Dear Minister Mah,
I refer to the 15 Apr 2011 Straits Times report of your comments
on the Workers’ Party’s housing proposals.
You said government subsidies on new HDB flats add up to $1
billion each year. What government subsidy are you referring to? If
you are referring to the $40,000 HDB grant, HDB resale prices have
gone up by more than $150,000 over the last four years. Since new
flats are pegged to resale flats, new flats must be fetching an
additional $100,000 each at least. Therefore, new flats should
fetch more billions for the government than the $1 billion
’subsidy’ each year.
If you’re referring instead to land cost subsidies, then
whatever that the HDB pays for land equates to earnings by the
Singapore Land authority (SLA). This is merely an internal transfer
and not real subsidy. Given that land was already bought for as
cheap as $1 over the past decades, land costs are hardly a cost to
the government.
Pegging housing prices to salaries does not necessarily mean
asset devaluation. Isn’t your insistence on 30% income limit for
housing purchase a form of pegging housing price to salaries,
albeit too high a peg?
The PAP’s asset enhancement policy is also a liability
enhancement policy. As housing prices soar, so do Singaporeans’
housing mortgages, albeit those of the later generations.
If you disagree with Ms Sylvia Lim’s statement that resale
prices take some time to filter to new flats, why didn’t you show
more concern when resale prices started to shoot up four years ago?
If you believe resale flats and new flats are interlinked and
rising resale flat price will lead to rising new flat price, why
didn’t you do more to curb rising prices then?
You said the cost of a new flat is $300,000. But a huge chunk of
the $300,000 bill is land cost which gets reflected as profit for
the SLA instead. So take that out and show us the real cost
instead.
There is nothing wrong in making assets grow except that it also
makes future liabities grow as well. Of course you are proud of the
asset enhancement policy because it means every new flat the
government sells fetches more money for the government.
You said you are proud to have given almost all Singaporeans a
home. If you didn’t take away almost all our land on the cheap in
the first place, why would we have needed you to give us a
home?
Thank you
Ng Kok Lim
- 19 Apr 2011, Temasek Review
