WP chief rebuts Mah Bow Tan on ‘raiding reserves’

Excerpts from Straits Times article “WP ‘not looking to raid reserves'” (22 April 2011) by Kor Kian Beng

Excerpts from Straits Times article “WP ‘not looking to raid reserves'” (22 April 2011) by Kor Kian Beng:

WORKERS’ Party (WP) chief Low Thia Khiang yesterday accused National Development Minister Mah Bow Tan of trying to distract Singaporeans from the issue of keeping new HDB flat prices affordable.

The opposition veteran said Mr Mah’s remarks on Wednesday, suggesting that the WP is trying to raid the reserves with its housing proposals and abolish the elected presidency, were ‘calculated to confuse Singaporeans’.

‘I would advise the minister not to sidetrack (from) the issue of public housing that the WP has raised in its manifesto,’ said the Hougang MP.

‘The WP is saying that the current flat prices are too high and would be a financial burden for younger generations of Singaporeans. What is the Government’s response to that?’

The ruling party, with Mr Mah largely at the forefront, has been attacking the WP’s manifesto, in particular its housing proposals, in the past fortnight.

Mr Mah said on Wednesday that the WP’s suggestion to peg new flat prices to median incomes to make them cheaper would devalue the one million existing flats.

This is because buyers would flock to new apartments if they are significantly cheaper, he added. Now, prices of new flats are tied to the resale market and then discounted.

It is possible to make flats cheaper because the Government could lower its price for state land for HDB blocks, said Mr Low earlier.

But Mr Mah slammed the suggestion, saying it would mean less contribution to the reserves and is thus considered a raiding of the reserves.

Mr Low fired back yesterday, saying that based on such logic, the People’s Action Party (PAP) has been guilty of taking from the reserves for years.

‘The PAP’s election budget and the Grow and Share package to please the voters also mean that we will have less contributions to the reserves. This is also raiding the reserves,’ he said, referring to the $3.2 billion package to help Singaporeans cope with higher costs of living.

In addition, the land cost for new HDB flats is usually lower compared to the land set aside for private developments, he said, which means the PAP is also raiding the reserves.

Private developers have to tender for the land, and thus the price is usually higher than that of land for HDB flats, Mr Low explained.

Stressing that the WP is not trying to raid the reserves in any way, he said: ‘We are not saying that we should make use of reserves, we are not saying that we should not accumulate reserves, we are not saying that we should not save for a rainy day.

‘I think we should save for a rainy day, but the question is how much is enough? And what is the trade-off?… you can save everything and make Singaporeans poor if you want to.’

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Mr Low also took issue with Mr Mah’s comments that the WP is against upgrading programmes as part of the asset-enhancement policy.

The WP does not object to upgrading, he clarified, but it is against the PAP making use of government money to ‘threaten the people during elections’.

And despite the growing heat on the WP’s housing proposals now, Mr Low insisted that the party will not shy away from the thrust and parry.

‘At this point, I think the PAP has chosen this particular issue to attack the WP and attempt to confuse Singaporeans. We will take them head on,’ he said.

He added that the PAP is addressing this issue now only because the polls are near. Despite complaints about high prices of HDB flats over the last few years, Singaporeans ‘did not see Mr Mah jumping up and down like this’, he said.

‘Why not? Because it’s election time. Why election time? Because your vote is precious and can make a difference. Election time is when you’re most respected because you can exercise your power,’ he observed.

‘However this power is valid only if there is competition, and opposition parties are able to provide you with a choice. I urge you to value your vote.’

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.

11 thoughts on “WP chief rebuts Mah Bow Tan on ‘raiding reserves’”

  1. And Mr. Mah please let us know who has been gambling away our reserves? $68billion losses by Temasick alone? How about GIC another $70billion?
    How many HDB homes can be built with these losses?

  2. Well, frankly i don’t see what wrong with pegging the prices of incomes to that of new prices of HDD flats. If our income goes up, the prices may correspond accordingly. If our income goes down, it may correspond accordingly. Afterall, if income goes down & flat prices go up, doesn’t that mean more flats are unsold? More people can’t start families, get married etc..?

    As for reserves, for me, isn’t it similar to telling the HDB, one can’t pay the monthly installments, because one needs to set aside some money for reserves (savings) for one’s retirement, now what do you think will their answer be?

  3. Hope Gerald reads this. I couldn’t find other ways to reach WP.

    Property is a double edge sword so tackle carefully. Lowering land price doesn’t help on e long term or young couples.

    Problem for 1st time, younger couples, is e high price of hdb flats. On e other hand, gov said pple are choosy ( spell). A possible solution, give them a xhoice, cheaper n affordable price at less ideal location or pay full price.

    What I mean. Eg select plots of land further away from city or town centers, e less desired location. Build a range of flat types, fr 3 rm to even EA/EM. Priced it at toral cost plus small. mark-up for 3rm flats, higher mark-ups for larfer types. Alternative, cost price, and these buyers will not be able to sell to open market. Such flats must be returned to HDB at a pre-determined pricing model that won’t put them to disadvantage.

    Pls give my suggestions (possible solution) a gd thought n maybe it can’t be WP’s argument w Mah.

  4. Hi Gerald,

    We are becoming a nation of debtors to the Singapore Government!

    I am sharing some ideas and thoughts. You may want to verify some of these numbers and statistics!

    In the 1970s, the average monthly income in Singapore was $500, which is about an annual $6000. My dad bought a 3-room HDB flat during that time for about $8000. Therefore, the mortgage to annual income ratio is about 1.33.

    Today, an average HDB 3-room flat (brand new) is about $300,000 and our average income is about $60,000 per annum, translating to a mortgage to annual income ratio of 5X!!!

    Besides this, if we were to calculate the interest from the mortage to HDB (I think its 6%, but please verify), the interest payments for 20 or 30 years are staggering!

    I know the Workers’ Party is hammering on the housing issue, so you need to put this in perspective and hopefully on diagrams in your leaflets/ handouts instead of words to make them easy to understand for the layperson.


  5. WP – Yaw Shin Leong is a total liability! He is such a disgrace to opposition. Vote for PAP in his own ward in 2006 and hope his ward can have upgrading? And yet contest in AMK to ask voter to vote for him?

    Such a hypocrite and selfish people!

    WP manifesto: Working towards a first world parliament with alternative voice? With this kind of person around, no way!

  6. Seriously whether the opposition is worthy or not, it does not matter anymore. Under the ruling of the PAP, we experienced extreme stratification, pushing the average and even the above average to the rear end of the bell curve due to rising housing, transport, education, healthcare and food prices.

    As for the reserves, has the government truly show the true value and accountable to every cents of it? All I know is Singaporeans have their money all locked up in the CPF vault! Yes, we might have lower income taxes as compared to the other developed countries, but do not forget part of their taxes are social securities which cover healthcare and education. We have another element of CPF which makes up 20% of our income to be contributed monthly, combining with the income tax,isn’t it equivalent to the higher taxes? And the worst thing is we are being restricted in using the fund for our medical care. If government is not going to offer cheap healthcare, then they should have at least let us utilise our medisave funds for all kinds of basic healthcare including dental treatment and annual health checkups.

    Irregardless whether out lives will improve or not by voting for the opposition, I think our lives will not get worst since we are already experiencing the worst.

  7. All we want is to have the housing for 4 rooms to be at $150,000 and level it, the WP should help us achieve this! Now the HDB house for 4 room is at $400,000 to $500,000 how to buy? And the monthly payments for other house hold exdenditures! We will want the workers party to fix the price at a low amount for singaporeans, this is why we vote you all in!

  8. We will want the workers party, as servants of the people to fix the hdb prices at a low rate

  9. low hdb prices and also we singaporeans requires that the house prices must be stable as well, and do not have any bad housing plans for as well, we expect top quality housing plans only and we know that you will need to have better plans for singapore, we will be watching you after voting you all in. With all strictness and care to people of singapore only, remember that. this is important! if not why we vote you in

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