By Leong Sze Hian
I refer to the reports “MM Lee warns of dangers of slow
growth if productivity does not increase” (CNA, Feb 18) and “S’pore
income gap narrows” (ST Breaking News, Feb 19).
The former article reported MM Lee
as stating that “The island state has a growing economy, increasing
real incomes, better homes which are rising in value, and citizens
are generally better off”.
Well, the next day, we had the news
that the economy contracted and nominal and real incomes
shrank.
According to an Occasional Paper
released by the Singapore Department of Statistics (DOS) on
February 19, under the section “Key Household Income Trends, 2009”,
household income from work declined in 2009. The decline in
household income from work reflected the weaker labour market
conditions in 2009, which saw higher unemployment and lower
wages.
It was further stated that “Median
monthly household income from work among all
resident households declined by 1.9 per cent from
$4,950 in 2008 to $4,850 in 2009. After adjusting for consumer
price inflation in 2009, median household income from work saw a
decline of 2.5 per cent”.
On the same day (Feb 19), the DOS
released a report on the Performance of the Singapore Economy for
2009, which said that “Singapore’s economy contracted by 2.8% on a
quarter-on-quarter, seasonally adjusted basis, in 4Q2009″, and that
“the economy contracted by 2.0% in 2009”.
So, were we in a way overly
optimistic when “Singapore declared the recession (was) over in
November last year”, according to the CNA article “Singapore
economy to grow up to 6.5% this year: govt” dated 19 Feb?
It was announced by the press that
“in the past few months, the government has taken further steps to
widen the differentiation between citizens and Permanent Residents
and to slow down the inflow of foreigners”.
Furthermore, on the same day (Feb
19), it was also announced that Polytechnic and Institute of
Technical Education (ITE) fees will be increased from April. The
press reported that “The Government decided to keep fees at the
status quo last year because of the economic recession but this
year, as the economy turns, it is timely to raise the fees” (“Fees
for poly and ITE students going up in April”, ST, Feb 19).
If we really want to widen the
distinction between Singaporeans and permanent residents (PRs) and
foreigners, why can’t we just raise fees for PRs and foreigners,
instead of raising fees for Singaporeans too?
Since we want to take on the
“challenges such as increasing productivity and raising skills
across the board” and the government has acknowledged that “every
worker also has to be re-skilled, re-trained and re-educated to
achieve higher standards of capabilities”, why are we raising
vocational education fees so soon before wage cuts are
restored?
In this connection, another example
is the reduction of the subsidy by five per cent for PRs in Class C
wards in hospitals from next year, and by another five per cent the
following year.
Actually, a five and 10 per cent
reduction in subsidy from the current 70 per cent subsidy,
translates to a 16.7 and 33.3 per cent increase in medical fees,
respectively.
With regards to the assertion that
“we always give preference to our own citizens”, with the total
increase at 100 per cent, from the former 80 per cent subsidy to 60
per cent eventually, many Singaporeans may bear the brunt of the
increase if they have PR or foreign spouses, dependents or
employees.
So, why not increase medical fees
for PRs and foreigners, but reduce fees for Singaporeans instead of
maintaining the status quo?
So, incomes are down, GDP has
contracted in the last quarter, but fees are going up.
Let’s hope that other fees and
costs will also not start to go up, citing the reason that the
economy is recovering.
Those who may suffer the most when
costs go up and incomes go down may be the poor.
On the same issue, there have been
media reports that charities need more donations.
For example, the National Kidney
Foundation (NKF) had a budget deficit of $0.9 million, its biggest
shortfall in 10 years, for the 2008/2009 financial year ended in
June (“NKF to dip into reserves of $270m: Charity hit by economic
downturn and drop in donations”, ST, Nov 29, 2009).
According to its annual report for
2007/2008, the surplus was $9 million, and the surplus for
2006/2007 was $19 million.
Does this mean that the 2007/2008
net surplus of $9 million alone, not counting the 2006/2007 surplus
of about $19 million, may be enough to cover about ten times or ten
years of the current year’s $0.9 million deficit?
There has been a significant
reduction in investment income from $11.6 million in 2006/2007 to
$3.2 million in 2007/2008, and to just $80,000 now.
What has NKF been investing in such
that its investment income can fall from $11.6 million to $80,000,
a drop of more than 99 per cent in two years?
NKF has $270 million of reserves
now, compared to $262.8 million in December 2005.
When the NKF saga broke in 2005,
one of the issues which riled Singaporeans was that it had some 30
years or so of reserves instead of the three years that the public
was led to believe.
Its 2007/2008 report states that
“After adjusting for inflation, the existing surplus fund is
expected to last for only seven years”.
Now, it says that its current
reserves of $270 million can only last for five years or so.
I am somewhat puzzled by the
figures — if $262.8 million in 2005 was deemed to be about 30 years
of reserves, why is it that $247 million in June 2008 was expected
to last for only seven years, and now $270 million for just five
years, despite cost-cutting measures like giving cubicles instead
of rooms to managers?
How does the NKF fare in the light
of the new guidelines for charities on the accumulation of
reserves?
Despite the current year’s $0.9
million budget deficit, is NKF still the largest charity with the
most reserves, and the most number of years of reserves?
Finally, with regards to the
statement “Without growth, Singapore will not be what it is and the
key to our growth is a government taking right decisions and labour
unions, employers, and the government working together. No other
country in the world has got this combination”, let the following
statistics speak for themselves:
