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Population White Paper: Debate with Ministers in Parliament

Immediately following my speech on the Population White Paper in Parliament on 5 February 2013, several government Ministers rose to seek clarifications on the points I raised. This is the transcript of my debate with them.

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Mdm Speaker (Mdm Halimah Yacob): Mr Iswaran.

The Minister, Prime Minister’s Office, Second Minister for Home Affairs and Second Minister for Trade and Industry (Mr S Iswaran): Mdm Speaker, may I seek a clarification from the hon. Member? Am I right to infer from column one of his chart that was distributed that the implication is that under the Workers’ Party’s proposal, between 2013 and 2020, there will be no new additions to our foreign worker pool in Singapore? Indeed, if anything, there may be a slight decline. And secondly, that there will be no new Singapore citizens or PRs?

Mr Gerald Giam Yean Song: I thank the Minister for clarification. Firstly, under our plan, we have proposed a 1% increase in resident labour force growth. So, we do not envision a need to have additional foreign labour except if we cannot attain that 1% growth in resident labour force growth.

Mr S Iswaran: Just to be clear, the Workers’ Party is advocating zero foreign workforce addition for the next eight years, including this year?

Mr Gerald Giam Yean Song: Our goal is to reach that 1% of resident workforce growth as a way to — [Interruption by the hon Member Mr S Iswaran]. I will answer that question. Our goal is to reach that 1%, at least 1% of resident workforce growth. So, our priority is to make sure that we do all we can to increase the labour force participation rate so that we can achieve that 1%. If we can achieve that 1% without having the additional foreign labour growth, then that I think will be a bonus for us.

Mr S Iswaran: Mdm Speaker, I appreciate the Member’s clarification. I paid close attention to this table because it is a serious proposal. And I read the footnote because it is quite clear from the footnote that for the period 2020 to 2030, the Workers’ Party envisages some selective top-ups to compensate for any decline in the resident workforce. But there is no such clarification footnote for the period 2013 to 2020. So, it must be assumed that you are assuming zero foreign worker addition, and there is no new Singapore citizen or PR.

Mr Gerald Giam Yean Song: I think it would be reasonable to assume that. And I do not think there is anything wrong with having zero foreign workforce growth in the next eight years. But that is not primarily our target. Our target is to make sure that we maximise the local workforce participation.

Mr S Iswaran: State it for the record.

Mdm Speaker: Mr Tan.

Continue reading “Population White Paper: Debate with Ministers in Parliament”

Restructuring the Economy to create a “Dynamic Population for a Sustainable Singapore”

I empathise with the concerns of many businesses, especially SMEs, which will be impacted by further curbs in foreign labour. Companies which are dependent on low wage foreign labour will face the greatest difficulties and will have to restructure. Economic restructuring is painful but it is critically important for our nation’s future. The Government should commit to supporting companies and workers through the restructuring process, as well as retraining workers to provide them with the right skills to make a transition to another industry.

This was the speech I delivered in Parliament on 5 February 2013, during the debate on the Government’s Population White Paper.

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Madam Speaker,

Over the past decade, Singapore’s population has grown by over 1.2 million people to reach 5.3 million last year. While GDP growth figures were rosy for most of the past decade, income inequality has risen significantly. The wages of the bottom income earners were held down in part by the influx of foreign labour while higher income earners enjoyed huge gains in their income and wealth during this period.

The much-anticipated White Paper on Population projects population growth of another 1.6 million, largely through immigration and foreign workers, over the next 18 years to reach up to 6.9 million by 2030. The Paper positions population growth as necessary for economic growth. Singaporeans are then given a Hobson’s choice: Accept more new immigrants and foreign workers, or face a declining economy and lower quality of life.

This is a false dilemma. In my speech today, I will explain how I believe we can stabilise the population size, while improving our economic dynamism and ensuring a more sustainable Singapore for future generations to enjoy.

The White Paper sets a goal for Singapore to become a “leading city” that can attract talent and enterprise, and set the pace for other cities (White Paper 2013, 16). It is this goal that seems to be driving the GDP growth target of 3 to 5% per year. This GDP growth probably cannot be achieved by productivity growth alone, so a high rate of mostly foreign labour force growth is needed. This in turn will drive up our population size.

Does being a leading city or global city improve the quality of life of all Singaporeans? Global cities attract many young migrants from their hinterlands and around the world. Even though their fertility rates are low, their populations continue to increase through immigration. But it is expensive to live in a global city. Many cannot afford to live in such expensive places upon retirement, so they move to other parts of their country with lower costs of living.

Will our retirees have such options when they are too old to work, since Singapore does not have any hinterland to speak of?

The cost of population growth

The Government needs to better explain to Singaporeans not only the benefits of population growth, but also the attendant costs that citizens will have to bear. With a larger population, businesses benefit from a larger pool of customers. Their profits increase, and their owners, top managers and shareholders reap the dividends and bonuses.

On the other hand, the negative effects of population growth are mostly borne by ordinary citizens. They have to suffer through overcrowded MRT trains, buses and public spaces. They continue to pay high prices for housing. They have to compete for jobs with foreigners, and their wage expectations must be lowered in order to remain competitive. The higher transportation demand pushes up COE prices, which puts cars out of reach for many. Taxpayers also have to bear the cost of infrastructure development to accommodate a larger population.

Has the Government calculated overall cost per new immigrant compared to per capita benefits which accrue to citizens? The Government has spelled out the expected GDP growth, but has it done any projections for real income growth of workers come 2030?

Productivity as a driver of growth

For the last decade in Singapore, GDP growth has been driven mainly by labour inputs. The generous supply of foreign workers has lowered the bargaining power of local workers, forcing them to accept lower wages in order to be competitive. This has led to much of the benefits of our stellar GDP growth accruing to company profits instead of workers’ wages. Our workers’ wage share as a percentage of GDP is relatively small compared with most other developed countries. In 2011, just 42.3% of Singapore’s GDP went to workers’ wages (SingStat 2012, 9). In contrast, according to OECD data, the wage share is 47.5% in Australia, 49.2% in the European Union and 52.3% in Canada (OECD 2011). If companies here continue to rely heavily on foreign workers, there will be little incentive for employers to think hard about ways to boost productivity.

But if growth is driven mainly by productivity gains, it would lead to higher real wage increases for workers. In a tight labour market, companies will need to pay their local workers more to retain them, as well as to restructure themselves to become more productive. Therefore higher productivity growth is critical for our next phase of growth, and we should not let up in our pursuit of our productivity targets.

WP’s population proposal

Our population has grown from about 3 million in 1990 to 4 million in 2000 to 5 million in 2010. This is an increase of about 1 million per decade. The White Paper projects the population to continue growing by about the same quantum. It is projected to grow to almost 6 million by 2020 and almost 7 million by 2030. What will happen after 2030? Will we grow to 8 million in 2040 and 9 million in 2050?

I am concerned that the Government seems to be proposing a “population growth forever” model, whereby each successive generation requires a larger workforce to keep expanding the GDP. This is simply not sustainable.

Our population will eventually reach the limit of our island’s space. Eventually all the reserve land will be used up and we would have reclaimed land to its limit. When that happens, we will have to settle for zero population growth because of constraints in Singapore’s physical size.

If we head down the path spelled out in the White Paper, as we approach 2030 we will again be debating about how to maintain economic growth without growing our population. The main difference then is that we would be bursting at the seams with close to 7 million people crammed on this island. We will have much less room for error in planning. That would be a truly worrying situation.

It would be more responsible to restructure our economy now to grow with fewer labour inputs, than to leave it to future governments to deal with this problem.

We need to start planning for an economy that assumes a stabilised population, rather than to rely on perpetual increases in labour through immigration and foreign workers. We must invest more in developing the skills of our people, improving our technology and investing in more capital so as to be able to increase productivity and raise wages.

The Workers’ Party is proposing a more moderate pace of growth of our labour force, compared to what the Government has planned in its White Paper. We envision a workforce which grows mainly through local instead of foreign labour force growth.

Madam Speaker, with your permission, I would like to request the Clerk to distribute a table listing our projected GDP, labour force and population growth numbers. (Click here for table.)

We will target to increase our local labour force growth by up to 1% per year from now until 2030. We should strive to keep our foreign labour force constant between now and 2020, depending on our success in growing the local labour force. It does not mean that we shut the doors to foreign workers. Instead, new work passes will be issued only to replace expiring work passes or to supplement shortfalls in the local labour force. Companies will have to find ways to hire more Singaporeans.

How will we grow our resident labour force if the number of new entrants is not increasing due to declining fertility trends? One way would be to increase our labour force participation rate, so that more residents of working age are encouraged to work. The Labour Force Survey 2012 found that there are 418,000 economically inactive residents of working age, of which 90,000 are willing to work. This is a valuable pool of labour that can be tapped.

With slower labour force growth, our economy will rely mainly on productivity improvements to grow. If the Government meets its 2 to 3% per year productivity growth target, we could enjoy 2.5 to 3.5% GDP growth per year up to 2020, which is far better than the 1.2% we achieved last year and the 1.8% average achieved by OECD countries in 2011.

Between 2020 and 2030, if we maintain labour force growth of 1% per year, and productivity grows by the Government’s 1 to 2% target during this period, this will generate 1.5 to 2.5% GDP growth per year, which is in line with the growth rates of most mature economies.

In this scenario, we are looking at a projected population of 5.3 to 5.4 million by 2020, and 5.6 to 5.8 million by 2030. This is significantly lower than the 6.5 to 6.9 million that the Government is projecting by 2030. More importantly, we will not need so many foreign workers and immigrants to supplement the local labour force, which will help us better preserve the Singaporean core.

What would be the trade-offs of having a slower inflow of foreign workers? The Singapore Business Federation has said that slower labour force growth in Singapore will have “devastating consequences for many companies” and that if businesses go under, jobs will be lost and Singaporeans will be affected (CNA 2013).

I empathise with the concerns of many businesses, especially SMEs, which will be impacted by further curbs in foreign labour. For many businesses it will mean lower profits, as they will need to pay higher wages to their Singaporean workers to attract and retain them. However, companies which are dependent on low wage foreign labour will face the greatest difficulties and will have to restructure.

Economic restructuring is painful but it is critically important for our nation’s future. The Government should commit to supporting companies and workers through the restructuring process, as well as retraining workers to provide them with the right skills to make a transition to another industry.

Conclusion

Madam Speaker, the Population White Paper proposes a population policy that continues to increase our reliance on foreign labour, leading to large increases in our population, which is unsustainable in the long run. I cannot accept this as the roadmap to address Singapore’s demographic challenge, and therefore I oppose this motion.

The Workers’ Party instead proposes a plan which places less emphasis on foreign workforce growth and focuses more on local workforce and productivity growth. This will increase the dynamism and real incomes of our local workers, while putting Singapore on a path towards more stable and sustainable population growth trajectory. Under the Workers’ Party’s plan, I am confident we will have a more dynamic population for a sustainable Singapore.

References

Channel NewsAsia (CNA). 2013. “Slower workforce growth will severely impact businesses: SBF”. 31 January 2013. Kristie Neo.

Economist Intelligence Unit (EIU). 2012. “A Summary of the Liveability Ranking and Overview”. August 2012.

Ministry of Manpower (MOM). 2013. “Labour Force”. Retrieved from http://www.mom.gov.sg/statistics-publications/national-labour-market-information/statistics/Pages/labourforce.aspx.

Organization for Economic Cooperation and Development (OECD). 2011. OECD.StatExtrats. Retrieved from http://stats.oecd.org/.

Saw, Swee-Hock. 2007. “The Population of Singapore”. Second Edition. ISEAS Publishing: Singapore.

Singapore Department of Statistics (SingStat). 2012a. “Key Annual Indicators”. Retrieved from http://www.singstat.gov.sg/stats/keyind.html.
Singapore Department of Statistics (SingStat). 2012b. “Singapore in Figures 2012”. Retrieved from http://www.singstat.gov.sg/pubn/reference/sif2012.pdf.

White Paper. 2013. “A Sustainable Population for a Dynamic Singapore”. Singapore Government.

Punggol East By-Election: Rally Speech on 23 Jan 2013

We in the Workers’ Party take this election very seriously. That’s why so many of our members, volunteers and all our MPs have been out in force, campaigning for our candidate, Lee Li Lian, both on the ground and online. The Workers’ Party values every one of your votes in this by-election, because this by-election is so critical in bringing about progress to our beloved nation of Singapore. Help make history in Singapore. This Saturday, please cast your vote for Lee Li Lian. Vote for the Workers’ Party.

Voters of Punggol East, friends and fellow Singaporeans, good evening!

Thank you for coming to attend our last rally of this election. We are very grateful for your support. For those who are still deciding who to vote for, and have come to listen to what we have to say, I hope we can convince you tonight that Lee Li Lian from the Workers’ Party is the best candidate to manage your constituency and represent you in Parliament.

PAP leaders have made a number of statements in response to issues that the Workers’ Party has raised during this campaign. I am glad to note that, at least for these nine days, the PAP is listening, because they know their political survival in Punggol East is at stake.

On Sunday, Mr Heng Swee Keat, told the media that this by-election is “about electing the right candidate who can best serve residents of Punggol East” and “not about voting more opposition into Parliament”.

My response to Mr Heng is: Why can’t we do both? You have a chance this Saturday to elect the right candidate to serve you and also vote more opposition into Parliament, if you vote for Lee Li Lian.

Mr Heng also asked you to look at what MPs have contributed in their constituencies and in Parliament, and said you should come to a conclusion to “vote for the PAP to make the Workers’ Party work harder for you”.

I really don’t understand his logic. How can voting for the PAP candidate make the Workers’ Party work harder for you? If you vote for the PAP candidate, how will Lee Li Lian have the opportunity to serve you effectively?

But if you vote for Lee Li Lian, you will be putting her to work. And she will work very hard for you, with the full backing of the Workers’ Party when she runs your town council and improves your neighbourhood. And yes, you will make the PAP work harder to win back the ward the next time round!

Mr Teo Chee Hean yesterday said that residents should compare what the PAP candidate has to offer with what other candidates can offer. He then listed out the material benefits that their candidate has promised to the ward.

This is a well-known PAP election tactic: Dangle material goodies before voters and expect them to take the bait like a fish to a worm. But I urge you: think carefully before you bite, because there could be a sharp hook behind it to catch you.

In any case, Dr Koh Poh Koon is not promising multi-million dollar HDB upgrading programmes, but more modest amenity improvements like new childcare centres and a job placement centre. Yet he cannot build these himself. He will have to work with the government authorities to get these built.

In her speech yesterday, Li Lian already identified many of the problems faced by residents in Punggol East, even down to the detail of having more halal food stalls in the ward. If she is elected, you can be sure she will raise these concerns with the relevant authorities to press them to take action, and if they refuse to take action, she can raise them in Parliament.

Last night, after our rally, Mr Teo Chee Hean wrote on his Facebook that “WP has avoided taking a stand on major issues, for example, population or foreign workers”.

I beg to differ with Mr Teo. Our Manifesto has large sections dedicated to these major issues. If you look at the dozens of Parliament speeches posted on our website over the past year, all our MPs have raised issues and stated their positions on the major issues of the day, including education, housing, transport, population and foreign workers.

Mr Teo feels that PAP MPs have offered more constructive suggestions, and have been prepared to take a stand. I think what is important for voters in this by-election to know is: What is Dr Koh Poh Koon’s stand on all these major issues?

In the last few days, we have been hearing announcement after announcement of goodies being rolled out by the government. Enhanced marriage and parenthood package. MediShield coverage for babies with congenital conditions. Paternity leave. More childcare subsidies. These have been things that the Workers’ Party and many other Singaporeans have been calling for. And now they are being announced just before this by-election. The timing is perfect, isn’t it?

This all proves that it is the voice of the people – through your vote – that is the most powerful force to move government policy.

However, there is one announcement which has been long awaited, and should have been made weeks ago. I’m referring to the government White Paper on Population. This was supposed to be released at the end of last year and it will be debated in Parliament in just over a week’s time. Why has this paper not been released yet? Is the PAP afraid that people will be unhappy with its contents and vote against them? Maybe the PAP wants us to hear only the good stuff before the election.

Voters of Punggol East, if you vote for Lee Li Lian in this by-election, you will get three key benefits:

Number one, you will get an MP who is energetic, enthusiastic and empathetic. Someone you can relate to. Someone who will work tirelessly to take care of you. You will get another Workers’ Party MP in Parliament who will speak up against poor government policies. She will pressure the government to improve – for your benefit.

Number two, you will get an experienced Party to run your town council and manage your constituency. The Workers’ Party has over 20 years of experience in managing town councils well. And not just small town councils, but a huge GRC town council in Aljunied. We know the ins and outs of running a constituency. Even when obstacles were thrown in our path to trip us up, we have still managed to ensure residents’ needs are well taken care of. Just ask your friends or relatives in Hougang and Aljunied.

And three, you will be part of a movement to bring about change to Singapore. Not just change for the sake of it, but real change that improves your life, and the lives of your children. With more credible opposition MPs in Parliament, you will have greater bargaining power to force the government to be more responsive to your needs and concerns.

Come join us on this exciting journey and play a part in shaping Singapore’s future.

Voters of Punggol East, this is not an ordinary by-election, just as Punggol East is not an ordinary constituency. It is special.

The Workers’ Party values every one of your votes in this by-election, because this by-election is so critical in bringing about progress to our beloved nation of Singapore.

Help make history in Singapore. This Saturday, please cast your vote for Lee Li Lian. Vote for the Workers’ Party.

Punggol East By-Election: Rally Speech on 19 Jan 2013

When you go to the polls in one week’s time, vote in an MP who has the experience on the ground, has the heart to serve and has the ability to speak up for you in Parliament. Vote for the Workers’ Party. Vote for Lee Li Lian!

It is my pleasure and honour to be able to speak with you tonight. I stand here in support of the Workers’ Party’s candidate for Punggol East SMC, Ms Lee Li Lian.

Before I say a few words about her, I want to share with you about a topic that affects your life, whether you are young or old, rich or poor. I want to talk about the cost of healthcare in Singapore.

This is a topic that I am very concerned about. Since entering Parliament in 2011, I have raised healthcare cost issues many times with the Government.

Many senior citizens worry that it is “better to die than to fall ill in Singapore”. This is very sad. We are already a developed country by all economic measures. We have on of the highest GDP per capita in the world. If you are a senior citizen, you should not have to worry about not being able to afford your medical bills. Not after you have worked all your life to help build this nation. Yet in Singapore, this is one of the top worries of the elderly.

But it is not just old people who worry. If you are a young working adult, even you may be worried. Because very often, you have to pay for your parents’ medical expenses.

In 2010, out of the total amount of Medisave used for elderly healthcare expenses, 45% was withdrawn from their children’s Medisave accounts. These are not my numbers. This is a from a reply by the Health Minister to a question I asked in Parliament.

This means almost half of the total amount Medisave withdrawals for elderly patients come from their children. But what if their children are also struggling to make ends meet and raise their own children?

In Singapore, the elderly have to depend on their children to pay a large part their medical bills. The PAP government tells you: this is self-reliance.

The PAP government makes you set aside money in your Medisave accounts. You can only use Medisave to pay for certain types of medical expenses. Why? Because they don’t want you to use up your Medisave before you get old, and then depend on the government.

But then the PAP government tells you that you must use your Medisave before they give financial assistance to your parents for their medical expenses. What is the logic here? If you use up your Medisave paying for your parents, you will have little left for yourself when you grow old.

I have said in Parliament that if we are to achieve the goal of universal health coverage, we need to expand the coverage and increase the pay outs of our national health insurance scheme, MediShield. This will help to reduce the cash payments when you are seeking treatment.

Recently the Government announced some enhancements to the MediShield health insurance scheme. But this enhanced coverage will come at a cost – almost all of which will be borne by you, not the Government.

You will have to pay more in premiums every year, and the deductibles – the money you have to pay before receiving benefits – will increase by 50% for C-class ward patients.

Why is there a need for such steep increases in premiums and deductibles? Between 2001 and 2010, MediShield collected over $2 billion in premiums and paid out less than $1.3 billion in claims. This amounted to $850 million more collected than disbursed over the past decade. So MediShield is not exactly losing money.

The MediShield scheme has huge economies of scale and faces little competition for customers. I believe MediShield can take on greater risks on behalf of Singaporeans, while still maintaining healthy margins, if it can be operated more like a national social health insurance scheme, rather than a commercial, profit-oriented one.

The Workers’ Party will continue to press the Government to lower the healthcare burden on Singaporeans, so that if you fall ill, you don’t have to worry about financial hardship, but can just focus on getting well.

Voters of Punggol East, we are here tonight because we are asking you to vote our candidate into Parliament – Ms Lee Li Lian!

I have worked with Li Lian in many areas of Party work since I joined the Workers’ Party. Most recently we have been working together as part of the Workers’ Party Media Team.

I have three words to describe Li Lian: energetic, enthusiastic and empathetic.

Energetic, because she is always full of life, and full of energy. This is very important if she were to become your MP, because it is a job that requires a huge amount of effort and energy, both in the constituency, and in Parliament.

Enthusiastic because she knows what needs to be done and can rally the troops to get things done. So with her as your MP, you can be sure that she will solve constituency problems with great vigour.

And finally, empathetic. Li Lian is a people person. She genuinely cares for people and tries to help them.

I am confident that Lee Li Lian will be able to serve you with the same energy, enthusiasm and empathy as she has served constituents of Hougang and Aljunied GRC and in her party positions.

When you go to the polls in one week’s time, vote in an MP who has the experience on the ground, has the heart to serve and has the ability to speak up for you in Parliament.

Vote for the Workers’ Party. Vote for Lee Li Lian!

Silver Housing Bonus and Lease Buyback Scheme

After the Silver Housing Bonus was announced by the Finance Minister in his Budget speech in February, I had voiced concern in my response in Parliament on 29 February that the scheme would be unattractive to the elderly as too much of the net proceeds from the sale of their flats would end up being locked up in their CPF accounts.

The potential beneficiaries of these two schemes belong to the generation of Singaporeans who built our nation to where it is today. They are the pioneer generation. It is appalling that despite their contributions, many find themselves living in poverty during their silver years. Our nation owes them a huge debt, which must be repaid before we miss our chance.

On Thursday, the Ministry of National Development (MND) announced some “enhancements” to the Silver Housing Bonus and Lease Buyback Scheme. Essentially, these two schemes enable elderly Singaporeans to monetise their HDB flats so that they have more cash to live through their retirement.

The Silver Housing Bonus is intended to provide an incentive for lower-income elderly couples to downgrade to a smaller flat and use the net proceeds for their retirement. In its press release, MND said that “The Government has made the SHB more attractive, by lowering the top-up requirement to $60,000 per household (subject to a $100,000 cap on cash proceeds for those who have not achieved the prevailing Minimum Sum). Furthermore, the $20,000 bonus will now be given fully in cash.”

I am glad to hear this. After the Silver Housing Bonus was announced by the Finance Minister in his Budget speech in February, I had voiced concern in my response in Parliament on 29 February that the scheme would be unattractive to the elderly as too much of the net proceeds from the sale of their flats would end up being locked up in their CPF accounts. Here is what I said:

The Silver Housing Bonus is a good attempt to help increase the retirement incomes of the elderly. However, I believe the Bonus would be more attractive if the elderly received a greater portion of the proceeds from the sale of their previous flat in cash, rather than having most of it returned to their CPF accounts.

In the example that the Finance Minister gave in his speech, the elderly couple receives only $23,000 in cash, or about 9% of their net proceeds from the sale of their flat, even after the Silver Housing Bonus.

This is because to benefit from the Silver Housing Bonus, flat owners must use the cash proceeds from the sale of their previous flat to top up their CPF Retirement Accounts to the Minimum Sum. I propose that they be allowed to pledge the value of their new studio apartment towards meeting up to half of the Minimum Sum. This will allow them to get more cash after the sale of their previous flat.

Since they will still be meeting their Minimum Sum, there is no need to apportion $5,000 from the Silver Housing Bonus to their CPF Retirement Accounts. The full $20,000 Silver Housing Bonus could be given to them in cash.

While a larger Retirement Account may get them more per month in CPF LIFE annuity pay outs, many senior citizens may have more immediate needs for cash, for example, to pay their medical bills. Why not give them this option to have more cash on hand? If they want higher annuity pay outs, they can always voluntarily top up their CPF Retirement Accounts.

The Lease Buyback Scheme allows lower-income elderly to sell the tail-end lease of their HDB flat to the government. This scheme has been around since 2009, but to date only 466 households have taken it up. Part of the reason for the low take-up rate could be the restrictive eligibility criteria. For example, only elderly folks living in 3-room or smaller HDB flats are eligible. In my Budget debate speech, I said:

…most elderly folks prefer to remain in their current homes, rather than get displaced to unfamiliar surroundings in their old age.

To give the elderly more choice, the Lease Buyback Scheme should be extended to owners of 4-room or larger flats, just like the Silver Housing Bonus. Currently only owners of 3-room or smaller flats are eligible. This could be a reason for the low take up rate.

An enhanced Lease Buyback Scheme will enable more of our elderly to age in place, and to live their golden years in familiar surroundings, without having to worry too much about finances.

In yesterday’s announcement, sellers still need to top up their CPF Retirement Accounts to the prevailing Minimum Sum if they are 70 years or younger. The top up threshold is reduced slightly for those older than 70 or 80. However, the 3-room or smaller rule still remains. With such restrictions still in place, it remains to be seen if the take up rate will increase by much.

Given a choice, I believe most senior citizens prefer to remain in their current homes, rather than move to unfamiliar surroundings in their old age. The government must therefore look into ways to increase the benefits of the Lease Buyback Scheme.

The Silver Housing Bonus is a good attempt to help increase the retirement incomes of the elderly. However, I believe the Bonus would be more attractive if the elderly received a greater portion of the proceeds from the sale of their previous flat in cash, rather than having most of it returned to their CPF accounts.

In the example that the Finance Minister gave in his speech, the elderly couple receives only $23,000 in cash, or about 9% of their net proceeds from the sale of their flat, even after the Silver Housing Bonus.

This is because to benefit from the Silver Housing Bonus, flat owners must use the cash proceeds from the sale of their previous flat to top up their CPF Retirement Accounts to the Minimum Sum. I propose that they be allowed to pledge the value of their new studio apartment towards meeting up to half of the Minimum Sum. This will allow them to get more cash after the sale of their previous flat.

Since they will still be meeting their Minimum Sum, there is no need to apportion $5,000 from the Silver Housing Bonus to their CPF Retirement Accounts. The full $20,000 Silver Housing Bonus could be given to them in cash.

While a larger Retirement Account may get them more per month in CPF LIFE annuity pay outs, many senior citizens may have more immediate needs for cash, for example, to pay their medical bills. Why not give them this option to have more cash on hand? If they want higher annuity pay outs, they can always voluntarily top up their CPF Retirement Accounts.

In any case, most elderly folks prefer to remain in their current homes, rather than get displaced to unfamiliar surroundings in their old age.

To give the elderly more choice, the Lease Buyback Scheme should be extended to owners of 4-room or larger flats, just like the Silver Housing Bonus. Currently only owners of 3-room or smaller flats are eligible. This could be a reason for the low take up rate.

An enhanced Lease Buyback Scheme will enable more of our elderly to age in place, and to live their golden years in familiar surroundings, without having to worry too much about finances.

Casino Debate in Parliament

I had earlier posted my speech during the debate on the Casino Control (Amendment) Bill on 15 November 2012. The next day, two ministers — Chan Chun Sing (Acting Minister for Social and Family Development) and S. Iswaran (Second Minister for Home Affairs) — rose to address my points and that of the other backbenchers who spoke on the bill. I followed up with several more clarifications to their points. Below is a transcript of the exchange.

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The Acting Minister for Social and Family Development (Mr Chan Chun Sing): Mr Speaker, Sir, I thank Members for their support of the social safeguards in the Bill. I also appreciate Members’ views and suggestions to strengthen the management of the harm of problem gambling. I share the concerns and I can also attest to the harm that problem gambling brings to the individual, family, community and society.

Continue reading “Casino Debate in Parliament”

Raising bus fares leads to greater efficiency?

I found it odd, to say the least, for the Minister to suggest that fare increases will incentivise PTOs to provide better service and be more efficient. There is little incentive for PTOs to be more efficient if they know they can count on receiving more fare revenue whenever their costs go up. Neither is there much incentive to improve service beyond the minimum standard set by the regulator, when the PTOs are primarily accountable to their shareholders, not the public.

I have spoken at length in Parliament about the deep shortcomings of the profit-oriented public transport model that we currently have in Singapore. Here is some excerpts of what I said during the debate on the Land Transport Authority of Singapore (Amendment) Bill on 9 July 2012.

I was asked on Thursday by the Straits Times for my thoughts on Transport Minister Lui Tuck Yew’s Facebook post explaining the impending rise in bus fares. Mr Lui said that “The purpose of fare increases is not to boost the short term profits of PTOs (public transport operators). It is also not just to improve salaries of bus drivers but to improve service to commuters while keeping public transport operations commercially viable.”

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Stem the rising tide of casino gambling

Mr Speaker, problem gambling is a terrible scourge in any society, cousin to alcoholism and drug abuse. The introduction of casinos seems to have sent a wrong signal that gambling can be glitzy and glamorous, or worse, part and parcel of a total family entertainment package. Some 200,000 Singaporeans visited the casinos in 2010. We already have the dubious honour of the second highest gambling losses per capita, according to the Economist magazine. We must significantly step up our efforts to stem this rising tide, or risk seeing more and more people falling prey to gambling addiction at the hands of our two casinos.

This was a speech I made in Parliament on 15 November 2012 during the debate on the amendments to the Casino Control Act.

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Mr Speaker, Sir,

Let me state categorically that I have always been strongly against having casinos in Singapore – and I have held this view long before I entered politics. Before the Government allowed in casinos seven years ago, I had written several letters to the Government, voicing my strong objections. I took part in feedback forums and even organised a petition to urge the Government not to proceed with the casino.

Regrettably, the Government proceeded to issue not just one, but two casino licences, despite strong objections from many Singaporeans. It was a dark day for many who felt that we were sacrificing some of our cherished values on the altar of economic growth.

Regardless of the economic benefits the casino may have brought, one ruined life, one bankrupt individual, or one broken family caused by casino gambling is one too many for Singapore.

Gambling, and in particular casino gambling, is a scourge to society. According to a Straits Times report last September, seven in 10 gamblers who sought help in counselling centres for their addiction said the casinos were the main reason for their money woes (Tai 2011).

The Australian Productivity Commission (APC) found that five to 10 people are affected for every individual who is a problem gambler (ScotCen 2006, 43). These include spouses, children, parents, co-workers and employers. In a survey conducted last year, Singapore’s National Council for Problem Gambling (NCPG) found that 2.6% of Singapore residents are problem or “probable pathological” gamblers (NCPG 2012, 11). This translates to over 98,500 Singapore residents (SingStat 2012, 23). Multiplied by six, which is on the conservative end of the APC estimate, there could be well over half a million people in Singapore who are directly or indirectly affected by problem gambling.

Now that the casinos are already on our shores, we need to make every effort possible to minimise the many negative social effects caused by them. This will be the focus of the rest of my speech.

Visit Limits and Exclusion Orders

The Bill introduces the concept of a Visit Limit, which allows individuals, their families or third parties to apply to limit the number of visits to the casinos by a gambler within a given month.

One of the key concerns about the Visit Limit expressed during the public consultation is that it may inadvertently increase a patron’s gambling intensity during his limited visits. To mitigate this risk, I propose that an Expenditure Limit order be imposed together with the Visit Limit. Once the expenditure limit is reached, no more bets may be placed, even if the visit quota for the month has not been reached.

I am also concerned that the Visit Limit may be used as a substitute for an Exclusion Order. Instead of taking out an Exclusion Order, the parties may go for the “soft” option of a Visit Limit. Hence the problem gambler’s habit continues to be fed, albeit at a more controlled pace.

If we introduce the option of a Visit Limit, then there should not be a heavy burden on the family to prove that the respondent is a problem gambler. I hope that applications will not be easily rejected against the desires of the family members. As such, could the Minister clarify, with examples, what constitutes (quote) “gambling activities in disregard of the needs and welfare of the respondent’s family members” (unquote), as worded in Section 163A subsection 4(a)?

This brings me to my next concern about both the Family Exclusion Order and the Family Visit Limit: Are the application procedures too onerous to be useful in practice?

According to the NCPG website, family members can take up a Family Exclusion Order only through Tanjong Pagar Family Service Centre (FSC). The Committee of Assessors convenes only once a month and would need to prove that “serious harm” was inflicted on the family due to gambling before approving the application. The Committee may also summon to a hearing “any person whom it may consider able to give evidence” (Section 158(4)).

This poses high entry barriers to family members who may wish to take up an Exclusion Order for their troubled loved ones. They might deem the process too troublesome or intrusive. It is no wonder that only 900 family exclusions have been issued as of January this year, compared to 42,700 self-exclusions, which can be obtained online instantly with a SingPass. 900 family exclusions make up barely 0.9% of the estimated number of problem and probable pathological gamblers in Singapore. This hardly makes a dent on the enormity of this problem.

Sir, for the Visit Limit applications, will families have to go through this same process? Given that a problem gambler can lose thousands of dollars a day at the casinos, one month may be too long a wait for the order to come into effect.

May I propose that Family Exclusion and Family Visit Limit applications be provisionally granted immediately upon an application by the family member. Close family members would, in the vast majority of cases, have the respondent’s best interests at heart. They would be in the best position to gauge whether the respondent has gambling problems which are affecting the family.

Only if the respondent disputes the Exclusion Order or Visit Limit, would a hearing need to be convened to make an assessment on the appeal, and repeal the order if the application is deemed to be frivolous.

This would encourage more families to apply, and ensure that their relative is immediately prevented from doing more harm to himself and his family.

How then do we prevent frivolous applications? Firstly, I don’t think we need to put too many checks and counter-checks in place to prevent these very unlikely situations. How many frivolous applications were received by NCPG in the past three years that had to be rejected?

Secondly, the rare frivolous application can be easily reversed with an appeal by the respondent and a decision by the Committee of Assessors. Being barred from the casino is not a death sentence. In fact, it will do most people’s pocketbooks some good, and one month would not be too long to wait for the order to be overturned.

Self-Exclusions

The Self-Exclusion is a good preventive measure which should be encouraged and promoted. However, I have found that most people are not aware of this self-exclusion facility. I would suggest that schools, social service and religious organisations encourage their students and members to apply for self-exclusions, just as some employers do for their foreign workers. The NCPG should better publicise these schemes so that people know they exist and are taught how to apply.

Self-exclusion should not carry a social stigma of being a problem gambler. For the record, my wife and I excluded ourselves as soon as the facility was made available, even though we don’t gamble.

Entry levies

The current casino entry levies for Singaporeans and PRs stand at $100 for a daily entry levy and $2,000 for an annual entry levy. I am disappointed that this Bill contained no review of the levies, and even more disappointed to discover that Section 116(4) locks in the current levy amounts for 10 years.

If the Government is serious about putting in place effective social safeguards against problem gambling, it should do away with the annual levy. $2,000 amounts to only a paltry $5.50 per day, and is equivalent to only 20 daily entry levies. Effectively, regular gamblers get a “discount” off their levy, while occasional gamblers have to pay a higher levy per visit. This sends the wrong message that regular gambling is preferred over occasional gambling. An annual entry levy, regardless of amount, will lead to a “buffet syndrome”; people will be incentivised to visit the casinos more just to get their levy’s worth.

With the data from actual transactions over the past two years, the Government would know how many times each annual entry levy holder has visited the casinos in a year. Anecdotally, I know that most hard-core casino gamblers buy the annual pass, rather than the daily pass. Hence, doing away with the annual levies could be a very effective step in combating excessive gambling in our casinos.

Currently the entry levy applies only to Singaporeans and PRs. The Government should extend the entry levy to all foreigners who are here to work or study in local schools, as well as Long Term Visit Pass (LTVP) holders.

The rationale for casinos targeting tourists, and not locals, is to prevent residents from developing gambling issues and causing problems in their homes and our community. However, foreign workers, including foreign maids, are effectively part of our community, unlike tourists who are here today and gone tomorrow. If foreign workers patronise the casinos and develop gambling problems, their work performance will suffer and this would affect their co-workers, employers or the families they work for.

Most foreign students in our local schools receive large tuition grants from the Ministry of Education; some are here on full scholarships. Singaporean taxpayers have made a large investment in them. They should therefore be discouraged from patronizing the casinos and gambling away our investments.

Lastly, LTVP holders are often married to Singaporeans and many are not earning an income. Their gambling problems will therefore affect local families. This is why they should also be subject to the casino entry levy.

Responsible gambling

The new Section 170B mandates that the casino operator shall establish and implement a responsible gambling programme. But can casinos really be trusted to run these programmes effectively, when it is neither in their vested interests to do so, nor is it part of their core business? Why not outsource these programmes to independent, social service organisations specializing in responsible gambling? These organisations will have an interest in reducing not just problem gambling, but gambling in general.

Compared to its counterparts in Australia, Canada and the US, the NCPG seems rather underfunded, understaffed and underdeveloped. It is now a council of 13 members supported by a secretariat from the Ministry of Social and Family Development. The NCPG does not provide help directly. It redirects problem gamblers to third parties. This is inadequate for the implementation of a comprehensive responsible gambling programme.

Sir, the NCPG needs to be transformed into a national centre run by professional staff providing research, outreach education, help services, programmes and best practices consultancy all under one roof.

Casino Junkets

Next, I would like to comment on the amended regulations of casino junkets – or “international market agents” as the Government now calls them. Junkets are essentially casino promoters, tour agents and moneylenders rolled into one. They have a notorious reputation of often being associated with organised crime (Lo 2005), which is probably why the Casino Regulatory Authority (CRA) has moved so tentatively in granting junket licences until now.

The CRA recently granted licences to two junkets (Ng 2012). These two junkets seem to have been approved because they are small operators with limited impact. Is the Government thinking of opening up the market to more junket operators? Would this be a slippery slope down to the situation in Macau, where junkets are responsible for a lot of the loansharking and other organised crime (Lo 2005)? Does the CRA have the capacity and capability to regulate an increasingly complex casino business, made more complicated by the junkets?

Our casinos are already among the most profitable in the world. Is there a need for more junket operators to prop up demand?

Evaluation Panel

This brings me to my final point on the Bill. A new Section 45A was added to empower the Minister to appoint an Evaluation Panel to evaluate the casinos on visitor appeal, international value of attractions, meeting prevailing market demand, and contribution of the casinos to Singapore’s tourism industry. The evaluation report will be used by the Government to decide whether or not to renew casino licences.

Sir, why is the Evaluation Panel only focused on the economic benefits of the casinos? Shouldn’t it also evaluate the social and crime situation caused by the casinos? This would provide a more comprehensive report of the impact of the casinos, and enable a more holistic evaluation when assessing the applications for renewal of the casino licences.

Conclusion

In conclusion, Mr Speaker, problem gambling is a terrible scourge in any society, cousin to alcoholism and drug abuse. The introduction of casinos seems to have sent a wrong signal that gambling can be glitzy and glamorous, or worse, part and parcel of a total family entertainment package.

Some 200,000 Singaporeans visited the casinos in 2010 (Huang 2012). We already have the dubious honour of the second highest gambling losses per capita, according to the Economist magazine (2011).

We must significantly step up our efforts to stem this rising tide, or risk seeing more and more people falling prey to gambling addiction at the hands of our two casinos.

References

Cohen, Muhammad. 2011. “Singapore casinos defy odds”. 28 June. Asia Times Online.

Department of Statistics Singapore (SingStat). 2012. “Yearbook of Statistics Singapore 2012”.

The Economist. 2011. “The biggest losers”. 16 May.

Huang, Lijie. 2012. “Fall in S’porean, PR numbers visiting casinos”. Straits Times. 24 February.

Lo, Shiu Hing. 2005. “Casino Politics, Organized Crime and the Post-Colonial State in Macau”. Journal of Contemporary China. Vol 14. Issue 43, pp 207-224.

National Council for Problem Gambling (NCPG). 2012. “Report of Survey on Participation in Gambling Activities among Singapore Residents, 2011”.

Ng, Kai Ling. 2012. “Green light for two junket operators”. Straits Times. 23 March.

Saad, Imelda. 2012. “Govt ‘anxiously’ watching effects of IRs”. TODAY. 13 October.

Scottish Centre for Social Research (ScotCen). 2006. “Research on the Social Impacts of Gambling”

Tai, Janice. 2011. “More gamblers seek help for addiction”. Straits Times. 8 Sep.

Teo, Xuan Wei. 2012. “RWS fined again for levy breach ; Staff ran marketing scheme showering patrons with freebies for renewing levies”. TODAY. 13 September.

Wong, Chun Han. 2012. “Singapore Bets on Casino Revenues”. Wall Street Journal. 5 September.

MediShield can afford to provide better protection

The changes to MediShield announced yesterday are a step in the right direction. However the enhanced coverage will come at a cost — almost all of which will be borne not by the government, but by policyholders themselves. I believe MediShield can take on greater risks on behalf of Singaporeans, while still maintaining healthy margins to build up its reserves, if it can be operated more like a national social health insurance scheme, than a commercial, profit-oriented one.

The changes to MediShield announced yesterday are a step in the right direction. However the enhanced coverage will come at a cost — almost all of which will be borne not by the government, but by policyholders themselves.

Among the changes announced are an increase in the lifetime claim limit from $200,000 to $300,000, upping the annual claim limit from $50,000 to $70,000, raising the maximum coverage age from 85 to 90 years, and removing the maximum entry age (currently at 75 years). Newly diagnosed patients who require inpatient psychiatric treatment will be covered at $100 per day up to 35 days per year. The decision on whether to cover babies with congenital conditions has been deferred pending the outcome of the ‘National Conversation’.

The actuaries from the Ministry of Health (MOH) have done their calculations and concluded that to fund this enhanced coverage without the need for government subsidies, policyholders will have to pay between $17 and $251 more in premiums per year. Deductibles (the out-of-pocket expense payable before receiving any benefits) will go up from the current $1,000 in C-class wards to $1,500, and from $1,500 to $2,000 for B2 wards or higher. To pay for the higher premiums, Medisave withdrawal limits for premiums will be raised from $800 to $1,200, depending on the policyholder’s age.

This change will amount to a 50% hike in deductibles for C-class ward patients, most of whom are from the lower income groups. They will have to fork out more in cash or dig into their Medisave to pay the increased deductibles and premiums. The elderly will see a bigger premium hike than the young, since MediShield is not cross-subsidised across age groups. Hence, the elderly will see a premium hike just at a time when they are approaching, or have reached, retirement age, when their income and Medisave contributions have declined.

To assuage the concerns over the higher premiums and deductibles, the government will provide a one-time top-up of $400 to Medisave, announced in Budget 2012. However, this does not even cover the $500 hike in deductible for one hospital visit, and for subsequent years, policyholders will be left to themselves to fund the increased premiums and deductibles.

I do not believe their is a need for such steep increases in costs for policyholders. Between 2001 and 2010, MediShield collected $2.11 billion in premiums and paid out $1.26 billion in claims (these figures were provided to me in Parliament by the Health Minister). This amounted to $850 million more collected than disbursed over the past decade. [Correction (17/10/12): I had earlier written “2006 to 2010”. It should be “2001 to 2010”.]

The MediShield scheme benefits from a huge base of policyholders (92% of Singaporeans) most of whom pay their premiums out of their forced medical savings (Medisave). It has huge economies of scale and faces little competition for customers. I believe MediShield can take on greater risks on behalf of Singaporeans, while still maintaining healthy margins to build up its reserves, if it can be operated more like a national social health insurance scheme, than a commercial, profit-oriented one.

What lies beneath the online vitriol?

For many Singaporeans, our country is much less recognisable than it was just a decade or so ago. Some feel like strangers in our own land. A friend who works as a professional in a large multinational firm confided that he is the only Singaporean in his department. He lamented that he felt passed over for promotions as he sensed that his department head, who is a foreigner, tended to promote his fellow nationals over locals.

This was an article that I contributed to The Straits Times. It was published in the “Insight” section of the paper on Saturday, 1 September 2012.

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“DON’T say that! It’s very rude! How would you like other people to call you that?”

That was the scolding I got from my mother when I was just six years old. I had just returned from playing with my friends from the neighbourhood—one of whom was an older Indian boy—and I thought it would be funny to hum a rhyme about him that I had learned from another kid in our group.

This was one of the many lessons my parents taught me about not harbouring prejudiced attitudes and stereotypes about people of other races, nationalities or socio-economic backgrounds. I am glad they not only instilled in me these values, but lived them out in their own words and deeds.

My consciousness against prejudice was honed and heightened during the time I lived in California as an undergraduate. This is in part due to the greater level of public discourse on issues of discrimination and prejudice there. Being a minority and a foreigner there, I was also keenly aware of any behaviour by locals towards me that might hint of prejudice.

That was 12 years ago when social media was non-existent, so I did not have the same insights into the dark recesses of people’s minds that are available now on the Internet. Try googling the phrase “I hate Asians” and you will get over a hundred thousand web pages of uncomplimentary remarks about Asians. Online diatribes against other races or nationalities are therefore not unique to Singapore.

Fortunately, most of the vitriol against foreigners in Singapore appears to be confined largely to the online space. We do not read about hate crime being perpetrated against foreigners here. Foreign diplomats I spoke to recently said they had not received any reports from their nationals about xenophobic attacks. I have many close foreigner friends who are aware of the anti-foreigner sentiments online but have not complained about any physical aggression against them on account of their nationality.

All this is not an attempt to justify any of the baseless insults against foreigners seen on some websites. Making prejudiced remarks against foreigners is objectionable and un-Singaporean, and should stop.

However, before joining the chorus of condemnation against allegedly “xenophobic netizens”, we need to ask what caused this sudden change in attitude towards foreigners. Haven’t Singaporeans traditionally always been welcoming of foreigners and diversity? Did Singaporeans suddenly become xenophobic overnight?

Anyone who examines the online comments about foreigners would realise that much of the anger is actually not directed at the foreigners, but at the Government for its liberal immigration policies.

The online diatribes could be a reflection of many Singaporeans’ frustration about the huge influx of foreigners over the past 10 years. Singapore’s population has ballooned by over 1 million during the past decade . Singaporeans now make up only 63 per cent of the population and 58 per cent of the workforce . The immigration boom has put a severe strain on our nation’s infrastructure, especially public transport, housing and healthcare. Singaporeans are facing increased competition not just for space on buses and for HDB flats, but also for jobs and promotions.

While many other factors may have been at play, this perceived “reverse discrimination” felt by many Singaporeans cannot simply be ignored.

This push back by Singaporeans against the foreign influx has manifested itself in other less offensive ways. The recent furore over the “insult” of Singaporean cuisine by Dîner en Blanc and last year’s “curry incident” reflect a level of cultural nationalism rarely seen in the past.

Singaporeans had hitherto been accustomed to being “educated” by the Government on how to love our country, how to stand up for Singapore, and how to stand together as Singaporeans.

Now we are standing up for ourselves without prompting. We are ready to take the initiative and organise ourselves to demonstrate our pride in our local culture and traditions, without being offensive or insulting. This is a positive development for Singapore.

Therefore, when interpreting online criticisms of foreigners, we need to first identify the genesis of the collective frustrations of many Singaporeans. The target of many netizens’ grouses is perhaps not at the level of the individual, but at the powers-that-be who have opened the gates to admit those individuals in the first place.