Published in Straits Times on 5 April 2010
The current system of bidding for Certificates of Entitlement has been operating for more than twenty years. When it was first introduced, it was envisaged that the end buyers would be bidding for the certificates.
Over the years, the bidding for these certificates appear to be dominated by the motor dealers who make a large profit on the trading of these certificates, adding to the total cost of ownership of a vehicle. The bidding system also encourages speculation and price volatility due to greed and fear.
One obstacle for the end buyer to bid directly is the high price of the certificate and the lack of financing for this item.
I wish to suggest the following modifications to the system reduce the speculative activity:
- Allow the successful bidder up to of six months to find a suitable vehicle
- Require the successful bidder to pay only 10% at the time of bidding and the remaining 90% on purchase of the vehicle
- Change the bidding cycle to three months (instead of the current one month).
The proposed changes will create a fairer and more transparent market for the certificate of entitlements and remove the unhealthy speculation.
Tan Kin Lian
Dear Mr Tan,
I saw your letter to the ST Forum today. I applaud you that you raised this issue for consumers like me. I was held captive by the COE system. The COE bidding discourages end users to bid due to the high upfront cash layout as deposit. Genuine bidders with limited cash will be left out. We are left at the mercy of the car companies who do not provide transparent cost structure.
Very often, you will not get a good car price if you got for your own COE. LTA insists that COE is transparent but COE is obviously a tool for car company to hide profits. I do not have the history of when COE started, (how many people have? we buy cars at most 5 times in our life time?) e.g. why there is this 'Open Category' where car companies can hold them and trade later, exchanging hands ... There seems to be more happening than we, as consumers, know. This is not transparent and definitely unfair.
S Y Tan
Sunday, April 4, 2010
Role of insurance agents
Insurance agents can play a useful role in marketing insurance to consumers. However, the insurance products must be designed to be fairly priced and to give good value to consumers. The design of the product is the responsibility of the management and the actuary.
Many general insurance products carry a commission rate of 10% to 15% of the premium. This is acceptable, if the premium is based on the risk that is covered by the policy. This rate of commission can be applied to health and term insurance policies.
For savings and investment policies, the commission rate should be much lower, e.g. similar to the chargespayable for the purchase of shares and bonds, e.g. brokerage is 0.3% of the amount invested. It is wrong for the commission and distribution cost to take away one or two years of the savings.
I hope that the life insurance companies and their management and agents change their practice to offer life insurance products that are fair and good for consumers. This will allow insurance agents to hold their heads high that they are serving their clients well.
I like to ask my readers to be fair in making your comments and not to use this blog to "bash" insurance agents. Please state your views objectively.
Tan Kin Lian
Many general insurance products carry a commission rate of 10% to 15% of the premium. This is acceptable, if the premium is based on the risk that is covered by the policy. This rate of commission can be applied to health and term insurance policies.
For savings and investment policies, the commission rate should be much lower, e.g. similar to the chargespayable for the purchase of shares and bonds, e.g. brokerage is 0.3% of the amount invested. It is wrong for the commission and distribution cost to take away one or two years of the savings.
I hope that the life insurance companies and their management and agents change their practice to offer life insurance products that are fair and good for consumers. This will allow insurance agents to hold their heads high that they are serving their clients well.
I like to ask my readers to be fair in making your comments and not to use this blog to "bash" insurance agents. Please state your views objectively.
Tan Kin Lian
Book-keeping scam
A FEW weeks ago, two Republican House members asked Ben Bernanke, the chairman of the Federal Reserve, whether the Fed knew — before Lehman’s bankruptcy examiner revealed it — about the bookkeeping scam at Lehman known as “Repo 105.”
Well, the truth is this: The collapse of Enron back in 2001 revealed that the biggest financial institutions, here and abroad,were busy creating products whose sole purpose was to help companies magically transform their debt into capital or revenue ...
http://www.nytimes.com/2010/04/04/opinion/04koniak.html?pagewanted=all
Well, the truth is this: The collapse of Enron back in 2001 revealed that the biggest financial institutions, here and abroad,were busy creating products whose sole purpose was to help companies magically transform their debt into capital or revenue ...
http://www.nytimes.com/2010/04/04/opinion/04koniak.html?pagewanted=all
High rate of tax
America is discussing how to curb the high salaries of top CEOs.
In my view, the best way is to impose tax of 90% on salaries above 50 times of the average national wage. The current average net compensation in America is $40,000. This will mean that the special tax will apply to salary above $2 million. The salary of the President of America is only $400,000.
There is an argument that high tax will drive away the top CEOs. I disagree. The top CEOs have to work in a company that is likely to use the human resources or market of the domicile country. It is not easy for the top CEOs to relocate to another country. For example, the health care companies in America make their profit in that country and cannot be relocated overseas. This also applies to the profits from the other big professions, such as law and accountancy.
The financial services industry may be one that can be relocated overseas. However, the top bankers and financial traders make their profits from excessive speculation and leverage, which is likely to be curbed and is not sustainable anyway.
The wonderful outcomes of a high tax on excessive earnings are:
- prevent the rampant profiteering at the expense of consumers
- can abolish the wasteful and unfair Goods and Services Tax.
There should also be an international agreement among the countries to prevent the use of a tax haven strategy to attract the high income earners to move their profits or earnings into that country. It is almost like cheating other countries of their tax revenue.
Tan Kin Lian
In my view, the best way is to impose tax of 90% on salaries above 50 times of the average national wage. The current average net compensation in America is $40,000. This will mean that the special tax will apply to salary above $2 million. The salary of the President of America is only $400,000.
There is an argument that high tax will drive away the top CEOs. I disagree. The top CEOs have to work in a company that is likely to use the human resources or market of the domicile country. It is not easy for the top CEOs to relocate to another country. For example, the health care companies in America make their profit in that country and cannot be relocated overseas. This also applies to the profits from the other big professions, such as law and accountancy.
The financial services industry may be one that can be relocated overseas. However, the top bankers and financial traders make their profits from excessive speculation and leverage, which is likely to be curbed and is not sustainable anyway.
The wonderful outcomes of a high tax on excessive earnings are:
- prevent the rampant profiteering at the expense of consumers
- can abolish the wasteful and unfair Goods and Services Tax.
There should also be an international agreement among the countries to prevent the use of a tax haven strategy to attract the high income earners to move their profits or earnings into that country. It is almost like cheating other countries of their tax revenue.
Tan Kin Lian
Lost & Found Portal
Have you lost a mobile phone, notebook computer, pet or other item. Report it at the Lost & Found portal. If you have found an item, you can also report it here. Our staff will match the reports and contact the owner and the finder. This service is free. Click here.
Please help to publicise this service through your blog, twitter, facebook and other social media.
Please help to publicise this service through your blog, twitter, facebook and other social media.
Al Jazeera English TV
Al Jazeera English TV is dropped from SingTel Mio TV from April 1, 2010. Here is a selection of some of their videos
http://dlzj.wordpress.com/2010/04/03/al-jazeera-english-dropped-from-singtel-mio-tv-from-april-1st/
http://dlzj.wordpress.com/2010/04/03/al-jazeera-english-dropped-from-singtel-mio-tv-from-april-1st/
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