Singapore to accelerate Immigration to support Economic

[boing]

Interesting comments Carbonman.

A dilemma for some of us. We have worked hard and many of us sacrified in many ways. Back in the 60s, 70s and 80s many of us including my family had our land properties mandatory acquired way below market prices by the authorities. It was painful for many of us having a way of life taken away and moving to a small flat that often cost more than the compensation. But many of us accepted it painfully that it was for nation building. Not easy to be cooped up in a tiny flat, no familiar faces, no walks in the garden, loss in livelihood some plus the large loss in networth...particularly tough for the seniors...some did not survive long after moving to a flat. The state coffers made billions out of land sales from cheaply acquired land.

For the guys, we had done our National Service commitment. Failing which was jail time. Two to 2.5 years of National Service. It meant a loss in income and two years in career profile behind those who did not have to serve. Yes, we did it grudingly in our heart but supported in our heads. Now with a population of 6.9 M, I can't help asking who are we protecting anymore? Some enlightened new citizens and PRs were ok in sending their sons to Army. But some did not let their son be PRs and others simply have their sons denounced PR just before National Service enlistment.

We were generally docile, pragmatic and supportive of the Govt. In return, the Govt had delivered in many areas including housing for a growing population, infrastructure development, attracting foreign investments, generally corruption free. Many Ministers and Civil Servants had gone through the difficult times had worked hard to make life for everyone better. It was tough love if I could best describe it between the government and the people.

Fast Forward to recent years. Fertility rate has dropped but population grew to more than 5.3 Million and it seems we will have another 100K more per year. Issues Housing, transport, a less driven population and social disharmony are starting to rear its ugly head.

Housing - Price of public housing have perhaps risen 16 -20 folds but income perhaps 4 folds for the average guy. Much of it paid from our pension fund managed by the govt. As a Singaporean, I wondered why cost to get a new flat is so high when the land was acquired next to nothing?

Transport - To get a certificate entitling you to buy a car, it cost close to $100 K even for a small Toyota Corolla and that excludes the actual sales price of car. I agreed that this system helps to improve traffic situation otherwise we will be more liked Jakarta or Bangkok. But it pained me that most likely I will not be able to afford the convenience of a car in humid Singapore. With increased population the situation can only get worse. Can you imagine that Porsche was at one time the 11th best selling car brand in SIN?

Retirement funds - With the baby bloomers aging, are our government investment agencies getting adequate returns to pay back our funds deposited monthly with the investment? I hope that our retirement fund is doing well and that the increase in population is not used to pop up the shortfall. I am just really not sure what is what.

Fertility - Best ways to improve fertility is to reduce cost of living and reduce school stresses for the kids. This means that the govt will need to make less on new flats so that couple will pay less or can afford a larger flat to support a larger family. In terms of school stress, parents + school + ministry should work in a concerted effort to reduce school stress.

Lack of drive - We need as a group to improve the attitude of our kids. We have failed as parents in many regards to build resilience and character in our kids. We cannot outsource to maids or grandparents. We need to have less fuzzy love and more tough love in my shameless opinion.

Immigrations - Earlier immigrants tend to be closer to those already ashore in terms of value and culture. In present context, the cultural gaps between the citizens and the new residents are larger even between groups that have the same ancestry. One difference between Singapore Chinese and Mainland Chinese is that the latter experienced the Cultural Revolution that shaped their outlook. The Indians in Singapore are mostly Tamils whilst many new comers are Northeners and even in India can be quite contrasting. We are shaped by different experiences and subcultures. How to gel is a puzzle that has to be resolved. Finally, I think whether you are a Singapore citizen, New Citizen, PR or economic residents...none should be treated as resources to be milked.

Couldn't have said it better myself. Most Singaporeans see themselves as working in a 5 star hotel called Singapore, where the richest and most affluent come to stay and enjoy their stay. The management of the hotel(Govt), bends over its back to welcome guests and repeatedly reminds its staff that its because of this guests that they have a job and they must be thankful that they have a job ! At times, they cut the staff pay just so that hefty discounts could be offered to guests ! I just put in a nutshell what most middle class Singaporeans feel.
The rich are getting richer, while the poor are getting poorer ! Singapore has one of the most widest income gap in the world. One of the main reasons is the import of foreigners who have suppressed the wages of most blue collar jobs. Taking into account inflation, it has remained too low that it's unsustainable for locals to be working in such jobs and raise a family. I'm not taking about branded goods, overseas holiday accessories, but just to put rice on the table ! Businesses then employ foreigners citing the reason that locals are not taking up this jobs. Most foreigners are on different employment contracts from locals, with reduced benefits and pay as the norm. Businesses, on the other hand, enjoy massive profits due to the low wage costs. The SMRT bus drivers strike was an eye opener to the public about this treatment. When this businesses make profits, guess who'll be grinning ear to ear on April 15 ?

NS- All Singaporeans are required by law to serve 2 years of compulsory NS. Even after serving these 2 years, they have to go for annual training that may last from weeks to month till the age of mid 30s. I've heard of Singaporeans who have lost jobs and promotions due to this call ups. Personally, I feel that NS is the biggest point of contention aggravating the local vs foreigner divide. To alleviate this, one thing the Govt could do is give more tangible benefits to those who have served NS other than some measly tax relief. They don't even count for low wage workers. Give them priority in public housing and extra grants ! And this might sound crazy, but the Govt should seriously consider paying market rates for NS ! They are paid less than maids now ! This would, to some extent, level the playing field between locals and foreigners in the labour market. It might also compel PRs to take up citizenship with the benefits in hand. There's just little distinction between a citizen and PR now. K, gotta nod off now ! To be continued...

[milehighj]

Bubbles will burst, and imbalances will over-correct. This is the way of the world.

My industry (no, I'm not in maritime) has been one of those responsible for driving cost-of-living and asset inflation, and there are clear signs (for those who look carefully) that this cycle is nearing an end.

What then? Things will not correct uniformly. Jobs will be lost, and some will find it harsh going. On the whole, Singapore will - for a time - be less of the promised land for high-income earners from other countries to come and sell their services and wares, and the positive development from this will be a normalisation of asset prices.

This is the least painful outcome.

Hence, my 2 cents recommendation: Sell Singapore assets. (And to bring this home to SQT, sell SQ shares, 'cos if they can't make money in a bubble, then the next few years will be even more painful.)

And yes, I don't think 6.9m is going to happen.

[CarbonMan]

LionCity & Boing, you have both brought up many real and painful issues facing a good number of Singaporeans. Singapore practices capitalism which unfortunately does not favour the disabled, the disadvantaged or the poor. The widening income divide has caused much distress and dissatisfaction and the only real cure for that is socialism a'la France/Denmark/Sweden countries where the well-off can be taxed up to 60-75%. But while socialism solves the symptoms of capitalism, it creates others. In this globally mobile world, the well-to-do can easily migrate; Singapore has benefited from a few billionaires as a result. In some countries it promotes a very lazy attitude. And when finally the country can't find enough money from taxes, it starts to borrow and maybe print some money, and then if incomes still can't keep up with expenditure, the country defaults and one gets Spain and Greece, where they now have to endure very, very painful austere economic policies.

Govt is about the business of setting some goals and balancing needs. Taxing PRs and non-residents higher may placate citizens but will definitely reduce their numbers. As a result, investments and spending from this non-so-insignificant group will drop in Singapore; costs will also go up, because they won't be around to construct offices and homes, nor cook and clean at restaurants. Singapore gained its reputation of cleanliness not because its citizens are clean (see story of rubbish thrown on MRT/LRT tracks) but because the town councils can afford to hire an army of cheap cleaners.

For everything we do, there is usually a negative side-effect. Singapore, by accident or otherwise, is a small island and hence unlike neighbouring countries, required a conscripted army. This does not come cheap, even as we pay our recruits a measly $400/month. Defense cost the country $8.3billion (SIPRI military expenditure database), earning a global ranking of 23rd. On a per capita basis it's probably top 10 if not top 5! If we ask the Govt to pay more to our NS boys, money currently going to education and health subsidies will need to be dropped - do we then start complaining about high costs there?

In hard times, it is always easier to point a finger at "outsiders". Soekarno did that in the '60s, Mahathir in the '80s in recent times. After we run the foreigners out, and the problems continue, we start descending to minority races, like in Malaysia. Unfortunately looking at human history, that spiral of blame knows no bottom until brother kills brother in order to gain favour. Again, I argue against insularity as history has always shown that cities and countries that are open to people and ideas are the most successful ones. China started going downhill when they closed the door after Zheng He, Japan progressed when it open it's doors to Western ideas, and Australia rebounded after it acknowledged it was part of Asia instead of colonial England.

During times like these, more so we need to look at our own selves instead of witch-hunting. We need to ask ourselves what can we do to help ourselves? Consider our assets and liabilities, build the former, reduce the latter. More education? Re-learn? Change jobs and follow the cheese. And when we can, we must reach out to the disadvantaged around us, and do our part in this inter-dependent society we live in.

As Milehighj says, bad times are coming (though I'm a tad less pessimistic) - many jobs have already been lost (just read the papers), more are coming. And still there are those who are continuing to buy seriously inflated properties and chase $90K+ COEs - well, if they have spare cash to throw, that's well and dandy. Time to pull our socks up, work hard AND clever!

[milehighj]

The problems aren't difficult to address, with foresight and political will.

I would offer all Singaporean males who served full-time National Service the dollar value of one COE ($90k) in either:

- A free COE renewal for those currently own a car,
- The balloted allocation of a COE (according to available inventory) which they can either use to register a new air, or sell on at market rates,
- Deferred income tax credit for that amount.

Political problem solved. The SQ analogy is that Singaporeans are paying the highest fares, and getting treated as KF Blue and Elite Silver, while new FT are paying lower fares and getting comped TPP. Oooh, that's kinda doubly true innit...

The government should face the problem, and solve it. It's not insurmountable.

[Kyo]

What then? Things will not correct uniformly. Jobs will be lost, and some will find it harsh going. On the whole, Singapore will - for a time - be less of the promised land for high-income earners from other countries to come and sell their services and wares, and the positive development from this will be a normalisation of asset prices.

This is the least painful outcome.

Hence, my 2 cents recommendation: Sell Singapore assets. (And to bring this home to SQT, sell SQ shares, 'cos if they can't make money in a bubble, then the next few years will be even more painful.)

And yes, I don't think 6.9m is going to happen.

Free financial advice? Say it ain't so, milehighj!

Interesting to see your take on this. I don't hold many Singaporean assets, I must say - save for the roof over my head. I also don't intend to sell that roof anytime soon (nor do conditions favour buyers at the moment).

I remember growing up in late 80s/early to mid-90s in Malaysia and there was Wawasan 2020 (Vision 2020) whereby Malaysia would reach 'developed' nation status. Not sure how that's going, but Singapore's Whitepaper 2030 (similar distance out) has me thinking that this country, with its infinitely more capable government, despite recent political 'setbacks' will easily weather the storm more than most.

[milehighj]

Free financial advice? Say it ain't so, milehighj!

Heaven forbid...

The information herein is furnished for information purposes only and does not constitute an offer, solicitation, advice or recommendation to enter into any type of financial transaction, deal in any investment product or to conclude any type of mandate or fund management arrangement with milehighj. The information shall not be considered by you to be a representation, statement or advice by milehighj. All material is provided without express or implied warranties or representations of any kind.

Interesting to see your take on this. I don't hold many Singaporean assets, I must say - save for the roof over my head. I also don't intend to sell that roof anytime soon (nor do conditions favour buyers at the moment).

I remember growing up in late 80s/early to mid-90s in Malaysia and there was Wawasan 2020 (Vision 2020) whereby Malaysia would reach 'developed' nation status. Not sure how that's going, but Singapore's Whitepaper 2030 (similar distance out) has me thinking that this country, with its infinitely more capable government, despite recent political 'setbacks' will easily weather the storm more than most.

To clarify, I'm not saying that the Singapore story is over for good.

I am saying that a number of factors point to the current expansionary & inflation cycle ending, and that this may be the peak in asset prices for the next 2-5 years.

[boing]

This is a step in the right direction.

Going back to Carbonman's earlier post, beg to differ on your view that LKY's policies in the 70s are the reason for the TFR shortfall. Most couples I know like to have at least 2 to 3 kids. Having children is the natural next step after marriage. But the reason most Singaporeans are holding off from having offsprings or increasing their brood is, you guessed it, the high cost of living. Public housing have become smaller and pricier over the years, causing a direct effect in reducing family sizes. LKY's stop at 2 was a necessity in the 60s and 70s when Singapore was growing as a nation and did not have much resources to cater to the ever increasing population. They couldn't have predicted the global forces and trends over the next half a century. They had to do what was pertinent at that point in time.

Small families are a global trend in cities around the world. Studies have shown that the more denser a city is, the less people are likely to reproduce. Big families are a common sights in the outskirts of a country or in rural areas. Just go to the kampungs in Malaysia and you will see families renting mini buses during Hari Raya season to go house visiting.

[boing]

LionCity & Boing, you have both brought up many real and painful issues facing a good number of Singaporeans. Singapore practices capitalism which unfortunately does not favour the disabled, the disadvantaged or the poor. The widening income divide has caused much distress and dissatisfaction and the only real cure for that is socialism a'la France/Denmark/Sweden countries where the well-off can be taxed up to 60-75%. But while socialism solves the symptoms of capitalism, it creates others. In this globally mobile world, the well-to-do can easily migrate; Singapore has benefited from a few billionaires as a result. In some countries it promotes a very lazy attitude. And when finally the country can't find enough money from taxes, it starts to borrow and maybe print some money, and then if incomes still can't keep up with expenditure, the country defaults and one gets Spain and Greece, where they now have to endure very, very painful austere economic policies.

Govt is about the business of setting some goals and balancing needs. Taxing PRs and non-residents higher may placate citizens but will definitely reduce their numbers. As a result, investments and spending from this non-so-insignificant group will drop in Singapore; costs will also go up, because they won't be around to construct offices and homes, nor cook and clean at restaurants. Singapore gained its reputation of cleanliness not because its citizens are clean (see story of rubbish thrown on MRT/LRT tracks) but because the town councils can afford to hire an army of cheap cleaners.

For everything we do, there is usually a negative side-effect. Singapore, by accident or otherwise, is a small island and hence unlike neighbouring countries, required a conscripted army. This does not come cheap, even as we pay our recruits a measly $400/month. Defense cost the country $8.3billion (SIPRI military expenditure database), earning a global ranking of 23rd. On a per capita basis it's probably top 10 if not top 5! If we ask the Govt to pay more to our NS boys, money currently going to education and health subsidies will need to be dropped - do we then start complaining about high costs there?

In hard times, it is always easier to point a finger at "outsiders". Soekarno did that in the '60s, Mahathir in the '80s in recent times. After we run the foreigners out, and the problems continue, we start descending to minority races, like in Malaysia. Unfortunately looking at human history, that spiral of blame knows no bottom until brother kills brother in order to gain favour. Again, I argue against insularity as history has always shown that cities and countries that are open to people and ideas are the most successful ones. China started going downhill when they closed the door after Zheng He, Japan progressed when it open it's doors to Western ideas, and Australia rebounded after it acknowledged it was part of Asia instead of colonial England.

During times like these, more so we need to look at our own selves instead of witch-hunting. We need to ask ourselves what can we do to help ourselves? Consider our assets and liabilities, build the former, reduce the latter. More education? Re-learn? Change jobs and follow the cheese. And when we can, we must reach out to the disadvantaged around us, and do our part in this inter-dependent society we live in.

As Milehighj says, bad times are coming (though I'm a tad less pessimistic) - many jobs have already been lost (just read the papers), more are coming. And still there are those who are continuing to buy seriously inflated properties and chase $90K+ COEs - well, if they have spare cash to throw, that's well and dandy. Time to pull our socks up, work hard AND clever!

It's not foreign talent itself that's the point of contention, but the quality and to a smaller extent, the quantity of it. Foreigners have always been in Singapore. No one made any noise then as they were only found in the opposite ends of the spectrum in the labour force. The word talent in FT was justified in every sense of the word as they took positions that not many locals had experience then. Then, of course you had foreign labours to do jobs that Singaporeans didn't want to do like cleaners and construction workers.

Fast forward now, you have foreigners in jobs locals could easily do and companies could easily find, IF they offered a pay that was commensurate with the times and not 10 years ago. Telemarketers, fast food staff, office staff are not lumped under the category "foreign talent"

This letter says it all.

[LionCity]

Just some points -

Health care - According to WHO, SG Govt spend only 36.3% of total health expenditure in the country and only 8% of budget on health. Seems to be the lowest among developed countries.

Defence - Second most militarised country in the world after Israel. Question is rather how much to spend on defence. It is the largest item on the budget now USD 10 Billion. Do we really need to arm ourselves to the teeth or some downward revision in our enormous defence budget be considered?

Singaporeans attitude to the liberal immigration policy - It is just that Singaporeans do not see the benefits coming to them but we do see more than 100% increase in car and housing cost, income suppressed due to influx of cheaper labour, space is much tighter, many of us retrenched and replaced by Foreigners with little protection offered by Official Employment Act etc. Things of which many of us think the policies should be in place to balance the effects.

This is the biggest grip from us is that more should be done for ordinary Singaporeans. When billions went into state coffers made from the two casinos, COEs, property land sales, rental, increased tax intake etc...we find it hard to grasp why more cannot be done for the ordinary citizens to at least maintain some semblance of the previous standard of living that we had before the immigration doors were opened?

Do pay salary better salaries to NSMen instead of buying two more F-15Es that zip along at $100 Million each, reduce profitability made by the govt on flat sales and some of the extra money made from increase tax revenue base due the foreign influx that grows the economic should be channelled to health care.

When you grew up in a country with 90% Singaporeans to one that has shrunk to 50%, it is not easy to accept emotionally. It affects our connection to Singapore as a nation united as one people and ultimately it will affect the spirit of nationhood and the character of the people.

We are just ordinary folks that hope our leaders can hear our voices and we want to work with them and not against them to secure a better Singapore. A feeling of home for us and a better future for our children. That is all I can say.

[CarbonMan]

This is a step in the right direction.

And how is that going to help any Singaporean except make some happier that someone else is paying more taxes to the Govt? Does it solve any problem?

LKY's stop at 2 was a necessity in the 60s and 70s when Singapore was growing as a nation and did not have much resources to cater to the ever increasing population. They couldn't have predicted the global forces and trends over the next half a century. They had to do what was pertinent at that point in time.

I conceded, right at the beginning, that it was 20/20 hindsight that led to me think that it was a wrong decision. I didn't accuse the Govt of sufficient having predictive powers. All I'm saying is that the policy was so successful that it has compounded the current problem. Neither did I say it was the sole cause.

[SQtraveller]

The problems aren't difficult to address, with foresight and political will.

I would offer all Singaporean males who served full-time National Service the dollar value of one COE ($90k) in either:

- A free COE renewal for those currently own a car,
- The balloted allocation of a COE (according to available inventory) which they can either use to register a new air, or sell on at market rates,
- Deferred income tax credit for that amount.

Political problem solved. The SQ analogy is that Singaporeans are paying the highest fares, and getting treated as KF Blue and Elite Silver, while new FT are paying lower fares and getting comped TPP. Oooh, that's kinda doubly true innit...

The government should face the problem, and solve it. It's not insurmountable.

post deleted

[SQtraveller]

And how is that going to help any Singaporean except make some happier that someone else is paying more taxes to the Govt? Does it solve any problem?

I conceded, right at the beginning, that it was 20/20 hindsight that led to me think that it was a wrong decision. I didn't accuse the Govt of sufficient having predictive powers. All I'm saying is that the policy was so successful that it has compounded the current problem. Neither did I say it was the sole cause.

post deleted

[milehighj]

I'm not sure that securing preferable COE conditions for NS citizens is the way forward. It is a populist measure which appeals to the hearts but it's not clear to me that would improve the welfare of citizens. I get where the idea is coming from, but this would make traffic even worse than it is and reduce air quality. I think a better idea is to retain the COE system as it stands but make tweaks -
Firstly, I would introduce a new COE level (for example double whatever Cat A COE is) aimed at luxury and performance cars with a minimum COE of say S$200k. At the same time, road tax for this segment should also rise. This acts as a form of wealth tax. Demand is relatively inelastic. That is to say that people who buy these sorts of cars don't care if the COE is high, they can afford it. These cars do not serve practical family purposes - typically you can't take families around in them and you can't really do your shopping.

I'm not advocating an increase in COE supply, simply that supply should first be allocated to post-NS Singaporeans for them to either use or sell. So increased traffic/pollution is not a factor.

IMO this is far more equitable than your "wealth tax" suggestion which would be far more populist in simply fobbing the costs to "those who can afford it"...

Finally, COEs for taxis should be lowered to help encourage more taxis.

I agree. Taxis are part of any city's public transport infrastructure, and I would go further to suggests that COE costs should be reduced to encourage better quality of vehicles that are both comfortable for passengers and can take sufficient luggage. This isn't the case with some of the newer taxis.

[scooby5]

The issue of COE for controlling the population of private transport doesn't really add up for me. Firstly the COE puts the price of cars to a level whereby they automatically become a symbol of status and/or wealth regardless of whether it is an Aston or a Honda. Secondly if we look at HK we see prices at a reasonable, even 'normal' level but congestion not being too bad (if we forget the x-harbour tunnel).

HK has the much better public transport system and the ownership of the car is left to a necessity for some but not, then, a symbol. Ownership, however, is more expensive with road taxes, insurance and most problematic of all, parking. Anyone that needs a car can afford to buy one even if it is to be used only occassionally but then if that's the case public transport and taxis are not difficult to reach.

The government's recent announcement of yet more train lines is welcomed but as has been pointed out, is way too late even now let alone when they become operational.

From the early days when Singapore was revolutionary it has in more recent years become reactionary. Investigations after this has happened, or that has happened or the next thing is now more commonplace

Telemarketers, fast food staff, office staff are not lumped under the category "foreign talent"

Whilst not 'talent' we can argue those jobs are now filled by foreign 'labour.'

[cscs1956]

The issue of COE for controlling the population of private transport doesn't really add up for me. Firstly the COE puts the price of cars to a level whereby they automatically become a symbol of status and/or wealth regardless of whether it is an Aston or a Honda. Secondly if we look at HK we see prices at a reasonable, even 'normal' level but congestion not being too bad (if we forget the x-harbour tunnel).

HK has the much better public transport system and the ownership of the car is left to a necessity for some but not, then, a symbol. Ownership, however, is more expensive with road taxes, insurance and most problematic of all, parking. Anyone that needs a car can afford to buy one even if it is to be used only occassionally but then if that's the case public transport and taxis are not difficult to reach.

The government's recent announcement of yet more train lines is welcomed but as has been pointed out, is way too late even now let alone when they become operational. By that time, SQ may have to use another country as a hub vs Singapore.

From the early days when Singapore was revolutionary it has in more recent years become reactionary. Investigations after this has happened, or that has happened or the next thing is now more commonplace



Whilst not 'talent' we can argue those jobs are now filled by foreign 'labour.'

Do not see a link here. Even our COE reach 100K, it is still not enough to buy a parking lots in Hong Kong. COE debate should be beaten to dead by now. It is only a question to own cheap initially then spend more when using it or other way round. I do not see a point to own it but not much use of it.

Anyway, once economic goes down, everyone suffer. It is not just limited to Singaporean or FT. We do not even need such a big airport to support the country. If these day eventually arrived, SQ my have to use another country as a hub vs Singapore.