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Don’t take pity on me

Robin Low writes that Singaporeans are struggling to afford retirement due to a high cost of living, inadequate retirement savings, longer life expectancy, difficulty finding work, and family responsibilities. Many turn to real estate investments to beat inflation, but this contributes to a housing bubble that exacerbates the income divide. The policies that maximize the price of public housing, with an increasing land value added, ultimately result in the housing yielding $0 at the end of the lease, making it more like a liability than an asset.

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by Robin Low

I don’t want pity. Pity is more painful than many other emotions that can be placed upon you, more than hostility, awe, envy, fear and repulsion.

Retirement? Singaporeans work long hours to try to afford retirement, but for many, this is just a dream, and some are even working in their twilight years.

Singaporeans’ long-term saving plans are being jeopardized by inflation hovering near the highest level in more than a decade, insufficient wage growth, accelerating housing costs and other financial burdens from living in a city recently listed as the world’s most expensive alongside New York.

The result is nearly 60% of Singaporeans say they are not on track with their retirement plans, according to a report by Oversea-Chinese Banking Corp. in November.

There are several reasons why some Singaporeans may be unable to retire:

  1. High cost of living: Singapore is known for its high cost of living, which can make it difficult for retirees to make ends meet. The cost of housing, healthcare, and daily expenses can be a significant burden on retirees, especially those with limited savings.
  2. Inadequate retirement savings: Many Singaporeans may not have saved enough for retirement due to a variety of reasons, such as a lack of financial planning, low income, or financial setbacks. The Central Provident Fund (CPF) is the main source of retirement savings for most Singaporeans, but some may have withdrawn their funds early or used them for other purposes. (like buying a HDB Flat)
  3. Longer life expectancy: Singaporeans are living longer, which means they need more savings to support themselves in retirement. With increasing life expectancy, the cost of healthcare and long-term care may also become more significant.
  4. Inability to find work: Some Singaporeans may be unable to find work in their later years due to age discrimination or health issues, making it difficult to supplement their retirement income.
  5. Family responsibilities: Some Singaporeans may have to support their children or elderly parents financially, which can put a strain on their retirement savings.

These factors can make it challenging for some Singaporeans to retire comfortably, and may require them to continue working or rely on government assistance to make ends meet.

One of the traits of being a Singaporean is that most Singaporeans are risk adverse.

Singaporeans are unwilling to take risks to invest, and as a result, most turn to properties which have proven to be something that could beat the inflation.

Eighty percent of Singapore citizens live in state-subsidized public housing and the median resale price of these homes was at a record S$545,000 in October, 35% above its pre-Covid level.

With Singaporeans with excess cash turning to buy more properties, and the push to increase population by the government by importing foreigners is creating a bubble where it is common to find public housing that cost over $1 million.

Public resale home prices in November rose 10% year-on-year, while rents are also jumping, according to flash data from online real estate portals SRX and 99.co.

Singaporeans were told that their 99 year leasehold HDB flats are assets which they can use. Even when at the end of the lease, the HDB flats are worth $0, many still want to believe that their HDB flat is still an asset.

With everyone with excess cash going into real estate, the prophecy is becoming true, prices of homes and commercial properties are increasing, and rents are going up.

The same thing is happening to vehicles. COEs are costing a lot more that the vehicles, and it is still going up.

For example, you can buy a motorcycle for $3,500, but the COE for the motorcycle is $12,189, almost 4x the machine price. For most people who need it, they will have to lease the motorcycle or take a 7 year loan…

And for housing, this is going to be the same case. Most people will take loans to buy their housing, and even for public housing, it is common to see 30 year loans now.

The keyword here is “Interest”. With a high interest rate, the gap between the Haves and the Have Nots will worsen. The rich that buys multiple properties, making profits and not paying capital gains taxes while the poor have to take 30 year loans for their public housing that will one day become $0. This is already happening, but many are working too long hours to realize that the rich would make more money on property appreciation than the poor could ever imagine for 100 years.

I have a friend who came from a well to do family, and he bought his $1 million dollar condominium at the age of 25, deposit paid by his family. Even though his salary is $3,000, he was able to service the loan by renting out a room. 5 years later, he sold his condominium for $1.5 million, making almost $500k profit. (no capital gains tax)

I have another friend who got married at the age of 25, and required almost 5 years to save up to place a deposit on public housing, and eventually got his place and paid for the renovations. Even when he is paid $6,000 a month, he now has a 30 year lease to pay, and he needs to pay even when he loses his job. Now he is stuck in his job, needs to hang on to service his loan, whether he likes it or not.

And yes, a lot of Singaporeans already own their public housing or a private property, and it probably is their biggest investment that they have and most of them do not want to entertain the idea that there should be a price reduction to keep it affordable for future generations.

Many Singaporeans want low cost public housing, and even when it is leasehold, they do not want the value of their housing to drop. Many non-PAP parties have suggested the idea of a more equitable housing, but the word affordable may make some of them nervous as they do not want their prized investment to lose value.

This is because, policies created are done to maximize the price of the HDB flats (with an increasing land value added) And since it is a leasehold, it will yield $0 at the end of the lease, making it more like a liability than an asset.

Yes, I’m a Singaporean. Singapore, the once glorious city that had uplifted many people from the villages to transform it into this city is now facing a situation of income divide.

Many do not want to admit or simply do not know that they cannot afford to retire.

And yes, Singapore is becoming the most expensive city to retire, despite what the government says, this is a fact.

So, even when I probably cannot afford to retire, don’t take pity on me, I probably will be one of the many in the country that will work until I drop dead at the age of 83.

This was first published on Robin Low’s medium post and reproduced with permission. Low is a former Singapore Democratic Party candidate at the General Election 2020 for Yuhua SMC. 

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Opinion

Iswaran unlikely to serve full 12-month sentence under conditional remission and possibly home detention

Former Transport Minister S Iswaran is unlikely to serve the full 12 months of his sentence. Under Singapore’s Conditional Remission System, he could leave prison after serving less than eight months, with the remainder of his sentence served under strict supervision, including home detention. While Iswaran is scheduled to surrender on 7 October 2024, there is a possibility of an appeal.

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Former Transport Minister Iswaran was sentenced to 12 months in prison on 3 October 2024 for accepting valuable gifts while in public office and obstructing the course of justice.

The court granted Iswaran’s request to surrender himself at 4 p.m. on 7 October 2024 to begin his sentence. However, his lead lawyer, Davinder Singh, indicated that the start of the sentence could be delayed depending on “instructions,” hinting at the possibility of an appeal.

However, despite the 12-month sentence, it is highly likely that Iswaran will serve less time in prison due to Singapore’s Conditional Remission System (CRS) and potentially the Home Detention Scheme (HDS).

Under the CRS, prisoners in Singapore may be released early if they demonstrate good behaviour.

Typically, under the CRS, inmates are eligible for release after serving two-thirds of their sentence. In Iswaran’s case, this means he could be released after serving eight months in prison, with the remaining four months of his sentence subject to a Conditional Remission Order (CRO).

The CRO, a legal mechanism that enforces strict conditions post-release, requires compliance with several terms, such as reporting to authorities and avoiding any criminal activity. If Iswaran violates these conditions, he could face penalties, including being sent back to prison to serve the remainder of his sentence.

Alongside CRS, there is also the possibility that Iswaran could serve part of his sentence under the Home Detention Scheme (HDS), which allows prisoners to serve their final months under strict supervision at home.

Take the case of former Singapore Civil Defence Force (SCDF) Chief Peter Lim Sin Pang, for example.

Lim was sentenced to six months in prison in 2013 for corruption.

After serving three months in Changi Prison, he was supposedly placed on home detention for one month — if we consider how CRO grants him two months of remission — allowing him to complete his sentence under supervision.

Home detention meant that Lim would spend his remaining sentence at home under electronic monitoring, fitted with an electronic monitoring device, typically worn as an ankle bracelet, which allows authorities to track his location at all times.

Like other inmates under the HDS, his movements were tightly controlled, and he was allowed out only for specific activities, such as attending work, medical appointments, or rehabilitation programmes, during limited hours.

Any deviation from the permitted activities or failure to return home on time could lead to immediate consequences, including being returned to prison to complete the sentence.

Eligibility for home detention depends on various factors, such as the inmate’s behaviour during incarceration and the level of risk they pose to society.

This scheme aims to reintegrate prisoners into society while maintaining strict oversight.

If HDS is applicable, Iswaran might spend even less time behind bars, as he could transition to home detention before completing the full period under the CRS.

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Opinion

Why the silence by Minister Shanmugam on his S$88 million property sale?

Despite being quick to rebut allegations, Minister K Shanmugam has remained silent on the S$88 million sale of his Good Class Bungalow (GCB) in August 2023. The lack of public commentary, especially given the potential conflict of interest with the Singapore Land Authority’s role, raises questions.

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When it comes to addressing allegations, Minister for Home Affairs and Law, K Shanmugam, has shown he can respond swiftly and decisively, as seen in his and Dr Vivian Balakrishnan’s rapid legal actions against Mr Lee Hsien Yang (LHY) for defamation, as well as their recent rebuttal to LHY’s statement regarding the defamation costs paid to the two ministers.

However, the stark contrast in how Mr. Shanmugam has handled recent revelations about his own financial dealings, and his silence regarding the S$88 million sale of a Good Class Bungalow (GCB), is puzzling and raises concerns about transparency and potential conflicts of interest.

TOC had earlier disclosed that Mr Shanmugam sold his GCB at 6 Astrid Hill for a staggering S$88 million in August 2023.

The sale was to UBS Trustees (Singapore) Ltd, a transaction managed by legal professionals from his former law firm and concluded without any encumbrances like a mortgage. This deal turned a home bought for S$7.95 million into an S$88 million sale—garnering a massive profit.

This sale was made just a month after he made his ministerial statement explaining the circumstances of his leasing of the massive black-and-white bungalow estate at 26 Ridout Road from the Singapore Land Authority (SLA), a statutory board that he oversees as the Minister for Law.

This transaction, particularly the identity of the buyer and the approval process for such a high-value sale, is of public interest because GCBs are subject to stringent sale conditions.

They are generally only sold to Singaporeans or approved Permanent Residents who have made significant economic contributions to Singapore. The approval for such transactions typically comes from the SLA.

This raises an inherent question: Why has Mr Shanmugam not addressed the public regarding this substantial financial transaction, especially when such approvals could potentially involve his direct oversight? We have written to him for his comments but were met with silence.

We do not know who the actual beneficiaries of the property are, as it was sold to ‘The Jasmine Villa Settlement,’ a trust managed by UBS Trustees. The beneficiaries could be Singaporeans, foreigners, or a mix of both.

His silence is notable because it contrasts sharply with his and other ministers’ rapid responses to allegations made by LHY.

The potential conflict of interest in the sale of the minister’s GCB is similar to earlier concerns about his rental of a black-and-white property at 26 Ridout Road, which also involved the SLA from which he has said to have recused himself from decisions made. Notably, the government has also cleared him of any wrongdoing.

The lack of public commentary from Mr Shanmugam about the sale of his GCB, despite the potential need for SLA’s approval, and the silence from the mainstream media on this revelation, merit scrutiny.

The public deserves to know:

  • Who was the buyer and, if the buyer is a non-Singaporean, who approved the sale to UBS Trustees and under what criteria? Especially since GCBs can only be sold to Singaporeans or Permanent Residents who have not only been resident in Singapore for over five years but have also made exceptional economic contributions—a criterion subject to the subjective approval of the authorities.
  • Was there any conflict of interest given the minister’s role over the SLA? This is particularly pertinent given that the SLA, which falls under the purview of the Ministry of Law, would typically be involved in approving such transactions if the buyer does not meet the usual criteria. Moreover, given the huge sum involved in the transaction, extra scrutiny is warranted, especially as Mr. Shanmugam is a public servant holding significant power.
  • Why has there been no public statement from Minister Shanmugam on this matter, especially given the rapid response to defamation accusations? His silence contrasts sharply with his prompt responses to other public issues, raising questions about consistency and transparency in handling personal financial dealings versus public allegations.

Minister Shanmugam’s transparency in this matter would reaffirm public trust and ensure that his actions as a minister do not conflict with his personal financial dealings.

His response, or lack thereof, will significantly influence public perception of his commitment to transparency and accountability in his official capacities.

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