http://theonlinecitizen.com/2007/09/04/3rd-world-savings-1st-world-cost-of-living/
3rd World Savings, 1st World Cost of Living
Posted by theonlinecitizen on September 4, 2007
This is a letter from Jason, one of our readers.
It has been argued strongly that elderly Singaporeans are not saving enough, despite the CPF scheme. This is hardly surprising.
The CPF was introduced in 1955 when Singapore was a Third World colony. Our per capita GDP (at current market prices) in 1960 was S$1,306. This figure rose significantly to S$13,725 in 1983 and to S$35,552 in 1996. Today Singapore is a First World nation and this is well backed by our 2006 per capita GDP figure of S$46,832.
The transformation of our country has led to rapid increase in the cost of living as suggested by historical Consumer Price Index (CPI) data. Using 2004 as the base year (=100.0), the CPI was 31.9 in 1961 (1960 figure not available), 74.7 in 1983, 94.3 in 1996 and 101.4 in 2006. (Source for statistics: http://www.singstat.gov.sg/)
The cost of retirement
Senior Singaporeans played individual minor, but fundamental roles in driving this economic miracle. Back in the 1960s, through the 1990s, they probably could not have imagined, how with hindsight, their salaries, by the same token their CPF savings, will appear so meagre today. Likewise they would not have expected the cost of retirement to be so expensive.
It appears that the pioneer generations of Singaporeans have become victims of their own hard work and success. Having earned Third World wages and made Third World savings in their younger days, they suddenly find themselves living, and dying, under the weight of First World costs.
Over the years Singapore has accumulated substantial wealth, including those made through investments worth millions by the GIC and Temasek Holdings. No one guarantees workers above 62 will find good paying jobs and the proposed compulsory annuity’s payout of $250 to $300 is a drop in the ocean by today’s costs of living. While we applaud our government’s initiatives to stretch our retirement savings, it is high time we tap on our riches to help those with inadequate CPF monies to overcome the disparity of Third World savings, First World costs.
It is increasingly urgent for the government to lower the cost of living for retired Singaporeans. This could be done by co-paying for their essential expenses, such as medical, healthcare and public transport. This should not be viewed as pouring resources into a bottomless pit. Just as government investments into the economy through mega-projects like the IRs and hosting of F1 are now rewarding handsomely, investments into such schemes will generate the economy and the welfare of our people.
The CPF Board website states “CPF ensured that workers could support themselves with dignity in retirement”. Would the government play its part to fulfill this?
Land of milk and money – and the politics of envy
Posted by theonlinecitizen on June 21, 2007
Singapore has changed.
And I am not talking about physical changes such as the new MRT Circle Line or the new shopping malls or even the upcoming Integrated Resorts.
One can almost feel the fundamental changes that are taking place – in the hearts and minds of Singaporeans.
Although economic progress is of course important for our livelihood, it is beginning to become the overarching, some would say over-bearing, force that threatens to consume us into an endless, meaningless cycle.
A selfish nation
The first change one would have observed is the government itself setting a different tone for society – with the rise in the salaries of government ministers. The issue has been debated vigorously and heatedly, with the government electing to go ahead with the increase.
The tone of society has changed.
If those at the top put such absolute importance on monetary rewards, then it is not possible for them anymore to preach about values such as selflessness, charity, compassion and service.
When leaders set such standards, the rest of society takes the cue.
We are at risk of becoming a selfish nation. Indeed, some people think that we already are.
Caring for the old
The Minister in charge of ageing issues, Mr Lim Boon Heng, is quoted by channelnewsasia as saying: “I would like to maintain and promote… that it is the duty of the family to look after its old.” (Channelnewsasia)
On the surface, this looks like a reasonable argument. But when one considers that MCYS Minister Vivian Balakrishnan had said that the government prefers a “many-hands approach” to caring for the needy, one would have to ask Mr Lim Boon Heng if the government would be willing to do more to help the family care for the old.
The perception among some Singaporeans is that when it comes to the needy and the elderly, the government pushes the responsibility to the family. These same family members are then persuaded to work longer, retire later (if ever) and have the withdrawal of their CPF monies delayed.
All this while the government too opens the door wide to foreign workers who is here to help “average down the wage cost for employers”.
It seems like Singaporeans are caught between the devil and the deep blue sea.
An “all-for-money” nation
If one reads the newspapers or watch our local television channels, one would be inundated with stories and reports of how well we are doing – the stock market reaching new heights, the property market is booming, we are clinching deals everywhere, from India to China to Dubai.
Almost everyday, you would read about millions of dollars here, billions of dollars there being invested by the Singapore government.
The question some have asked is: Do all these benefit the average Singaporean?
Endless cycle of rising costs
With the continued influx of foreigners, wages remain depressed. Indeed, this is the very reason which our then deputy prime minister Lee Hsien Loong cited for letting such huge numbers of foreigners into Singapore:
“If we did not have some foreign workers to average down the wage cost for the employers, are you sure the employers can survive in Singapore?”
<!--[if !supportLists]-->- <!--[endif]-->DPM Lee Hsien Loong, Straits Times, Oct 29, 2001
The recent spate of cost/price increases has thrown up the question of whether Singaporeans themselves can survive in Singapore instead. And now, there are rumblings by the foreigners (or expats) in Singapore as well, about high rental. It has also been reported that Singapore is now one of the most expensive countries in the world to live in.
A prediction coming true
Many people predicted that once the PAP is elected into government again, price increases will undoubtedly take place. – and indeed, they have.
From the latest announcement of an increase in electricity tariffs to the previous increases in polyclinics and hospital fees, from cable tv subscriptions to the introduction of means testing, from the ERP to even postage stamps, Singaporeans are facing an incessant barrage of such news.
In the coming months, Singaporeans can expect increases in the GST (July), NETs (July), and also transport fares (Oct).
Already, food prices have increased – from those at your hawker centres to those at your supermarkets.
So, who is benefiting from the “sizzling” economy?
It seems that the only people benefiting from this ‘sizzling’ economy is big business – especially those which are government-linked. Most of these are monopolies. And as monopolies, they pay scant regard to protests from average Singaporeans.
Also, watchdogs such as the Consumer Association of Singapore (CASE) and the Competition Commission seem not to be doing anything at all. Even if they do, such as in the case of CASE, they’d rather spend their time and resources “catching” and warning small businesses like hawker stalls and coffeshop stalls holders about increasing their prices.
Not a word about big companies and government-linked companies’ price increases.
What can the average Singaporean do?
Short of public protests and boycotting certain products/services, it would seem that there isn’t much Singaporeans can do.
Which brings us back to the point at the beginning of this essay.
There is a growing sense of envy among Singaporeans – envy that the rich are getting richer and the poor, well….the poor staying right where they are.
This is the very thing which our prime minister wanted to avoid:
“We must not allow ourselves to be divided between haves and have-nots, or winners and losers … if we let a politics of envy drive a wedge between us, our society will be destroyed, and all will suffer. That must never happen.” (Link)
With the government’s seeming disregard to cries and protests about the rising cost of living amidst the latest round of price increases, we may indeed be in the process of being “divided between the haves and have-nots”.
Our income gap divide still remains one of the widest in the world.
While the top echelons of our society are making a killing right now, the poor - like those on public assistance who continue to receive only $290 per month from the same government which preaches about “a politics of envy” - continue to worry about their livelihood.
So, what can the average Singaporean do?
Not much, really.
It is hard to do anything when what you’re faced with is an all-powerful, all-pervasive government, monopolistic companies and civil servants who give non-replies to questions asked.
It would seem that the politics of envy is not being propagated by anyone else other than the PAP government.
Glitzy and dizzying news headlines and all.
Why about 1 million residents work long term overseas?
Is sgp unaber to provide attractive job opportunities for these
1, 0 0 0, 0 0 0 . 0 0 0 residents?
What does people incharge of job creation have to say about this ?
news reported a family of duo-income earning 7000 a month have to spend 1, 6 0 0. 0 0 0 a month! on PRE-school in sgp ! for 1 baby alone!
cost of living certainly has gone skyrocket and still climbing. but has the income level increased the same? OF course please completely ignore the rich. Look at those earning between 2500 to 7000. how stagnant has their pay been since the econo-crisis, wage freeze, cpf-cut, etc to now? how much more is the cost incurred for living here?
What is progress? when costs skyrocket? or when income increase and overall cost is lowered? This to me will be true undisputable progress.
so, in your opines, from 2005 to 2007, how much porgress has sgp made , really? exclude the rich who got pay hiked to extra-terrestrial porportions.
The fact that TS had stated will be unavoidable, as sg become more global. It will be up to individual to accept the trend, quit from it or left out entirely.
But one thing for sure, our generation is feeling the heat, our next generation will be in a worst off position, not to talk about our grand sons....
^Grandsons? What grandsons lol. If this continues, i don't think anyone is willing to give birth anymore.
I believe that different people look for different things from their government depending on their backgrounds. It is tremendously difficult for the Government to fulfil all those needs and some may argue that the Government should not be attempting to fulfil all those needs so as not to be too intrusive and have an undue influence in the citizen's lives.
However with regard to CPF, one thing stands out in my mind. I remember that CPF contribution on the employer's part was lowered by the Government to boost the economy by lowering labor costs.
Logically if you lower the premiums to any annuity, you'd end up with a shortfall at the end of the period. I feel the Government should calculate this shortfall which resulted directly from their action and top up the CPF accordingly.
I also believe that the issue of inflation and rise of costs of living due to economic progress eroding the value of CPF savings is an important issue that needs to be addressed as well.
The present batch of poodles already recognised that smart sinkie are already moving away from sin city and not staying around to be debt-cow and slaves.
Even FT are smart enough to enjoy free sinkie-paid uni education and moved on to getting a green card later.
So, the poodles have to severely milked the present bunch of stuck sinkie who are heavily tied up with housing, car, insurance and education loans for $$$$$.
What ever remains after all the sinkie have moved on will be the problems for the "4"- die generation poodles who have no one left to milk and cheat.
None of the poodles would admit that they are responsible for the cost improvement.
It is actually not their concern as they will not be staying around after their evil reign is over.
That is when the talk a lot of nonsense old man dies.