Comments, opinions and an occasional ramble
Initial thoughts on National Day Rally 2007
I must say that it’s a very, very comprehensive talk by PM Lee Hsien Loong on various topics. Although his starting point was on address the widening income gap, using that issue as a platform, he gave an outline of the arsenal of policy changes that the government intends to effect on the issues education, aging, CPF and public housing.
I haven’t had the time to dissect the entire speech in its entirety, mainly because I don’t have the complete speech now and I’m only recalling from memory, so I’m just only writing down my initial impression on the speech. I believe that other bloggers will soon put in their expertise and comment on specific parts of the speech later on.
I think that credit should be given to the government for trying to tackle all the various problems through policy changes. Whether these are necessarily the right tools to solve impending problems facing Singapore is another question, but at the very least, they are aware, and they are trying. Certain news will surely be received with joy by Singaporeans, such as the government’s pledge to increase university education to 30% of every cohort, as well as improved upgrading programmes (e.g. Home Improvement Programme, Estate Upgrading programme) at a faster pace. The Punggol 21 Plus project is likely to meet with much approval as well. An additional 1% increase in the rate of return on the CPF (subject to a $60,000 cap) is certainly good news for all. The government also plans to unlock the value of homes for those in their twilight years by “buying back” the existing unit and then leasing it to the occupant for 30 years. It’s perhaps another good move as well. The additional CPF housing top-up grant will be expanded to households whose combined income is $4000. Good news, especially for those who are just starting work and wanting to buy a flat.
On the flip side, changes to increase the drawning down age in stages to 65 years old is going to cause some unhappiness. It’s an emotional issue no doubt, but honestly, given the hard data on life expectancy, it’s perhaps a fantasy to think that we can happily retire at age of 62. Except for a select few who can earn enough money to last them through 20 or more years of retirement, I think we all have to realise that it’s probably impossible for most of us to retire early. I think Singaporeans have built up certain expectations over the years on when it’s time to retire but those expectations are based on yesteryear’s life expectancy. For myself, I think I’m going to mentally brace myself to retire only at 70.
The problem with retiring late is that while I might be willing to work longer, employers might not be willing to hire. According to PM Lee’s speech, the government is trying to combat this with a combination of legislation and incentives. The new legislation, slated to come into force in 2012 (if I don’t remember wrongly), will force employers to provide a job after the age of 62, until the age of 65. According to PM Lee, this is better than raising retirement age because raising retirement age will only result in employers refusing to hire older workers. I don’t see how this legislation will help things, though. If I have to guarantee re-employment, all the more I will refuse to hire older workers! It might be presumptuous of me to criticise the upcoming Re-employment Act, though. I’m going to withhold comment until more information is available.
Expanding Workfare is a good idea though. The government will increase it from 10% to 20%. So a low income worker (including the elderly) will get 20% more in salary top up from the government every month, part in cash and part in CPF. In a sense, this will make companies more willing to hire locals, since the cost to the company is made “cheaper” by the government’s “wage subsidy” through Workfare. I wonder will companies then take Workfare into account when calculating how much to pay low wage workers and deliberately give lower wages, since there’s a top-up to the worker from the government.
The various upgrading projects are exciting, but I was thinking to myself as PM Lee rattled away the names of the different estates, why is Potong Pasir not mentioned? Well, at least he mentioned Hougang. 
There’re probably alot more to talk about other than all these I’ve mentioned, but I think it’ll take quite a while to discuss all of them. I think I’ve more or less summed up the key points of PM Lee’s speech, along with some initial thoughts and comments here and there. I shall get going to bed now because I still have work tomorrow. 
| Print article | This entry was posted by Aaron Ng on 20/08/2007 at 12:09 am, and is filed under Perspective. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site. |
about 5 years ago
You shouldn’t rely on the government to secure your next 30 years. It is my opinion that annuity thing is an admission of the failure of CPF scheme for retirement. Factoring inflation, the annuity scheme itself seems hardly sufficient for a practical retirement scheme. There are a couple ways to face the current situation:
1) Look into expanding your horizons overseas. Getting overseas/international work experience will do wonders for your resume. The decision to return to Singapore after your overseas stint will be up to you but you will gain a lot from it. Working overseas might make you more money, get your more work connections/opportunities and maybe even give you an exit strategy from this island if you choose to. You can also return to the island as a “foreign talent” and be treated in a different light compared to locals. That’s how Singapore inc. works.
2) Remain on the island, live the normal Singapore grad life and suck it up. Dump a huge amount of your CPF on a HDB flat, slave for the rest of your life worrying about job security, a government that is gradually degrading overtime due to increasing incompetence and finally lack of funds when you want to retire but can’t.
You are still young and it’s not too late to make a choice. Don’t do it when you hit the late 30s or early 40s and are bogged down with a house and kids. If you realise it only by then, you are truly fucked.
about 5 years ago
Oviraptor,
Thanks for the comment, especially the part on the failure of the CPF scheme. I will think about it and comment in another entry.
about 5 years ago
I watched the first 5 minutes of the PM’s speech then turned off the TV, simply because I couldn’t bear watching him on stage, lying to a nation. The sheer hypocrisy of it hit me when he mentioned the subject of this year’s rally would be “leaving no one behind”, and the attempt to remedy the widening income gap. This coming in the same year of raised ministerial salaries and 7% GST? That’s bullsh*t.
The only way he could prove the government’s commitment would be to use a formula similar to this: Take Low Thia Kiang’s suggestion that top ministerial salaries pegged to a MULTIPLE of the lowest income bracket salary, and add another peg to the 80th percentile of Singaporean salaries, whichever is LOWER. Understand the difference between satisfaction and passion: High pay may amount to higher satisfaction, but makes little difference in motivation and passion. My formula has a three-pronged approach: First, weed out those who are purely in government for the money. Second, give a cash incentive for the government as a whole to close the income gap. Third, keeps them more in touch with the average Singaporean: I mean when is the last time a minister took a bus/train, tried to get a cab or drove his own car down the CTE at rush hour?
So why do I think that ministers should not be paid top dollar? Well, imagine the day when parents everywhere tell their kids, “I don’t want you to be a doctor, scientist, engineer etc… I want you to grow up to be an administrator. Start pushing paper and creating red tape once you can read!” I’m not trying to be unreasonable. I understand the need for leaders, especially in our competitive region. But all studies show that income gap actually widens more acutely at the top tier, and guess where our ministers’ choose to peg themselves to?
That’s exactly right, they choose to elevate themselves to the elite level and can choose to simply give themselves a raise unilaterally, no vote required. Isn’t that in fact, PM actively choosing to widen the income gap further? Earning more than 80% of the population should mean that one is by no means poorly paid, right? If these “talents” we choose to retain need more money, then they should by all means join the private sector where they can easily be retrenched based on performance. My mom told me he mentioned Tiger Woods: Come on lah… worst example ever, as his earning are directly pegged to his performance. His shelf life is based on when his muscles/skills give way and a newer, stronger model replaces him. He proves he is the best every single day, to all challengers, no excuses/exceptions. Where is the PAP versus rest of the world’s governments? Number 1 in pay by far, at best top 5 in any other real world benchmark (that I can find).
Talking about performance, they burden us with higher taxes, and then say they are doing a good job? Well done. I see the government’s moves as very anti-competitive, the antithesis of everything they say. You pay top dollar to retain “talent”, effectively excluding these doctors, scientists, engineers from the private sector where they can put their talent and passion to good use. Who knows, the next big innovation could have come from one of them, instead we stick them behind a desk and ask that they run a country. If money is all that is needed to attract the right brains, maybe less of it is needed to see who has the right hearts.
So don’t talk of lessening the income gap, then take action to widen it. Actions speak louder than words. What about quality of life and work/life balance? Keeping retirees in the workforce artificially means fewer jobs/promotions for the younger generation, and leaves older workers no choice but to keep working. Very unhealthy. Can you blog about that? How their overall actions rarely benefit the people; one step forward, 2 steps back…
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