The Finance Minister will be announcing the government’s annual budget in exactly 2 weeks’ time on the 17th February 2014. Under the rule of the PAP, Singaporeans have come to suffer much social and economic injustice as I will discuss below.
Blame the foreigners? And the incompetence of the PAP as well?
How have many of our economic problems come about? The PAP government initiated an “asset enhancement” policy where they have cut the supply of housing to push prices up. In 2008, for example, there were 145,000 foreigners let in while they only build 3050 units of HDB flats, resulting in a shortfall of 30,000 units while the price index rose by 10-12% year-on-year excluding COVs. As political pressure mounts, various anti-speculative measures were put into place for residential properties, thus causing money to flow to commercial properties.
As prices increases, rents would increase as well since landlords have to make up for their investment returns. According to URA, the median rental for category 2 (i.e. mass market) properties was S$5.69 a square foot in Q3 2013, marking an increase of 21.3% in less than 4 years. Other categories were also affected, such as a 10.4% quarterly increase in multiple-user warehouse prices in Q3 2013. This represents an unsustainable model for many businesses – in particular the SMEs - thanks to the PAP’s failed policies. Let me explain.
Rising business costs? More retrenchments? Higher inflation?
The recent closure of large companies such as HBST, Banquet and five star tours all point to the fact that Singapore’s asset bubble is grossly hurtful to businesses. If these closures are not bad enough, there are worse statistics even for those businesses which are in operations. According to data from IRAS, the number of loss-making companies in Singapore rose from 104,000 to 165,000 from 2003 to 2011 while the average loss per financial year increased from $210,000 to $600,000. Not surprisingly, more retrenchments – if not passed down business costs - are expected to occur.
High costs of living? Inadequacy of CPF?
Before the floodgates were opened by Pinky in 2005, the real rate of inflation was kept below 2%, resulting in positive savings and returns for our CPF monies. However, the inflation has risen way beyond the 2.5% rate in recent years, hitting a high of 6.5% in 2008. This represents a negative real rate of savings rate for our CPF monies even as the minimum sum increases – a phenomenon which is not seen anywhere else in the world.
This becomes even more absurd given our living conditions of cramped government apartments and overpriced cars which are out of reach for the average man. With our cost of living recently been ranked 7th in the world, we are more expensive than places such as Sydney thanks to the PAP’s failed policies. In the long-term, as the PRs and new citizens are free to cash out their monies and move to cheaper places while Singaporeans are stuck with little choice except at the ballot box.
Income inequality? Yet spending more on foreign trash?
With wage stagnation, the PAP’s refusal to implement a minimum wage, and rising living costs, there is little doubt that this spells disaster for the lower income workers. According to the last available statistics, the Gini coefficient rose by 0.005 (out of 1) from 0.473 in 2011 to 0.478 in 2012. After tax effects, the rise was even worse as the coefficient rose by 0.011 from 0.448 in 2011 to 0.459 in 2012. To put things in perspective, a coefficient of 0.5% is officially classified as “very severe”. While the PAP government dishes out scholarships to foreign trash for free, there are also many starving people in Singapore which are presumable ignored.
Concluding Remarks?
I have previously discussed that a general election may be on the cards soon, and accordingly there may be some goodies handed out. Nevertheless, we must see beyond the big picture and realise that the small goodies handed out to us pale in comparison to the harm that the PAP has done to our economy and lives. The real viable solution is to vote them out.
Joseph Kheng-Liang Tan
* The author is a 21 year-old polytechnic graduate who is currently pursuing his law degree in Australia. A believer of the free press, he has contributed extensively in his personal capacity to popular socio-political sites such as TRS and TRE. Supremely homophobic, he would rather vote for the PAP should the opposition send in a homosexual representative.