Donate to the TKL for President campagin

I wish to ask my readers to donate to the campaign as a show of your support, and to encourage your friends, colleagues and contacts to do likewise. You can donate here: http://www.easyapps.sg/tklep/Donate.aspx

Singaporean in Melbourne

Dear Mr Tan,

I would love to vote for you but I am based in Melbourne. I will pray that Singapore will have a people's president who truly care for the citizens and not the one of the PAP who care for their own pockets. We want a Singapore for Singaporeans first, and not the other way round. I too lost my last job to Pinoy, that was why I decided to uproot and come down under. Right now, I am studying (courtesy of the Australian Govt), and would be in the work force shortly. 

Wish you the best, and in a few months, hello Mr President !

Winning back public trust after GE

An excellent article by Ngiam Tong Dow.
My views about the ministerial salary and the transparency of the reserves are similar to Ngiam Tong Dow. I am glad that he highlighted these two points as being the most important for building the trust of the public.

Winning Back Public Trust after GE

By NGIAM TONG Dow

FOR THE STRAITS TIMES

THE General Election on May 7 this year yielded the best possi­ble outcome for Singapore. The People's Action Party (PAP) Government was re­turned to power with an 81-6 majority although its vote share dipped to 60.1 per cent, reflecting a secular decline. The Workers' Party (WP) won Aijunied, a Group Representation Constituency.

The greatest value of the WP win in Aljunied is that it breached a psychologi­cal barrier, giving a boost to the opposi­tion and its supporters. Politics is about winning the hearts and minds of the peo­ple. Trust is the cornerstone. This elec­tion shows some chipping away of the trust that past generations of Singapore­ans had in the PAP. This was shown, for example, in the way Aijunied voters did not heed the statements from senior PAP leaders warning them against choosing the opposition. The challenge for Prime Minister Lee Hsien Loong and his col­leagues is to win back their trust.

The PAP began as a multiracial grass­roots party. Its largely English-educated leadership was supported by the ordinary man in the street, clerks, postmen, techni­cians, small businessmen, carpenters and barbers. Mr Lee Kuan Yew and his Cabi­net colleagues were seen by the electorate as selfless men, sacrificing promising ca­reers for an uncertain future in politics. PAP cadres rode bicycles to hang up elec­tion posters on lamp-posts. The party could not even pay for a soft drink. Former MP Chan Chee Seng told me that they paid out of their own pockets.

The founding generation lived frugal lives. My permanent secretary drew a monthly salary of $1,95O, just three times more than mine, a young rookie, at $680.

When the gap between the highest and the lowest paid is excessive, the rank and file become disgruntled. Insolence sets in. Morale goes down. The organisation, whether Government, business, or profes­sional practice, begins its slow decline.

The Government has done most things right. Over the five decades since inde­pendence in 1965, Singapore's per capita income has increased from $500 to $50,000. Unemployment rates have fall­en from over 10 per cent to 3 per cent. The Housing Board has resettled and re­housed 85 per cent of the population. Average education levels have been raised from primary to tertiary levels in one gen­eration.

Yet the Government's popular vote has dropped to 60.1 per cent, close to the psychological tipping point of 60 per cent. I feel that this decline is due in part to the Government's own policies. Some Singaporeans believe less and less that the Government acts in their best inter­est. In the earlier years Mr. Lee Kuan Yew's rallying cry was that no one owes Singapore a living. Despite its hard edge, the older generation believed that then PM Lee Kuan Yew and his Government put Singaporeans first.

Not having gone through the hard times of the earlier years, the young gen­eration today is not willing to give the Government the benefit of the doubt. They judge the Government by its actions, not just promises.

Changes in two aspects of PAP policies can help build more trust: ministerial sala­ry, and being more open about national re­serves.

The formula used for benchmarking ministerial salaries to top earners in the private sector is perceived as a case of heads you win, tails we lose. Worse, it is regarded as self-serving.

A better benchmark would be the medi­an income at the 50th percentile. If we can agree that the core role of govern­ment is to raise the livelihoods of the peo­ple, then the median income is a good measure of the Government's perform­ance. As a minister's job is more complex than that of the average wage earner, his compensation can be 10, 15, 20 or 25 times the average. Ministerial salaries can range from $40,000 to $100,000 a month or somewhere in between. This would be about $480,000 to $1.2 million annually.

The Government should adopt a clean wage system and not use incentive schemes modelled on the private sector. Profit may be the measure of perform­ance in a company, but not in a public ad­ministration. Using gross domestic product (GDP) as a proxy for performance of the Government and using this as one in­dicator to determine bonuses for minis­ters is deeply flawed. For instance, the GDP of Singapore can expand simply by importing more low-cost foreign workers - but this would be detrimental to citi­zens' interests. It is good that a commit­tee has been set up to review salaries of ministers and political office-holders.

To my mind, even more crucial than revising ministerial salaries, is the need for transparency in the management of Singa­pore's national savings.

These are accumulated from Central Provident Fund contributions, budget sur­pluses, revenue from land sales and divi­dends from government-linked compa­nies such as DBS, Singapore Airlines (SIA), SingTel, ST Engineering, Keppel and Sembcorp. These enterprises were es­tablished with equity from the Ministry of Finance or the Ministry of Defence.

Temasek Holdings and the Govern­ment of Singapore Investment Corpora­tion (GIC) are the wealth managers for the Singapore Government. Temasek Holdings was established by the Ministry of Finance to manage the equity invest­ments of the Government, such as SIA, Neptune Orient Lines, DBS and other gov­ernment-linked companies. Though Temasek was expected to play an entrepre­neurial role like its predecessor, the Eco­nomic Development Board, it has become more and more of an equity investment manager no different from private hedge funds. In fact, it has sold off some know­ledge-based government -linked compa­nies.

Temasek and GIC are profiled in the fi­nancial press as Singapore's sovereign funds. They are not. They are just wealth managers for the Ministry of Finance. The ministry is the custodian of Singa­pore's national wealth. The President ex­ercises custodial powers only over draw- down of past reserves.

There is considerable misunderstand­ing over the governance of Singapore's re­serves. Few people understand just what the reserves are composed of and which agency is responsible for which portion of the funds. To be sure, Termasek Holdings and GIC do publish annual statements on their funds, even disclosing returns. But these are neither comprehensive nor spe­cific.

The Singapore Government can seek to build more trust with citizens by being more open about the size and composi­tion of the national reserves.

While there is no outcry on the secrecy now, a more open, transparent approach can reduce confusion and dispel any doubts on the issue. I would urge the Min­ister of Finance to consider publishing an annual audited statement on the size and composition of our reserves. It can be presented as a White Paper to the new Parlia­ment, which is due to begin its term.

The writer is a former permanent secretary for finance in Singapore. This article is based on a lecture delivered on Tuesday at the Nanyang Centre for Public Administration at Nanyang Technological University.

University education

Many young Singaporeans appear to be angry at missing the chance for a university education here. Their parents have to spend a lot of money to send them for education overseas. http://www.temasekreview.com/2011/07/02/what-has-tony-tan-done-for-university-education-2/

Withdrawal of CPF savings

Here are some suggestions to deal with the problem faced by many cash strapped people who need their CPF savings  at 55, and do not like to see the money locked up in the CPF Minimum Sum Scheme. (Note: this represents my personal views and is not a matter for the Presidential Election).

18 June 2011

Withdrawal of CPF Savings

A few people have asked for my views about the withdrawal of CPF savings. They waited to withdraw their savings at 55, but found that it is now being held back under the Minimum Sum Scheme (MSS) to 62 and to be withdrawn in instalments. The minimum sum being held back for those reaching age 55 in 2011 is $131,000.

More details of the CPF Minimum Sum Scheme can be found here: http://ask-us.cpf.gov.sg/Home/Hybrid/themes/CPF/Uploads/RSD_WDL/CPF_Minimum_Sum_Scheme.pdf

Some people need the CPF money before age 62 as they are unemployed or have debts and were unhappy at the delay caused by the MSS scheme. They asked for my views if this CPF scheme should be modified to take into account of their situation.

Technically, the CPF member is allowed to withdraw all of his or her savings in the CPF at age 55, except for the minimum sum that has to be held back.

Withdrawal at 55

If a person has been contributing to CPF and has not used too much for housing, there should be cash available for withdrawal at age 55.

The problem is that many people paid too much for their HDB flats or private housing and do not have sufficient savings to withdraw at 55 years. This leaves them in a cash strapped position. The situation is worsened when they are unemployed. And many people seem to be caught in this situation.

Rent out a room

The practical solution to get an income is to rent out a room. The rental market is booming and it is easy to rent out a room in a HDB flat for $400 to $600 a month. This can be a good source of supplementary income. Many property agents will be happy to arrange this rental for the owner.

The family has to adjust and accommodate the tenant. This may be inconvenient but it should be considered, as it provides an additional source of income to owners who are cash strapped.

Allow early withdrawal of MMS money?

Some people may prefer a way to make an earlier withdrawal of the MMS money. They may not have sufficient money for their old age, but the felt strongly that their immediate need is to have money now, not later.

So far, there is no way to allow early withdrawal of the MMS money. The regulation is quite strict.  

I believe that for some special situation, it may be justified for the CPF member to make an early withdrawal. The problem is – how to access the justified cases from the unjustified cases? Do we want to make it easy for more people to withdraw their money early to spend and face a problem later on? Who makes out the case?

We should consider working out a case for people to make earlier withdrawal. The application can be handled as follows:

·         A set of guidelines should be set out on what are justified cases for early withdrawal

·         The applicant should engage a financial planner (from the approved panel) to assess the financial situation and make a recommendation

·         The recommendation should be considered by a special committee

We should recognise that there is a problem faced by many people under the current CPF regulations and be able to work out a way to deal with these problems. I hope that this problem can be looked into and a solution found (not necessarily the solution that I have proposed).

Limit use of CPF for housing

We should also set prudent limits on the amount of CPF savings that can be used for housing. Recently, some regulations have been implemented to set certain limits. I am not sure if these regulations are working well.

Instead of relying just on regulations that may not apply to certain people, it may be advisable for the purchasers to get the appropriate financial planning advice. This can be handled as follows:

·         A set of guidelines should be set out on what are prudent purchases

·         The applicant should engage a financial planner (from the approved panel) to assess the financial situation and make a recommendation, if the applicant wishes to go outside of the regulations

·         The CPF board can insists on this recommendation, if the applicant appears to be using too much of the CPF for housing

The recommendation of the financial planner should be considered by a special committee.

Financial Planning Advice

Many people need the right type of financial planning advice. They are many people who have obtained the qualification but they are not using their knowledge in the right way, i.e. giving financial planning advice for a fee.

The above schemes can help to build a proper financial planning service that will benefit many people in planning their savings properly for the future.

Tan Kin Lian

Marxist conspiracy - if it happens again

I was asked - what would I have done, if I was the President in 1987 when action was taken against the people involved in the alleged "Marxist conspiracy?" .

My honest answer is, "It would depend on the information that was made available to me at that time". I would still rely on my personal values of honesty, fairness and courage. If I believed that the arrested people were unfairly arrested, i.e. that they do not represent a security threat to the state, I would have the courage to reject their detention. (But I do not wish to judge any of the parties that were involved at that time, as they might have been given misleading information at that time).

A more important questions is - what would I have done today, if I were the President and a similar event had occurred. Fortunately, we are now in a different era - where the Internet allows greater transparency to uncover any abuse of power. It would be easier today to uncover the truth from the lies or forced confessions.

The citizens would have to depend on the ability of the President to act honestly, fairly and independently and exercise courage to stop any such abuse of power. I will be able to meet up with this standard.

Tan Kin Lian