geraldgiam.sg

MFA: Strengthening ASEAN’s credibility

The Workers’ Party supports Singapore’s efforts to work with our neighbours to bolster ASEAN. The regional grouping plays an important role in fostering deeper social, cultural and economic ties, enhancing regional stability and integrating Southeast Asian economies. An effective ASEAN can help countries in the region — including Singapore — punch above their weight when dealing with major powers.

Despite all its benefits, ASEAN’s flaws have been laid bare on several occasions, most recently with the crisis in Myanmar.

A key tenet of ASEAN is the requirement for decision-making to be based on “consultation and consensus”, effectively giving any member the veto power over decisions. This requirement can hamper ASEAN’s ability to address critical security issues.

How is Singapore working with ASEAN to overcome situations where consensus is hindered by a minority of member states? According to Article 20 of the ASEAN Charter, “where a consensus cannot be achieved, the ASEAN Summit may decide how a specific decision can be made”.

Has there ever been any push by Singapore at the ASEAN Summit for a decision to be taken by majority vote, on issues where arriving at a consensus is impossible?

Has Singapore asked ASEAN to adopt stronger mechanisms to enforce its own consensus decisions? For example, little progress has been achieved by the Myanmar Armed Forces in the implementation of ASEAN’s Five-Point Consensus to put Myanmar back on the path to peace following the military coup. Does the ASEAN Summit have the authority to decide by a vote to suspend Myanmar from participation in all ASEAN meetings and initiatives? This will send a strong signal to the country’s military rulers that their violent actions against their own citizens are not compatible with ASEAN’s principles.

Committee of Supply Debate on the Ministry of Foreign Affairs on 27 Feb 2023. Cover photo by nguyenthuantien on Pixabay

MINDEF: Military Expenditure

MINDEF’s total expenditure in FY2023 is projected to increase 5.6% over FY2022, on top of an 11.3% increase from FY2021 to FY2022. In the Revenue and Expenditure Estimates for FY 2023/24, “Military Expenditure” is just a single line item with an amount of $17.0 billion, without any further breakdown.

MINDEF does explain that operating expenditure includes the payments for the (i) purchase of military equipment, (ii) maintenance of equipment and camps, (iii) allowances for national servicemen, and (iv) salaries of regular servicemen and women. While I understand the need for military secrecy, can MINDEF minimally provide the estimated expenditure for each of these four items? This is common practice in public budget estimates in other territories, including Taiwan, Latvia and Finland, all of whom face real and existential threats.

I am aware that the Public Accounts Committee (PAC) conducts scrutiny of the Government’s expenditure and accounts, including the defence budget. However, does the PAC have access to any breakdown of military expenditure? If not, it will be difficult for the Committee to scrutinise the defence budget, given that military expenditure comprises almost 95% of the Ministry’s total budget.

Sir, I am proud to have served my full-time NS and completed all my Operationally Ready NS cycles. I support the need to maintain a strong and credible SAF to effectively defend Singapore. This is why I believe that more thorough scrutiny of MINDEF’s budget and expenditure will help maintain public confidence that the $17.97 billion allocated to the Ministry — the highest among all the Ministries — is going entirely towards achieving its mission.

Committee of Supply Debate – Ministry of Defence, 24 Feb 2023

Budget 2023: Business rents, Jobs for Singaporeans, Resale flat prices

As we step out of the shadow of the Covid-19 pandemic, Singapore continues to face numerous challenges as we navigate the uncertainties ahead of us. In my response to the Budget Statement, I would like to discuss the challenges faced by three stakeholders in our society: businesses, workers and families.

Businesses: Costs and rent

The Singapore Business Federation’s latest National Business Survey highlighted that the key challenges faced by businesses in Singapore were an increase in overall business costs, and the availability and retention of manpower. The main cost pressures include raw material costs, energy costs, manpower costs and rental costs. Singapore is generally a price taker on raw materials and energy. Higher manpower costs, while challenging to businesses, can improve the welfare of our workers by increasing their income, as long as the wage increases do not set off a sustained wage-price spiral.

High rental costs in Singapore, however, benefit a narrower segment of society, namely landlords and property owners, and come at the expense of tenants, especially SMEs, who may struggle to afford the rent. They can also affect the competitiveness of these businesses, which have to allocate more resources to rental expenses and less to other more productive aspects of their operations.

The Government needs to look for ways to moderate industrial and commercial rental costs for SMEs. This will benefit a broader base of businesses which play a critical part in growing our economy and providing good jobs for our people. To achieve this, JTC could expand its market share for industrial space that offers more low-rent options to SMEs, and HDB also could offer lower rent commercial spaces allocated by ballot, to stimulate micro-businesses and entrepreneurship in the heartlands.

Attracting Singaporeans to promising industries

Next, I would like to discuss the challenges faced by workers in Singapore, particularly those in industries that heavily rely on foreign workers. In recent years, the Government has implemented various work pass restrictions to manage the inflow of foreign workers and professionals. Additionally, the Government has allocated funding to help local companies become more productive and manpower-lean.

However, there needs to be more emphasis on attracting Singaporeans to work in industries that are currently over-dependent on foreign workers, such as the marine, manufacturing and construction industries.

The Government has introduced several programmes, such as career conversion and professional conversion initiatives, to equip those who have decided to switch to these industries. However, there has been less success in urging our local workers to switch to these industries in the first place. While the Government has been working to raise awareness of the job opportunities and career prospects in these sectors, more needs to be done to address the perception that these industries are less attractive or prestigious than other sectors like finance, technology, and law.

It is commonly believed that Singaporeans are not interested in working in these industries due to the long hours, shift work, low pay, and difficult working conditions. However, the popularity of platform food delivery jobs indicates that many Singaporeans are willing to work in physically demanding jobs. Food delivery riders work long hours, with many cycling around town for over 12 hours a day. The job can be dangerous, with around one-third of riders having been in accidents that required medical attention. And the median income is less than $2,000, according to a paper by researchers at the Institute of Policy Studies (IPS).

The IPS paper also found that of the platform delivery workers who intended to leave the food delivery industry for other industries, they were looking for higher salaries, longer-term career pathways and opportunities to learn new skills in their next jobs. A significant number were seeking flexible work hours, although less than a third were looking for jobs in air-conditioned offices.

If the industries that are currently lacking in local workers can provide these benefits, they will be able to attract more locals to join them. Some progress has been made in attracting more locals to work as nurses and early childhood educators. The same effort should be undertaken to upgrade other industries that are facing local worker shortages.

However, even after these human resource matters are resolved, these industries may still face difficulties attracting job applications from Singaporeans due to a lack of awareness of jobs in those industries.

To address this, there is a need to increase awareness of these industries among students early on in their school life. Schools can work with industry representatives to introduce these career opportunities to students as early as lower secondary school. By doing so, students and their parents will be more aware of the career prospects in these industries and be better equipped to select suitable subject combinations in Secondary 3 and eventually make informed career choices when they are graduating from school.

Our success in reducing dependence on foreign workers and professionals heavily relies on being able to raise local talent in these occupations. By providing better pay, training and career pathways, and better work-life balance, and by increasing awareness of these industries among young people, we can attract more locals to work in these industries and reduce our dependence on foreign workers.

Families: Impact of the increased CPF Housing Grant

CPF Housing Grants and Resale HDB Flats — Photo by Jiachen Lin on Unsplash

Finally, I’d like to discuss the increased CPF Housing Grant and its effect on homebuyers. The Government has announced that it will raise the CPF Housing Grant for first-time homebuyer families purchasing resale HDB flats by $30,000 for those buying 2-, 3- and 4-room resale flats, and by $10,000 for those buying 5-room or larger resale flats. First-timer singles will get half the increase given to married couples.

This increase in the CPF Housing Grant will be welcomed by many first-time homebuyers, especially those who are looking to get a flat in a mature estate near their parents’ home, but have been unsuccessful in balloting for a BTO flat in a mature estate.

However, some property analysts have cautioned that the increased grant amount may also raise demand and prices of resale flats. The Hon. Member Hazel Poa also raised this concern in her speech. This could potentially offset any progress made towards enhancing the affordability of resale flats.

As such, it’s important to understand the Government’s projections on how much this increase in the CPF Housing Grant will elevate resale HDB flat prices over the next two years.

Has the Government projected any resale price increases as a result of the CPF Housing Grant increase, by modelling the large amount of housing transaction data available to HDB?

Additionally, since only first-timers will benefit from the increase in the CPF Housing Grant, non-first-timers may end up having to pay even more for resale flats.

I hope the Government can provide more information on its projections to help Members assess the net effect of the CPF Housing Grant increase.

More fundamentally, is increasing housing grants going to continue to be the Government’s main approach to making resale flats affordable?

Has the Government considered the alternative proposals which I shared during the debate on the housing motions earlier this month to moderate resale flat prices?

These include, one, providing more help to “empty nesters” who are prepared to sell their larger flats to obtain 2-room flexi flats and Community Care Apartments; two, requiring future buyers of private property to sell their HDB flats; and three, incentivising those who currently own both a private property and an HDB flat to sell their flat by rebating the Additional Buyer Stamp Duty they paid on their private property.

These proposals may provide longer-term solutions to moderating the price of HDB resale flats.

Conclusion

As we contemplate the future, it’s natural that Singaporeans are apprehensive, particularly for their children. The soaring property prices have made it increasingly challenging for families to purchase a new home. The Deputy Prime Minister has cautioned that we may continue to confront a period of high inflation, which is likely to persist throughout the first half of this year.

In these trying times, it’s imperative for us to keep our minds open to workable solutions — regardless of where they might emerge from — so that we can help our fellow Singaporeans in need, and progress and prosper together as a nation.

This was my speech in Parliament during the debate on the Budget Statement on 23 Feb 2023.

Cover photo by photosforyou on Pixabay

Providing affordable homes for all Singaporean families

A public housing flat should be an affordable home for our families to live and grow up in.

The original mission behind the Housing and Development Board (HDB), when it was set up in 1960, was to alleviate the severe housing shortage at that time by building affordable homes for the population. However in 1989, public housing flats took on another role as an appreciating asset for their lessees, when the Government announced several major policy changes with regard to HDB resale flats.

First, the income ceiling for the purchase of resale flats was removed. This allowed people to buy HDB flats, even if they were higher income earners.

Second, permanent residents were allowed to buy HDB resale flats. This supported the Government’s liberalisation of immigration policies to attract more middle- and higher-income foreigners to come to work in Singapore. And third, HDB flat owners were allowed to purchase private property for investment purposes.

These measures added liquidity to the public housing market which pushed up prices.

The Government also introduced various upgrading programmes for HDB flats and estates. In addition to improving the living environment of HDB flat dwellers, this also bolstered the view that HDB flats are an appreciating asset.

Flat upgrading was pitched to voters by the PAP during the 1997 General Elections as a benefit they would enjoy priority for if their precincts voted for PAP candidates. Voters were told that after upgrading, their flat would increase in value. Conversely, precincts that voted for the opposition risked being placed further back in the upgrading queue.

Soon after the 1997 GE, then-PM Goh Chok Tong assessed that linking the upgrading programme to electoral support was the “single most important factor” in the vote swing to the PAP and that it was “decisive in tipping floating voters” in the PAP’s favour.

The PAP’s “votes-for-upgrading” election strategy continued into the 2006 election, when PAP candidates promised $180 million of upgrading projects for Hougang and Potong Pasir if voters tossed out the opposition there and voted in the PAP. Hougang and Potong Pasir voters did not bite the carrot offered.

However by 2015, opposition held wards like Hougang eventually started getting their lifts and flats upgraded. The scheme lost its effectiveness as a political tool. In fact, in my conversations with many residents in Hougang, it was this perceived unfairness that prompted them to vote against the PAP.

It is natural for people to not just desire a home to live in, but to also own an asset which grows in value. Many people think that their salaries alone will not make them rich. Properties, including HDB flats, are seen as very attractive assets to grow one’s wealth.

For the first two decades of the Government’s asset enhancement policy, the property asset-driven mindset worked like a charm. HDB resale flat prices increased 382% in value from 1990 to 2010. Many HDB lessees saw eye-watering increases in their property wealth.

However, this pathway to wealth requires ever increasing property prices to sustain it. Every property bought would need to be sold for significantly more than the purchase price. Yet, perpetual property price increases are neither sustainable nor in the public interest.

There are currently about 70,000 flats that are more than 40 years old, with remaining leases of 59 years or less. These flats will tend to decline in value after their 50 or 60 year old mark, as illustrated by Assoc Prof Jamus Lim yesterday.

Those who bought HDB flats in the 1980s and 1990s may be glad to see that their properties have increased in value. However, to unlock the value of these assets, they will need to sell and downgrade their properties before their leases start to decay.

Those with adult children would realise that the situation is much more precarious for their offspring. Many parents of young adults nowadays worry that their children may not be able to realise the same dream they themselves achieved to own a home of their own. Those who are better off have gone ahead and bought properties for their children to move in when they get married. Others have migrated to Australia, New Zealand and Canada where they are able to buy landed property for the price of an HDB flat. But where does it leave the rest of the Singaporeans who don’t have wealthy parents and want to remain in this country to build their homes, careers and families?

While many who graduated in the 1970s were able to afford a landed home after a few years of work, private property is now out of the question for most younger graduates. Even resale flats are out of reach for many of them, leaving BTO (Built-to-order) flats the only remaining option.

Moderating the price of resale flats

My honourable friends Louis Chua, Leon Perera and Jamus Lim have tabled proposals on making the price of BTO flats more affordable. In the remainder of my speech, I will focus on moderating the price of resale flats.

Many young couples buying their first flat prefer to live near their parents. This provides them the familiar surroundings that they grew up in and the companionship they can offer to their parents and vice-versa. Their parents are also able to help them care for their children when they are at work. Many homebuyers also prefer living in mature estates where amenities and transport links to the city are better developed. Only resale flats can meet many of these requirements.

This is also why BTO flats in mature estates are so popular. Many of my residents have approached me to ask me to help them appeal to HDB for priority to get a BTO or Sale of Balance flat in a mature estate, after trying multiple times to secure one in balloting exercises and failing. When I suggest buying a resale flat and using government grants to help with the down payment, my suggestion is often met with great scepticism because resale flat prices feel so far out of reach for them.

The median house price-to-income ratio (HPI) after grants of first-timer families who bought a resale HDB flat in the last five years was between 4.6 and 5.0. This ratio is the resale flat price divided by the household income of the buyers. According to the International Housing Affordability Ratings by Demographia, such a median multiple would be rated as “seriously unaffordable”. The median multiple would need to be 3.0 and under to be considered “affordable”.

This has pushed many of my residents to either rent at high open market rates or compete with other homebuyers to ballot for BTO flats.

We need to moderate the growth in resale flat prices. Our goal must be to moderate the growth, not make the prices collapse, because the latter would negatively affect many existing flat lessees who are depending on their flats as a source of future retirement income.

There are two ways to moderate resale flat price growth without imposing price caps by government fiat. These are: To reduce demand or increase the supply of resale flats.

The Government has already introduced the 15-month waiting-out period for private property downgraders to reduce demand. I will focus on measures to increase the supply of HDB resale flats.

Right-sizing for empty nesters

There is a potentially large stock of HDB resale flats that can be put on the market. Many seniors live in flats that are larger than what they require after their children have gotten married and moved out. It becomes difficult for them to clean and maintain such a large flat on their own.

As at 2021, there were 71,000 flats, 3-room or larger, which were owned by married persons over the age of 65, whose children had moved out. These flats could potentially be sold on the resale market if their owners are prepared to move into new 2-room flexi flats on short term leases. Many of these 2-room flats come with elderly-friendly fittings and nearby amenities, which seniors find quite attractive.

However, not all elderly applicants for 2-room flexi flats are successful. The application rates of BTO 2-room flexi flats allocated to elderly households, as at September 2022, ranged from 2.0 to 4.6 times in non-mature estates, to 9.9 times in mature estates.

If a larger proportion of the 71,000 senior households decided to sell their flats and buy 2-room flexi flats, the demand will far outstrip supply. By 2030, 25% of our population will be over 65. The number in need of right-sized flats will only grow as the years go on.

The Government needs to provide more help to seniors who wish to right-size their flats by building more 2-room flexi flats. Doing so will have the twin benefit of increasing the supply of resale flats for new homebuyers and moderating their prices.

Concurrent ownership of HDB flats and private property

Another area that the Government should look into to increase the supply of resale flats is to prospectively restrict the concurrent ownership of HDB and private property.

Currently, private property owners who want to buy an HDB flat are required to dispose of their property before buying an HDB flat. The Government has stated that this is to prioritise our limited supply of public housing for residents who do not own other properties.

However the reverse is not true: HDB flat owners are allowed to buy private residential property without selling their HDB flat. They can do so if they meet the Minimum Occupation Period and pay the Additional Buyer’s Stamp Duty (ABSD) of at least 17% on the purchase of their second and subsequent residential property. The Government has stated that this is allowed because HDB recognises that the financial position of HDB flat owners may improve over time and some may aspire to own private residential property.

While I acknowledge that this is a valid aspiration of many higher income Singaporeans, realising this aspiration cannot come at the expense of less well-off Singaporeans who are only looking for a roof over their heads.

As at October 2022, about 3% of HDB flat owners owned at least one private property. This translates to about 32,600 units. Of these, 45% are not living in their flats. So there are about 15,000 HDB units which are not occupied by their owners, who live in another private property that they own. This represents a not-insignificant number of HDB flats that could potentially add to the resale flat supply and moderate the price of resale flats. I do acknowledge that many of these flats are rented out, adding to the supply of open market rental flats.

Has the Government given further consideration to the possibility of future buyers of private property being required to sell their HDB flats? When I asked the Minister for National Development about this in November last year, he said that the Government has been “gathering views from Singaporeans as part of Forward Singapore, and will study these as well as other views and ideas carefully.”

For those who already concurrently own both a private property and an HDB flat, the Government could incentivise them to sell their HDB flat by rebating the ABSD they paid at the time they purchased their private property, if they choose to sell their HDB flat. This would encourage private property owners to free up their HDB flat for others who cannot afford to buy private property.

This policy should be prospective, so it will not compel current HDB and private property owners to dispose of any property. It will only affect those that currently own an HDB flat and decide to purchase private property after the policy takes effect.

If this policy is implemented prospectively, it will not immediately add to the supply of resale flats. However, in the medium to long term, it will better promote the owner-occupation intent of public housing and better ensure an adequate supply of affordable resale flats.

Conclusion

Mr Speaker, housing is a basic human need. Singapore’s public housing policies were a great success in the first few decades after our independence. But the Government got distracted along the way when it started pairing the objective of affordable housing with that of asset enhancement. As a result, public housing has become unaffordable by international measures. The longer we allow these two objectives to be conflated, the more unaffordable housing will become for future generations. It is time that we stopped kicking the can down the road and focus on HDB’s original mission of providing quality and affordable housing for all Singaporeans, especially the lower and middle income earners.

This is my speech in Parliament during the debate on public housing policies on 7 February 2023.

Keppel O&M corruption case

I have filed several questions in Parliament for the Prime Minister to answer regarding the massive Keppel Offshore & Marine corruption case and the decision not to charge 6 former senior management staff:

1) Why couldn’t the 6 senior management staff be charged based on the evidence in the statement of facts in the Deferred Prosecution Agreement between KOM and the US DOJ?

2) Why couldn’t the 6 be named?

3) How many times has CPIB reached out to witnesses overseas or sought to obtain documents located overseas regarding this case?

These are the full questions I have filed:

*4106. Mr Gerald Giam Yean Song: To ask the Prime Minister why the statement of facts contained in the Deferred Prosecution Agreement concluded between Keppel Offshore and Marine Limited with the United States Department of Justice dated 22 December 2017 is not considered sufficient, available, and appropriate evidence of the six former senior management staff’s culpability for them to be charged with corruption in Singapore.

*4117. Mr Gerald Giam Yean Song: To ask the Prime Minister (a) why is CPIB not naming the six former senior management staff of Keppel Offshore and Marine limited who have been issued stern warnings in lieu of prosecution for offences punishable under the Prevention of Corruption Act; and (b) whether their ages and nationalities can be revealed.

*4116. Mr Gerald Giam Yean Song: To ask the Prime Minister since the conclusion of the Deferred Prosecution Agreement between Keppel Offshore and Marine Limited and the United States Department of Justice in December 2017 (a) how many times has CPIB reached out to witnesses overseas or sought to obtain documents located overseas; (b) when did these actions take place; and (c) what have the responses of the overseas witnesses or organisations been when contacted.

These questions are likely to be answered in the Parliamentary sitting on the week of 6 January. If you have some insights into this case that you would like to share with me, please WhatsApp me at 89250747 or email me at gerald.giam@wp.sg.

SPH Media’s falsification of circulation data

I filed several questions for the Minister for Information and Communications to answer in Parliament regarding the revelations of the falsification of circulation data by SPH Media. In summary, I will be asking:

1) What are the terms of reference of the Ministry’s review of SPH Media and under what conditions will public funding to SPH Media be reduced?

2) Were the increased circulation figures cited by the Minister in Parliament in 2021 used as a basis for funding and are they still reliable?

3) How many newspaper copies were printed, counted and destroyed and what is the environmental impact of these actions?

These are the detailed questions I will be asking:

*4103. Mr Gerald Giam Yean Song: To ask the Minister for Communications and Information regarding the Ministry’s review of SPH Media following their admission of falsification of circulation data (a) what are the terms of reference of this review; (b) when did this review begin and when will it be completed; (c) what have the findings been so far; (d) whether the report will be made public; and (e) what are the conditions under which public funding to SPH Media will be removed or reduced.

*4104. Mr Gerald Giam Yean Song: To ask the Minister for Communications and Information (a) what was the source of the figures cited on 10 May 2021 in Parliament that SPH’s newspapers’ circulation had grown by 5% and The Straits Times’ circulation had grown by 20% from 2017 to 2020; (b) how much bearing did this data have on the Government’s decision to fund SPH Media; and (c) whether the Minister still considers this data reliable in light of recent admissions by SPH Media.

*4102. Mr Gerald Giam Yean Song: To ask the Minister for Communications and Information (a) what is the total number of newspaper copies that were printed, counted and destroyed by SPH Media or its predecessor company for the entire duration of the scheme to inflate circulation numbers; (b) what is the estimated total weight of paper used; and (c) what is the environmental impact of these actions.

These questions are likely to be answered during the Parliament sitting on the week of 6 Feb 2023. If you have further insights into this issue to share with me, please email me at gerald.giam@wp.sg or WhatsApp 89250747.

Singapore’s participation in nuclear fusion reactor projects

Nuclear energy has been identified as a potential power source for up to 10% of our energy needs by 2050. New nuclear power plant designs have the potential to be much safer than many of the plants in operation today. In particular, nuclear fusion reactors promise to be even safer, as they do not rely on chain reactions, nor do they produce radioactive waste with an incredibly long “half life”. However, fusion reactors are still in the R&D phase. ITER (originally, “International Thermonuclear Experimental Reactor”) is a giant experimental fusion reactor in France, which may deliver fusion power as early as 2045. Scientists from more than 35 countries are collaborating on this project to achieve the ambitious goal of grid-scale fusion electricity production. ITER recently produced a breakthrough of sorts, where it was able to produce more fusion energy than it consumed.

I asked the Prime Minister whether Singapore’s National Research Foundation (NRF) is looking into participating in ITER or other international fusion reactor projects, to allow Singaporean researchers direct access to the data and latest developments in the field

Deputy Prime Minister Heng Swee Keat, who is also the chairman of the NRF board, replied that the NRF is currently not participating in any international fusion reactor projects, but is monitoring global developments related to fusion, including ITER, to identify where Singapore can participate and contribute meaningfully.

This is the full question I asked on 9 Jan 2023 and DPM Heng’s answer:

PARTICIPATION IN INTERNATIONAL FUSION REACTOR PROJECTS AND AVAILABILITY OF FUNDING

Mr Gerald Giam Yean Song asked the Prime Minister with regard to the recent experimental developments in fusion and the Government’s previously stated aims to look into nuclear fusion as a source of electricity generation (a) whether the National Research Foundation is looking to participate in any international fusion reactor projects, like the International Thermonuclear Experimental Reactor (ITER), to allow Singaporean researchers direct access to the data and latest developments in the field; and (b) if so, what projects have been looked into and how much funding is being provided.

Mr Heng Swee Keat (for the Prime Minister): The National Research Foundation is not currently participating in any international fusion reactor projects. Nonetheless, as part of our overall efforts of keeping abreast with the latest progress in nuclear technologies, we are monitoring global developments related to fusion, including at the International Thermonuclear Experimental Reactor (ITER), to identify where Singapore can participate and contribute meaningfully.

The latest development, in which researchers produced for the first time a small fusion reaction that generates more energy than it consumes, is a significant scientific advancement. However, more work needs to be done to achieve a much higher scale of net energy gain over a sustained period, for fusion to generate electricity in a commercially viable manner.

We will continue with our efforts to better understand the evolving nuclear science and technology by supporting research in relevant areas of nuclear science and engineering, and training a pool of scientists and experts through education programmes and collaborations with overseas nuclear technology partners.

Govt grants to Town Councils to cope with higher costs

All Town Councils in Singapore depend on government grants to offset their costs. In recent years, many costs, including that of electricity, manpower, construction and maintenance services, have gone up significantly. I asked the Minister for National Development if the Ministry has any plans to increase its grants to Town Councils to cope with these higher costs. Mr Desmond Lee acknowledged that TCs face higher costs. Although he did not immediately commit to increasing grants, he said the Government will continue to monitor the larger macroeconomic environment, the cost drivers affecting TCs, their income sources and overall financial positions, and assess if further funding support is required.

This was my full question and the Minister’s answer on 10 Jan 2023:

PLANS TO INCREASE GRANTS TO TOWN COUNCILS TO COPE WITH HIGHER COSTS

Mr Gerald Giam Yean Song asked the Minister for National Development whether the Ministry has any plans to increase its grant to Town Councils to cope with higher costs, including for electricity and other Town Council contracts.

Mr Desmond Lee: Town Councils (TCs) are autonomous legal entities formed under the TCs Act and managed by elected Members of Parliament. The TCs are responsible for their financial sustainability, through managing their income and expenses prudently.

We understand TCs face higher costs due to higher energy prices, manpower costs and costs of maintenance services. Such cost increases are not unique to Singapore and the Government has taken steps to partially cushion the impact on residents. To help TCs cope with costs, the Government provides grants such as the Service and Conservancy Charges (S&CC) Operating Grant, Lift Maintenance Grant, GST Subvention Grant and Lift Replacement Fund Matching Grant. Collectively, these grants to TCs amount to about $239 million a year.

The Government will continue to monitor the larger macroeconomic environment, cost drivers affecting TCs, their income sources and overall financial positions, and assess if further funding support is required.

Land valuation and BTO flat prices

Will the high resale flat prices that we have seen in recent years push up the value of BTO flats and impact the price that Singaporeans pay for these flats, or does HDB increase subsidies to completely offset the increase in land valuation due to this factor?

This was a question I asked Minister for National Development Desmond Lee today.

I had earlier asked a related question: What is the differential that the Chief Valuer applies to land used for public housing compared to that for private housing?

I also asked the Minister: How does the Government ensure in practice that the Chief Valuer is able to make his valuation decisions completely independently and that no one attempts to influence his decisions?

I asked this because the Chief Valuer’s decision on the valuation of a piece of land has a great impact on the amount that Singaporeans have to pay for their HDB flats. The current Chief Valuer is concurrently an Assistant Commissioner heading the Property Tax Division in the Inland Revenue Authority of Singapore.

The Minister’s answers will be published in the Hansard.

——————

*4017. Mr Gerald Giam Yean Song: To ask the Minister for National Development in determining the value of land that will be used to build HDB BTO flats (a) what is the differential that the Chief Valuer applies to land used for public housing compared to that for private housing; and (b) whether the private housing land use comparables used to value land for HDB BTO flats are based on the records of the last transacted private residential land sold by the Government and private parties.

How many households own more than one car?

This is a question I asked Minister for Transport S. Iswaran in November. He said that as of 31 Oct 2022, about 471,000 households own cars. Of these, about 12% own two cars and less than 3% own three or more cars.

This means that about 15% of car-owning households — or 70,650 households — own two or more cars. This is by no means a small number. I followed up by asking what impact these multiple car owners have on the price of COEs, considering they not only add to the demand for cars, but because they tend to be higher income households, they have the ability to pay more for their COEs.

I also asked if the Ministry has any plans to dampen the demand for second and subsequent Category A cars from the same household, so that the limited supply of cars can be spread out more equitably to those who need it the most — for example, caregivers and those who need to drive for work.

Read below for the Minister’s full response and my subsequent supplementary questions:

29 Nov 2022

DATA ON FAMILIES OWNING MORE THAN ONE CAR

Mr Gerald Giam Yean Song asked the Minister for Transport how many households currently own (i) one car (ii) two cars and (iii) three or more cars, including cars owned by different members of the same household.

The Minister for Transport (Mr S Iswaran): Mr Speaker, as of 31 October 2022, about 471,000 households own cars. Of these, about 12% own two cars and less than 3% own three or more cars.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): I thank the Minister for his reply and his figures. Can I ask the Minister two supplementary questions? What impact do these multiple car owners have on the price of COEs, considering they not only add to the demand, but because they tend to come from higher-income households, they have the ability to pay more for their COEs. And secondly, has the Ministry considered the possibility of introducing measures to dampen the demand for second and subsequent Category A cars from the same household, so that the limited supply of cars can be spread out more equitably to those who need it most – for example, caregivers and those who need to drive for work.

Mr S Iswaran: Mr Speaker, I thank the Member Mr Gerald Giam Yean Song for his question. Firstly, I think the underlying thesis is that somehow this component of the COE ownership is driving price increases. If we look at the facts, the proportion that has been accounted for by households in these various categories has been relatively stable over time. There has not been any major shift in patterns of demand. If anything, in fact, multiple car ownership amongst individuals has shown probably a bit of a declining trend; firstly.

Secondly, in terms of what accounts for the COE prices, whilst we can look for many plausible explanatory factors, the fundamental issue is supply and demand. Demand remains unabated, whereas supply is constrained, because we have a zero-growth policy and the supply is determined by de-registrations – which are in part affected by the 10-year cycle because of the historical pattern of car registrations and also because of current economic environment in people’s decisions on the margin – whether they want to de-register or extend their COEs on the cars that they already have.

So, on balance, I would say that it does not necessarily follow that any effort to curb car ownership beyond the first car in any household will necessarily have a dampening effect on COE prices, which is the second point that the Member raised. For two reasons, first, the quantitative impact is unclear as I have just explained; and secondly, because there may be very legitimate reasons why households have a second car or need a second car. So, we have designed a system where the market, based on demand and supply, clears the COEs at a certain price and we need to try not to adjust or affect the fundamentals too much because then it starts to create unintended consequences in the market.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song: I have a quick supplementary question. I accept that the second and third car households have not contributed to the increase in the COE in recent years, but does it add to the baseline of the COE demand. Because it might well be the fact that the number of households with two or more cars has not increased over the years, but 12% is not a small number, so that could also be causing the baseline price of the COE to be high.

Mr S Iswaran: If I may make two points in response to the Member’s questions. First, as I said the percentage has been stable over a period of time, at a time when COE prices were not so high. So, if the baseline argument is to be made, it must be made consistently across a 10-year cycle.

And the fact is, it is not so much that part of the equation, but more the supply side that has been affecting the overall prices of the COEs because of what we have seen.

It is also worth noting that households — because implicit in the Member’s question is that multiple car ownership is biased towards higher-income households. I think that is the point the Member is making, if I am correct, is that right? Yes.

So, there is a certain equity argument that is being advanced as well. I would point out that households that own multiple cars are not just those that live in private residential housing. There is actually a distinct proportion that also live in public housing.

So, there are different reasons why people have more than one car and we should have a care in making decisions on how to curb these additional demands.

Going back to the first point, I think that the patterns have not changed dramatically; in fact, it has been fairly stable. But we remain open and I think policy has to be informed by data and the patterns. And we will continue to track them.

Source: Parliament Hansard

#Parliament #WorkersParty

(edit: Changed “15% of households” to “15% of car-owning households”.)