>Mah Bow Tan unwittingly highlights faulty land policy

>It was reported in the news that Mah Bow Tan said that land forms part of the reserves of Singapore. I posted what I thought about that here. Mah Bow Tan slips up on HDB price issue

In the above link, it can be seen that Mah Bow Tan said that lowering HDB prices is tantamount of “raiding reserves”. That’s because under the current system, when HDB buys the land, it will pay for the land at full cost, which the money will be returned to the reserves. If HDB buys it at a lower cost, the reserves will be “un-replenished” and fall.

There are two very important concerns with the policy of using land as reserves.

1. Value of your flat will drop anyway, asset enhancement or no asset enhancement -

It must be remembered that the flat we all purchase has only 99 years of lease. The older towns have already expired quite a fair portion. So even with asset enhancement schemes, there is a built in depreciation value.

Alarmingly, in spite of this built in depreciation factor, the Valuation Department doesn’t seem to take this into account. Just take a look at the resale HDB market. How many of them are priced as if they still have more than 90 years of lease left?

Hence, in reality, while the real value is dropping, isn’t the valuation process simply artificially inflating the value of your flats?

Come on. This can’t go on forever. Given another generation or so, the bubble will burst. And everyone who has paid a high value of that flat, will see a sudden devaluation.

Is not Mah Bow Tan and gang being irresponsible not to address this time bomb?

2. Churning an asset, with no value added -

There is a far more serious implication in this “land used as reserves” policy. There is a “churning” of the land, with no real value added. The land will always be there. By using this as part of the reserve, with a certain value attached, and with a lease attached to that, the govt will be able to create an artificial value which will be recorded in the books, every lease cycle.

For example, Land Parcel A is sold to the HDB for $x million dollars in the year 20X9. After 99 years, in the year 21X8, the same Land Parcel A would have completed its lease, which means the “owners” of that land, in this case the HDB dwellers, would have zero assets.

But some how, magically, the govt would be able to “recharge that value” at say maybe $100x million dollars now.

Magically, without producing any good or service, that extra money comes out from thin air!

Wait a minute, there is another nation in the world that creates money out of thin air today, no? The flailing American economy, no? Difference is that America prints money without adding any economic value. In our case, we churn land parcels without creating any economic value.

Time bomb ticking -

The problem of creating value out of thin air is that you will be stressing the economy. Consumers will be paying for a commodity that on paper may be of value, but in actual fact, has no value or a value that is far less than it inherently has.

Creating “value out of thin air” is akin to a ponzi scheme. As long there are “new buyers” to support the “value” of the scheme to pay the “old” subscribers, everyone thinks it is a good scheme. There is no value added.

As long as consumers (in this case HDB dwellers) are able to pay up their flats, well and good. The moment they can’t, they will default. Today, new HDB flat owners will have to seek bank loans, which does not protect them from repossession.

If they default their loans, the banks have the right to repossess the flat. But the price of the flat the banks are able to sell will depend on the market demand. If prices of flats are out of reach of most, it will fall and the banks will have to take whatever losses.

Isn’t that is what is happening in America, where their system is also dependent on artificially inflating the economy? Isn’t there a flood of foreclosures in America and the market price of those foreclosed properties aren’t even able to cover the banks’ losses?

I have in the past made several posts how Singapore apes America. From their economic to military policies. It looks like we ape them so much that when their economy boomed in the 20C, we boomed the same way they did. And when they crash in the 21C, we crash the same way they do too.

Didn’t I keep repeating that we ape them in every single detail, their silly mistakes included?

Are we truly not sitting on a time bomb, due to a stupid policy of using land as reserves, artificially propping up our economy, the way America artificially props up their economy by printing worthless US Dollars?

Mah Bow Tan, in an attempt to defend the high cost of HDB by explaining land used as reserves policy, unwittingly tells everyone that this policy is an economic disaster waiting to happen.

>Mah Bow Tan slips up on HDB price issue

>Mah Bow Tan takes a potshot at the Workers Party’s call for lower housing prices. Here is part of his reply, which he unwittingly proves WP’s point that it is the govt and not market forces that controls HDB prices!

Mah Bow Tan’s response to Workers’ Party on Public Housing

7. Finally, the WP’s proposal to lower flat prices by paying less for
the land is an illegal raid on our reserves. Under our Constitution, after every general election, the new Government is required to manage its expenditure based on its current revenue during its term in office. It cannot use assets which have been accumulated under previous governments, unless the Elected President (“EP”) agrees. These assets are reserves protected by the EP for future generations of Singaporeans. This system was put in to prevent a profligate government spending money which it had
not accumulated.

8. State land forms part of the reserves protected by EP. When the Government takes state land from the reserves to use, for example for public housing, it has to pay the full value of the land back into the reserves, to replace the land which it has used. This land value is determined by the Chief Valuer, according to objective market conditions and established valuation principles. In this case, it is valued for public housing, which is already lower than for private housing. The Government cannot arbitrarily price state land higher or lower as it pleases. Nor can it appoint a Chief Valuer to do its bidding, because the Chief Valuer’s appointment is protected, and subject to the approval of the EP.

- State land forms part of reserve.

- When govt takes it, it has to pay FULL VALUE and put it back to reserves.

- Chief Valuer determines valuation of land.

Interesting. Very, very interesting. The figures for our reserves is not open to public. We don’t know the details. Only the govt knows the lurid details. But now Mah Bow Tan has publicly stated what is the cause of high HDB flats.

Before I come to the point how Mah slips up, showing that HDB prices are controlled by the govt, allow me to discuss a very pertinent point – using land as part of our reserves.

When Mah Bow Tan said that land forms part of reserves, he is actually giving away a hint many analysts have always feared – ie our assets are highly and artificially inflated. If a huge amount of assets is propped up by land, and if land prices fall for whatever reason, won’t our reserves fall?

In the first place, to have land as part of our reserve system is foolhardy. It is not that we have much land. It is because we have little land, and any fall in price of that little land can cause a serious devaluation of our reserves, we shouldn’t have used land as part of reserves in the first place. We are unlike huge countries where they have large lands and if one sector of land drops in value, it does not affect the other areas.

So now MBT has shot himself in the foot. He has disclosed publicly that our reserves are dependent on land value, and as such, the PAPpies are afraid to lower the price of land to lower cost of HDB. Which brings up the point that WP said – HDB prices are controlled by the govt.

Has Mah not shown that by manipulating the value of the land you can prop up land value, so as to prop up the value of our reserves? And in doing so, would that not actually cause the cost of building to escalate, affecting many first time buyers of HDB flats?

As minister in charge of HBD, has he not now publicly shown to the world his faulty HDB land policies?

And lets’ remember that the Chief Valuer is a govt servant too. You think he will value the land at fair value, or do you think he would value it as what his bosses want him to value?

Thank you Mah Bow Tan for admitting that the govt, or more specifically the PAP, has been manipulating the value of the land, such that new HDB applicants now have a very hard time acquiring a home.

Thank you for showing that you screwed the whole system up. Thank you for proving WP right.

>Racist HDB Quota Policy begins to show its Effect

>I don’t buy PAP’s flimsy excuse that the reason for HDB’s Race Quota Policy is for the races to intergrate. If that were truly the case, there won’t be any SAP Schools, because SAP Schools does the exact opposite – polarize the Chinese and cut them off from other races!

Here is an article from the ST pertaining to why people want to live close to relatives. I will touch on the HDB Race Quota after this.

More living near parents

MORE married children now live in the same estate as their parents.

The proportion of such children rose from 29.3 per cent in 1998 to 35.5 per cent in 2008, according to a 2008 Housing Board survey of around 8,000 households.

The count comprises married children, aged 21 to 54, who live in the same flat, the same block, a neighbouring block or a block in the same estate as their parents.

HDB said it saw the 6 percentage point rise over 10 years as an encouraging sign that its housing policies to get people to live near their parents were a step in the right direction.

Since getting married in 2001, store assistant Kok Chee Keong, 43, and his wife have been living one floor below his parents in Ang Mo Kio. It was a deliberate choice, borne out of his desire to take care of them.

‘My parents are getting old,’ he said of his 72-year-old father and 69-year-old mother, who had until last year helped baby-sit his children who are aged seven and eight.

There are advantages to live close to your parents. It is easier for you to look after them, or for them to look after your children. I don’t have to go into the details.

The race discrimination is not apparent to you until you take a closer look. Because of the race quota, the minority races are in a fix. It is easier for the Chinese majority to find many willing sellers in any HBD Town.

For the minority races, there are fewer in numbers and hence, if the quota is hit, it would be difficult for that minority race couple to find a flat near their parents. The smaller the minority race, the harder they are hit. Hence, a Malay couple will find it more difficult to find a flat compared to a Chinese couple. And an Indian couple will find it more difficult than a Malay couple.

I have made that point in this blog two years ago. The main reason for the HDB Race Quota is for PAP to remain in power. But the effect it has is discriminatory against minority races. Here is that post. Racial Quota for HDB is for PAP to stay in power – and it is racially discriminatory

The racial quota for HDB ownership was thus introduced. It was a thinly disguised move to re-distribute “opposition voters” (presumably Malays – and to some extent, Indians) amongst HDB towns, so that it would be more difficult for wards to fall to the opposition.

Around the same time, the GRC was introduced. This also means more dilution of “opposition voters”. The excuse given for the introduction of the GRC was that minority race MPs would find it difficult to be in parliament, because the majority Chinese voters would want a Chinese MP.

The above is a smack in the PAP’s own face because it in fact confirms PAP’s race politics and views.

A problem minority races face under the quota system -
The unintended consequence of this racially discriminatory rule is that minority races find it difficult to be close to their relatives. A newly married minority race couple, who may want to apply for a flat near their parents or in-laws, may find themselves being disqualified because of the quota system. The Chinese on the other hand, because of their large population, will still be able to find willing sellers easily, even if the quota has been hit in that town.

I don’t buy the race integration crappy reason from the PAP. The SAP Schools prove that is not so. In any case, Singapore is so small even if certain HDB areas have a high concentration of minority races, it won’t change Singapore’s multi-cultural landscape.

When The HDB Race Policy was introduced, it was simply for the PAP to dilute the minority votes in GRCs, because PAP (then) believed that was where most of the protest votes came from. This policy is highly discriminatory against minority races, as it makes it difficult for them to find a flat near their parents or relatives.

It is about time to abolish the HDB Race Quota Policy.

>PAP activates Panic Button

>Within just a few days, you see signs of panic in the PAP camp. The hot issue is HDB, HDB, HDB. Yes, that appears to be the hottest issue now. So far we have:

1. Reports that opposition parties are going for Tampines GRC because Mr Mah BT, the guy in charge of HDB appears to be unpopular.

2. MM Lee throwing his weight behind Mah BT and the HDB policies, hoping that would scare the electorate from voting opposition in Tampines GRC.

3. Now HDB is revving its engine at full-scale, coming up with policies that hopefully will end speculation and prevent PR ethnic enclaves in HDB.

Never have we seen so much discussion and interest on HDB issues within just a few days. That’s because PAP appears to be panicking and suddenly realise that the HDB issue is one of the hottest topics.

HDB reviews rules

THE Housing Board is embarking on a review of its rules to ensure that property speculators are not abusing the system – and driving up flat prices.
It will check if any rules are ‘encouraging or allowing’ people to speculate on HDB flats, said National Development Minister Mah Bow Tan.

At the same time, it will step up efforts to make sure people do not get away with abusing the system.

Some disgruntled homebuyers, priced out of a rising market, worry that some HDB buyers are exploiting the rules to try to make a fast profit.

They claim these speculators snap up flats on the resale market and then either rent them out illegally or sell them legally after the stipulated one-year period.

Under HDB rules, citizens and permanent residents who buy resale flats without housing grants or HDB loans must live in the flats for at least one year before selling, or at least three years before renting out the entire flat.

Assuming that HDB amends its rules such that citizens and PRs who buy resale flats without grants or HDB loans need to live for, let’s say, five years before selling flat or renting entire flat, how does that bring down resale HDB prices?

The extension period only works if there is speculation and PAP is ASSUMING that the high cost of HDB resale flats is due to speculation. But what if it is not? What if it is caused by short supply vs high demand? The situation would WORSEN.

Why worsen? Simple. With the current policies, if these people have not had any grants or loans from HDB, all they need is to wait for one year to sell or 3 years to rent whole flat. If the rules are changed to 5 years, it would mean that the supply would drop because these people can’t sell or rent yet – but the demand is still there isn’t it?

It has to be noted that it is citizens who claim that the price of resale flats have gone up due to speculators. Has the HDB verified that? If not, is not HDB jumping the gun coming up with these adjustments? And if the rising cost of HDB flats is due to high demand and low supply, would not HDB make the situation worse?

Come to think of it, the notion that Mah BT is not doing his job and hence a very unpopular guy, is very true. He and HDB are not detailed enough. They just react to what the ground says and if the ground is very hot. In other words, they work on a knee-jerk reaction policy. What planning?

Yes, if MBT gets voted out, he deserves it. And LKY should know that he is the daft one, putting a daft minister (LKY handpicked him) to take charge of HDB!

Here are more stories of what PAP is doing to calm down the electorate. PAP sure is panicking real bad.

New flats every month
Wider gap in health subsidy

>More crap from Old Man Lee – what integration talking he?

>From the Sunday Times, 8 Mar 2008.
Integration a 2-way street

Lee portrays that he would like to see an integration of citizens, regardless of race, colour or religion. My toes are laughing. If at all, I feel that Lee has been one of the greatest racists in the history of Singapore since independence. Correction, make that even BEFORE independence. Let’s take a quick walk through history.

Before Independence

Before independence, when we were still part of Malaysia, Lee kept harping the race card. Now, it is not that I support Malaysia’s bumi policy. It is that I feel if LKY and party were not comfortable with the bumi policy of Malaysia, why the heck did they ask for a merger in the first place?

It is not that Malaysia was dying to have Singapore in their federation. It was actually Lee’s idea to merge with Malaysia. The bumi policy was already in place. Lee goaded Malaysia for Singapore to be included in the federation – knowing FULL WELL that the acceptance of the bumi policy was ONE OF THE CONDITIONS.

So if at all, Singapore asked to be invited to the party, knowing full well what are the terms. After being accepted, Singapore kicks the chairs and overturns the tables of the hosts, and claim that the conditions at the party were not conducive!

In the guise of opposing the bumi policy, Lee shouts the “Merdeka” card, which calls for all Malaysians to be Malaysians. Hence, this was his first “integration call” amongst citizens. What’s worse, Singapore leaders even instigated Sabah and Sarawak, the other two states, that were to be merged into the federation, against KL.

Of course, we all know that according to Old Lee, Singapore was finally kicked out. Well, that’s Old Lee’s version. According to the Tengku then, Lee was the one who asked that Singapore be out. In fact, there are historians and political analysists who strongly believed that Lee even threatened the Tengku, that he would use Singapore’s Chinese majority to create problems for KL. The Tengku finally relented.

Only the two of them were at the meeting. And only Lee is now alive. Somehow, looking at the background, I believe the Tengku’s version. Yeah, you can call that crocodile tears LKY shed on TV.

Post Independence

Lee’s racist remarks and actions are well known. Integration my foot. One of his well known concocted stories was this:

Three women, one South Asian, one South East Asian and one East Asian were in labour. All had difficulties. As it turned out, the South Asian and the South East Asian woman did not make it. But the East Asian woman did – due to her strong resilience.

No prizes for guessing that the South Asian woman was to depict an Indian, the South East Asian a Malay, and the East Asian a Chinese.

Where did he get that story that was told in the 1960s was beyond me. That story was repeated some years back in the Straits Times if I recall correctly.

However, in my opinion, the strongest evidence of his racist attitude, which actually shows that all his talk about integration is bull, is the treatment of Malays as far as NS in the early years, is concerned. We all know that for decades there were no Malays in the RSAF, commando, armour units or any other sensitive areas. You can give whatever reason you want for that. The fact is that the reason is based on RACE and that means the decision is RACIST. That you can’t argue.

Yet another policy, which was less obvious then (during the 1970s to 1990s), was the ease of granting PR to Chinese Malaysians, as compared to other races from Malaysia. The idea was to keep the racial ratio in Singapore intact. It was found that Chinese families in Singapore were not reproducing as much as the other races. Hence, to keep the ratio intact, granting PRs to Chinese was made easy, compared to other races.

Racist Policies is deep in Singapore – so what integration?

I have commented in this blog before that racism exists in Singapore. I have also given examples. In this article, I am going to elaborate some of the things I may have touched on in earlier posts.

CDAC, Mendaki, Sindha and other funds -
Why must we segregate the funds based on race? Is that integration? You mean to say funds contributed by a Chinese cannot be used by a Malay, Indian or Eurasian? The Chinese, being the biggest majority will of course have the biggest contribution. That means the Chinese community will be able to have much better programmes than the rest. Is that integration?

Racial Quota as HDB Policy -
While it appears that the PAP is trying to integrate the races, this policy actually disadvantages the minorities. In fact, the smaller the minority, the worse the situation for them.

It is understandable that newly married couples would like to be close to their parents. For the minorities, it is easy for a particular area to have hit the racial quota. For so long as there are no willing sellers for that area, the newly weds cannot be close to their parents.

The Chinese however, are large in number. The chances of any Chinese family selling their flat in any particular area is hence, more likely than a minority family to do the same.

So is the policy intended to integrate the races, or is it to disintegrate the minorities?

SAP Schools -
Ah….so if integration of races in important, such that there has to be racial quota in HDB flats, why is it the reverse in schools? Why do we have elite Chinese schools which automatically disqualifies minority races, due to their mother tongue?

Most Chinese schools hardly have any minority races. If you want to talk about racial integration, shouldn’t we start them young – at school? Why then this racist policy of favouring the Chinese by setting up special schools for them?

Integration you say? Look at your IC, dude! –
Many of us accept that race is stated on our IC. Now why must that be so? Are we not all Singaporeans? Here is where some social engineering has taken place, which many have not realized. About 20+ years ago or so, there is a column that states our dialect. Hence, on top of ‘race’, we had ‘dialect’.

Around the late 1970s and early 1980s, LKY kept lamenting that the Japanese could progress because they are a homogenous race. One of his thoughts he lamented was that Singapore is diverse. But presto, in no time, ‘dialect’ was removed and all Singapore Chinese were simply categorized as “Chinese”. This was also the time when the “Speak Mandarin Campaign” started.

But wait a minute. Not all Singaporeans are Chinese, are they? So how do you integrate the rest? PAP didn’t integrate them. In fact, PAP subtly disintegrated them. You see, before “dialect” was removed, all Malays were stated as Malays in the race category. Indians were stated as Indians too. However, after dialect was removed, Malays were categorized Malays, Boyanese …..whatever, while Indians too, had sub-races like Malayalee.

I was born during the time when “dialect” was still found on the IC. My dialect was stated “Hokkien”. When the new policy came up, “Hokkien” disappeared from my IC. I was then no longer different from my other Chinese friends who may have once been a Teochew or Hakka. However, over the years, I found that some of my Malay and Indian friends had their race sub-categorized.

So what the heck is going on? The above move meant the PAP wanted to homogenize the Chinese, while trying to break up the minorities into their sub-categories. Integration? My foot!

The above are some examples of blatant social engineering, based on racial lines. I don’t believe a word of old man’s words about integration. In my opinion, he has been the biggest racist leader in the history of Singapore.

>Racial Quota for HDB is for PAP to stay in power – and it is racially discriminatory

>The Workers Party recommends in their manifesto that the race quota pertaining to HDB ownership be removed. http://hammersphere.wordpress.com/2008/03/18/manifesto-ii-wps-housing-agenda/ Scroll to the bottom of the message.

“As our society has now attained a level of multi-racial integration, the ethnic quotas governing home ownership of HDB flats should be removed to allow all Singaporeans equal freedom of choice of home locations.” – WP

Sometime last year, I made a post on discrimination in Singapore – If I told you Singapore has racist policies, would you believe me?

In the post above, the issue of the segregation of funds, namely the CDAC, Mendaki and Sinda Funds was discussed. It was mentioned in the post that CDAC, being the biggest fund, will of course have better economies of scale. Malays, Indians and other races, would thus be kept out of programmes only the Chinese could enjoy. A better way to address the inequality would be to have a single fund for all Singaporeans.

I ended the post above with the point that the racially segregated funds is only one example how Singapore is governed by race politics. I am glad that the WP has in effect brought up another example of race politics in Singapore – the ethnic quota for HDB ownership.

Real reason for ethnic quota is for PAP to remain in power -

The HDB gives the reason that the race policy is for different races to intermingle. However, I am not convinced.

Let us remind ourselves that the REAL reason for distributing the races is to disperse voters who the PAP believes, support the opposition. In the early 1980s and before, before the GRC system was implemented, all wards were single constituencies. The first opposition MP who got voted into Parliament since independence was JB Jeyeratnam. He won the by-election in Anson in 1981.

Anson was thought to be heavily populated with Indians. Hence, before the 1984 GE, the constituents of Anson were “remixed”, to skew towards the Chinese race. Jeya retained his seat – and Chiam See Tong won Potong Pasir. JBJ was then sued by the PAP and he lost his Anson seat. Needless to say, Anson constituency, after JBJ’s exit from parliament, was redrawn and it became history.

At the same time, it was also noted that constituencies with heavy population of Malays like Bedok, Eunos and Geylang, saw the opposition fared very well. A comparison was made to the “Chinese populated areas”, where the PAP fared better.

There was then talk about how to “arrest” the “problem of opposition voters” – whom PAP firmly believed then (actually some PAP members still believe today!) are “caused by minority races”.

The racial quota for HDB ownership was thus introduced. It was a thinly disguised move to re-distribute “opposition voters” (presumably Malays – and to some extent, Indians) amongst HDB towns, so that it would be more difficult for wards to fall to the opposition.

Around the same time, the GRC was introduced. This also means more dilution of “opposition voters”. The excuse given for the introduction of the GRC was that minority race MPs would find it difficult to be in parliament, because the majority Chinese voters would want a Chinese MP.

The above is a smack in the PAP’s own face because it in fact confirms PAP’s race politics and views.

A problem minority races face under the quota system -

The unintended consequence of this racially discriminatory rule is that minority races find it difficult to be close to their relatives. A newly married minority race couple, who may want to apply for a flat near their parents or in-laws, may find themselves being disqualified because of the quota system. The Chinese on the other hand, because of their large population, will still be able to find willing sellers easily, even if the quota has been hit in that town.

This actually brings up the subject of race discrimination again in Singapore. As mentioned in the beginning of the this post, the ethnic quota is indeed another example of racially discriminatory practices in Singapore.

Intermingling of races? Really? -

Another interesting point that is worth to be discussed is the fact that, is PAP truly sincere about mixing of races?

The segregation of the CDAC, Mendaki and Sinda Funds actually polarizes communities rather than integrates, doesn’t it?

What about SAP schools, where the promotion of Chinese culture is heavily funded by the government? Consider this fact. A Chinese student, who most likely takes Chinese as his mother tongue, has the choice of entering a host of premier schools after his PSLE.

A Malay or Indian student, who most likely would be taking Malay or an Indian Language as Mother Tongue, would be disqualified from SAP Secondary schools, no matter how well he did for his PSLE.

A minority race pupil is thus deprived from the tons of government sponsored programmes.

Some pro-SAP proponents may argue that the Malays and Indians can always get the government to sponsor SAP specially for Malays and Indians. My reply would be, isn’t that race segregation again? And like the racially divisive funds, would not the minority races, because of the smaller funds allocated for them, have smaller economies of scale, compared to the SAP Chinese schools?

The crux of the point is – if PAP truly is sincere about intermingling of race, why are they segregating races through the racially divisive funds like CDAC, Mendaki, Sinda – and why does PAP promote Chinese SAP schools, hence disqualifying many Malays and Indians who do not take Chinese as their Mother Tongue?

I agree with the WP that the ethnic quota for HDB ownership be abolished. It is racially discriminatory – and a smack of hypocrisy on PAP’s part, noting the fact that it always takes a jibe at our northern neighbour’s race policies.

Pot, Kettle, Black.