Comments, opinions and an occasional ramble
What constitutes a “clean” government?
I think by large, the Singapore government is relatively clean and uncorrupt. However, before government leaders start boasting about how clean and uncorrupt they are, they should really leave no room for doubt. This includes being upfront about everything. The revisiting of the issue of HDB subsidies is a good case in point.
The issue of HDB subsidies have captured the attention of Singaporeans when it was exposed in 2004 by a Singaporean who reviewed HDB building contracts. He found that a brand new 5-room flat that HDB sells for $200,000 cost the building contractor only $50,000. Calls have been made every now and then for HDB to release all information regarding HDB subsidies to the public. From what I know, HDB has been dodging the issue. This gives the impression that the information is secret and should not be divulged.
Of course, secrecy and corruption are two different matters. However, keeping things secret does not necessarily mean there is no wrong-doing. Knowing the truth but choosing not to say it can be considered a form of obstruction of justice, which is punishable by law. Of course, I’m not suggesting that the HDB or the government is guilty of some wrong-doing and intentionally hiding it. The point is that maintaining secrecy can be wrong, and sometimes, it can be as bad for reputation as blatant corruption.
After all, if everything has been done in accordance with the law as well as societal definition of morals and integrity, why should the issue be dodged? Why do we want to give the impression that there might be something fishy going on by being so secretive? I don’t think HDB subsidy have any justification in being secret. If we’re talking about Ministry of Defence or Ministry of Home Affairs, perhaps there’s a case for secrecy in the name of national security. However, I don’t think information on HDB subsidy when given out will compromise national security (I could be wrong, though).
Ultimately, I think what constitutes is clean government is not just having low published numbers of corrupt individuals. What I think truly constitutes a clean government should also include the removal of any possible doubt of corruption. This entails candidness in making information public. All public organisations should make all their information public, except for that relating to national security. Perhaps it’s time for Singaporeans to start requesting for public access laws.
There’s no point in one saying, “I’m have been an honest man all my life” when the very same person refuses to reply yes or no to the question, “Have you ever told a lie before for any reason?”
| Print article | This entry was posted by Aaron Ng on 04/01/2007 at 1:46 pm, 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
The HDB housing value issue has nothing to do with subsidies.
Land value. Peg. CBD.
Even if the entire populace understood the causality of such so-called ‘subsidies’, there is nothing they can do.
The government and the people have each other to thank for the Catch-22 that future generations have to pay for.
about 5 years ago
The selling price has everything to do with the prevailing prices of existing HDB flats. Prices are high due to speculation and cashback deals in the 90s. Prices fall now, people will kill themselves (and the MRT people will have a lot of scrapping to do, or better, overthrow the Garmen) over negative equity. Therefore new flats must be die die be pegged to price of existing flats.
The so-called “market subsidy” is *REAL* money ‘cos technically, people can cash out the surplus by selling their flats. There are of course resale restrictions, but if you kwai kwai hold on to the flat for 5 years, you can cash it out.
It makes no difference if the building price is $50K or $150K if the prevailing market price is $200K. If the grant is $30K, then HDB die die will have to sell at $170K. Related to this is the concept of arbitrage. I hope this helps in your understanding of what’s going on.
about 5 years ago
In other words, there should more transparency to facilitate checks and balances.
Any listed company have an external auditor to check their accounts and publish a annual report for their shareholders, customers and business partners to read. This is to ensure confidence in their company. Now this is transparency.
So why not a government which utilize taxpayers money? If they did not do any wrong than there is no reason to dodge being transparent.
about 5 years ago
Hi KTM,
Belated happy new year, and thanks for insightful points, as always.
I’m no university economics student, and reading up on arbitrage made me gain a little more knowledge. I do not dispute your points, which I understood perfectly well if you read my last entry on the fact that as it stands now, there cannot be anything done to lower the market price because it will bring chaos to the housing market.
True, while it is not wise to try and adjust the current market value by selling HDB flats at a huge discount, that issue is different from the issue of subsidy. I mean, HDB takes care of public housing, and if we view public housing as something in the public interest, should the sale of brand new HDB flats be non-profit (after deducting necessary costs)? Indeed flat prices might have gone up due to speculation and cashback, but HDB could have adopted measures then to cool the market, which it didn’t. The subsidy stayed the same throughout the years. I’m not sure but could this be a deliberate attempt to try and increase their profit?
As a government agency charged with ensuring affordable public housing, I’m not sure if making profits is in line with their main purpose of existence. In anycase, I’m fine even if HDB makes nice profits provided that where the money goes is made transparent. I’m pretty sure few people know where the profits of selling HDB flats go to. This is perhaps more important than the level of subsidy. Where’s the transparency of accounts?
I might not be able to reply until after next Wed, so please pardon me.
about 5 years ago
Aaron,
Happy Belated New Year to you too. I think you are still not getting it. Do spend more time thinking about it.
HDB could have adopted measures then to cool the market, which it didn’t
Easier said than done. Deregulation is not a bad thing by itself. Bubble was fueled by greed. Not quite so easy to regulate and it’s not obvious how to regulate also. They have already done what they need and brought some sanity to the market, though albeit late. Nevertheless, what’s done is already water under the bridge. Right now, we can only move forward.
Why has the subsidy stayed the same? Why should it increase? Because of inflation? Actually the subsidy is already quite generous at $30K and $40K. How long do you think it takes an average joe to save that amount of money? Increasing it some more will make it a windfall and not a subsidy.
For your information, if there are surpluses, the money goes into the reserves of the Stat Board. If there are too much reserves and the Stat Board has not good ideas on how to spend the money, the Garmen might decide to claw back some of the money and it might go into the Consolidated (Consol) Fund. The Consol Fund is like the Garmen’s petty cash and all kinds of things get paid out from there.
This piece is pretty incoherent as it stands. For example, your claim, “I don’t think HDB subsidy have any justification in being secret” is quite bogus. The subsidy is well-defined. It is the cost price that’s unknown — but like I said above, the actually cost price actually doesn’t matter. If people cannot understand the concept of “market subsidy” and arbitrage, that’s a completely different matter.
To conclude, it is easy to speculate on why HDB refuses to reveal the cost price of the HDB flats. Because (i) people cannot understand the economics behind what’s going on; and (ii) the cost price is much lower than the selling price minus subsidies (this is speculative) and if that’s made official, you will have the greedy Singaporeans applying political pressure on the Garmen to either reduce the selling price or increase subsidies. There are no good reasons for either and we dun wanna mess with the market too much. Makes sense to you?
about 5 years ago
Happy New Year to you! It has been a while since I read your postings and you are already starting on such a heavy topic.
You are right to differntiate guilt from reticence when questioned. But I would go one step further to pin down the cause of this secrecy or lack of transparency.
As you I believe there is no wrong-doing to hide. It is the hubris of the mandarin that makes him think that he is not answerable to the commoners, so something analogous is suspected here.
Lastly, hope you have had a fruitful trip to Bangkok. Stay safe.
about 5 years ago
The policy was to make housing affordable to citizens but once public housing could be funded by pension savings, it became created problems that will be bear by future generations. Freeing pension funds for public housing loan repayment inevitably created sky-rocketing public housing prices.
For example, a typical 5-room flat was selling for $140K in 1987. That same flat was reputably worth $380k. During the same time period, absolute wage increasingly trail behind soaring public housing prices (do not be fooled by percentage increases during same period).
The debt level of citizens are rather high if you consider the median $600 used to service housing loans. We have not considered the tenure of most housing loans, for many families that learn less than $3000, the loan period is easily 15-22 years.
The first sign of the asset bubble bursting came in 1997. Successive slowdowns in global and regional economies e.g. 2001, 2003 hurled many public housing into negative equity. Many citizens were caught flat-foot when banks began aggressive in recalling housing loans for review and there were the usual sob stories of those downsized during these periods. Furthermore, it takes little or no intelligence to conclude ‘over investment’ of housing created pension shortfall problems for many ‘homeowners’ by 2000.