If I were the Prime Minister, I would be infuriated at how certain members of parliament have haphazardly spoken in defense of the finance minister's comments that a household income of $1,000 would be enough to fund installments for a HDB flat.
I love the way Miss Josephine Teo actually says that "They don't necessarily know that there are grants available from the HDB that will make the actual size of the loan for purchasing these houses not very big."
Well Miss Josephine, you may not necessarily know a few things.
1) Your assumption is based on the fact that the low income household earning $1,000 can set aside $100 to $200 a month for housing installments throughout the whole loan tenure. You assume that they can take a loan of 20 to 30 years, thus stretching the installments thin to fit into their monthly expenses. This is assuming that all goes well in the family. There are no unexpected events such as a family member falling severely ill. You also assume that the breadwinner will be able to be employed throughout the assumed loan tenure of 20 to 30 years. You also assume that there is no handicapped person who requires special care in the family. What if a child is born premature or with a pre-existing medical condition? Can a $1,000 income support this situation and yet still fork out $200 for housing installments? Please note that this is not realistic as the assumption assumes all other things to be constant and I believe that you know that life is anything but that.
2) Your assumption is also based on the fact that the flat to be purchased is a 2 room flat with only one bedroom and one hall. I believe that you have failed to realize that Singaporeans do yearn to own larger units. Also, 2 room flats seem to be segregated from the larger flat types. There are 3-room flats mixed with 4 and 5 rooms within the same block but 2 room flats seem to be segregated into a cluster of blocks with only that flat type. Are we trying to create a divisive society? Let us not only focus on housing our people. Let us focus on housing our people decently as well. For a family of 4 to squeeze into a 2 room flat, I feel we can do better. Let us not always compare ourselves with places like Hong Kong and say that our houses are big. We are a unique society with unique people. The government at times is employing a "you see, we are so much better off" stand when they want the people to be appreciative of what they have and a "we must do this if not we will not progress" when they want to implement policies which have already been written in stone but the mandatory public consultation did not receive positive feedback. (flashback to the building of the two casinos and the relaxation of the immigration policy)
3) You also assume that everyone spends a similar proportion of their income on food, transport and daily necessities. Data may show that we, on the average, spend a certain proportion of our income on things like transport. However, if you were to think about it, if a household earns $1,000, sets aside $200 for housing installments, $100 for utilities, this leaves $700 for everything else. If there are two studying children and each of them take up $100 a month in school fees, transport and food, we are left with $500 for household expenses and transport for the breadwinner. Please note that there is no "cheaper" transport for the breadwinner to go to work. He cannot go up the MRT and say that he is earning $1000 a month and expect to get a free ride. He has to pay the exact same fare as the banker or lawyer who is earning in excess of 10 times his income. The low income earner cannot go to NTUC and expect to pay less for a carton of milk or a bag of rice. The lower income groups spend a larger proportion of their incomes on daily necessities and transport. Let's face it, majority of us eat the same type of rice, drink the same type of milk, use the same type of toothpaste. However, to some of us, a tube of toothpaste may not be very significant but to some they are spending a large about of their income on such items.
4) The government always tells it's citizens that we as a nation need to save up for a rainy day. We must always guard our reserves. We citizens follow what the government has planned. That is the macro way of looking at things. Then what about the micro perspective? Do these lower income families not require a buffer of their own? Do they not require savings for rainy days? Do they not require insurance coverage to protect the dependents from the loss of that $1000 household income? The state does not and will not provide handouts in the form of social security. DPM Tharman has stated that he does not want a first world social state as it will run us into first world debt. How else can the lower income prepare themselves for the unexpected other than saving and purchasing insurance? Can they then afford it?
5) The government wants to help the needy but at times does not know how to do so. I heard of a story of a mildly retarded lady who failed to sign up for her GST credits, Progress Package and other handouts by the government. She had no idea that she was eligible for such handouts and she did not even know that the government was handing out such goodies to the whole population. Someone kindheartedly brought her to a meet the people's session to appeal as the deadline had long gone. The appeal failed and the reason was that there was enough time for her to complete the registration to receive the handouts. Obviously this person did not pursue the matter. It is like going to a restaurant. The one who makes the loudest noise usually gets served first. Usually to increase the chance of a successful appeal, one has to know which door to knock on and this requires a certain level of intellect and this lady did not have this attribute.
Gone are the days whereby HDB flats cost a small multiple of a person's monthly salary. There were times when $8,000 could buy a flat when people were earning $400 a month. That translates to approximately 2 years of income. Now, a 3 room flat will set the buyer back in the region of $320,000. Assuming an annual income of $20,000, that is 16 years of income.
Moral of the story? The best social safety net would be to lower HDB prices. Minister Khaw, it is all up to you now...
Yours Sincerely,
Daryl Lum
(+65) 9009 8731
visit my website @ www.DarylLum.com
read my blog @ www.DarylLum.blogspot.com
