Encourage electronic cheques

Printed in Straits Times Forum Page on 7 November

In spite of the technological advances, many people still write cheques to pay their bills, especially for the irregular payments. This manual mode of payment is inefficient, costly and time consuming.

I urge the Infocomm Development Authority and the Monetary Authority of Singapore to introduce a convenient way for the public to pay their bills electronically, and make it as simple as writing a physical cheque. This should be done through a common platform that serves all the banks, instead of asking each bank to develop its own application.

The payor should log into his bank account and write an e-cheque by indicating the party and amount to be paid, and details of the payment. If there is a mistake, the payor should be allowed to cancel the e-cheque within one day.

The payees should have the facility to log into the platform to view the details of the electronic payments that are credited to their accounts, similar to clearing their incoming physical mail. They can accept or reject the payment. For example, they may wish to reject a payment that does not have sufficient details to identify the transaction.

The use of a common platform will make the new system adopted more widely in a short time. It will also reduce the implementation cost of the participating banks.

The current form of internet banking was not designed to serve the needs of commercial organisations, which explains why so few organisations ask their customers to pay through internet banking. I believe that a new system, as described above, will overcome the current shortcomings.

Tan Kin Lian

GST and inefficiency in our economy

Someone argued that as many countries (except Malaysia, Hong Kong and Brunei) have adopted Goods and Services tax, this must be a good tax.

I argue that GST is a bad tax for Singapore for the following reasons:
a) There is no need for GST as the government has sufficient tax revenue from other sources
b) It is more efficient to collect any needed tax revenue from income and corporate tax rather than GST
c) GST requires an additional expensive layer of administration and imposes compliance cost to business
d) Singapore does not provide the costly welfare benefits (e.g. pension, unemployment) that is provided in other high tax countries
e) It is a bad idea to lower income and corporate tax and replace by GST - just to attract some high income foreigners to move their tax base to Singapore.

We should not have followed other countries blindly in adopting GST. We could have stayed with our system of taxation and be a more efficient economy.

Tan Kin Lian

Willing to make decisions

A friend told me this story. A Singaporean migrated to Australia and worked in an Australian company. She was surprised that the Australian managers were willing to make decisions. In Singapore, her managers waited for decisions to be made by the higher ups. This was a big culture change to her.

I did not ask if the Singaporean had worked in the private sector or the civil service. It probably did not matter. Quite likely, the habit exists in both sectors.

Hong Kong tightens sale of deriviaties

2 Nov 2009

HONG KONG - HONG Kong officials said on Monday they have tightened regulation of complicated investment products after thousands of local retail investors were burned by Lehman Brothers-backed derivatives last year.

But lawmakers said the new measures fall short, and urged the government to prosecute banks that misled investors and to ban some risky products outright.

Under the new regulations, banks must issue risk warnings for complex products and record conversations between their sales staff and clients to prevent deception, K.C. Chan, Secretary for Financial Services and the Treasury, said at a legislative hearing on Monday. The government was also considering setting up an investor education body and a financial services ombudsman, he said.

The measures come after 30,000 Hong Kong small investors who bought US$1.8 billion (S$2.5 billion) in Lehman-linked derivatives were left in limbo after the US investment bank collapsed September last year. Upset they weren't fully aware of the risk their investments carried - many of the complex derivatives were innocuously labeled 'mini-bonds' - investors took to the streets.

Hong Kong regulators announced a settlement with 16 local banks in July that returned up to 70 per cent of principal to the buyers, or up to HK$6.3 billion.

Opposition lawmaker Ronny Tong criticised the government for not focusing on legal action. 'I think it's strange that there is not a single case of prosecution after investigating for more than a year,' he said.

Reduce travelling time, cost and congestion

Read this suggestion. We need to change our approach and recruitment practices.

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Buying a home

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