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In reply to "[lpc1998] ROOT CAUSE" – [szhcornan73]

lpc1998 - 02:07pm May 26, 2003 SGT (701.
Higher GST rates will quickly translate themselves into higher cost of living .. Pg 1/4

“The earlier our people and government recognise the root causes of the areas of our uncompetitiveness the better.

There are at least two of them. One is the high cost of doing business in Singapore, which the government is in the process of tackling it after the Economic Review Committee’s recommendations addressed this concern. However, the government has yet to address the high cost of living here as it is linked to labour cost which is a major component of cost for many businesses.

The other is the quality of our people, but this problem cannot be effectively addressed without the necessary changes to our political and social systems. The quality of the people we have today is primarily the (error correction) consequence of the political and social systems we have since birth of our nation.”… Quote from [lpc1998]

You [szhcornan73] said:
“[lpc1998] ROOT CAUSE

The very fact. And there could have two reasons:

One, they are trying hard, still very hard but caught in situation, still trying. But let's start cutting labour cost first, it is easier.”

You are right here. They have and are trying very hard to lower the cost of doing business in Singapore. They begin by slashing company taxes, government levies, fees and other charges on businesses and revising rules and regulations that impose unnecessary expenses and costs on businesses.

Broadly speaking, these are good moves, except that they result in the need to raise the rate of GST to 4% this year and 5% next year, and if this trend persists, higher and higher GST rates in the future, as the national budget needs to be at least balanced.

Actually the pressure to raise the rate of the GST was unduly amplified by the generous personal tax reduction for the rich individuals on doubtful grounds. This is bad, as higher GST rates will quickly translate themselves into higher cost of living for the people. We have a very difficult problem here that requires minds that can really see the big picture.

To be continued … Pg 2/4

lpc1998 - 02:13pm May 26, 2003 SGT (701.
Asset inflation is the primary hidden culprit behind our cost uncompetitiveness .. Pg 2/4


“Second, there is never high cost of living in their dictionary. Don't belief? Check the CPI, it suppose to tell you it dropped. Low interest rate (haha... saving rate I meant) .”
“How would they ever think of high cost, if the gap is almost 100x away. It is forever low untill most of us step into the coffins lah. HaHaHa! CPI ? It does not reflect any real costs of living at all, it is more a mechanism to justify fee hike I suppose.”
The question of what constitutes a high cost of living in Singapore is essentially a question of fact. Just total up the costs of maintaining a decent, average family of a couple living in a HDB flat with two school going children and two parents. The CPI is irrelevant and meaningless to real people struggling to keep a family going, if it does not reflect the actual condition they are in.

When wages fall below what is really needed for survival economically in Singapore, there will be adverse social and security consequences of far reaching proportions. And the people who will suffer most in such a situation would be the dumb majority who would then behave more irrationally as these are the people most vulnerable to manipulation by forces hostile to Singapore and by the religious, political and commercial opportunists.

I think the high cost of doing business in Singapore and the related high cost of living are primarily the results of the asset inflation, especially land and property prices. In the Namly Crescent Property Dispute case, a 1,115-sq-m residential property purchased for $14,500 in 1966 was said in court to worth $4 million as at 20 August 2002: i.e. for a capital appreciation of 2,658.62%! (correction: 27,486%!)

It could be an extreme case, but it does indicate the extension of asset inflation when we add up the figures for all the economic properties in Singapore as in 1996 at the height of the property market. This must have been translated into hundreds of billions of dollars boost to the economy, far more than what could have been actually earned in the real economy.

An appreciation in property prices as the result of economic development of the country is not necessarily a bad thing, but when it changes totally the character of HDB from dedicated public housing agency into just another property developer competing for profit in the market and huge increases in rent for commercial and industrial properties, we are in serious trouble.

This asset inflation episode benefits fabulously the lucky generation, especially those who bought or owned properties before 1990 and sold them before 1996, not only in tax free capital gains, but also from the ‘economic miracle’. It looks like those in the future generations without inherited wealth would have to suffer for it, unless property prices can resume ad infinitum its upward trend after every setback, but this would lead to economic uncompetitiveness, as we are now facing.

Now the government cannot simply act to lower property prices without jeopardizing the financial integrity of many companies and the banks that lent money with properties as collateral. What the Japanese economy and banks has gone through for the past ten years is an ominous harbinger for what is in store for us in the future.

To be continued … Pg 3/4

lpc1998 - 02:20pm May 26, 2003 SGT (701.
SARS has taught all of us an immensely valuable lesson . .. Pg 3/4


“Attitude, no only Singaporean's attitude need change, the sg gov's Attitude is one big hurdle that is yet being recognised.

Yes : The people and gov need to recognise the ROOT CAUSE problem and do some reflection. Me too.”

“Individuals are selfish, institutions are also selfish, you aspiration of change is different from the expectation of other individual selfish souls. The east asia economy recovery has to depend on the swiftness of how institutions change its policy. Though we are fast enough to materialise the physical surface change (like changing institutions' name, logo but replacing with the same blood), You are quite right to say it is one big hurdle, infact not one... many... many... many.....


Like someone mentioned before, those who favour a change are only minority, and the majority are still very happy to be dumb, if not completely dumb.. I still got job.. I still got my business to run... I still benefiting from the handouts.... No need any change... Oh please..I'm so happy....please... How? ”

“I believe as long as the majority of Singaporeans are happy with what our Garment is doing and the whole country is well managed,there is no reason to submit to the whims and fancies of the kanenanbeh minority.”
“The quality of the people is very important. I believe that changes to the political and social systems should be considered and implemented for the benefit of the people and the nation. However, certain individuals may subscribe to the concept that since Singapore has limited resources, a higher proportion should be devoted to nurture and benefit the "talented". Notwithstanding their concept, with respect, I believe that sufficient resources should be dedicated to nurture and train those not considered "talented" (or gifted) in order to ensure that a majority of the people are able to "think", and be politically and be socially aware of various matters in this new information age.”
It is really amazing that many people are not aware or convinced that the Singapore Government’s ‘attitude’ has changed substantially in many areas in the last five years. It is now much open than before, far more tolerant and receptive to criticisms by and feedback from ordinary citizens. It has encouraged and set up, among others, online forums and chatrooms. It even has a ‘thinking schools and learning nation’ slogan and has set up a People’s Forum of 10,000 participants. The most prominent of all is the Remaking Singapore Committee. Have people ever wondered why all these changes carried out with a sense of urgency?

These changes are certainly not the consequence of a sudden religious, ethical or political enlightenment. It is globalization and the Information Age that dictate these urgent changes for the future viability and survival of Singapore as a nation and Singaporeans as a people.

Our leaders understand we can no longer afford a dumb majority merely ‘technically educated’ (the term Technical Education whatever it means ought to be banished forever from our vocabulary. We can no longer afford people with robotic ethics or behaviour) to operate machines and blindly follow instructions. We now need entrepreneurs who can compete globally and creatively and at the same time remain loyal to Singapore and Singaporeans. The first requirement is extremely difficult and the second requirement is much more so.

Basically, ours has to be a premium Citizenship of the Willing and the eventual emergence of Singapore as a superstate with the majority of our citizens living physically overseas.

To be continued … Pg 4/4

lpc1998 - 02:27pm May 26, 2003 SGT (701.
SARS has taught all of us an immensely valuable lesson . .. Pg 4/4

The Singaporean of the future when he finally materializes is not only much more globally mobile, but also highly desirable by other countries and peoples. So we can see that this constitutes a Herculean challenge to our government and leaders. Obviously, we cannot keep producing such desirable people for other countries in exchange for normal immigrants from them. We would in time be left on the island with a residue of really dumb majority and a people without a future. On the other hand, the failure to evolve progressively in the Era of Globalization and the Information Age would mean unavoidable extinction. So it is Singapore’s destiny to excel or to be extinct.

Perhaps, people do observe that the government has a perceptible tendency to revert to some of its old ways when the economy brightens up. This may account for the pessimism and skepticism of many people.

The areas that are most resistant to change are the political and social systems because such changes are perceived to entail huge risks not only for the nation and people, but also for the leaders personally and the ruling party. So in these areas the current preference of the leaders is to seek changes only within the existing ‘proven’ systems. So we are in stalemate here and time is fast running out.

There is unlikely to be a way out here until many Singaporeans understand this dilemma and the necessity to work with the leaders towards a reasonable and sensible solution. In this connection, SARS has taught all of us an immensely valuable lesson: how the people and government can work together to solve problems without the usual blame, acrimony, denial of reality and the need of the people in-charge to defend their errors and misjudgement. Whatever that is good and practicable is implemented and whatever that is bad and not performing is discarded, all done without ceremony and fanfare.

Best Regards

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