisbookareimportanttoanyonewhohasa stakeinSingapore.Throughthearticlesinthisbook,weplantoraisethe awareness of present policy issues. There will be 9 topics of discussion; 1)Central Provident Fund 2)Charity 3)Credit Preface IV 4)Education 5)Healthcare6)Housing7)Investment 8)Population and Employment 9)Transport Besides national education textbooks and ministry publications, we strongly urge Singaporeans, PRs and visitors to spend some time understanding the structureofoursocietythroughthiscompilation.Byidentifyingthese issuesinthisbook,wehopethatsolutionscanbefoundtosolvethese problems. To put this book together, Andrew Loh (Editor) sourced for the articles that best represented the selected topics. Andrews wealth of experience as an editor in The Online Citizen was truly a great help to our team. Ong Su Kiat, an alumnus of the Hwa Chong family, has also been a great pillar of support. HissuperiorChineselanguageskillswereimportantineditingthe translated articles. Finally,wewouldliketothankMr.LeongSzeHianforbeingaconstant sourceofhelpintheproductionofthisbook.Hisarticlesprovidea refreshing view of the policy-making arena in Singapore. We hope you enjoy the book! Alex Lew Yan Liang Tan Li Ping V 9 Charity | 1 1 1. Charity1 | 2 Stop Profiting From Charity The Business Times, 29th October 2002 IrefertothenewlylaunchedNationalCouncilofSocialServiceon-line charity donation portal www.donation.org.sg. I would like to express my support for this new initiative, as I feel that doing gooddeedsshouldnotbemotivatedbythepossibilityofmaterialgains, such as prize money.Sometimeago,Iwasapproachedbyaprimaryschoolstudentwitha donationcardfromacharity,whichindicatedthathewouldreceivea pencilcaseifheaccumulated50points($50)andabagfor150points ($150). Shouldchildrenbeencouragedtodogooddeedsformaterialgain? WhenIwasachild,myfathertaughtmethatoneshoulddocharitable work,becauseitismeaningful,andnotforsomereward(orpoints). PerhapsIamold-fashioned,orshouldIjustchangewiththetimes? Charity | 1 3 , 2002 10 29 National Council of Social Service www.donation.org.sg 50 $50 150 ($150) 1 | 4 A Discrepancy In Charity Fund-Raising The Business Times, 13th May 2003Irefertomediareportsaboutthecharitybreadschemerunningoutof funds. Although it will get a $50,000 grant soon, the scheme costs $20,000 a month to run, and may fold if there are no sponsors.The programme has 400 volunteers delivering leftovers from 70 bakeries to 68 welfare homes every day. Itwould be a pityif $20,000 a month cannot be raised to support tens of thousands of Singaporeans in welfare homes.TheCommunityChestisraising$42millionthisyeartofund130social service programmes and support 324,000 beneficiaries.The National Kidney Foundation raised $53 million in 2001 to support about 2,200 patients for dialysis with the NKF this year. To treat a patient, it costs NKF $2,600 a month.Theabovestatisticsseemsomewhatdisproportionate.Iwouldliketoask whetheranyonecanhelpusunderstandtheabovephenomenonin charitable giving in Singapore.Hasanyoneoranytertiaryinstitutiondoneanysurveyorresearchon charitable fund-raising and giving in Singapore? Charity | 1 5 , 2003 5 13 $50,000 $20,000 400 70 68 $20,000 130 324,000 NKF 2001 2200 NKF 2600 * http://www.mfa.gov.sg/experience/apr2003/Images/Coverstory.pdf http://www.foodheart.org/news/index.php 1 | 6 Transparency Needed For Charity Show Call ChargesThe Business Times12th August 2005 IrefertothePresident'sStarCharity2005showonAugust6andJuly31. Unlikepreviouscharityshows,therewasno20-centchargeforeach donation call. I would like to ask if this is the first time that a charity show does not charge for calls.Howmuchrevenuehastelephonecompaniesmadefromallthecharity shows in the past, which I understand began in 1994? For example, the NKF receivedatotalof3.2millioncallsduringitsthreecharityshowsinApril 2004,and2.6millionduringitsfirst-everChildren'sMedicalFundShowin July 2004. At 20 cents each, does it translate to a revenue of $1.16 million forthese5.8millioncalls?Ifeachcalldonationwas$5,the20-centcall chargemeansthatanadditional4percentdidnotgotothebeneficiaries of the charity.Shouldweaddthis4%backtodeterminetheactualpercentagethatgoes to the beneficiaries of the charity?Do charity shows in other countries charge for donation calls? Will charges for donation calls and SMS be scrapped for all future charity shows? Charity | 1 7 , 2005 8 12 8 6 7 31 2005 1994 1994 ,NKF 2004 4 320 , 2004 7 260 ,580 16 ?5 , 4% 4% ?? 1 | 8 How Much Has Been Paid For Charity Shows? The Business Times22nd November 2005Irefertothearticle'CancerShowfigurecoveredallcosts:NKF'(The BusinessTimes,Nov18),andmediareportsaboutMediacorprefuting allegations that it profited from the NKF Cancer Show. NKF had paid Mediacorp $2.5 million to produce the show. Before the NKF saga, I believe there were charity shows in almost every month of the year. If there were, say, 10 charity shows in the year, the total sum received may be around $25 million. Thisamountis,Ibelieve,morethanhalfthetotalsumcollectedbythe CommunityChestinanentireyear.Whywasthesumreceivednever discloseduntilnow?Iwouldliketoaskhowmuchintotal waspaidforall charity shows last year.Inmyletter'Transparencyneededforcharityshowcallcharges'(The BusinessTimes,Aug12),Iaskedhowmuchcharityrevenuehasbeenlost through the 20 cents charge for calls, and whether following the President's Star Charity Show in August - which was the first time that calls were free - would mean that future charity shows would also be free of call charges.To-date, there has been no reply, and call charges have started again at the last charity show.CanTVbroadcastersandanybodyelsewhohavebeenpaid,tellusonce and for all, instead of disclosing in bits and pieces, how much has been paid to them for all charity shows since they began in 1994?Charity | 1 9 , 2005 9 22 NKF 11 18 NKF 10 8 12 $0.20 8 $0.20 $0.20 1994 1 | 10 Lesson From Kids: Stop Passing The BuckThe Straits Times24th December 2005Irefertothearticle'PWCrappedfornotspottinglapses'andtheletter 'Former NCSS president clarifies chain of events' by Dr Robert Loh Choo Kiat (The Straits Times, Dec 22). IoverheardsomechildrentalkingabouttheNationalKidneyFoundation (NKF) saga, and was struck by their satirical take on the issue.In gist, they were saying everyone seems to be passing the buck and making excuses. 'Durai pass to NKF board, board pass to patron,' they said.In fact, the patron did not even know Mr T.T. Durai's remuneration, and did not 'know and endorse' it as alleged by the board.'NationalCouncilofSocialServicepasstoCommissionerofCharities,COC pass to Health Ministry, ministry pass to auditors, auditors pass to..?'DrLoh,formerpresidentofNCSS,hasclarifiedtothemediathat'the revocationofNKF'sInstitutionofPublicCharacterstatusbyitselfwould send a strong signal that something was not quite in order. The COC had to be informed of this action and why it was taken'.WithinlessthanamonthoftheNKF'sIPCrevocation,theHealthMinistry restoredit,relyingontheassuranceofpastperiodicroutineauditsbythe auditorsthatthefinancialstatementsdidnotshowanyunusual transactions.Charity | 1 11 The auditors have responded in a statement that 'our primary responsibility was to express an opinion on whether the NKF financial statements show a trueandfairview.Webelievewehavedischargedthatresponsibility'. ToechoDr Loh's concerns,ifregulatorsgloballyreliedonlyonthecursory facade of routine audit reports, despite 'red flags' being raised periodically, financial scandals like Enron and now the NKF might never come to light.Parents tell their children: 'Admit your mistake. Don't make excuses.'Inthisinstance,thechildrenmayhavetaughtusadultssomething,bythe clarity and simplicity of their logic.Ithasbeensaidmanytimesthatwemustrestorepublicconfidence, otherwiseatstakearethehundredsofthousandsofneedySingaporeans whoarethebeneficiariesofthe1,700charitiesandvoluntarywelfare organisationsinSingapore.Myfearisthatifthechildren'sperception permeatesthroughtothegeneralpopulation,publicconfidencemay continue to slide.OnInternetblogsandforums,thousandsare'screamingforblood'and asking 'who's to blame'.Inasense,weneedtoreflecthowmanyofushavetotakepartofthe blame for our gullibility in donating to glitzy TV charity shows in the hope of winning a $500,000 property we now know was not sponsored but paid for by ourdonations, anddonatingmore in a yearto the NKF withonly 1,700 beneficiaries than the Community Chest with more than 300,000.1 | 12 Goingforward,weshouldsaynotoextravagantcharityshowswithprizes andtelephonecallcharges,soagreaterpercentageofdonationsgoesto beneficiaries.PerhapswecanlearnathingortwofromcountrieslikeJapan,where, whenever there is a serious financial scandal, those responsible admit their mistakes, apologise and resign. While I do not advocate this, what is at stake is so great - the future of the charityandvolunteersectorinSingapore-wemustmoveon.I wouldlike tocommendtheHealthMinister,astodate,Ibelieveheistheonlyone whohasapologised-notMrDurai,theformerNKFboard,theauditorsor anyone else.To restore public confidence, perhaps we should listen to the children. We must stop passing the buck and making excuses. Charity | 1 13 , 2005 12 24 12 22 PWC Dr.RobertLohChooKiat , 12 22 NKF ...? NKF InstituteofPublicCharacter,IPCCOC NKF NKF NKF 1 | 14 Enron NKF 1700 NKF NKF 1700 300,000 $500,000 Charity | 1 15 NKF 2 | 16 2. CPF CPF | 2 17 Increase 2.5% CPF Interest RateThe Business Times19th December 2006I refer to NTUC's proposal to reduce the CPF contribution for lower-income workers and put 40 per cent of the Workfare bonus to CPF.Ononehand,weareputtingmoreoftheWorkfareBonuscashpayoutto worker'sCPF,butontheother,wearecuttingtheirCPFcontributionso that they can have more cash for living expenses.SincebothWorkfareandtheCPFcontributioncutareforlower-income workers,arethesenotcontradictory?Forexample,iftheemployee'sCPF contributionisloweredfrom20to10percent,andtheproposed40per cent of Workfare is channelled to CPF, for a worker earning $600 a month, hisorhertake-homepaywouldincreasebyonly$20amonth($600 multipliedby10percent,minusWorkfare-$1,200multipliedby40per cent, divided 12).This is an increase in disposable cash flow of only 3.3 per cent. In contrast, if the Workfare bonus is left unchanged as a fully cash payout, the increase incashflowwouldbe$60,whichisthreetimesmore.Forthosewhose monthlyHDBflatmortgagerepaymentis$120ormore,theCPFand Workfarechangesmaynotimprovetheircashflowatall,asthenetcash disposableincomeof$100orlowerwouldbelessthantheexisting$100 Workfare cash per month.It may also be counter-productive to use Workfare to top up workers' CPF, and then pay them a lower interest when they retire.Inthepast,thosewhohadlessthantheCPFMinimumSum(MS),and chose not to withdraw half their account balance allowed, were paid 4 per 2 | 18 cent on their entire CPF account balance. Now, those who turn 55 with less thantheMS,currently$94,600,whochoosenottowithdrawhalfoftheir CPF balance, as the other half will be transferred to the Retirement Account (RA) which earns 4 per cent, are now only paid 2.5 per cent.Why is it that Singaporeans are not allowed to keep as much of their CPF as theylike,toearn4percentinterest,whentheyretire?Forricher Singaporeans who have more than double the MS, which is $189,200, they willbepaid4percentontheentireMSof$94,600.Hence,thecurrent policy pays the rich more and the poor less.To further illustrate this unfairness, a rich man with $189,200 will get 4 per centon$94,600,whereasapoormanwith$94,600willget4percenton $47,300 and only 2.5 per cent on the other $47,300.According to the Department of Statistics' (DOS) General Household Survey 2005(GHS),therewere106,384householdswithnoworkingpersons, presumably most of which are retirees. With the rapidly ageing population, Singaporeans who are risk adverse or not investment savvy may have a dire need for their CPF after the age of 55 to earn 4 instead of 2.5 per cent. CPF | 2 19 2.5% , 2006 12 19 40% 20% 10% 40% 20 600 10%120040%12 3.3%60120 100 100 MinimumSum 4%55 2 | 20 94600 2.5%Retirement Account4% 4%18920094600 4% 18920094600 4%9460047300 4%47300 2.5% (DOS)2005 (GHS),106384 55 4%2.5% CPF | 2 21 Manage CPF Property Cap With PlanningThe Straits Times17th October 2002IREFERtothearticle,'Calculateagainbeforebuyingahome'(TheStraits Times, Oct 5), by Vladimir Guevarra. TheNationalUniversityofSingapore(NUS)DepartmentofRealEstate's study recommends that Singaporeans have at least $70,000 in their Central ProvidentFundOrdinaryAccount,tobeabletoafforda$400,000 condominium unit.ThisrecommendedminimumCPFbalanceisincreasedto$210,000,ifone decidestobuythesameunitin2008,whentheCPFwithdrawallimitfor housing is reduced to 120 per cent.ItisprobablynotveryrealisticorpracticaltoexpectyoungSingaporean couplestowaituntiltheyhavetheaboveamountsintheirCPF,before buying a home.Inallprobability,Ithinkmanywillcontinueastheyaredoingnow,inthat theywillpurchaseahomeoncetheyhavethe10percent($40,000)cash downpayment,andtheother10percentdownpaymentintheirCPF. Onepossiblestrategy,ifonedecidestodothis,istocalculatethe estimated housing-loan outstanding balance, when the CPF withdrawal cap is reached.For the example cited in the study, for a 30-year housing loan of $320,000 at4.5percentinterest,thecapwouldbereachedafter28years. The outstanding loan balance then would be $23,607.2 | 22 Onecouldstartadedicatedmonthlycashsavingsandinvestmentplanat, say,aprojectedreturnof6percent,andtargetanaccumulatedamount equal to the loan balance, when the cap is reached.Thiswouldensurethatintheworst-casescenario,onewouldhavethe funds to pay off the loan, when CPF money can no longer be used.Ifthisaccumulatedamountisnotrequiredthen,itcouldbeutilisedfor other purposes, such as for one's retirement plans.Forthisexample,thehome-ownerstartswithregularmonthlysavingsof $16,increasingat5percentperannum(savingmoreasone'ssalary increases in future), for 28 years, in order to accumulate $23,607.Similarly, for the 120 per cent cap which will apply in five years, the cap will bereachedafter22years,withaloanbalanceof$130,513.Thehome-owner would be required to start with monthly savings of $155.PerhapsonlytimewilltellwhethermostSingaporeanscanmanagethe risksandimplicationsoftheCPFchanges,throughfinancial-planning strategies such as the one described above. CPF | 2 23 , 2002 10 17 VladimirGuevarra ,105 NUS 40 7 2008 40 21 120% 10%40000,10 30 3200004.5% 28 $23607 6% 2 | 24 $23607 16 5 28 $23607 5 12022$130,513155 2008 CPF | 2 25 Relax CPF Rules For Real EntrepreneurshipThe Straits Times7th July 2003I refer to the article, 'Measures to help jobless adequate: Ng Eng Hen' (The StraitsTimes,July1),whichreportedthatActingManpowerMinisterNg Eng Hen disagreed in Parliament with calls to allow people to use their CPF money to start businesses.He also pointed out that most start-ups fail.YetweoftenhearotherministersurgingSingaporeanstobecome entrepreneursinordertohelpSingapore'seconomicdevelopmentand mitigate the loss of jobs.Itdoesnotmakesensetourgepeopletotakerisksandbecome entrepreneursand,atthesametime,tellthemnottorisktheirCentral ProvidentFundmoneyonanewbusinessbecausethefailurerateofsuch ventures is high.HowcanweexpectSingaporeanstotakeriskswhentheGovernment shows itself unwilling to do so?Sincetheywouldberiskingtheirownmoney,buddingentrepreneurs wouldprobablybeevenmorecarefulandstartabusinessonlyafter coming up with a proper business plan and projections.TheyarelikelytobemoreworriedaboutlosingtheirCPFthantheCPF Board.If a person already has, say $300,000 in his CPF account, why not allow the amount in excess of, say $200,000, to be used for starting a business?2 | 26 Withthebalanceof$200,000growingwithinterestuntiltheretirement age of 62, there should be enough to provide a reasonable monthly annuity when he retires.Incidentally,$200,000ismorethandoublethecurrentminimumsumof $80,000 that one has to set aside at age 55.If CPF policy is not flexible for those with higher CPF balances, we may end upwithanationfullofretireeswithsufficientmonthlyincomesbutfew entrepreneurs, lower economic growth and fewer jobs.Evenprivatepropertyownerswhoarepreparedtodowngradetoanew HousingBoardflattofreeupmorecapitalforentrepreneurship,haveto wait 30 months to do so.Perhapsentrepreneurshiphastostartwiththerelaxationofpolicieson whatwecandowithourCPFmoney,becauseonlywhenonebearsfull responsibilityfortherisksthatonetakes,cantherebeatrue entrepreneurial spirit. CPF | 2 27 , 2003 7 7 7 1 62 55 2 | 28 30 CPF | 2 29 Medisave A Big Burden For The Low-income The Business Times21st September 2004Irefertothearticle'Medisave:CPFcrackswhiponself-employed'(The Business Times, Sept 17).Self-employedpeoplewhoearnmorethan$6,000ayearhavetomake Medisave contributions of up to 8 per cent. So a person who earns $6,001 has $460 a month to live on after paying Medisave.About 20,000 households are said to be more than three months behind on theirHDBmortgagerepaymentsorutilitybills.Andthenumberof householdsthreemonthsormoreinarrearsonmortgagerepayments reportedly rose almost 15 per cent from 2002 to 2003.Pay-as-you-usemeterswillbeintroducedsoontomakesure'poorer' familiesdon'thavetheirelectricitycutoff.Andabout15,000households aresaidtobeunabletopaytheirchildren'sschoolfees.Isitanywonder that if can't pay your power bill or your children's school fees, you can't pay your Medisave either?Theeconomiccrisis,9/11,Sarsandstubbornlyhighunemploymenthave made it hard for some self-employed people to pay Medisave. On the other hand, Medisave contribution rates haveincreased from 3 per cent in 1992 to 8 per cent now for those aged 45 and over.Forself-employedpeopletorenewtheirlicence,evidenceofMedisave contributionsmustbeproduced.Sochancesarethatsomepeoplemay have had to give up their trade and look for alternative work because they were unable to pay Medisave.2 | 30 Before2003,thosewhohadnotpreviouslybeenissuedaNoticeof Assessment/Non-tax advice from Iras had to contribute Medisave based on anassumedincomeof$6,000ayear.Butthiswasraised50percentto $9,000in2003attheheightoftheeconomicdownturn,increasingthe burden on some self-employed people.With such people already finding it hard to get by, should we be adding to their stress by threatening to take them to court? CPF | 2 31 , 2004 9 21 917 6000 8%6001 460 20000 3 3 2002 2003 15 15000 9/11 45 1992 3 8 2003 $6000 2003 50%9000 2 | 32 Make Minimum Sum Payouts Last Longer The Straits Times15th October 2005Irefer to the article, 'How to bank on apretty pension' (TheStraits Times, Oct 8). The default life annuity is expected to be implemented in one to two years' time. A default life annuity uses the prevailing CPF Minimum Sum at age 55 topurchaseafixedguaranteedlifeannuitypayablemonthlyfromage62, for as long as a retiree lives.One can choose to opt out of a default life annuity, and leave the Minimum Sum,currently$90,000,withtheCPFBoardat4percentinterest,and withdraw, from age 62, $711 monthly for 20 years.IwouldliketomakethefollowingsuggestionstotheGovernment: 1.Allowthosewhodonotneedthe$711eachmonthtodefertheir withdrawal to a later age than 62.Insodoing,themonthlywithdrawalscanlasttoanolderage,insteadof endingatage82.Iunderstandthatatage82,thelife-expectancysurvival probabilityisaround20percentformalesandmorethan30percentfor females.Currently, those who withdraw$711 when theystill have othersources of income or assets to liquidate for retirement, may just deposit the money in a bank account paying about half a per cent interest. It would be better to leave the amount with the CPF Board at 4 per cent interest. CPF | 2 33 2. Have a retirement calculator on CPF Board's website to enable retirees to compute how long their withdrawals will last if they choose to withdraw an amountlowerthan$711,andthesurvivalprobabilityatthewithdrawal-ending age.This option may be particularly useful for retirees who are concerned about providing an income for their dependants for a period which is longer than 20 years.This may be the case because of the longer life expectancy of their spouse, orinfantdependants.Thiswillhelpretireestomakediscerningdecisions, depending on their individual circumstances, needs and concerns.3.Considerallowingflexibilitytochangetheamountandtimingof withdrawals.Forexample,ifaretireeelectstodrawlessthan$711,butlandsin unexpectedfinancialdifficultysomeyearslater,allowhimtowithdraw more,aslongasthewithdrawalsaresuchthattheydonotdepletehis retirement account before age 82. Wherearetireediesbeforeage82,allowthemonthly$711tobepaidto the nominees until the end of the 20 years, as if the retiree had lived till age 82.This is because the retirement-account balance is paid in a lump sum to the nominees.Somenomineesmaynotknowwhattodowiththelumpsum, and may just leave it in a fixed deposit earning around 2 per cent interest, or, worse, invest the sum, which may result in losses.4.AllowthosewhohavemorethantheMinimumSum,andwhoarenot financiallysavvytoinvestthemoney,toleavelargersumswiththeCPF 2 | 34 Boardat4percentinterest,sothattheycanwithdrawmorethan$711 monthly from age 62.Manyofretirees'concerns,likelivingtoolong,nothavingenoughincome whentheyneeditmost,andprovidingfordependantsiftheydieearly, may be minimised if there is more flexibility in the CPF rules. CPF | 2 35 2005 10 15 10 8 55 62 $90000 4% 62 $711 20 $711 62 82 82 20 30 $711 0.5% 4% 2 | 36 $711 20 $711 82 82 $711 20 2 4%62 $711 Credit | 3 37 3. Credit3 | 38 NewCreditCardMayLeadSingaporeansIntoMore Debt The Business Times24th July 2007Irefertothearticle'Citibankofferscreditcardforlowearners'(The Business Times, July 19).The article said that Citibank is the first bank here to launch a credit card for those earning less than $30,000 a year.Thisnewcard,whichisaimedatstudentsandotheryoungadults,will charge higher interest at 28 per cent on rollover balances.WhilstIcanunderstandtherationaleformakingcreditavailabletothose whoearnbelow$30,000,anddon'tqualifyforacreditcard,whyisthe interest charge so high?Thisis4percentmorethancreditcards,10percentmorethanhire- purchase,16percentmorethanunsecuredcreditlines,andabout23per cent above the prime rate?Thosewhorollovertheircreditbalance,mayendupdoublingwhatthey use and owe, at an estimated two years or so.We may be able to take a leaf or two out of Malaysia's book.It has recently announced regulations stating that the maximum interest on creditcardscannotexceed15percentforthosewhodonotdefaulton their repayments in any 12-month period. Credit | 3 39 Theannualfeeof$28forthecreditcardforthoseearninglessthan $30,000worksouttobe5.6percentofthecreditlimitof$500.ThisI believe, may make it one of the highest fee -to- credit ratio in the world.As I understand, Singapore already has one of the highest levels of debt per capita in the world and such credit cards may propel us to even more debt, as well as the proportion of the population with debts.How many students may end up being in debt even before they graduate? Howmanyyoungadultsmaybeindebt,evenbeforetheystartafamily? HowmanySingaporeansmaybeindebtwhentheyreachretirement, whichshouldbethetimethattheyshouldhaveaccumulatedsufficient assets for retirement, instead of having debts or a negative net worth?Itremainstobeseeninthefuture,astohowmanyoftheestimated 900,000 Singaporeans aged 18 to 54, who earn below $30,000, may end up in debt, and be financially stressed. 3 | 40 , 2007 7 24 7 19 $30,000 28% 30000 28% 4%10%16%23% 15% $28 500 5.6% Credit | 3 41 $30,00018 54 90 3 | 42 NetsFeeHike:CompetitionLegislationShouldBe About Protecting ConsumersThe Business Times6th July 2007 Irefertothereport,'Anti-competitionunitclearsNetsfeehike'(The Business Times, June 26). Fourheartlandmerchantassociations,withabout4,000members,have told the media that Nets has offered to charge them a lower rate, but only if they do not have other debt or credit payment facilities. Isn't this clearly anti-competitive behaviour?WhenMicrosoftdidsomethingsimilarbyrequiringvendorstonotoffer competitors' software, it was fined billions of dollars in several countries all over the world.Byitsaction,Netsisdenyingconsumerstheveryalternativepayment methods which were given by Competition Commission of Singapore (CCS) asthereasonwhytheNetsfeeincreasewasnotinbreachofthe Competition Act.SinceNetshassaidthatitdoesnotallowmerchantstopassontheNets' fee to consumers, why is it that taxis charge a 3 per cent administration fee since Nets payment was introduced in taxis about three months ago?TheCCShassaidthattheNetsfeehikeisnotanabuseofamonopoly position,andthattheincreasedoesnotamounttoaninfringementof Credit | 3 43 Section47-relatingtoacompanyabusingitsdominantposition-ofthe Competition Act.IfamonopolylikeNetsraisesfeesbyasmuchasthree-fold,althoughits profits have been increasing by 53 per cent from 2004 to 2005, and 44 per centand13percentfrom2002to2004,howcanitbedeemedas'not amounting to an infringement or (not) abusing its dominant position'?Can the CCS give us an example of just one case of infringement of the Act sincetheformationoftheCCS,sothatthepublicmayhaveabetter understanding of what constitutes an infringement?AsitwouldappearthatevenCaseisnotveryclearaboutwhatthe CompetitionActentails,anditsapplicationvis-a-visconsumers,more information from CCS may be helpful.Otherwise,Casemaybe'barkingupthewrongtree'againinthefuture. Going forward, consumers and other organisations may also be reluctant to bring up new anti-competition cases.So, CCS - please clear the air by telling us more and give us some guidelines as to what is 'anti-competitive'?OnCCSnotingthatconsumershavealternativepaymentmethodssuchas creditanddebitcardsandez-linkcards,howmanypeoplequalifyfora creditordebitcardandhowmanyorganisationsdonotacceptcredit, debit and ez-link cards?Moreover, those under 16 years old cannot have a debit card (unlike Nets, which is available to anyone with an ATM card). The typical debit card also 3 | 44 hasa$20annualfeeunlessonechargesatleast$1,800ayear,plusa monthly service fee of $2 if the monthly average balance is below $1,000. Forthemajorityofthepopulation,theremaythusbenoalternative payment methods.As the timing of the increase coincides with the GST hike, what is the view of the Committee Against GST Profiteering (CAP)?AsCaseisdisappointedwiththeCCS'sdecision,willitraisetheissuewith CAP?InothercountriesliketheUnitedStates,thismayclearlybean infringementbecauseitisamonopolyraisingpricesmanyfolddespite rising profits, which will surely result in increased prices for consumers.The interchange fee after the hike may be among the highest in the world.Attheendoftheday,thecompetitionlegislationshouldbeabout protecting the consumer, particularly from monopolistic providers of goods andservices.ItistheintentandspiritoftheActwhichshouldprevail, ratherthanthenicetiesofwhatiswithintheCCS'spurviewonprice changes. Credit | 3 45 Nets , 2007 7 6 6 26 Nets 4000 Nets Nets CompetitionCommissionofSingaporeCSSNets Nets Nets 3%Nets 47 Nets 2004 2005 53%2002 2004 44%13% 3 | 46 Case 16 Nets$20 $1800$1000 $2 Nets (CAP) CAP Credit | 3 47 3 | 48 Be Fairer To Debtors By Modifying Planned DRSThe Business Times, 26th April 2007 IREFERtothearticle'Publicfeedbacksoughtondebtrepaymentscheme' (The Business Times, April 23). Arguably,theworstthingaboutbeingabankruptisthatoneisblacklisted forlife,evenafteroneisdischargedfrombankruptcy,inthatonemay neverbeabletogetcreditforanything-buyingaflat,car,furnitureor computer. Therefore,unlesstheproposeddebtrepaymentscheme(DRS)addresses thisissue,ineffect,theremaynotbemuchdifferencebetweenbeinga bankrupt and a debt repayer. Inthisconnection,Iwouldliketosuggestthattheproposaltomaintaina public database of casesunder the DRSbe reconsidered, so thatproviders ofcreditcannotusethedatabasetodenycredittodebtrepayersforthe rest of their lives. In a way, being bankrupt now may be better because you just pay what you canandwhatisdeemedreasonableaccordingtoyourincomeand expenses, and you will very likely be discharged in three years for debts not exceeding half-a-million dollars. UndertheDRS,youhavetopaytheamountdeterminedbytheDRS Administrator through a repayment plan of up to a maximum of five years, providedthesumisnotmorethan$100,000.Butifyoudefault,youcan still be made bankrupt. Credit | 3 49 So,thekeydifferencemaybewhattheDRSAdministratordeemstobe reasonablefullorpartialdebtspayableundertherepaymentplan,using the'bestinterestsofcreditors'andthe'availabilityofdisposableincome' tests. Inthisregard,Ithinkwemayneedmoreinformationtoassurethepublic thatthe'bestinterestsofcreditors'andthe'availabilityofdisposable income'testsundertheDRSwillbethesame-ifnotbetter-fromthe debtors' position, relative to the current tests under bankruptcy. Otherwise,insomecases,onemayactuallybeworseoff,andstillendup bankrupt too, eventually. On balance, the net result may be that creditors in general will be better off under the DRS by collecting more debts than under the current bankruptcy regime,ifthefailurerateofDRSishigh,becausefordefaulters,thetotal periodundertheDRSandsubsequentbankruptcymaybemuchlonger than the current three years discharge by certificate from bankruptcy. WillcreditorsreceivemoreundertheDRSforfiveyears,comparedwith three years under bankruptcy? Whydoyouthinkmanypeopletodaypayabout$1,800toself-petitionto be made a bankrupt? So that they can reasonably expect to start life again after three years. In contrast, many debt repayers may end up paying more, struggle to make endsmeetmuchlonger,and,sadly,stilldefaultduringthelongfive-year repayment period when one's job may still be lost, or when business takes a turn for the worse. 3 | 50 In this respect, I urge the DRS Administrator to exercise flexibility under the DRS Modification of Repayment Plan. If there is a substantial and material change of circumstances affecting the debtor'sabilitytopay-forexample,ifthedebtorreceivesasubstantial inheritance or enjoys a significant increase in his earning ability, or suffers a pay cut - the administrator may modify the plan to increase or decrease the amountpayablebythedebtortothecreditors. Fiveyearsisalongtimetonothaveanythinggowrongforonewhois perhaps currently already at his or her wits' end financially. Finally,afterthesuccessfulcompletionoftheplan,thedebtorshallbe released from all debts under the plan, with the exception of certain debts, for example, debts due to the government. What are some examples of 'debts due to the government'? Why are such governmentdebtsaccordedspecialexemption?SincetheDRSistohelp Singaporeans,whyaccordspecialstatustogovernmentdebtsoverother debts? Credit | 3 51 (DRS) , 2007 4 2 $100,000 5 ' ' 3 | 52 3 5 1800 3 5 Credit | 3 53 Pitfalls Of Credit-card Balance TransfersThe Straits Times7th July 2005 I REFER to reports about banks offering zero interest to vie for credit -card balancetransfersandthearticles'Localconsumersshuffletheirplastic better'(TheStraitsTimes,June2)and'Lifeinplasticnotsofantastic'(The Straits Times, May 28).AsattheendofApril,Singaporehadmorethan22,000undischarged bankrupts.Ifthereare1.5millionSingaporeansworking,thismeansthat about three out of every 200 workers are currently bankrupt.Asthisfiguredoesnotincludedischargedbankrupts,therecordhighin bankruptcy cases, which continue to climb every year, should be addressed urgently.Iwouldliketoaskwhatisthetotalnumberofdischargedbankrupts,so that we know the extent to which Singaporeans are being denied credit for a lifetime.AmericansblewmorethanUS$24billiononcredit-cardfeeslastyear,an 18 per cent jump from 2003.Iwouldliketoaskwhatisthetotalamountofcredit-cardfeesthat Singaporeans pay in a year. This may be a more revealing statistic than data on thepercentage of cardholders who missed monthlypayments or rolled over debt.Forexample,onceacredit-cardbalancetransferhasbeenarranged, interestatupto24percentperannumischargedfromthedateof 3 | 54 purchases,insteadoffromthenormalstatementduedate,whichis typically about three weeks from the statement issue date.Thismeansthatfornormalcredit-cardstatements,onemaybegivenan interest-freeperiodofaslongas45daysfromthedateofpurchase.Ifyoudefaultonyourpayments,paylateorpaylessthanthemonthly minimumrequired,yourrecordattheCreditBureaumayhaveanegative remark which may mean that you may never be able to get another credit card or other forms of credit. Whatthismeansisthatyoumaybestuckwithhavingjustthebalance-transfer credit card which charges interest from the date of all your future purchases.Inthisscenarioyoumaybemuchbetteroffhadyounotarrangedthe balance transfer in the first place.Thepromotionalbalance-transferrateof,say,3.88percentperannumis typicallyvalidforonlyaboutsixmonths,afterwhichitwouldrevertto24 per cent.I receive brochures, letters and telephone calls almost every week soliciting credit -card balance transfers. I understand that almost all balance transfers arenotapplicabletoafinancialinstitution'sexistingcustomers,asthey apply only to balance transfers from other institutions.Doesthismeanthatonehastokeeptransferringfromonefinancial institution to another every six months or so, until one runs out of financial institutions?In a sense, in so doing, financial institutions are discriminating against their own customers. Why is this so?Credit | 3 55 One brochure I received said 'Balance Transfer at 0.33% p.m.' on the cover, but the fine print inside said 'Interest is calculated based on front-end and add-onmethodbymultiplyingtheprincipalloanamountbythespecified monthly rates for the full tenure of the plan. Effective interest rates for 12-monthplanand24-monthare7.09%p.a.and9.31%p.a.respectively.An administrative fee of $60 applies'.If the $60 fee is factored in, the effective interest rates are even higher.Arecentcredit-cardbillhadthestatement'PaymentHoliday:Withthe festiveseasonaroundthecorner,weunderstandtheimportanceof financialflexibility.Asourvaluedcustomer,youhavebeenspecially selected to have the option to defer your minimum payment this month. If you choose to take up the option, please note that normal interest charge of2%permonthwillcontinuetoapplyonyouroutstandingbalancefrom thedateeachchargewaseffected.Youwillbeadvisedonyourpayment due in next month's statement.'This statement is somewhat misleading because it is not normal for 'normal interest charge' to apply from the date each charge was effected.Are financial institutions upholding the spirit of the new code of practice for credit cards? 3 | 56 , 2005 7 7 5 28 5 28 4 2.2 150 200 3 240 2003 18% 24% 45 Credit | 3 57 3.88%24% 6 , 0.33%',,12 7.09%,24 9.31% 60 ' 60 :,2%,' ?3 | 58 Time To Inculcate Values Of Thrift, Modesty In Children The Straits Times, 16th November 2004 Irefertothearticle,'Teeteringonthebrinkofbankruptcy'(TheStraits Times, Oct 31). Credit-carddebtsandbankruptcieshavereachedrecordlevelsin Singapore. In Britain, many have been driven to suicide becauseof credit -card debts.When a credit counseling service was launched recently in Singapore, it was deluged with calls.AccordingtoMonetaryAuthorityofSingaporeguidelines,onlythosewho earn $30,000 or more a year can apply for a credit card.However, some banks will give one a credit card even if one does not have anyincome.Oneneedonlymakean'unsecured'credit-cardapplication after putting in a fixed deposit of $10,000.Thenumberofsupplementarycardsthatamaincardholdercanhaveis unlimited.Outofabout3.7millioncreditcards,aboutonemillionare supplementary cards. I understand that our ratio of supplementary to main cards is one of the highest in the world.When we were young, our parents and the Post Office Savings Bank gave us piggy banks to encourage thrift. Now, the young get supplementary cards.Credit | 3 59 As a society, are we not encouraging spending and credit , instead of thrift, whensomanySingaporeansgivesupplementarycreditcardstotheir dependants?One can just walk along Orchard Road and apply for credit cards from seven banks, which would give one credit of 14 times one's monthly income.No wonder more than 30,000 people in Singapore owe more than $20,000 ontheircreditcards.Threeoutoffourhaverolledovertheirdebtduring the last 12 months.Thelooseningofcreditpolicies-likenodownpaymentforcarpurchases, and repayment of up to 10 years - is good for the economy but bad for the tensofthousandswhohavedifficultyservicingtheirdebts,andtheir families.Likewiseacasino,whichwillundoubtedlybegoodforthe economy and tourism but bad for those addicted to gambling.Maybeouronlysalvationliesininculcatingthevaluesofthrift,modesty and less materialism in our children. 3 | 60 , 2004 11 16 10 31 $30,000 $10,000 ' 370 100 7 14 3 20000 3 4 3 2 Credit | 3 61 10 4 | 62 4. EducationEducation | 4 63 What Is The Ratio Of Foreigner To Local Scholarships? The Business Times, 13th October 2006 I refer to the Public Service Commission's reply, 'PSC study awards given to S'poreans'(TheBusinessTimes,Sept22),tomyletter,'Howmany foreigners get scholarships here?' (The Business Times, Sept 21). Accordingtomediareports,foreignstudentsmakeup9percentof SingaporePolytechnic's1,300studentseachyearandalmostallareon scholarships.Forty Pre-U Two students were offered full scholarships and five Singapore polytechnics were offering scholarships that pay 80 per cent of tuition fees in Sichuan, China.River Valley High School gave free scholarships worth $80,000 each in China. Raffles Institution has given free scholarships in China for the past 10 years - 1,240 were given in Shandong, China.NUSawardedtheSIA-NOLundergraduatescholarshipto40studentsin India.NUSgave140scholarshipstoforeignersin2001.A*Starsaidthatit would give scholarships to foreigners on the condition they become citizens when they graduate.StJoseph'sInstitution(International)willofferupto$3millionofopen scholarships over the next two years to bright students from Singapore and theregion.A*Starisalsogoingtosponsorfiveregionalstudentsayear under its Young Researchers Programme to study at SJI International.Only about 25 per cent of PhD students in Singapore are Singaporeans. 4 | 64 InreplytoaquestioninParliamentonApril19,2005,theMinisterfor Education said: 'Foreign students constitute 20 per cent of the universities' enrolmentandmorethan60percentofthose(foreignundergraduates who receive tuition grant subsidies) who were admitted to our universities between1996and1999havebecomepermanentresidentsorSingapore citizenssincegraduation.'Thismeansthatlessthan40percentleft Singapore after getting subsidised education.Iunderstandthatnow,morethan20percentofundergraduateand postgraduatestudentsareforeignersonscholarshipsortheTuitionFee Grant,wherebytheyjustpay10percentmoreintuitionfeesthan Singaporeansonconditionthattheyworkforatleastthreeyearsin Singapore after they graduate.Againstthisbackdropofspendingoneducationforforeigners,ithasbeen reportedinthemediathatlessthan20percentofneedySingaporean studentsweresuccessfulwhenmorethan1,000appliedforanannual bursaryof$1,500fromalocaluniversity,whichsparkedanoutcryamong some alumni in newspaper forums.Subsequently,financialassistancefundingwasincreasedintandemwitha riseintuitionfees,andin2005,fouroutof10studentswhoappliedfor bursaries were successful.TheMinistryofEducation'suniversitybursaryhasaqualifyinggross monthly per capita household income of not more than $900.So instead of just one public agency like the PSC telling us that they do not give scholarships to foreigners, how many scholarships in total are given to foreigners relative to Singaporeans? Education | 4 65 , 2006 10 13 9 21 PSC 9 22 1300 9% 40 5 80% $80,000 1240 40 2001 140 A*Star () 300 A*Star5 25% 2005 4 19 20% 1996 1999 4 | 66 60%40% 20% 10%3 $1,500 20% 2005 $900 PSC Education | 4 67 John Hopkins Universitys-A*Star Break-up Raises More Questions The Business Times27th July 2006 I refer to media reports about Johns Hopkins University's Singapore arm not meeting A*Star's goals in their tie-up. A*Star'sstatementthatJohnsHopkinsUniversity's(JHU)agreementwas terminatedbecauseitfailedtomeeteightoutof13performance benchmarks may raise more questions. Its spokesman had, only days earlier, described the problems as a period of 'transition' - a decision taken by the leadership of the American university and the agency to replace the current 'operatingmodelofcollaboration'witha'newmodelofpartnership'still being developed. Itisinterestingtonotethatwhilstfiveoftheperformancebenchmarks (KPIs) relating to recruitment were not met, output in the five KPIs typically associated with academic research far exceeded their targets. For example, in the first year, the result was zero for training programmes, graduate students and visiting faculty, and a shortfall of 78 and 62 per cent forfull-timefaculty,andresearchscientistsrespectively.Evenbythe second year, the result was still zero for graduate students, with a shortfall of 50 per cent for training programmes, 66.6 per cent for visiting faculty, 92 percentforseniorinvestigatorswithinternationalreputation,and69per cent for research scientists. Incontrast,theKPIsfornumberofpost-doctoralparticipatinginresearch, joint projects with other research institutes in Singapore, papers published, paperspresentedattopconferences,andconferencesorganised;far 4 | 68 exceededtheir targetsby 20, 300, 260, 300 and 100 per cent respectively. If you are not able to recruit the numbers you target, but fewer people are abletoproducemuchhigheroutputs,thenwhatistheproblem?Perhaps what is more important now is to try to understand why it is so difficult to getresearcherswillingtocometoSingapore.Weneedtofindouthowto make our research environment more attractive. ItisperhapsinstructivetonotethatallthreeKPIsrelatingtocommercial end-results,failedtoproduceasinglepatent,newtechnologiesornew products.Inthiscontext,maybethereisaneedforustore-examineour fundamental strategies and approach. If JHU, which is arguably one of the best in the world in its field, is not able to meet A*Star's standards, are the goals realistic and achievable within the time frame stipulated? Inthefinalanalysis,KPIsandagreementsaside,itisa'nowin'forA*Star, JHUandSingapore,asSingaporehasclearlystumbledinitsmaidenmajor medical research effort. Weshouldfocusonlearningfromtheexperienceratherthanconcentrate on apportioning blame. Otherwise, we may just be reinforcing the scientific community'sperceptionthatSingapore'senvironmentisnotconduciveto creativity. I cannot help but feel that the root cause of the problem may be a clash of twocultures-Singapore'stechnocraticefficiencyversustheAmerican ideals of freedom, liberalism, diversity and creativity. Education | 4 69 Forexample,JHUpreferstorecruityoungresearchersastheymayhave morepassionandarehungrierforaresearchbreakthrough,whereas A*Star wants researchers with international reputation. UnlikeotherAmericanuniversitiesandscholarships,JHUdoesnotbelieve inbondsforitsscholars,likeA*Starwhichhasahistoryofeventaking bond-breakers to task. As one researcher I spoke to said rather profoundly, you need to be happy to be creative, so Singapore's happiness ranking at 131 out of 178 countries has to improve. (Reply from A*Star: DJHS did not deliver as promised.) 4 | 70 JHU A*Star , 2006 7 27 John Hopkins University JHUA*Star A*Star JHU JHU 13 8 A*Star JHU 5 5 78% 62% 50% 66.6% 92%69% 20%300%260%300% Education | 4 71 3 JHU A*Star A*StarJHU ; JHU A*Star JHU A*Star :178 131 (A*Star DJHS 4 | 72 Better To Fail And Learn From It The Straits Times, 12th March 2003 Irefertothearticle,'Wanttobeentrepreneur?Don'texpectgovt handouts' (The Straits Times, May 3). It states that 16-year-old Zhang Zhen Wei, a Secondary 4 student at Raffles Institution,indicatedthatthesystemcouldbeatfaultforthelackof entrepreneurship here.He was quoted as saying: 'I'm afraid to fail. We've been taught since young topasstests.Ifapersonfails,he'llhavetoanswertohisteachersand parents and he is branded a failure.'I think we need to send the message to the young that failure is all right by sayingthingssuchas:Ifyoufailatestfivetimesandpassonyoursixth attempt, and someone else passes it the first time round, who do you think will know the subject matter better?Isitbettertofailalittleinprimaryschoolandlearnfromtheexperience, rather than wait until you are in university to fail for the first time?Inmyworkexperience,Ihavefoundthatthosewhofailseveraltimesin attemptingthelicensingorprofessionalcertificationexaminationsinthe financialservicesindustry,aremoreresilentandtendtohaveabetter chance of success in the long term, particularly when things get tough, such as during economic crises and the recent Sars outbreak.TheStraitsTimesarticlealsoreferredtofindingsaboutSingaporebythe EconomicIntelligenceUnitandtheGlobalEntrepreneurshipMonitor.Education | 4 73 OnefindingwasthatSingaporerankedpoorlyonentrepreneurship comparedwithothercountriesbutwastopinAsiaforitspoliciesand framework to encourage businessmen.Thisfindingmaysuggestthatdevelopingentrepreneurshipisnotsomuch aboutpoliciesandframework,butratherthespiritofentrepreneurship, whichislinkedcloselytothespiritoffreedomandwhichrequiresa mindset and cultural evolution that takes years, if not decades, to build and nurture.Forexample,theAmericaneducationsystemhasoftenbeencriticisedfor beingtooliberalandlackinguniformstandards,withthediverserangeof its institutions and courses.However, its diversity is, in a sense, its greatest strength as the system has resulted in the push for constant innovation and survival. PerhapsstudentsinSingaporeshouldbeallowedagreaterfreedomof choice in selecting subjects.Also,almosteveryscholarshipthatIhaveencounteredisforstudyat prestigiousuniversitiesindevelopedcountriesinNorthAmerica,Europe, Australia and Asia.How about scholarships to study in, say, Latin America, where there are old universities which may never have had a Singaporean student?Latin America may have few ties to Singapore now but this may mean that it also offers the greatest opportunities in the future.4 | 74 Perhaps we need to realise that it is better to fail early in business, so that welearnaboutthepitfalls,whichwouldreducethechancesoffailurein future ventures. Education | 4 75 , 2003 3 12 5 3 16 Economic Intelligence Unit Global Entrepreneurship Monitor 4 | 76 Education | 4 77 Life-long Learning Brings Intangible Benefits Too The Straits Times 12th November 2002 I refer to Ms Jessica Tan's letter, 'Life-long learning a waste of workers' time and money' (The Straits Times, Nov 8). AccordingtoastudybytheCommonwealthDepartmentofEducation ScienceandTraining,Australia,amalegraduateearnsA$622,000more over his lifetime than a non-graduate.Increasingly,asmoreemployersandhuman-resourceprofessionalshave gonethroughorbeenexposedtolife-longlearning,theacceptanceof degreesandprofessionalqualificationsattainedthroughpart-timestudy will increase.Life-longlearnersmayevenhaveanadvantageinthattheyhave demonstrated their perseverance and ability to manage work and study at the same time.Life-longlearninghasmanybenefits,likeknowingoneselfandothers,or enhancing work performance and non-work interests, other than getting a better-paying job.PerhapsSingaporeansshouldviewlife-longlearningasanattitude,rather than a means to an end. 4 | 78 , 2002 11 12 JessicaTan (,11 8 ) ,$622,000 , , Education | 4 79 Balance Use Of Funds, MOE The Business Times, 23 th January 2007 Irefertothearticle'Trustfundsetuptohelpneedypupils'(TheBusiness Times, Jan 11).According to the Ministry of Education's (MOE) website, it was announced at the 'Lee Wee Kheng Fund For Needy Children Award Ceremony' that the number of FAS (Financial Assistance Scheme) recipients has increased from about 15,000 in 2005 to 35,000 in 2006.I find this statistic somewhat alarming. Why is it that the number of needy students given financial assistance has jumpedby 20,000, or 133 per cent, in just one year, when last year was one of the best years for the economy marked by record jobs creation and very low unemployment rate?HastheMOE'scriteriabeensostrictinthepastthat57percentofthose whoqualifiedlastyear,couldnotqualifyin2005andinpreviousyears? HowmuchmoredidMOEspendlastyearinhelpingtheadditional20,000 students, compared with 2005?TheMOErecentlyannouncedthatitwillbeworkingwithaninternational research team to develop 15schools of the future with wirelessnetworks. The team has access to part of a $500 million fund.There may sometimes be a trade-off whenever we spend a lot of money on somethingnewinabigway.Forexample,whenthenewNEUPCPlus SchemewasannouncedlastyeartoreplacetheNEUPCScheme,needy families with school-going children got a better package, but needy elderly families without school-going children were no longer eligible for a low-cost PC and Internet access.4 | 80 Therearethousandsofchildrenwhoareunabletopaytheirschoolfees, andwhohavenopocketmoneytogotoschoolgoingbythenumber getting help under the ST Pocket Money Fund.There are also free breakfast schemes offered by some schools and various organisations which give one-off vouchers to needy students.Also, more than 2,000 university students are applying for a bursary of only $1,000 plus a year and needy students at 100 schools will get $1 million this year to help pay for school lunches, uniforms, transport, spectacles, from a $25 million bequest left by the late Mr Lee Hiok Kwee.Giventheserealities,wemayneedtobalancethe$500millionfund availablefortheschoolofthefutureprojectwithmorehelpforneedy students.(MOE reply: Balanced use of public funds in education) Education | 4 81 , 2007 1 23 (,1 11 )LeeWeeKheng 2005 15,000 2006 35,000 20000 133% 57%2005 2005 2005 20000 15 5 NEUPCPlus NEUPC 2,000 100 $1000000 4 | 82 LeeHiok Kwee 5 Housing | 5 83 5. HOUSING5 | 84 Settle Question Of HDB Subsidy Once And For AllThe Straits Times2nd January 2007 I refer to Mr Viktor Ye Kok Kheong's letter, 'Did HDB land pricing use Raffles Place as rule?' (The Straits Times, Jan 1).HousingandDevelopmentBoardsaidthat'HDBdoesnotrevealtheland andconstructioncostsofspecificprojectsastheyvaryfromlocationto location...Thatiswhyitincursanoveralldeficiteachyearforitshome-ownershipactivity,asreflectedinitsannualaccountswhichisavailable publicly'.Thereasongivenfornotrevealingthelandandconstructioncostsis somewhat illogical, because the HDB is not being asked to disclose the costs ofeveryprojectorlocation.Whynotjustrevealthebreakdownoftotal costs,andafewexamplesofsomeprojectsandlocations,nowandinthe past?What the HDB is saying is akin to 'since we cannot tell you each and every item, we won't tell you anything at all '.Everyonceinawhile,thequestionofthecostandpricingofHDBflats comes up in the media. So, why not put a stop to the on-going speculation that HDB flats are not really subsidised?IntheinterestofmaintainingSingapore'sreputationofhavingthehighest standards of transparency and corporate governance, the HDB should keep up with the standards of disclosure in the private sector. Housing | 5 85 Toillustratethepointoftransparency,noreal-estateinvestmenttrustor publicly-listed company would be able to give the reason given by the HDB for not breaking down the information on the major cost components in its accounting statements.HowcanwetellwhetherHDBpricesare'atmarketprice'withouta breakdown of the land and construction costs for comparison purposes?Astothemarketpriceforlandtakingintoaccountthe'substantial resources...investedtoprovidemajorinfrastructure,suchasroads,MRT, sewersandutilities,forthenewhousingdevelopment',thussignificantly enhancingthelandvaluebeyondtheacquisitioncostsincurredbythe Government,aren'tthebillionscollectedeveryyearfromroadtax, electronicroadpricing,propertytax,30percentwater-conservationtax, etc, supposed to be used to provide such infrastructure? 5 | 86 , 2007 1 2 ViktorYeKokKheong ?(,1 1 ) :,... :,? :,,,?, ,,? ...,,,,,,,,30%? Housing | 5 87 Income Ceiling For HDB Flats May Be Too LowThe Straits Times 6th November 2006 I refer to the HDB 's reply, 'Smaller flats for the lower- income (The Straits Times, Oct 23) to Ms Phang Geak Lean's letter, '$3,000 ceiling stands in way of smaller flat ' (The Straits Times, Oct 12).Itstates:'Thehouseholdincomeceilingis$2,000fornewtwo-roomflats and$3,000fornewthree-roomflats...Householdswithincomesofmore than $3,000 can consider buying new four-room or larger flats within their affordability.' TheHDBseemstobemakingtheassumptionthatthosewhoearnmore than $3,000 can afford a four-room flat.According to the HDB's July 2006 fact sheet, the price of four-roomflats is from$131,000to$182,000.Itslatestofferoffour-roomflatscosts $230,000 to $292,000 ('450 new flats in Geylang for sale'; The Straits Times, Oct 27).Evenifweassumeoneisabletobuythecheapestat$131,000,the monthlyrepaymentona30-yearHDBsubsidisedloanafterpayingthe10 per cent downpayment is $472. Thisleavesanet'aftermortgagepayment'monthlydisposableincomeof $2,528.Deduct $100 for school fees and pocket money for two children, and we are leftwith$2,150.Basedonafamilyofsix(couplewithtwochildrenliving withparents),thebalancepercapitadisposableincomeis$358.Ifwe 5 | 88 assumefoodat$9andtransportat$4perpersonperday,totalfoodand transport will come up to $390 per person per month.This means the family's monthly deficit is $192 ($390 - $358 x 6), assuming theydon'tspendanymoneyatallonentertainment,holidays,learning activities, insurance, maintenance and repairs, and so on.Those who are self-employed, and do not have employer's CPF contribution for workers, may have an even higher monthly deficit.I suggest the HDB review its income ceiling eligibility for flats , because my example clearly demonstrates that some Singaporeans who earn more than $3,000 may not be able to afford four-room flats . Denyingthemthepurchaseofasmallerthree-roomflatmayleadto financial stress and very little CPF when they retire. Housing | 5 89 2006 11 6 PhangGeakLean $3,000 10 12 (10 23 $2,000$3,000$3,000 $3,000 2006 $13,000 $182,000 $230,000 $292,000450 $$2,528 $100 $2,150$$4$390 5 | 90 $192 ($390 - $358 x 6) $3,000 Housing | 5 91 Let Singles Rent Vacant Flats Without Pairing Up The Straits Times20th January 2005 I refer to the letter, 'Why build more flats when many are unoccupied' (The StraitsTimes,Jan17);thePresident'sAddress,'Buildingabetterhomefor all'(TheStraitsTimes,Jan13);andthereport,'JointSinglesSchemestays' (The Straits Times, Nov 27).On Jan 12, the President's Address called for ensuring a place for everyone and for the needs of all Singaporeans from all strata of society to be looked at.Inapreviousparliamentarysession,MinisterofStateforNational DevelopmentCedricFoosaidthatifsingleswereallowedtorentflats withoutpairingup,thedoublingofresourcescouldrequireanadditional investment of some $900 million from the Government.Iunderstandthatthereareabout10,000HDBflatsthathaveremained vacant for many years because the HDB has been unable to find buyers.I suggest that some of these flats be made available for rental to singles.Why talk about the cost of building new flats to meet the demand of singles when there are so many unwanted vacant flats?I understand that there are also many vacant HDB rental flats. For example, inBlock100,AljuniedCrescent,Ibelieveabouthalfofthe224one-room rental flats have been vacant for many years.I would like to ask what is the number of vacant HDB rental flats, in addition to the many unsold HDB flats?5 | 92 Whydowecontinuetomaintainpublichousingpoliciesthatdenyneedy single Singaporeans a roof over their heads when there are so many vacant rental and unsold HDB flats?If it costs $900 million to build 9,400 new flats to meet the singles ' demand, what is the cost of keeping 10,000 flats vacant for so many years? Would it not make business sense to rent them out till they can be sold?Itishardenoughtobeold,singleandearningnotverymuch.Ontopof that,theyhavetoenduretheindignityofhavingtofindastrangertolive with-theJointSinglesSchemerequirestwosingleswhosecombined monthly income is below $1,500 - just to be able to qualify to rent a flat.If you are earning $900, you will have to find another single who does not earnmorethan$600toqualify.HowmanySingaporeansearnlessthan $600 a month?The HDB gives a six-monthgrace period for the remaining tenant to find a newflat-mateifthetwosinglescannotgetalong.Canyouimaginethe pressureandstressontheelderlysinglewithlowincomewhensuch situations arise?Accordingtoastudy('Linkbetweenstressandageingfound';TheStraits Times,1stDec2004)byDrElissaEpeloftheUniversityofCalifornia,San Francisco, stress leads to physiological ageing, poor health and a depressed immune system.Perhapsthosewhodecideonthesingleshousingpolicycouldtrytoput themselvesintheplaceofthosewhoareelderlyandsingle,withlow income and no shelter, to truly appreciate their plight. (HDBs reply: It's still 'no' to singles renting HDB flats singly) Housing | 5 93 ,2005 1 20 1 17113 1127 , 1 12 100 224 5 | 94 9400 $1,500$900$600 $600 6 ElissaEpel 2004 12 1 Housing | 5 95 Can A Bankrupt Lose His HDB Flat To Banks?The Business Times, 8th October 2004 I refer to reports quoting a study titled Credit Cards and Consumer Lending in Asia-Pacific 2003-2005 by the Lafferty Group saying that Singapore is one of the smallest consumer credit markets in Asia. However, it has one of the highest levels of consumer debt per person in the world. ThedebtoftheaverageSingaporeanwasestimatedtobe122percentof his personal disposable income, up 2 per cent from a year earlier.BankruptciesareatarecordhighinSingapore,despiteanimproving economy, and the first-ever study of credit card usage patterns released on Sept 30 by the Consumer CreditBureausaid that about 30,000 credit card holders have outstanding balances of over $20,000 each.Withoilpricesatanall-timehighandrisinginterestrates,thecostsof servicing debts may rise, and this may result in more bankruptcies.Ialsorefertomediareportsthatifonebecomesbankrupt,thehousing loan mortgagee bank will have to foreclose and realise their security within sixmonthsofthedateofthebankruptcyorder,orsuchextendedtimeas the Official Assignee may allow.Iunderstandthatthird-partycreditors,suchascreditcardcompanies, cannot take possession of an HDB flat even if the flat owners are unable to pay their debts because such debts are not secured against the HDB flat. On theotherhand,thebankwhichgrantedthemortgageloancanrecallthe loan and sell the flat if the loan agreement allows it to do so in the event of bankruptcy.5 | 96 If one has credit card debts, is made a bankrupt and the bank sells the flat becausetheloanagreementallowsittodosointheeventofbankruptcy, doesitnotmeanthatonecanloseone'sHDBflatduetoothernon-HDB mortgage debts? So, does or doesn't one run the risk of losing one's HDB flat to banks, even if one does not default on the housing loan monthly repayments? Housing | 5 97 ,2004 10 8 LaffertyGroup2003-2005 122%2% ConsumerCreditBureau 9 30 , 30000 $20000 5 | 98 'Downgraders' Need More Information From HDBThe Business Times, 26th November 2002 IrefertotheHousingandDevelopmentBoard's30-monthdebarment period for private property downgraders to new HDB flats.HDBhasindicatedthatitwillwaivethisonacase-by-casebasisfor 'deservingSingaporeanswhoareformerprivatepropertyownerswith genuine financial hardship and unable to afford re-sale flats'.PerhapsHDBcangivesomeexamplesastohowfinancially-stressed Singaporeansneedtobeinordertobeconsidered?Suchamovewould help people better understand what criteria are used to determine whether theyare'deserving',face'genuinefinancialhardship'andare'unableto afford'.And who decides such things? Is it an officer, a committee, HDB by itself, or inconsultationwiththeMinistryofCommunityDevelopment,Community Development Councils, etc?Is it also possible to tell us how many waivers have been granted and what proportion of applicants has been turned down?Veryoftenwegetrepliestoletters'forumssayingthatapolicycannotbe reviewedbutthattherewillbeflexibilityonacase-by-casebasis.Such assurances are not very reassuring.I would also like to seek clarification on whether the waiver is only possible for'formerprivate-propertyowners',asopposedtoexistingprivate property owners. Housing | 5 99 Howcanapersonplantodowngradeandgetcashoutoftheirprivate property-soastoretirelessfinanciallystressed-iftheyhavetosellfirst andbecomea'formerprivate-propertyowner'beforetheycanbe considered for a waiver of the 30-month debarment period?Fora$200,000HDBflatloan,thedifferenceinthemonthlymortgage repaymentbetweenthesubsidisedrateof2.6percentandtheaverage market rate of say 4.5 per cent is considerable.We are told that there are thousands of unsold new HDB flats, so it may be to HDB 's benefit to allow their sale to former private-property owners.The fact that one lives in private property and has never availed oneself of a newHDBflatshouldnotmeanonehastobejudgedasbeing'deserving' and 'genuine'.IwouldliketoaskHDBtore-considerwhetheritisreallynecessaryfora persontobein'financialhardship'beforetheirlifecanbemademore financially palatable in the light of the current economic downturn.PerhapsHDBshouldfocusonprovidingaffordablequalityhousingforall Singaporeans,ratherthanbethejudgeofsocialandfinancialpoliciesthat impact our financial decisions.Isbeingaprivate-propertyownersucha'stigma'thatapersonhas,ina sense, to be 'discriminated against' when trying to explore the HDB option in one's financial planning? (HDBs reply: Downgraders can easily buy an HDB resale flat) 5 | 100 ,2002 11 26 30 , 30 200000 2.6%4.5% Housing | 5 101 6 | 102 6. HealthcareHealthcare | 6 103 Don't Raise Medisave CeilingThe Business Times, 26th April 2005 Irefertothereport,Medisave,Medishieldchangesinthepipeline''(The Business Times, 25th April 2005). HigherincomeearnersmayhavetheirMedisavecontributionceiling, currently at $30,000, raised in a year's time.The reason given was that Medishield was designed with the B2 and C class wardsinmind,soforhigherincomeearners,cappingtheMedisave contribution ceiling might mean that they would not have sufficient savings if they opted to stay in A-class wards.This policy change in a way contradicts the recent policy change of farming outtheMedishield-Plusschemestoaprivateinsurerbecause,ontheone hand,wesaythatwewanttogivethosewhocanaffordthechoiceofa widerandcompetitivelypricedrangeofmedicalinsuranceschemesfrom privateinsurers,but,ontheotherhand,wearenowtoldwehaveno choice but to have more Medisave for Medishield's design limitations.Ifthehigher-incomeearnerschoosehigher-classwards,itistheirchoice becausetheypreferitandbelievetheycanaffordto.So,whyistherea needtolockupmoreoftheirdisposablecash-flowandassetsinthe Medisave account?The more one's assets are locked up in Medisave, the less will be available forotheruseslikeretirementexpensesanddesiredhealth-related expenses.6 | 104 TherestrictionsontheuseofMedisaveactuallylimitthechoiceofmany health-related services available such as out-patient, health screening, etc.Thismaymeanmorecashout-of-pocketmedicalexpenses.Thehigher-incomealreadypaymoreincometaxandwillbesubjectto means testing if they opt for class B1, B2 and C wards. So, is it fair to make them contribute more to Medisave?Increasing the Medisave contribution and withdrawal ceilings may have the undesirableeffectofencouragingpeopletooptforhigher-classwards, becausesomemayfeelthattheymightaswelluseitsinceitcannotbe used for anything else.Moreover,thebalanceintheMedisaveaccountgoestoone'sCPF nominees upon death.Perhaps,healthcarepoliciesshouldfocusonthelower-incomelikenot closingthenightservicesatpolyclinics,insteadofforcingthehigher-income to contribute more.After all, if those with higher income do not have enough when they opt for higher-class wards, it should not be the government's problem.The CPF cuts, lower contribution for older workers, and lower contribution ceiling for the higher income, is already causing more financial hardship and stressforsomehigher-incomeearners,whohavepropertymortgage repayments.So,whyreversethedownwardtrendofCPFcontributionsbyraising Medisave?Healthcare | 6 105 Thismaymeanevenlessdisposablecash-flowforsomewhoseearnings were cut during the recent economic downturn.By2013,theCPFMinimumSumwillincreaseto$120,000plusminimum Medisaveamountof$25,000.HowmuchmorewillSingaporeanshaveto set aside in their CPF in the future, when they reach age 55? 6 | 106 ,2005 4 26 (4 25 ) 30000 B2 C A , ,,,"" "", , Healthcare | 6 107 , B1,B2 C ? ,, ,,,, ,,, , ? , 2013 $120,000,$25000 55 ?6 | 108 RaisingCostsForForeignersMayNotBenefit Singaporeans The Business Times, 13th December 2006 IrefertothearticleForeignerstopaymoreforhealthcarecostsfrom October (The Business Times, 11 December 2006).Increasingmedicalcostsforforeignworkersmayleadtoemployers reducing the take-home pay, particularly for lower-skilled workers.Inthepast,whenforeignworker'slevy,accommodationrequirements, polyclinicandCommunicableDiseaseCentrefeeswereraised,takehome pay generally declined.Withtheincreasingtrendofoutsourcing,particularlyforlow-skilledwork, employers in the outsourcing industry typically have relatively low margins, andarethusquitesensitivetohigherlabourcosts,whichtheymayhave some difficulty in absorbing, because they may alreadyhave committed to long-term contracts with fixed pricing.A spokesman from the Humanitarian Organisation for Migration Economics hasalreadyraisedtheconcernthattheincreaseinmedicalcostswillbe passed on to workers.TherealityisthatemployerscannothaveSingaporeansandforeigners working side by side, doing the same low-skilled job, with different pay.So,theimplicationforlow-skilledSingaporeansmaybethattheirwages may decline too.This is reflected in the Department of Statistics' General Household Survey 2005,thatthe11thto20thpercentileofhouseholdsbyincome,had Healthcare | 6 109 decliningincomesby4.3percentperannumfrom2000to2005.TheplayingfieldbetweenforeignersandSingaporeanworkersmaynever belevel,aslongasforeignersdonothavetocontributeCPF,whereas Singaporeans have to.Singaporean males also have to do reservist training.EmployerssavebynothavingtocontributeCPFforforeigners,and Singaporeans may find it harder to survive with 20 per cent less take-home pay compared to foreign workers.The fact that most Singaporeans have families to provide for, compared to foreignerswhoareherealone,maymakeitevenharderforSingaporeans to take on low-skilled jobs.Insteadofremovingthesubsidyforforeigners,reducingitforpermanent residents,andmaintainingthestatusquoforSingaporeans,whynot increasethesubsidyforSingaporeansusingtheexpected$36million additional revenue?SincemanySingaporeansmayhavetobearthebruntoftheincreasefor foreigners and permanent residents for whom they are responsible for, it is akintoano-winsituationforeveryone,ifthesavingsarenotchannelled directly back to citizens.For example, last year, Medifund paid out $39.1 million to 288,000 patient applications, giving an average subsidy of $136.Givingthe$36millionadditionalrevenuetoMedifundcouldincreasethe average payout to $261.6 | 110 Thus,increasingthehelptoneedypatientsby92percent.Alternatively, current subsidies for Singaporeans could be increased across the board, for lower class hospital wards.Iwouldliketosuggestthatweexplorethepossibilityofnotcharging foreigners and permanent residents more, but giving more to Singaporeans instead.Insodoing,allwillbehappy,insteadofoneoutoffour(non-citizens)ontheislandbeingunhappy,andperhapsanotheroneortwoof theremainingthree(citizens)beingunhappytoo,becausetheymayhave to pay for the former.Whynotusesomeofthehundredsofmillionscollectedinforeignworker levies annually, so that Singaporeans do not have to end up paying for them?IntryingtoaddresstheissuethatSingaporeansshouldhavemore privilegesthannon-citizens,areweinadvertentlycreatingotherproblems for Singaporeans? Healthcare | 6 111 , 2006 12 13 1211 HumanitarianOrganisationforMigration Economics DepartmentofStatistics20052000 2005 11 204.3% 6 | 112 288,000 3,910 $136 3,600 $261 92% Healthcare | 6 113 Issues Healthcare Panel Should ExploreThe Business Times, 30th August 2006 IrefertothearticleMOHpublishespatients'averagehospitalbilldata (TheBusinessTimes,23thAugust2006)andmediareportsthatMedisave willbeextendedtocovergeneralmedicalpractitionerbillsforthosewith chronic illnesses, such as diabetes. Thosesufferingfromdiabetes,highbloodpressure,highcholesteroland strokewillbeabletouseMedisave,'bringingthetotalnumberofpeople allowed to dip into their Medisave to one million'.With the resident population at 3.6 million, does it mean that 28 per cent of thepopulationhasdiabetes,highbloodpressure,highcholesteroland stroke? If we include other illnesses, how many unhealthy Singaporeans are there? What percentage of the population are not in good health?Thisstatisticisquitealarming,andIwouldliketosuggestthattheHealth Promotion Board step up its efforts to help Singaporeans stay healthy.'A patient will have to pay $30 out of pocket for each visit, and 15 per cent oftherestofthebill.'Forexample,ifthemedicalfeeis$80,theamount that can be deducted from Medisave is $42.50. 'Each transaction will carry anadministrativefeeof$3.05.'Inthisexample,theadministrativefee works out to be 7.2 per cent of the amount deducted from Medisave.TheCPFpays2.5and4percentrespectivelyontheordinary(OA)and specialaccounts(SA).Forthisexample,inpercentageterms,the administrativefeeis4.7and3.2percentmorethantheinterestthatCPF pays us for OA and SA.6 | 114 At this rate, some Singaporeansmay be paying more to CPF by way of the Medisaveadministrativefee,thantheCPFinteresttheyearn.Thus,those withhealthproblemsmayseetheirMedisavedepletedquitequicklyas they grow older and generally require more medical services.If each of the one million residents with the four chronic illnesses use their Medisave just twice a year, the CPF Board will collect additional revenue of $6.1 million from the administrative fees.HowmuchdoestheCPFBoardcollectinayearnowfromMedisave administrative fees, and how much more will it collect when Medisave can beusedforout-patienttreatmentfromOctoberforthe275,000people with diabetes, and from January 1, 2007 for those with high blood pressure, high cholesterol and stroke? Why do we have to pay a fee to CPF to use our own Medisave? InarecentLianheZaobaostudy,asurveyofmorethan500Singaporeans revealedthat64percentoftherespondentsarenotconfidentofcoping withmedicalcosts.Astomediareportsthatmostpeopleareabletopay healthcostsusingMedisaveandthatthe'releaseddata''assure Singaporeansthathealthcareherehasremainedaffordable',dothe hospitalbillssizestatisticsincludepre-hospitalisationconsultation, diagnostictests,in-hospitaldoctors'visits,post-hospitalisationtreatment and medicines? I understand that the trend has been to discharge patients earlierfromhospital.Thismayhavecontributedtothedecliningshareof hospitalisation costs to total costs.Thestatisticsspeaksforthemselves:Anestimated400,000Singaporeans donothaveanyformofmedicalinsurance.AccordingtotheCredit CounsellingService, 17.6 per cent of Malays who got into debt was due to Healthcare | 6 115 medicalcosts.AccordingtotheWorldHealthOrganisation'sWorldHealth Report2006,Singaporeat36.1and7.7percentfor'generalgovernment expenditure on health as apercentage of total expenditure onhealth' and 'generalgovernmentexpenditureonhealthasapercentageoftotal government expenditure', was ranked 164 and 140 respectivelyout of 192 countries.AccordingtotheMinistryofHealth'swebsitewhichwaslastupdatedin June2006,governmenthealthexpenditureoverGDP(grossdomestic product) (%) was only 1.2, 0.9 and 'na' for 2003, 2004 and 2005 respectively.In contrast, the OECD median is 8.6 per cent. Why not consider waiving GST forhealthcosts?Ahealthcarefocusgroupoffivemembersofparliament hasbeenformedtoexaminethecurrenthealthcaresystem('High-level panel to explorehealthcare options; Ledby Minister of State for Health, it willtackleissuesofqualityandcost',BT,Aug15).Perhaps,thehealthcare focus group could look into some of the above. 6 | 116 ,2006 8 30 8 23 360 28% $30 15%$80$42.50$3.05 7.2% 2.5% 4%4.7%3.2% Healthcare | 6 117 610 10 275000 2007 1 1 500 64% 40 CreditCounsellingService17.6% 2006 36.1%7.7%192 164 140 2006 6 20032004 2005 1.2%0.9% 6 | 118 OECD8.6% 5 8 15 Healthcare | 6 119 Relook Means Testing For DisabledThe Business Times, 12th January 2006 IrefertomediareportsthatmeanstestingwillstartinAprilforsome services in the disability sector. For example, children with palsy may have to pay $920, instead of $30 now, for therapy. I would like to suggest that consideration be given to the absolute amount ofthesubsidy,insteadofjustanarbitrarycut-offof$1,000percapita income-'calculatedbydividingfamily'sincomebythenumberof dependants'. It is difficult for, say, a family with per capita income of $1,001 to pay $920, as it may effectively consume about 92 per cent of the income. Thepercentageincreasefromtheexistingsubsidisedrateshouldalsobe considered, as in this case, it is a whopping increase of 3,000 per cent. Household per capita income could also be incorporated in means testing, instead of just per capita income per dependant. Toillustratehowthismayimpactthelowerincomegroup,twoparents earning$501eachwithonedependentchildwillnotqualifybecausethe per capita income per dependant is $1,002, which exceeds $1,000. Asingleparentearning$1,001withonedependentchildwouldalsonot qualify. Howcouldfamiliesliketheabovebeconsideredas'notpoor'formeans testing?6 | 120 Thefactisthatthedisabledtypicallyhavetoincurotheradditional expensesduetotheirspecialneeds,andthusthemeanstestingsubsidy may just be one item of the overall expenses. Reducing or taking away the subsidy may increase their financial burden. AsIunderstandthatmeanstestinghasnotbeenimplementedfor healthcare,whyisitbeingintroducedforsomeservicesinthedisability sector first from April? This,inaway,isdiscriminationagainstthedisabled,whentherestofthe population are not subject to means testing. In this connection, to help lower income Singaporeans, rebates in 1998 and 2003 included rebates on rent and utilities for HDB flats and ERS (Economic Restructuring Shares) of $27 and $25 monthly per capita. They were given to the lowest 20 per cent household income group and the second quintile group respectively. In contrast, the third and fourth 20 per cent of households had rebates of $25, and the highest, $26. Why is it that the lowest 20 per cent had only $1 more than the highest, and the highest had $1 more than the second, third andfourthquintiles?Shouldn'tthelowesthavebeengivenmoreandthe highest least? Affectedparentsmaybeforcedtoquittheirjobsortake onlowerpaying jobs,justtogobelowthe$1,000percapita,inordertoqualifyforthe subsidy. Perhapsanotheralternativeistohaveanotherdependantlikeachildor parent in order to qualify? Healthcare | 6 121 Itissaddeningtoreadthatwithoutanysubsidy,all46oftheSpastic Children'sAssociationofSingapore's(SCAS)Eipic(EarlyIntervention ProgrammeforInfantsandChildren)clientswillhavetopay$920,while another 34 awaiting admission to SCAS' new day-activity centre will have to pay $720 a month. How many of these disabled children qualify under means testing? Thosewhocannotaffordmayhavetotaketheirchildrenoutofthe programme,stayathome,andtheirconditionwillsimplydeteriorate without any therapy. ThecharitysectorisalreadychallengedbytheNKFsaga.Thenewmeans testing may only increase the stress on charities to get more funds to help their beneficiaries. The reason given was that 'means testingensures that funds are allocated more to the poor and needy, and less to those who are able to pay'. Unless theschemeisflexible,thosewhoaredeemedtobe'abletopay'may becomeverypoorovernight,andsomeofthedisabledmayinasense become 'financially disabled' as well. 6 | 122 ,2006 1 12 4 $30 $920 1000 - $1001 $920 92% 3000% 501 10001001 Healthcare | 6 123 1998 2003 27 25 Economic RestructuringShares20%20%40% 40% 60%25 60% 80%261 20% 80%1 (SpasticChildren'sAssociationofSingapore) EIPICEarlyInterventionProgrammeforInfantsandChildren)46 6 | 124 $92034 720 $920 Healthcare | 6 125 Fee Hikes For Needy Should Be ReviewedThe Business Times, 23th March 2007 Irefertotheincreaseinpolyclinicandhospitalcharges.The80-cent increase for polyclinic fees may seem small in absolute te