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NCMP Leong Mun Wai questions Government’s focus on Income’s capital adequacy over social mission

On Tuesday’s Parliamentary session, NCMP Leong Mun Wai expressed concern that focusing on the capital adequacy of NTUC Income n the proposed sale to German insurer Allianz might overshadow its social mission. He questioned whether Allianz had provided a written commitment, but Minister of State Alvin Tan did not confirm this, reiterating NTUC’s dedication to preserving Income’s social mission amidst market changes.

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SINGAPORE: During the Parliamentary session on 6 August, Leong Mun Wai, Non-constituency Member of Parliament (NCMP) from the Progress Singapore Party, expressed concern that focusing on the capital adequacy of NTUC Income Insurance Ltd in the proposed sale of a majority stake to the German insurer Allianz might overshadow the importance of Income’s social mission.

He argued that while the social mission of Income might currently seem less prominent due to market conditions, it still provides Singaporeans with a sense of security.

Leong Mun Wai compared this to how FairPrice offers reassurance during food crises, even if it is no longer the cheapest option.

“My question is, first of all, does the government admit that they are only going to concentrate on the capital adequacy of Income, disregard the social mission?”

In response, Alvin Tan, Minister of State for Culture, Community and Youth (MCCY) quoted Dr. Goh Keng Swee, highlighting that cooperatives must be competitive and financially sustainable without government privileges.

He noted that a cooperative that is bankrupt would not serve its purpose.

Tan reassured that NTUC has consistently upheld its social mission since its founding in 1961. He highlighted NTUC’s efforts to uplift workers’ lives, including raising wages for low-wage workers through the Progressive Wage Model (PWM) and supporting workers during COVID-19 with the Job Security Council.

Alvin Tan emphasizes balancing social mission with financial responsibility

Tan explained that while maintaining the social mission is important, NTUC also needs to be financially responsible and address long-term challenges.

He mentioned that NTUC had thoroughly assessed its situation and explored various funding sources before deciding to proceed with Allianz.

On Tuesday, several MPs, including NCMP Leong, raised concerns in Parliament about the potential deal between NTUC Income and the German insurer.

Mr Leong inquired about the government’s plans to support the cooperative movement in providing affordable essentials, especially with Allianz’s proposed majority stake acquisition of Income.

In response, MOS Tan reaffirmed the government’s commitment to maintaining the affordability and quality of goods and services for Singaporeans.

He cited support measures for co-operatives, such as amendments to the Co-operative Societies Act, resources and training, and grants from the Central Co-operative Fund (CCF), which are regularly reviewed.

NTUC has also promised to keep premiums affordable for Income’s low-cost schemes for union members.

He reiterated NTUC’s commitment to preserving Income’s social mission amid market changes.

NCMP queries whether Allianz has provided written commitment

In a supplementary question, NCMP Leong asked whether Allianz has provided a written commitment and raised confusion from statements by NTUC Enterprise CEO Andrew Yeo and Chairman Lim Boon Heng about Income’s status as a social enterprise or private company.

“Because Singaporeans are confused that NTUC Enterprise CEO Mr Andrew Yeo stated two years ago, that the corporatized income will remain an NTUC social enterprise. ”

“NTUC Enterprise chairman Mr Lim Boon Heng has just implied in a recent interview that Income should be treated as a private enterprise, and thus we should not interfere in this transaction.”

He asked whether, if NTUC Enterprise and Income are considered social enterprises, the government should intervene in the transaction to ensure that Income remains majority-owned by Singaporeans and that its social mission is preserved.

In response, MOS Tan reiterated that Allianz has assured its commitment to upholding Income’s existing policies, charity commitments, and a pledge of S$100 million over ten years.

He noted that this assurance aims to maintain Income’s social mission.

“Income’s social mission has already evolved. It only offers two low-cost options right now and the other products have competitive options and are well regulated.”

He elaborated on the reasons behind the sale, emphasizing that Income faced capital adequacy pressures and competition in both the private and public insurance markets.

“Therefore NTUC Enterprise had to put in capital injections of up to its publicly known S$630 million. but it cannot do so alone and it cannot do in perpetuity, ” he said.

“The financial capital adequacy that is the reality that income faces.”‘

Alvin Tan mentioned that NTUC Enterprise had explored various funding sources, including local and foreign financial and non-financial institutions.

Despite this, Allianz was found to be the best fit in terms of alignment with NTUC Income’s goals.

He emphasized that the sale to Allianz was aimed at ensuring long-term protection for Singaporeans, addressing both immediate and future challenges.

Alvin Tan recognized the emotional attachment and concern Singaporeans have towards Income, a trusted brand for many years.

“Ultimately, time will tell, it’s a judgment call, that’s what leadership is that’s what judgment call is, and that’s what I think is really stated clearly what NTUC enterprise, as Income insurance has already stated very clearly,” MOS Tan concluded.

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Business

Times Bookstores to close after nearly four decades in Singapore

Times Bookstores will cease operations in Singapore after nearly four decades, with its final outlet at Cold Storage Jelita closing on 22 September 2024. The closure is seen as being attributed to high rents, low sales, and rising operational costs, reflecting challenges faced by physical bookstores in Singapore.

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16 September 2024

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Times Bookstores will end its operations in Singapore after nearly 40 years, as its last remaining outlet at Cold Storage Jelita on Holland Road is set to close on 22 September 2024.

In a farewell statement posted on Instagram on 16 September, the English book retailer, established in 1978, invited customers to visit the store one final time. “Our happily ever after has finally come,” the post read. “It is with both a heavy heart and a sense of fulfilment that we announce the closure of Times Bookstores.”

The closure of Times Bookstores has been anticipated for several years. The company, owned by regional consumer group Fraser and Neave Limited, closed its branches in Plaza Singapura and Waterway Point in February 2024.

The shutdowns triggered a discussion in Singapore’s literary community about how to better support bookstores.

Struggles Facing Book Retailers

Times Bookstores has been affected by increasing rent, low sales, and rising operational costs. The Covid-19 pandemic exacerbated its challenges, with the business quietly closing outlets at Marina Square and Paragon in 2021.

A key warning came in 2019 when the retailer closed its 8,000 sq ft Centrepoint branch, once one of Singapore’s largest bookstores.

These closures reflect a broader struggle for physical bookstores in Singapore. Rising rent, higher goods and services taxes (GST), and increasing printing costs have driven book prices up, making it difficult for traditional retailers to compete.

Popular bookstore also shut its Marine Parade outlet on 18 June 2023, citing similar reasons, while Books Kinokuniya closed its JEM branch on 9 May 2022 due to slow sales and rental costs.

Future of Singapore’s Bookstores

Following the closure of Times, few large bookstore chains remain in Singapore. Books Kinokuniya, the largest bookstore in Singapore, continues to operate its flagship store at Takashimaya Shopping Centre.

According to a spokesperson from Toshin Development Singapore, cited by the Straits Times, Kinokuniya remains a key tenant, though no specific renewal dates were disclosed. The spokesperson added that Kinokuniya continues to engage with the landlord regularly to appeal to patrons and remain in trend.

Although Times Bookstores will no longer have physical stores in Singapore, its book distribution business, which supplies books from international and local publishers to other retailers, continues to operate.

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Opinion

Are Govt policies and big business interests limiting competition in Singapore?

This opinion piece from Foong Swee Fong explores concerns about how restrictions on private driving instructors and rising COE prices may reflect a broader trend of collaboration between large corporations and the government, potentially reducing market competition and impacting Singaporeans.

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9 hours ago

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16 September 2024

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by Foong Swee Fong

The article, “Driving schools fully booked for months; some students paying bots to secure limited lesson slots” by Channel News Asia, encapsulates all that is wrong with Singapore.

The reason why students can’t get slots is because the “police stopped issuing private driving instructor licences in 1987 when the first two driving schools were set up”.

The police cited coordination and safety reasons.

In 1987, there were “thousands of them” but today “the country only has about 300 private driving instructors” as those who retired were not replaced.

With the gradual reduction of private driving instructors, students have little choice but to patronize the two main driving centres.

Thus, their business is booming not because they are providing excellent service at a competitive rate but because their main competitors – private driving instructors – are being reduced with each passing year, eventually to zero.

Singaporeans should be incensed because what the authorities did is anti-competitive and disadvantageous to them, but not surprisingly, this being Singapore, they brushed it aside, accepting it, perhaps, as the price of progress.

It is becoming a recurring trend: Big Business working hand in glove with the government to subvert the free market.

For crying out loud! The police “stopped issuing private driving instructor licenses WHEN the two driving schools were set up!” How blatant must it get before people start waking up?

While ComfortDelGro Driving Centre is part of the publicly listed ComfortDelGro Corporation, which is commonly perceived as government-linked, Bukit Batok Driving Centre is majority-owned by large corporate entities including Honda Motor Co, Kah Motors, and Income Insurance Ltd.

The CNA article then quoted young Singaporeans who say they still want to learn driving despite the skyrocketing COE prices “due to the convenience and option of renting a vehicle” from car-sharing companies.

It then relates the positive experience of a 22-year-old national serviceman, Calvert Choo, with car-sharing companies, about the price of rental and its convenient location near his HDB block, about Tribecar and GetGo, ending by saying that other reasons for learning to drive
include working in the ride-hailing and delivery industry.

I can’t help but sense that Big Business, with the government, is again trying to subvert the market:

In 2012, taxis were exempted from the COE bidding process to prevent them from driving up Category A COE prices. Instead, they pay the Prevailing Quota Premium, which is the average of the previous three months’ Category A prices at the point of purchase, with their COEs sourced from the Open Category. This arrangement acknowledges that taxi companies are using passenger cars for commercial purposes unlike private car owners, and that they can outbid private car owners.

However, recent trends have seen Private Hire Vehicles (PHVs), car-sharing companies, and even driving schools pushing passenger car COE prices higher, echoing the earlier situation with taxi companies. A simple solution would be to extend the taxi model to these groups. Yet, this approach has not been adopted, and authorities have instead proposed unrealistic solutions.

If COE prices remain elevated, average and even above-average-income drivers will be priced out of the market, forcing them to use PHVs and car-sharing vehicles.

Is this another diabolical scheme to force the people to patronize certain businesses, just like student drivers have now to patronize driving schools?

There are numerous worrisome alliances between Big Business and the Government in our country. They are using fewer generic medicines compared to many other countries in the region, which may contribute to higher healthcare costs. Some have raised concerns about the influence of patented medicines within the healthcare system, potentially increasing overall medical expenses.

As a measure of how preposterous the situation has become, the said CNA article, which in fact is propaganda and free advertisement for the respective big businesses, is published by state-owned MediaCorp, thus paid for by the people, to brainwash themselves!

The Big Business-Government cancer has spread deep and wide. By subverting the free market, resources will be mis-allocated, the poor will be poorer, a large chunk of the middle class will become the new poor, and the rich will be richer, thus tearing society apart.

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