Monday, 25 July 2011

Presidential Election Watch Part III - Dr Tony Tan & Singaporeans' CPF Savings & Wage Cuts

Further to my posting, Presidential Election Watch Part II - Tony Tan As EP - Too Close For Comfort ? , let me take you closer on a topic which concerns all Singaporeans deeply - CPF Savings.

Straits Times (15 July 2011)'s headlines read "NTUC looking at reviewing CPF for older workers".

"The labour movement is taking a closer look at the current practice whereby the Central Provident Fund (CPF) contribution rates of workers are cut when they reach 50 years old, and cut further when they turn 65."

Why is the NTUC suddenly announcing to look at CPF for older workers now? Is this due to PAP's poor showing in GE 2011 that the PAP must act urgently if it does not wish to lose more votes in the next GE? Is it also because of the Presidential Election and that PAP's "unofficial" endorsed candidate Dr Tony Tan is taking part?

I said somewhere in this blog that baby-boomers of the early 1960s had often been made the "guinea pigs" of the Govt's CPF and wage restraint policies during the period post 911 and SAR crises. Affordability of HDB flats today is also an issue closely knitted to the several rounds of past CPF cuts. So are Singaporeans' CPF limited savings left for retirement. You may read what I had posted on 23 Feb 2011 about its impact on middle income earners, lest to mention about the burden on lower income earners.

Wage and CPF cuts were very sensitive and "sore" issues for all working Singaporeans in 2003. The photo below were just some headlines of my letters to the two free-sheets then - TODAY and Streats. These headlines now still paint an old scary picture. You need not read the details in my old letters to appreciate. Re-visiting this topic will certainly bring your attention on what Dr Tony Tan said then as a DPM.

Headlines of my letters to TODAY & STREATS in 2003

Today, CPF issue is still a very "sore" topic. You may read recent letters published in ST Forum, as follows. The impact of the ill implementation of the past CPF policies still lingers on:

What had Dr Tony Tan said or done to Singaporeans' CPF and wages in 2003 that "he needs to be measured, considered" now, as in DPM Teo's words; since he is a hot PE candidate unofficially endorsed with PAP's blessings?

You may feel the "heat of argument" and "bad mood" by reading the various articles here at this Yahoo Group site link. Perhaps, the "media workers" were very much affected personally too which made their voices exceptionally louder.

A review dated 27 Aug 2003 by Mellanie Hewlitt captioned "Spore's labour costs higher than US, Australia? Really?", with reference to a commentary by Lee Han Shih published in TODAY dated 19 Aug 2003, and is still available here at this Yahoo Group link.

Lee Han Shih, a free-lance jounalist; was a "terrific" writer to me and the depth of his commentaries was always thought-provoking and a worthy read. If you have not heard of him, perhaps you can get a short introduction and his final article in BT here. "With his departure, Lee Han Shih will take with him what little spark of indepedent thought and insightful journalism there is in Singapore's local government controlled media."

Let's get back to Dr Tony Tan and the CPF issue. It had attracted Lee Han Shih's critical bombardment on the bloated and top-heavy state administration then, which still see our Government doing nothing till GE 2011, that Mr Gerard Ee has now been tasked to chair a  committee to review Ministers' Pay. You may want to read my earlier Blog posting, "Budget gives more than required - Ministers' Pay?".

In the article by  Mellanie Hewlitt mentioned above, Dr Tony Tan addressed Sembawang Shipyard workers in a National Day gathering; and cautioned them about the need to cut CPF and wages to make Singapore competitive by citing the a PERC report which claimed that the labor costs in Singapore were higher than USA and Australia. The purpose was to convince the shipyard workers to take a cut in CPF and wages cut.

Perhaps, you should read Dr Tony Tan's controversial arguments via the links.

In Wikipedia today, his words were turned into praises, by citing him as speaking against retired MM Lee then ..... If you had read the comments by Lee Han Shih then, you will probably feel, appreciate or even identify with the sentiments on the ground, especially if you are borned in the 1960s and 70s. Up till today, maybe only Rupert Murdoch would praise the Singapore’s ministerial pay, working Singaporeans would blame, if not cursed Dr Tony Tan and the Govt for those words.

Quote Wikipedia

Unusually for a PAP Minister, Tan clashed with his colleagues and then-Prime Minister Lee Kuan Yew over issues such as the Graduate Mothers Scheme, under which the children of mothers without university degrees received lower priority when registering for primary school. Tan, then Minister for Education, advocated abandoning the policy, which was ultimately scrapped. He also took the lead in espousing a cut in CPF in the 1980s, which Prime Minister Lee Kuan Yew had said would not be allowed except “in an economic crisis”.

Quote "Standard & Poor's"

DBS Group Holdings and other Singapore banks may face higher defaults on home loans following the Government's decision to cut CPF contributions,research firm Standard & Poor's (S&P) said yesterday.

DBS, United Overseas Bank and Oversea-Chinese Banking Corp have said they are prepared to defer payments on home loans after the Government cut employers' contribution rate to 13 per cent of a worker's salary, from 16 per cent.

"These restructuring efforts by banks, however, are tantamount to a technical default on loans," S&P said. "In the short term, the level of problematic consumer credits is likely to increase." - Bloomberg

Quote "South China Morning Post"
What will happen in Singapore is foreign employers will take what native Singaporean workers lose through this cut.

There will be a transfer of wealth from the people who worked for it to the multinational corporations (MNCs). This could be excusable if these MNCs then invested the money back in Singapore but the difficulty is capital investment in Singapore is dropping faster than a rock in freefall and has never been lower than it is now, relative to the size of the economy. The MNCs are mostly in exit mode now. They will not put the money back into Singapore. They will just take it home with them.

Then you get to that fuzzy thinking that labour costs are an obstruction to economic performance. If so, Mr Tan, may I ask you what is the point of economic effort? Is it not to improve the prosperity of those who participate? What sort of an achievement is it if you instead make them poorer?

Quote  "TODAY"

When Deputy Prime Minister Tony Tan cited an Asia-Pacific report that rated Singapore as having the fourth-highest labour cost in the region, and even more expensive than in the United States or Australia, it raised puzzled and, for many, angry eyebrows among not only the man in the street, but economists and academics as well.

The study was conducted by the consulting firm, Perc or Political and Economic Risk Consultancy.

Quote "A Netizen's comments"

Here we have a goverment who thinks they know best and never consults the citizen of any decision that's made. In these times of difficulties we have a 650 million Esplanade splurge.....

We have a goverment who on one hand splurge on the Esplanade scrimp on HDB upgrades. Who won't learnt after repeated mistakes of bankrupt contractors delaying the upgrading project time and again. It is only after flare ups do they take attention to the issue.

Have they gone so fat that they have gone thick in the head?? PAP is entirely faultless.

I see now an increasingly bleak future for Singapore. The goverment has a death gripe on the enterprises here and practises pseudo-deregulations and privatisations. They have no directions. Despite top scholarly decisions made, Singapore's economy is going down, down down. And now, to top it all, they have resorted to pointing fingers shifting blames. The lowest of the low. Our salaries is higher than US.

Now we can all look forward to work till the end of our lives trying to pay up mortgage and have a absolutely zero quality of life.

I can barely survive on my own, much less talk about getting married and having children. I guess that option is reserved for the PRs and the FTs. I am in a country where Singaporeans and it's goverment look down on it's own Singaporean citizens. Where they give all the key roles and development to Angmoh FTs and PRs.


Those were part of PENGSAN's words on 28 Aug 2003.....and the scenario today isn't much different or better.

After the sacred cow (CPF) was slaughtered, Dr Tony Tan left the Cabinet in 2005 to become Executive Director of the Government of Singapore Investment Corporation (GIC), and Chairman of Singapore Press Holdings Limited (SPH). In Presidential Election Watch Part II - Tony Tan As EP - Too Close For Comfort ? , I asked did Dr Tony Tan safeguarded the interest of the stake-holders, particularly SPH shareholders; in his commercial decisions? While ordinary Singaporeans fell backwards, with the burden after the CPF scared cow was slaughtered, even up till today. You may recall who took over the PM post in 2004.

Since then, what had those CPF cuts and wage restriant policies delivered? Income stagnation for most Singaporeans and even PMETs? More foreign workers and FTs brought in; even though CPF and wage cuts were  supported by Dr Tony Tan when he was DPM under the PAP Govt. Costly HDB flats, medical bills and expensive transport costs? You name it ... you have it.

Only in a Election Budget for GE 2011, had the PAP wanted to help Singaporeans  to increase their general income by 30% over the next 10 years by boosting national productivity by 2~3% annually, while Ministers' pay had ballooned since 2003 (just like housing costs) to its current level that forced a re-think after losing votes. Imagine if you were a baby-boomer borned in the 1960s and you had to work till 60 years old to get back what you had sacrificed through CPF and wage cuts in the past years? Does it make sense anymore ?

Only after a poor GE showing does the NTUC wanted to talk about helping older workers reviewing CPF for older workers on reaching 50 and over. Lim Boon Heng, as Union Chief; was talking about "pre-emptive layoffs" for Singaporeans above 40 years old back then and Dr Tony Tan was advocating along with the PAP Govt to cut CPF and wages for all Singaporeans.

Not surprisingly and on hindsight, I was retrenched personally in 2005 after working 13 years with a Korean MNC contractor. Like other Singaporeans, I sacrificed in terms of those CPF cuts and wage restraints. Did they help? When retrenched 2 years later after the CPF cut, I was initially offered "2 months" compensation in pay after the 13-year stint.....Mortgage had to be re-structured, etc. If not for a personal "turn-around" strategy and pure luck that my own skill-set was saleable then, OMG...

Is it now on hindsight that Dr Tony Tan realised he has to speak up for Singaporeans to "undo" his earlier "wrong" on CPF and wage cuts?  What had Dr Tony Tan done as a "follow-up" on the CPF and wage cut issue  after he left the Cabinet, if he was indeed concerned about workers' wages and their livelihood? I am sure he could positively claim that as Singaporeans' aspirations now which he could help convey to our Govt. if he is elected. Will higher income materialise in 10 years' time? This was what PAP promised to deliver in GE 2011, and very much in the hands of the present Govt. Dr Tony Tan maintains he has no "executive" powers, didn't he?

The Singapore Govt. often left problems to be compounded, not "extinguished" it after "fire-fighting";  and Dr Tony Tan could be a part of it again as EP.

I must say Singaporeans should "measure" it and weigh it against his becoming the EP and having to protect our reserves and your CPF savings invested through the GIC that he once chaired till 1 July 2011, if he is elected. Are the PAP Govt, President SR Nathan (PAP endorsed) and Tony Tan as ex-GIC Chairman (unofficially endorsed) all striving for an "effortless" but "smooth" handover?

Is there a need to vote in an obedient President, so closely linked to the Govt in power; who is not vested with "executive" powers, after all; in order to ensure our aspirations are would  be  realised some 10 years later. It is still "too close for comfort" and any other suitably qualified and capable candidate could still provide the same "checks and balances", and need not be that "close" to the present Govt. in power.

In this Presidential Election, I wish to vote for a candidate who is "measured and considered" to be simple, but yet a clear and logical thinker, willing to speak up for the people, financially experienced and capable to safeguard foremost my own CPF, even before our national reserves. Why? Because "executive powers" means your CPF savings may be "raided" first whilst politicians like Mr Mah Bow Tan could argue that "a proposal to lower flat prices by paying less for the land is an illegal raid on the reserves". Only the "right values" will ensure the right "checks and balances".

Indeed for Dr Tony Tan, "What sort of an achievement is it if you instead make them poorer?"


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