Leong Mun Wai
Singapore
“Okay, yes, Mr Chairman. So, first question, can I confirm that MOM still does not track the change in work pass holders that turned to PRs in the resident PME statistics?”
“Yes. Third question, the increase in part-time workers and contract work are also examples of underemployment. Can the Minister explain why we do not need to be concerned that the proportion of part-time workers out of all employed residents has increased from 8.4% in 2009 to 10.1% in 2023, and can the Minister quote the corresponding inc…”
“Thank you very much, Mr Chairman. I have four clarifications for the Minister. First of all, I would like to thank the Minister for his energetic response to my arguments. I have always respected him for that. However, because I think our views are still very different, I have —”
“For those who do not have a university degree, the prospects are even dimmer and younger workers also face the prospects of skills-related underemployment later in their career. Mr Chairman, let me conclude.”
“And I have three more. To many Singaporeans, including myself, the new policy does not make sense in certain areas. I agree with the Government that NRIC numbers, full or masked, should not be used as authentication, and that must be impressed on Singaporeans. Next question, why is there a need to do away with the masked NRIC policy?”
“In paragraph 40 of the report, it was stated that this July 2024 CM was also emailed to senior Public Service Leaders, including those with key responsibilities in IT and data matters within their agencies. Can I ask the Senior Minister whether any of these senior leaders have voiced concerns over the CM?”
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“But I can talk more about the context of the question.”
“Mr Speaker, Sir, this question, I have originally directed —”
“Mdm Chair, I have two questions for the Minister regarding the distortion of the current public housing system on our Budget structure. First question, MND's expenditure on public housing development has already ballooned from $2.9 billion in fiscal year 2021 to $7.2 billion in fiscal year 2023. And this is mainly due to the difference between the rising land cost that goes into the reserves and what is collected from the BTO buyers. Can I ask the Minister does the MND plan to continue to fund this, even if this amount of expenditure continues to goes up? Two, related to this is, is it fair for the Singapore taxpayer to pay higher taxes to help to fund this expenditure?”
“Singaporeans may ask if all these are too good to be true and where is the caveat. There is actually no caveat. And all these are possible because the Government has acquired the land from the 1970s to the 1980s at zero or nominal cost. We only need our rich "ah gong" to agree to do more for Singaporeans. Singaporeans deserve better, for country, for people. Resale Affordability for First-timers”
“Therefore, whether a Singaporean buys a 4-room BTO flat in Tengah $350,000 or the same flat for $148,000 under AHS, he will need to sell it at about $700,000 in order to make a profit after 25 years. For the BTO flat, it is for recouping the loan servicing cost. And for the AHS flat, it is for paying the deferred land cost. The deferred land cost feature prevents the AHS owner from profiteering from selling his flat. This also prevents the AHS owners from affecting the resale market. Overwhelmed by the value proposition of the AHS, the Government has tried to frighten Singaporeans into thinking that the PSP is going to cause a crash in resale flat prices with our policy proposals. But this is just a red herring. In the short term, it is a policy intent of AHS to cause a slight adjustment in the current surging resale market so as to enable keen buyers to get their flats at a more reasonable price. That will be healthy after recent market exuberance. However, the resale price will recover in the long term because fewer AHS owners are likely to sell as they can live in the flat throughout their life without paying for the land cost. Furthermore, there will also be support for the resale market from the backlog of first-timer demand. In addition, buyers who are ineligible for new flats, buyers who want to live in a specific location because they want to live near their parents, permanent residents and upgraders form a large pool of demand that will underpin the resale market which is still much cheaper than the private property market. The AHS will not require excessive fiscal resources to implement. Most of the land cost forgone at the beginning is recoverable from the deferred land cost later. Effectively, we will only defer our reserved accumulation.”
“Mr Chairman, the Progress Singapore Party (PSP) has recommended the Affordable Homes Scheme (AHS) and the Millennial Apartments Scheme to deliver affordable and accessible public housing to Singaporeans of current and future generations. I am sure Singaporeans will be excited to be able to buy a new flat in Tengah $140,000 under the AHS and live in it for their entire lives without having to pay land cost, instead of paying $350,000 under the current BTO scheme. The lower housing cost under AHS will allow Singaporeans to afford housing without depleting their Central Provident Fund (CPF) savings. They can look forward to a comfortable retirement and no longer need to worry about the ups and downs of the resale market, the lease decay and the ever-changing policies of the Government. The Government must admit that the current housing system has reached its limits. The Minister has argued that the main problem is temporary short supply. But the biggest problem we face is actually ever-increasing BTO prices. BTO prices would hit $1 million soon. What will be the BTO price in 20 years' time? Future generations will have to constantly worry about BTO prices. On the other hand, the AHS will ensure that every Singaporean of each generation will be able to afford an HDB flat because he pays only the construction cost and not the land cost. The land cost is waived because public housing is considered a public good. This is the most equitable way of distributing the benefits of our land to Singaporeans. The AHS also continues to offer Singaporeans the choice of making a profit from his flat by selling in the resale market. However, to be fair to other Singaporeans, he will need to repay the deferred land cost with accrued interest to the Government upon the sale of his flat.”
“Yes, yes, okay. So, can I ask about the salary component that you have talked about, that you have adjusted the salary for Employment Passes (EPs) so that it is comparable with Singaporeans having to pay CPF contributions, while the EP holders do not have to pay CPF contributions? Do you think that is a strong enough deterrent, really? Or do you think that the recommendation made by us, that of imposing a levy, would be a better solution?”
“Thank you, Chairman. Just a further clarification from my question just now. First of all, the PWM. I thank the Senior Minister of State for the reply. But I think he has not compared like to like. What the PSP has recommended in terms of the living wage is $1,800 take-home pay, but the figure shown in the material is actually gross salary. So, I just want to clarify that. I would also want to ask one more clarification question with the Senior Minister of State. If the Government is already contributing more in terms of Workfare Income Supplement (WIS), why do we not just add the WIS into the salary and then make it a clear one-policy living wage? That is one question. There is one other question I want to clarify with the Minister. Of course, Minister, I have got that answer from you before. But I think we have not exhausted the discussion, so let me carry on with that. In terms of —”
“Thank you, Chairman. I have three questions for the Minister, but before that, I would like to thank the Minister for answering all my questions except one with very direct and succinct answers. I usually do not get that from most of the other Ministers. However, we have to continue to work on improving the situation for Singaporean workers, because while the job situation has kind of improved because of the reopening, job and wage growth is still very uneven. For example, even MOM admitted that out of the 47,400 jobs growth in the fourth quarter of 2022, most of those were actually from non-residents and there are some complaints from IT graduates that they are unable to find jobs as soon as they want. So, I have three questions. First, the question that the Minister did not answer me. Can I ask the Minister what makes him and the policymakers so certain that the Singaporean PMEs are not disadvantaged although employers do not need to contribute CPF for Employment Pass holders? Second question, can I ask whether the Minister will consider accelerating the income increase under the PWM so that lower-income workers can get a minimum of $1,800 of monthly take-home pay by 2024? Looking at the materials that were distributed by the Minister, the lower-income worker will get that by 2028, but that is far too long – five years to wait – bearing in mind that many of these workers also suffered considerably during the pandemic. The last question, does the Minister expect Singaporeans to occupy a larger share of our IT jobs going forward, especially in higher positions, in the next five years, given that the number of IT graduates – local IT graduates – will be increasing significantly over the next few years?”
“This is in line with the spirit of repealing section 377A and will better protect LGBT workers from discrimination based on their sexuality, which still exists in Singapore. LGBT workers should be allowed to earn a living on a level playing field based on merit, like anyone else in Singapore. Finally, I would like the Government to elaborate on actions it has taken since October 2022 to ensure that employers without genuine occupational requirements no longer practise vaccination-differentiated measures (VDS). Is the employment rate of unvaccinated citizens back on par with vaccinated citizens for each age group? Mr Chairman, workplace fairness is an important issue. The PSP is glad that the Government will be enshrining this in law next year. But when drafting the law, I hope the Government will enforce a level playing field for Singaporeans and ensure that workplaces remain secular. Singaporeans deserve better. For country, for people. Workplace Discrimination against PwDs”
“This is a potential loophole that will allow larger companies to set up subsidiaries that employ one local and 24 foreign PMETs. The PSP has also repeatedly urged the Government to introduce a $1,200 monthly levy on Employment Pass holders. This is urgently needed to level the playing field for Singaporean PMEs because employers will have to pay more and more CPF contributions for Singaporeans as the ordinary wage ceiling is raised, making Singaporeans less competitive on wages compared to foreigners. The second area that I am concerned about is the secular nature of our workplace and employment laws. Everyone should be free to practise their religion but this should not hinder anyone else from earning a living. I note that Recommendation 10 in the interim report that religious organisations should be allowed to make employment decisions based on religion and religious requirements for all workers. This appears to be a reversal of MOM's stance in 2013. At that time, a pregnant church employee was sacked in the seventh month of her pregnancy because she had conceived a child in an extramarital relationship against church teachings. MOM intervened to secure compensation for her because employment law had been violated. MOM also stressed that workplaces must be preserved as a secular space in Singapore. Thus, I hope the Minister can clarify how Recommendation 10 is aligned with MOM's stance in 2013 or whether MOM's stance has changed since then. If Recommendation 10 is adopted, then I would like to call on the Government to include sexual orientation as a protected category in the anti-discrimination law.”
“Mr Chairman, I refer to the recently released interim report of the Tripartite Committee on Workplace Fairness. The Progress Singapore Party (PSP) has high hopes of the Committee which was set up just before debate on foreign talent policy in September 2021. But we have found the interim report to be inadequate in at least two areas. We hope the Committee will consider and incorporate our views in the final report. First, there is an inadequate focus on the job security of Singaporeans. The report noted that the most common form of workplace discrimination is nationality, which accounts for close to 60% of the complaints received by the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP). As it is quite unlikely that foreigners will complain about discrimination when they have no automatic right to work in Singapore, many of these complaints must be from Singaporeans complaining that the foreigners have been preferred. Workplace discrimination against Singaporeans is thus prevalent. I hope the new legislation would enforce meaningful changes in the quality, number and concentration of foreign work pass holders that the Government, including the Prime Minister, have identified as potential problems in July 2021. Stronger actions can be taken to ensure that our workplaces remain diverse. MOM should consider imposing diversity quotas, or limits on the total percentage of a company's workforce that may be from a certain foreign nationality. This will be a stronger safeguard than COMPASS in ensuring their workplaces do not become communal enclaves where one foreign nationality is favoured over others. 1.45 pm To complement that policy, we should also take out Recommendation 9, which provides exemptions for SMEs that employ less than 25 employees.”
“Chairman, I thank the Minister for the reply. I have three questions. One is that given the kind of payments like the Sports Hub and also SPH Media Trust, where is a big payment to a third party, what is the procedure whereby the Parliament can come in and have oversight over such expenditure? Meaning, how far can the Government just approve the expenditure, just like that? For example, now, we have this SINGA Bill where infrastructural projects that are more than $4 billion require – when it goes through the SINGA Bill, then it comes to Parliament. But does it mean that if in the future, there is a project where we need to terminate the project and it is a $4 billion payout, the Government just makes the decision like that without Parliament scrutinising the numbers? That is one question. The second question is, to your best knowledge as the Second Minister for Finance, what is the percentage of the endowment funds that are being paid out every year – as a percentage of the outstanding assets that these endowment funds have at the moment? The third question, with regards to the raiding of reserves. Your question basically means – does it mean that as long as the Government has a set of rules, we cannot debate against that set of rules? In this case, it is a set of rules regarding reserves management and the recording of the reserves. You can always say that what you have proposed is not in line with our reserve management policies but we can still discuss about it. There is no need to say right from the beginning, that this is a raiding the reserves and it is not only one time, but many many times by many people and over the mass media and all that.”
“And secondly, the purpose of the expenditure, any proposal that passes these two criteria, where the amount involved is small relative to the reserves, or even the NIR, and serves an important purpose, should not be accused of raiding the reserves. Let me illustrate the two criteria using the Affordable Homes Scheme, which the Progress Singapore Party (PSP) recommended during the recent public housing Motion on 7 February 2023. During the debate, I explained that the Affordable Homes Scheme will only defer the accumulation of reserves, because the deferred land cost will be collected when the flat is sold in the future. And even if, the whole deferred land cost of about $3 billion per year is not collectable, it is only 6.4% of NIR and 12.8% of NIRC. We do not even need to use our reserves, so we have passed criteria one comfortably. For criteria two, the money is to be spent on an important and noble purpose, which is to make the Housing and Development Board (HDB) flat affordable and accessible for every Singaporean, of each generation. It will allow Singaporeans to retire comfortably, without having to sell his flat or downgrade. The financial security accorded is expected to unleash the innovative and entrepreneurial spirit in Singaporeans, and you would be able to better compete with the rest of the world. So, we also passed criteria two. 6.15 pm Hence, based on the two criteria above, the affordable home scheme is an example of an alternative policy that does not constitute a raiding of reserves according to my definition. I hope to hear from the Minister what does she think. In the future, from my point of view, if the Government makes such accusations again, I will call them baseless allegations. Singaporeans deserve better for country, for people.”
“Mr Chairman, I have questions for the Minister of Finance. Firstly, the termination payment for the Sports Hub was advanced from the Contingencies Fund and this House is now being asked to vote on replacing the amount in a Supplementary Supply Bill, how much is this termination payment? The Contingencies Fund was created for urgent and unforeseen expenditure. Was the termination payment for the Sports Hub so urgent, that it had to be advanced from the Contingencies Fund and not paid out of the Budget 2023? Secondly, where and when were the $900 million for SPH Media Trust be accounted for? Three, are there financial projections available, to determine the amount or transfer to the endowment and trust funds, and is the actual spending from the funds included in the Budget, in the year when the spending was made or is it off-balance sheet of the Budget? Fourth, when will the financial report on the $72 billion COVID-19 expenditure be completed? Fifth, based on what is given in the Budget, can the Minister confirm, what are the total financial assets as of 31 March 2022 and what is the net investment return (NIR) estimated for fiscal year 2023? What is "Raiding of Reserves"? Mr Chairman, the People's Action Party (PAP) Government and some of its MPs like to invoke the claim of raiding of the reserves to attack alternative policy ideas and proposals put up by the Opposition. In order to have a more productive debate in this House, it will be helpful to have an understanding of what constitutes "raiding of reserves". I would like to suggest two criteria to assess any new proposal that might affect the reserves. Firstly, the amount of expenditure required for the new proposal, relative to the size of the reserves and NIR.”
“Thank you, Chairman. I have a question for Minister Indranee. On the KOM case, so far, we have always been talking about the criminal proceedings. But such a big case for our country, there is also a lot of implication on corporate governance. So, I would like to ask a question on corporate governance: for these six individuals – and maybe there are even other individuals – these things have happened and it is a very big case. So, there should be an internal report. And KOM is a Government-linked company or a Temasek-linked company, so I think that it is within the interest of Parliament to be able to understand the case better. I have, specifically, this interest: are the six individuals, after the case had happened, were they still under the employment of the company? Did the company relieve them of their responsibilities? The second question, now that they have gotten the warning letter from CPIB, did the company, retrospectively, go and impose some penalties on the six individuals. For example, as far as I know, some companies can take back their bonuses, the bonuses that they have learned in the past, based on these cases that they have now found out that these businesses that they have done in Brazil is not proper, but they could have gotten bonuses and other monetary benefits. So, is KOM as a company, going to do that? Because this has a lot of implications on corporate governance. Whatever we say about zero tolerance and all that, if all these things are not done, then whatever we say in this Parliament is not going to be credible.”
“Point of order, Sir, point of order. I am not asking new questions but the Deputy Prime Minister did not answer any of my four questions. Can I just request that he answer two questions? I will take care of the other two, at the Committee of Supply. 2.57 pm”
“Given that we have not exhausted debating about the two schemes – BTO scheme and the affordable home scheme – in the sake of time, I will not go too much into that, but I hope the Government will consider our proposals carefully because they are overwhelming advantages in the affordable home scheme versus the BTO scheme.”
“Third question, the Deputy Prime Minister said that the total revenue – the total expenditure in 2023 cannot come down, it has to stay at $100 billion because, and that is despite the end of the pandemic, because of the effect of nominal GDP growth which I think that is what his chart shows. Can I confirm with the Deputy Prime Minister that nominal GDP growth had indeed increased by 33% from 2019 to 2023, which is exactly that increase in expenditure from 2019 to 2023, from $75 billion to $100, that is 33%. Has our nominal GDP growth by that amount over the last three years? And also, if what the Deputy Prime Minister said is correct, then I would expect the $25 billion increase in expenditure to be spread uniformly across the Ministries, but you look at the $25 billion difference, between 2019 and 2023 actually the increases were lumped up in mainly three ministries – Ministry of Health, Ministry of National Development and Ministry of Defence. Can the Deputy Prime Minister explain that? Lastly, last question: In his obsession with the reserves, this Government has actually lost its bearing. Can I ask the Deputy Prime Minister how can the affordable home scheme as proposed by Progress Singapore Party (PSP) which guarantees every Singaporean of each generation an affordable HDB flat because he only paid the construction cost, how can that be less equitable to the current BTO system, where future generations of Singaporeans will have to worry about how high the BTO prices will go?”
“Thank you, Mr Deputy Speaker. The Deputy Prime Minister said that I have said an outright falsehood. I categorically reject that and I will ask him a few questions to demonstrate that he has been trying to pull wool over our eyes. Firstly, the first question I want to ask, the Deputy Prime Minister said that the middle-class Singaporeans are not over-taxed and showed the benefit tax ratio as a proof. Can I ask whether the Deputy Prime Minister has factored in BTO subsidies and land cost in the equation? If the land cost is not considered a tax, but the subsidies given to BTO is considered a benefit, it is no wonder that the benefit tax ratio turns out to be very favourable for middle-class Singaporeans. But that does not reflect the true picture. The second question I want to ask: The Deputy Prime Minister has always said that the Net Investment Returns Contribution (NIRC) is money that we can spend as revenue. After having gotten us agree to not touching the reserves and ploughing back 50% of the net investment return to the reserves. Then if the NIRC now is not spent when most of it is being tucked away in endowment and trust fund each year, how can you say that that money is being spent because it will only be spent very slowly into the future? Can the Deputy Prime Minister share with us how much NIRC has been tucked away in total to-date and what percentage of that we spent every year? It is even more insidious when the Government, on one hand, tucked away all these revenues and then tell Singaporeans that we have not enough fiscal resources as a result "I need to raise GST and other taxes".”
“For a start, we have increased net spending by about $8 billion – a fraction of the excess resources we have – to implement long-term programmes that will: one, proactively deploy excess fiscal resources in the Budget for the benefit of the current generation of Singaporeans; two, promote the financial security of the middle-class, who are the bedrock of the society, as a priority; and three, reduce socioeconomic ills caused by high property prices by resetting our public housing policy and eventually wean off Singapore's over-dependence on property as an engine of economic growth. I invite Singaporeans to be the judge of the merits of the proposals in the alternative Budget. Singaporeans deserve better. For country, for people.”
“We should have focused our spending on training Singaporeans to acquire skills that help them to hold on to their existing jobs or find jobs in fields with similar required core competencies. A good manpower policy is one that will not allow the displacement of Singaporeans from the job market. Fourth, PSP will increase the amount of compassionate spending for low-skilled workers and disadvantaged segments of our society. PSP proposes budgeting $3 billion for a living wage, which guarantees a minimum monthly take-home pay of $1,800 for all Singaporean workers. We have recommended this during Budget 2021. The living wage will allow all Singaporean workers to attain the minimum standard of living. The Progressive Wage Model can remain but for helping workers to achieve a higher wage level than the living wage. Next, PSP proposes budgeting $1 billion to help the disadvantaged segments of our society by doubling the ComCare payout for the poor and providing an allowance for caregivers and stay-at-home parents in recognition of their sacrifices and contribution to society. In conclusion, Mr Speaker, Sir, in the Occasional Paper on the medium-term fiscal projections, the Government has painted a scenario of looming current and future Budget deficits. But PSP has pointed out that in fact, there are excess fiscal resources in the Budget that can be deployed better. This is before further potential savings that we can have from spending cuts partly due to the end of the COVID-19 pandemic. PSP has proposed an alternative Budget to demonstrate how the Budget can be restructured to deploy these resources.”
“While we should maintain the MediSave Account for Singaporeans to share in their healthcare expenses to prevent over-consumption, the existence of multiple healthcare insurance schemes has added unnecessary costs and complications to the healthcare system. By taking over the whole healthcare insurance, we hope the Government will be in a better position to develop an optimal healthcare system together with the new Healthier SG initiative. Third, PSP is very concerned about the job security and job prospects of Singaporeans. The Government should always be mindful that Singaporeans are disadvantaged when competing with Employment Pass (EP) holders who are exempted from CPF contributions. While we welcome the move to increase the contribution cap to $8,000 to boost retirement adequacy, it will exacerbate the disadvantaged position of the Singaporean PMEs relate to the EP holders. In the alternative Budget, to level the playing field between Singaporeans and foreign employees, PSP will introduce a $1,200 monthly levy on EP holders, which we have recommended since 2021. This EP levy is estimated to generate additional revenue of $2 billion to $3 billion, which will add to our excess fiscal resources. In Budget 2023, there is one positive change in the Government's approach, which is the Jobs-Skills Integrator programme. Finally, the Government realises that the funding of skill training should be tied to specific job prospects. We have always been skeptical about the nearly $1 billion of annual spending on SkillsFuture and all the other spending on retraining and placements of Singaporeans who have lost their jobs, because it is unrealistic to expect all Singaporeans who have been displaced by foreign PMETs to acquire totally new skills and join new sectors.”
“In contrast, the top 10% income bracket is doing well because Singapore's tax regime favours them and the bottom 20% do not pay taxes. It is not wrong as a fiscal principle to spread the tax burden as widely as possible. However, middle-class Singaporeans are already overtaxed relative to their income. Personal income may be low but there is a whole range of indirect taxes they pay: the GST, high housing prices, stamp duties, MediShield and CareShield premiums, COE, ERP, ARF, foreign domestic worker levy and so on. During Budget 2022, besides the GST, we have spoken out against the property tax increase which affected middle-class Singaporeans. This year, the stamp duty and ARF increases will affect them again. In the alternative Budget, PSP proposes that some of the tax increases of Budget 2022 and 2023 should be reversed. GST will be reverted to 7% and property taxes for owner-occupied properties will be restricted to those with annual value of more than $50,000. The stamp duty increase will be limited to properties that are worth more than $3 billion and the ARF increase will be limited to cars with Open Market Value (OMV) of more than $60,000. PSP believes if tax increases are really necessary, they should be targeted at wealthy individuals and corporates. PSP would also budget $4 billion for the nationalisation of the MediShield and CareShield schemes, which we first recommended during Budget 2021. This will relieve, especially middle-class and senior Singaporeans, of the anxiety over ever rising healthcare insurance premiums. After the HDB flat, healthcare expense is the largest drain on the CPF savings of Singaporeans.”
“So, we do not understand why the Government said such schemes would negatively affect the future generation. To counter other narratives that the Government is spreading, we would also like to reiterate that the schemes will not cause a sharp fall in resale prices because the demand and supply situation remains tight and the Affordable Homes sellers will need to sell above current resale prices in order to earn a profit. On the other hand, Singaporeans who want to sell their flats after the Minimum Occupation Period need not worry about paying a big clawback because the breakeven price for a seller will be roughly the same whether under the current BTO scheme or the Affordable Homes Scheme. The Affordable Homes Scheme and Millennial Apartments Scheme will not draw down the reserves. Although land cost is waived for Singaporeans who live in HDB flats for their entire lives, most Singaporeans aspire to upgrade and about half to two thirds of the deferred land cost will be paid to the reserves eventually. In the alternative Budget, we have budgeted $2 billion a year from the excess fiscal resources to reflect the upfront investment cost. Second, the alternative Budget will promote the financial security of middle-class Singaporeans as a priority. It is the decline of the middle class that has given rise to the "two Singapores" that the Leader of the Opposition has described just now. While the middle class may not be a homogenous group, it stretches roughly from the 20th percentile to the 80th percentile income brackets and is the group targeted by the Government for spreading the tax burden over as wide a spectrum of the population as possible.”
“However, even ignoring the potential spending cuts, it is quite safe to say that we have excess fiscal resources each year, mainly from the NIRC, which can be deployed more proactively for the benefit of low-income and middle-income Singaporeans. In 2023, the NIRC has reached a new record of $23.5 billion. The Progress Singapore Party (PSP) has always been confident that we have excess fiscal resources from the NIRC and other potential spending cuts. That is the reason why we have argued during the Budget 2022 debate, that there was absolutely no necessity to increase the GST and other taxes to increase revenue. This year, PSP will present an alternative Budget with long-term programmes to give Singaporeans an idea how our budget can be restructured to better strengthen their financial security. First, the alternative Budget will implement the Affordable Homes Scheme and Millennial Apartments Scheme to reset the public housing policy. This is a single most-important long-term structural programme that will boost the financial security of Singaporeans. In Budget 2023, the Government has increased the CPF Housing Grant to help young Singaporeans buy resale flats. While we agree that young Singaporeans need help with affordable housing, the CPF grant may not be the best solution because it will further inflate the resale market. This will necessitate higher CPF grants in the next round and the cycle will repeat itself. In order to get out of this vicious cycle, we need a more fundamental solution and PSP has proposed the Affordable Homes Scheme and the Millennial Apartments Scheme as one policy option. With the schemes, every Singaporean in each generation will enjoy an affordable HDB flat to start a family, without sacrificing his retirement in the future.”
“The Government did not need to draw $72 billion from the reserves but only $40 billion because it was able to find $32 billion of excess fiscal resources in the Budgets of 2020 to 2022 to fund the balance. On top of that, in the same three years, the Government was able to set aside $24 billion from the Budget to top up various endowment and trust funds whose spending are for future years. Hence, we can say that there is a total of $56 billion – $32 billion plus $24 billion – of excess resources in the Budgets over the past three financial years. This translates into an annualised amount of about $18.7 billion a year. This amount is roughly equal to the Net Investment Return Contribution (NIRC) allocated to the Budget each year. This is proof that the NIRC has always been a slack in the Budget, which is normally not used to benefit Singaporeans in the year it was allocated. The Government has argued that the NIRC is pooled with the rest of the budgetary resources and used for other purposes. But by setting aside a sum of money almost equal to the NIRC in trust funds and endowment funds. It is equivalent to not spending the NIRC in the current year. In fact, there may be more slack in the Budget because we cannot understand why the total expenditure has stubbornly stuck at the $100-billion level in 2023. The total expenditure was only $75 billion in 2019, the year before the COVID-19 pandemic. It shot up to $100 billion from 2020, presumably for fighting COVID-19. Hence, we have expected the expenditure to drop significantly in 2023 as we wind down the exceptional COVID-19 expenditures. We look forward to the Deputy Prime Minister explaining with specific figures why the total expenditure has not come down.”
“Mr Speaker, Sir, we welcome the financial assistance that the Deputy Prime Minister has announced in Budget 2023 to help Singaporeans cope with the rising cost of living and inflation. However, we are not sure whether more of the same short-term ad-hoc financial assistance will strengthen the resilience of Singaporeans and help them move forward in a new era. The dozens of short-term handouts, like CDC vouchers, Assurance payouts, our Cost-of-Living Special Payment, Public Transport vouchers, and so on, are more likely to breed dependency – "what is in it for me?" – but unlikely to strengthen resilience. We have said many times in this Parliament, that we need long-term programmes to give Singaporeans Comfort over their current and future financial positions. Before they can concentrate on becoming Innovative workers and enterprising risk-takers to build Singapore into a competitive information economy. We do not understand why the Government is reluctant to implement long-term programmes. Although, according to our estimates, Singapore has sufficient fiscal resources to fund these programmes without drawing on the national reserves. The Government likes to argue that alternative policy proposals will raid the reserves. But Singaporeans should note that this is a baseless allegation. Singaporean should have guessed, from the COVID-19 experience, how large our reserves are and how strong our fiscal position is. If we do not have that, the Government would not be able to commit to a $100 billion COVID-19 response package, which is equal to more than 20% of Singapore's GDP in 2019. In the end, the Government spent a total of $72 billion, fighting COVID-19. But the interesting part is how the Government has funded it.”
“Mr Speaker, thank you for allowing me to make this explanation. On 7 February 2023, when I was giving more details on the Affordable Homes Scheme during my closing speech for the public housing Motion, I have said the following, "will the scheme actually increase the holding cost of the buyers? I called that a breakeven price, meaning the land cost is determined today, you add on the interest payment and what would be the price going forward when the buyer wants to sell the flat in the market. The idea is that, this breakeven price should not be much higher than the current price for the current HDB owners." [Please refer to "Affordable and Accessible Public Housing, and Public Housing Policies ", Official Report, 7 February 2023, Vol 95, Issue 82, Motions section.] The last phrase should read like this: "this breakeven price should not be much higher than the breakeven price for the current HDB owners." I would like to make this clarification and correction for the record.”
“Mr Speaker, I would just like to tell the Member, whether it is taking away the ladder, or whether it is a stool that I am providing, is a matter of interpretation. 10.53 pm”
“Minister, I would accept that you register that this is an outstanding issue. I do not accept that this is an inaccurate fact.”
“Thank you, Mr Speaker. I am of the opinion that the point about NIRC is a very important one. So, can I request the Minister to respond to that point properly?”
“Okay. I have spoken about this in my maiden Parliamentary speech on 1 September 2020. I said, "it is disconcerting to have many of countrymen live outside Singapore in Johor and Batam while we are housing more than two million foreigners on our island at the same time. Surely more consideration can be given to Singaporeans who are citizens of our sovereign city state." So, let us work together as one united people to achieve a better future for Singapore and Singaporeans. Singaporeans deserve better.”
“Many people do not mind, nor do they worry about falling home prices because the Government has stressed for years that HDB flats are valuable assets and their prices will continue to rise. However, in recent years, price increase of older HDB flats has not kept up with that of new flats as people are starting to pay attention to the issue of lease decay. This issue cannot be ignored. Hence, PSP called on the Government to announce the details of VERS as soon as possible to put an end to the lease decay issue and maintain stability in the resale market of old HDB flats. HDB flats are one of our greatest achievements, but HDB housing policies must stay relevant to ensure that every generation of Singaporeans can benefit. Our land is a precious asset, shared among each generation of Singaporeans. PSP’s Affordable Homes Scheme will be a wise and sound way to ensure that Singaporeans can benefit from our land assets for generations to come. This is also in line with, and a continuation of the spirit of land reform that the Government has been carrying out under the Land Acquisition Act for nearly half a century. (In English): Mr Speaker, the President said at the opening of this 14th Parliament that Singaporeans are masters of their own land. But that rings hollow when a significant number of Singaporeans have difficulties owning a house. I have spoken about this —”
“More importantly, with reduced housing costs, young people do not have to use a large portion of their CPF savings to service their housing loans. This will break the vicious circle of "house prices must continue to rise, otherwise Singaporeans will not have the money to retire". PSP is of the view that Singaporeans should not need to sell their flat or lease for old age, and that everyone should own a flat while meeting the Basic Retirement Sum. Our country has sufficient resources to realise this vision. This dream can be translated into reality by PSP’s Affordable Homes Scheme. Our Reserves will not be raided by the Affordable Homes Scheme and the Millennial Apartments Scheme. Although Singaporeans are exempted from paying land cost when buying a flat, under the Affordable Homes Scheme, they still need to return the land cost with interests to the Government when they sell the flat, so most of the land cost will be recovered sooner or later. Moreover, the exempted land cost is only about $3 billion to $4 billion a year, which is a small fraction of our Net Investment Returns contributions (NIRC), as our NIRC has reached $30 to 40 billion a year. Our country can afford the financial expenditure of these policies. Singaporeans need not worry too much that our Reserves will be reduced. We will continue to uphold the principle of "planting trees to provide shades for future generations." On the other hand, many senior citizens who own flats with shorter and shorter leases have another worry. Many Singaporeans use their CPF savings to service their housing loans, so they have to find ways to monetise their flat after retirement.”
“They believed that the Government would make good use of their land to provide affordable and quality housing for their children and grandchildren and build a better future for Singaporeans. But today, the public housing policy has imposed a heavy burden on the people of all generations. Although the land of the Pioneer Generation was acquired by the Government at a low price, their children and grandchildren could not benefit directly from it as HDB has to buy land at market prices to build HDB flats. While BTO prices are not pegged to market prices, rising land cost will eventually push up BTO prices in the long run. In addition, the long waiting time of BTO flats has caused many young couples to choose to buy flats at high prices in the resale market. The current high property prices are not only a heavy burden to many young people, but also a shackle that keeps them from starting a family and developing their talents. During yesterday and today's debate, PSP has proposed the Affordable Homes Scheme to reduce housing costs by exempting Singaporeans from paying land cost when buying a flat. It is only when they sell the flat that they need to return the land cost together with interests to the Government. This means that if a couple lives in the same flat from the time they get married to the end of their life, they do not have to pay the land cost. In order to provide more housing options for young people, PSP has also introduced the Millennial Apartments Scheme, which allows young people to rent premium HDB flats in the city for a long time at a low cost. These two policies will significantly reduce the housing burden of young people, give them more space to start their own businesses and fulfil their dreams, and inject new vitality into the city.”
“They surrendered their lands to the Government, in the hope that it will be used to improve the lives of Singaporeans, not for the Government to accumulate reserves for the sake of accumulating, with no clear and transparent definition as to what constitutes "a rainy day", when we can use the reserves for the benefit of Singaporeans. In the run-up to this debate, some descendants of the Pioneer Generation who had given up their land came to see me and asked me to fight for affordable homes for their children. Is it not a great irony that a family that had earlier given up its land for a pittance, thus sacrificing housing for his descendants, is now seeing his descendants pay half a million dollars each for a 90 square metre BTO flat? Thus, PSP believes that it is the Government's duty to live up to the hopes and expectations of the Pioneer Generation and repay them by ensuring their descendants continue to have affordable homes. Mr Speaker, in Mandarin, please. (In Mandarin): [Please refer to Vernacular Speech.] Dear Fellow Singaporeans, I believe many Singaporeans, like me, still remember how Pioneer Generation Singaporeans were forced to sacrifice their land under the Land Acquisition Act in the 1970s and 1980s. Among them, there were big landlords and capitalists, but also many more ordinary Singaporeans including pig farmers in Punggol, villagers in Charn Mao Hern and Koo Chye Sheng, as well as fishermen in Tuas fishing Village. Most of our forefathers willingly gave up their land to the People's Action Party (PAP) Government. They knew that they sacrificed their land and their way of life for the country's development and the interests of the majority.”
“The asset enhancement policy, which started in the 1990s, may have reached its limit as the price of any asset cannot rise forever, especially one with a lease decay problem. The Government's appreciating asset narrative for the HDB flats has become untenable, as more than 50% of the HDB flats will be over 50 years old by 2030. It is also counter intuitive to believe that a system that relies on rising HDB prices can actually deliver affordability. The ecosystem developed to sustain the asset enhancement policy, like the BTO supply and pricing systems, as well as the link between CPF retirement funds and housing prices must be reviewed and changed accordingly. We have explained why Affordable Homes Scheme and the Millennial Apartments Scheme are the way to achieve a reset of the public housing policy. When PSP advocates that the land cost be taken out of the pricing of owner-occupied HDB flats, so that every Singaporean in each generation can have access to affordable housing, we also believe that this is in keeping with the spirit with which our Pioneer Generation sacrificed their land for national development. A spirit, which the Government might have forgotten from the 1990s onward. The Pioneer Generation have responded to the call for national development and sacrificed much when they gave up their land. These are not just the big landlords and capitalists, but also ordinary Singaporeans, including farmers who were resettled from rural areas, such as Chua Chu Kang, Lim Chu Kang and Punggol, and indigenous Malay fishermen who were resettled from the Southern Islands.”
“We will assume that it should be used for the current year for the benefit of Singaporeans, but the Minister for Finance put that under endowment and trust funds again. So, the funds, again, are not used in the current year. For example, in 2019, $13,570,000,000, or 80% of NIRC was ploughed back into the funds. Hence, if we can use part of that money, the $3 billion that we are talking about to execute the public housing reset, represents a very small fraction of NIRC allocated to the Budget each year. So, we can see that we do not need to use any additional reserves at all, we only need to deploy our current resources where and when they are needed. With the above, I hope I have addressed most of the Members' questions, but of course, questions are welcomed afterwards. Next, I will conclude today's debate, although the conclusion will take some time. [Laughter.]”
“Whether it is a draw on reserves, actually we all know that it depends on the definition of use. If the use is to serve a very useful purpose, then we should not hesitate to redefine the use – if public housing land is state land, we can redefine it. If public housing land is defined as state land, then there is no question about the use of reserves. But there will be a cost. Still, this cost can be managed under our budget resources and there is no need to actually use the reserves. Ms Denise Phua asked about the fiscal implications of our policies. The total land cost paid by HDB is only about $3 billion a year. Under our scheme, most of it will not be permanently lost, first of all, and can be recovered with interest from the deferred land cost. But even if we need to fund the whole sum, we will have more than sufficient fiscal resources required for the implementation of the reset. We only need the Government to do more for Singaporeans, because we actually have the resources. The Government has been saving repeatedly, again and again, in many ways, just to take the resources and put it back into the reserves. First of all, reserve accumulation, that is something that you cannot spend unless the President approves it. Second, the Government said, put 50% of the net investment return into reserves. You can only use 50%, that 50% becomes the net investment return contribution (NIRC), which goes to the Budget. Yet again, I do not know whether Members noticed, 80% of our NIRC was never used, maybe except during the COVID-19 years, in the current year. For most of the years, NIRC was re-parked into endowment and trust funds. So, this is the money, 50% of the net investment returns that is supposed to be used for the budget.”
“The answer is that the beneficiary can live in the flat as long as they are just an occupier. But they can also sell the flat. When they sell the flat, then the same rules apply. They have to return the land cost with the accrued interest to the past reserves. But if they cannot sell the flat in the market, then they sell the flat back to HDB, based on a formula which I have explained to Ms Carrie Tan just now. It is based on the user price, minus the location premium and some depreciation. Again, we can decide on how much depreciation we want to put into the price later. So, I have addressed the resale market, I have also addressed some of the questions raised by the Members. Next, I will address the impact, or the perceived impact, on the reserves. Given the advantages of the Affordable Homes Scheme and the Millennial Apartments Scheme, their implementation will require the Government to change its mindset regarding accounting for land reserves. I beg to disagree with Mr Cheng Hsing Yao and Mr Sitoh Yih Pin, that we must necessarily charge a price, because land is a scarce resource. PSP believes the land cost should not be charged for owner-occupied HDB flats because it is a public good, with all the social benefits that can be shared by society. Our proposals are still fair to future generations, because not all the land cost will be lost. We are also giving the present generation a leg-up to do better, which is the best inheritance which we can pass on to our future generations. In fact, Affordable Homes Scheme will make it fairer for future generations who can enjoy HDB flats at the user price, rather than the higher BTO price in the future. This is the most consistent and fair treatment for every Singaporean in each generation.”
“I think we all agree that this is detrimental to our total fertility rate. The current system cannot provide a large enough price difference between BTO flats and resale flats to restrain the resale market. But the Affordable Homes Scheme, which is based on the clean concept of taking out the land cost for the owner-occupier, can do this and make the overall housing market more accessible to young Singaporeans. Next, I want to address some of the questions raised by Mr Lim Biow Chuan and Mr Henry Kwek on the Affordable Homes Scheme. There are two main areas that they have raised. One is, will the scheme actually increase the holding cost of the buyers? I call that a breakeven price, meaning the land cost is determined today, you add on the interest payment and what would be the price going forward when the buyer wants to sell the flat in the market. The idea is that, this breakeven price should not be much higher than the current price for the current HDB owners. Of course, there is an accrued interest involved but we can actually adjust the number of years for accruing the interest. So, this is something that we can still subject to more research, but as a starting point, we can say that the accrued interest will accrue for 25 years. That is the normal term of a loan. First, I propose an idea, but based on the experience that we have in the public housing market, if it is a good idea, then based on the experience accumulated by HDB, we can decide on how much we want to accrue that interest going forward. This is one thing. The second thing is, there is a question about what happens if the flat is given to a beneficiary? Does the beneficiary need to pay the accumulated interest on the land cost?”
“In fact, a collapse is actually counterintuitive because in the long term, the supply of resale flats will be reduced as new sellers will not sell their flats unless the price is high enough for them to earn a profit after paying for the deferred land cost. Furthermore, there will also be support for the resale market from the backlog of housing demand. In addition, a large pool of buyers who are ineligible for BTO flats, buyers who want to live in a specific location because they want to live near their parents, Permanent Residents and buyers who want to upgrade to a larger flat form a large pool of demand that will underpin the resale market. Most importantly, we must bear in mind that in Singapore, the resale market HDB market is still much lower than the private property market, so there is a demand there. But I believe that the Affordable Homes Scheme is also aiming at engineering a soft landing of the current surging resale market. That will be healthy after recent market exuberance. We want a buoyant resale market, not an exuberant one. At the same time, to complement that strategy with a Millennial Apartments Scheme, which can increase the number of housing units in the same prime location housing site by building smaller units for rental. These quality rental apartments will absorb demand while people are waiting for their new flats. I think the Millennial Apartments Scheme is a much better policy solution than the PLH scheme in terms of providing choice to young Singaporeans, reducing the profit motive in speculating in HDB flats in mature estates and thus moderating social inequality. The current BTO system, which feeds on the resale market and vice versa, does not make the overall housing market accessible to young Singaporeans.”
“One thing I want to highlight is that Senior Minister of State Sim Ann had defined the CPF account now as being one that would cater for both buying the HDB flat and for retirement. That is something new to me. The CPF account has been pulled into financing the HDB flat from 1968. The original definition or the original intention of the CPF account is for retirement. I hope the Government will clarify on that later. We want a situation whereby Singaporeans do not have to depend on resale prices for their retirement. Many Members have pointed out that resale prices go up and down. This proves my point – that retirement adequacy needs to be delinked from housing prices because resale prices go up and down. Is our current system fair to the elderly Singaporeans who may be forced to retire during a recession but have not enough money in their CPF and may therefore have to sell their flat at a lower price point? Not everyone can control when they retire or when they must monetise their flat for retirement. This is a real problem and I hope Members on the other side of the House will consider when they are voting for the two Motions. At the same time, the Affordable Homes Scheme increases owner-occupation intent without having to tighten current rules on the Minimum Occupation Period, which Ms Denise Phua has suggested. Application for BTOs in popular areas will increase and upper middle-income Singaporeans may be unhappy but that is the cost we have to pay to reduce social inequality. Mr Sitoh Yih Pin, Mr Xie Yao Quan and Mr Vikram Nair are concerned that the PSP's proposal will cause a collapse in resale prices.”
“The Minister had concentrated on doing more of the same, sorting out the current tight demand-supply situation, but what is required is a fundamental change in the thinking of what should be the best public housing policies going forward. As a result, PSP has proposed the Affordable Homes Scheme and the Millennial Apartments Scheme as key proposals for the policy reset. I must say again that the Affordable Homes Scheme and the Millennial Apartments Scheme, we had them in mind right from the beginning. I did not shift my ideas from taking out of land cost and now add that land cost as a deferred land cost. I must again repeat that point. So, what are the advantages of the Affordable Homes Scheme? The most important objective of this scheme is to stop the depletion of the CPF savings of Singaporeans from buying HDB flats. What we are aiming for is to delink the CPF account from the HDB flat. Mr Murali Pillai argued that only the Ordinary Account savings can be used for housing. There is still the Special Account savings. But how many Singaporeans can meet even the basic retirement sum with just their Special Account savings and without having to sell their flat? Under the current system, retirement adequacy will only deteriorate further as CPF contributions are capped and remained the same level for many years while HDB prices continue to rise. Senior Minister of State Sim Ann shared just now that maybe the retirement situation in terms of the CPF saving balances are better than what we have gathered. But nevertheless, as BTO prices continue to go up, CPF contributions will continue to be depleted.”
“So, I think this is a brilliant opportunity, while our market is very bullish, for us to reset the policies. I think, for years, policy-makers and policy analysts have debated – maybe we should change our public housing policies, but we are at such a high price already, how do we do it? I think that has been bothering a lot of people. But I think this is a brilliant opportunity. Fortunately, unlike Japan, we can use our public housing sector as a buffer. We can continue to allow foreigners and well-off Singaporeans to invest in our private property market at higher prices but we must maintain an affordable and accessible public housing market so that our young Singaporeans can have the financial security to be enterprising risk takers and build Singapore into a competitive information economy. While the Government thinks it is doing its best, I think there are substantial reasons to think that there needs to be a reset because the current system is not delivering all the outcomes that we desire. For example, young couples are not forming families as fast as we want, CPF savings are being depleted and going forward, there is no sign that this will slow down because as BTO prices escalate, the amount of CPF savings required to pay for the mortgage will be bigger and bigger. Our CPF contributions are capped but housing prices are not capped. Also, the lease decay problem is worsening. If we do not change the way we price the HDB flats, the lease decay problem will be a problem of every generation. These are some of the problems that accompany the current housing policies. I think we need to address them. I do not think in the debate and even what the Minister said just now have fully addressed them.”
“The property market cannot rise forever at a fast pace. In the long term, any country's population will eventually peak and decline and there will be fewer buyers than sellers. Continued economic growth will then depend on raising productivity and competitiveness. However, the more important property investment and speculation become in an economy, the more likely that economy will become less competitive because property speculation and rent seeking are easier and better alternatives to innovation and entrepreneurship. In Japan, for example, I have seen how the average Japanese has been bogged down by their mortgages, some of which straddle two generations. It is from that angle that I got worried when I look at the situation in Singapore today – high property prices but a dearth of innovation and creativity. What we need is more innovation and entrepreneurial spirit to continue competing effectively with the rest of the world in the Information Age. A home is a place for a Singaporean to share comfort and love, not a chain that ties him down with a mortgage that needs to be serviced for the larger part of his life. He should spend his life innovating, creating and fulfilling his potential. Singaporeans can become knowledge workers only if they are liberated from the bondage of mortgages and high property prices. The only saving grace is that our property market is still rising partly because of population growth through immigration. If we do not want to be left with no choice, however, except accepting a continuous fast pace of immigration, we will have to seriously consider a reset at this stage when the foreigners, especially the Chinese, are still eager to put their money in our property market.”
“Mr Speaker, Sir, I thank the Ministers, Senior Minister of State, Minister of State and Members for making so many contributions which have enabled us to have a lively debate on public housing. I have certainly learned a lot from this debate because the rebuttal points have been specific and substantial. While we may differ in our policy ideas and recommendations, all of us in this House share a common objective of keeping public housing affordable and accessible for Singaporeans. I also agree with Ms Janet Ang that we are here to unite and not divide but that is provided the Government does not treat every alternative ideas as a source of division. I will now give specific responses to the questions and rebuttals. I will demonstrate to Mr Murali Pillai and all of you that what PSP has proposed are feasible aspirations based on pain and choice. This is because our policies will benefit most Singaporeans but there will be some slight negative effect on some as well, like those who have committed to high-priced resale flats in anticipation of future profits. This is no different from some of the other policy proposals made by PAP Members. I thank Mr Sitoh Yih Pin for pointing out the example of the Japanese property market which, indeed, is one of the reasons why I have tabled this Motion. I spent a total of 12 years, first studying and later working in Japan. So, I have a fairly good understanding of what the overuse of property as an economic management tool had done to that country. However, the lesson I have learned was opposite to what Mr Sitoh has tried to convey. The Japanese property market downfall was not due to just a change in policies. It was caused by property being used as a tool to prop up the economy for too long until it is no longer sustainable.”
“Thank you, Madam. If I am a military strategist, obviously, I have just executed a very brilliant strategy. If you try to second-guess what my policy is and you fail to second-guess my policy, it is your problem. I am not flip-flopping, right? So, when I say the land cost should be taken out of the picture, I mean, it should be taken out of the picture for owner-occupation. And you did not guess that I actually have a second part to it. So, there is no conflict in my first idea that I put up on Facebook and what I actually proposed in my speech yesterday.”
“(In Mandarin): [Please refer to Vernacular Speech.] According this 安居乐 scheme (Affordable Homes Scheme), if the original buyer of the flat passes away and leaves the flat to his children, his children do not need to return the land cost at that point of time. But if his children choose to sell the flat back to HDB, then the selling price will be based on the user price minus the locational premium and some depreciation. With this formula, they can sell it back to HDB.”