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Uniquely Singapore, F1 or F9: “Residents willing to pay more for service and conservancy”?

Published

17 years ago

on

By Leong Sze Hian and Andrew Loh

The following article was first published here in TOC on the 2nd of Oct 2007. The Straits Times has a report titled “New rule to safeguard council funds“, December 2nd 2007, which addresses some of the issues in our article.

In a report titled “Punggol 21 Plus masterplan is a long-term one: Grace Fu” on the 15th of September 2007, Channelnewsasia website stated:

“But according to feedback to HDB, 81 percent of residents said they were willing to pay more for service and conservancy to enjoy the new flat designs. About half of them said they were willing to pay above S$10 more than the usual rates.”

The report did not reveal the details of the “feedback” which HDB had received. How the percentage of 81% was arrived at was also not revealed.

We have managed to obtain copies of the financial reports of 6 Town Councils (TC) out of the 16 TCs in Singapore, for the financial year 2005/2006. These 6 Town Councils are:

– Aljunied Town Council (pdf file)

– Bishan-Toa Payoh Town Council (pdf file)

– East Coast Town Council (pdf file)

– Holland-Bukit Panjang Town Council (pdf file)

– Sembawang Town Council (pdf file – part 1) (pdf file – part 2)

– Hougang Town Council (pdf file)

Unfortunately, we have not been able to obtain a copy of the Pasir Ris – Punggol and Potong Pasir Town Councils’ Financial Reports.

Going through the 6 reports above, what is evident is that most of these town councils have substantial funds in their accounts.

For example, the Sembawang Town Council has $269 million in its funds, with $237 million going into its Sinking Fund. Aljunied TC has $93 million ($67m going into its Sinking Fund) and Bishan-Toa Payoh $139m ($96m going into its Sinking Fund.) Opposition-held Hougang Town Council has $14 million in its Sinking Fund.

(The sinking funds of Town Councils largely comprise S&CC contributions from residents. They are meant for the long-term cyclical maintenance of HDB estates. Works like the replacement of roofing systems, water tanks and electrical sub-systems, repainting, and major repairs and maintenance of common property.) (Ministry of National Development)

So, where do these funds come from?

Service and Conservancy Charges (S&CC)

The 6 Town Councils collect Service and Conservancy charges from residents and businesses within their constituencies. For residential properties, they range from the lowest of $18.00 (1-room flat in Hougang and Hong Kah GRC) to the highest of $80 (executive flat in Bishan-Toa Payoh GRC) per month.

(Figures derived from the town councils’ websites. East Coast, Jurong and Marine Parade Town Councils do not list their S&CC charges on their websites.Figures for Hougang are before the latest revision on Oct 1st, 2007.))

Renting out of facilities

Town councils also rent out facilities to residents and businesses. For example, in Aljunied GRC, void decks, banner arms, acrylic panels for advertisements and event halls can be booked for use. The charges are anywhere from $25 per month for an acrylic panel to $2,000 a day for use of the event hall at the town centre for commercial purposes. (link)

Car parks

According to this website, carparks at Hong Kah GRC “are managed by the Town Council for the HDB on an agency basis”. We are unsure if other town councils also run or manage carparks.

Government grants

Government grants received by the town councils include Service and Conservancy Grant, Citizens’ Consultative Committee Grants and the Community Improvement Projects Committee fund (CIPC).

According to the Straits Times’ report of March 25, 2006, “The gathering storm”:

“Taking into account all the grants from the Government, the Aljunied Town Council, for example, gets $560 per household for the financial year ending March 2005.

The grants include funds from the Community Improvement Projects Committee (CIPC), which is controlled by the Ministry of National Development.

In contrast, government grants came up to just $113 per household in Potong Pasir.”

In another report on the same day, “Hougang’s Low may be ‘heart’ to beat”, the Straits Times reported:

“Government grants came up to about $111 per household in Hougang in 2004-05. By contrast, neighbouring Aljunied Town Council, which has access to funds such as the government-controlled Community Improvement Projects Committee (CIPC), got $560 per household for the same period.”

One therefore will have to question why the Aljunied Town Council charges more for S&CC than Potong Pasir and Hougang, across the board – from 2 rooms to executive flats – when the Aljunied TC is getting more government grants than the two opposition wards.

In one instant, a one-roomer’s S&CC in Aljunied Crescent rose from $3.50 to $18.50 from 1994 to 2005 – an increase of about 428 per cent.

Community Improvement Projects Committee (CIPC)

The Straits Times, June 2006, (link) reported what the Minister for National Development, Mr Mah Bow Tan, said:

“Turning to the question of the funds from Community Improvement Projects Committee (CIPC), a source of funds controlled by the National Development Ministry for minor improvement work in the estate, Mr Mah revealed that a town of 100,000 households could stand to get a few million dollars of funding a year, depending on the projects its grassroots leaders proposed.”

Opposition-held wards Potong Pasir and Hougang have long complained that CIPC funds are not made available to them, unlike PAP-held ones. The funds are “always disbursed through Citizens’ Consultative Committees (CCCs), which have PAP politicians as their advisers”, according to the Straits Times report.

CIPC funds are “used to build amenities such as street soccer courts, playgrounds and sheltered linkways, but cannot be used for major projects like lift upgrading”, the report says.

Investments

Town councils also invest their funds to generate more revenue. Details of such investments are not readily available, however. There are no breakdown of any such investments in the financial reports.

How much of your S&CC goes into the Sinking Fund

The minimum amounts to be paid, by property type, into the Sinking Funds are as follows: (link)

i) 1-room to 3-rooms – 30% of the conservancy and service fees and grants-in-aid

ii) 4-rooms – 35% of the conservancy and service fees and grants-in-aid

iii) 5-rooms – 35% of the conservancy and service fees

iv) Executive – 35% of the conservancy and service fees

v) Shop with living accommodation – 35% of the conservancy and service fees

vi) Commercial property – 35% of the conservancy and service fees

Surpluses

In a recent letter sent out by the Hougang Town Council, which is run by the opposition Workers’ Party, in September 2007, residents in Hougang were informed that S&CC were being raised – with effect from 1st Oct 2007. The letter said:

“Further, with the compulsory transfer of 80% of its accumulated surplus into the Sinking Fund as required under the Town Councils Act after the last General Elections, there is also no longer reserved funds which were accumulated in the past years through prudent management to cushion the shortfall which would have allowed the Town Council to further delay a revision of the sc/cc.”

One wonders if this has anything to do with crippling the opposition Town Councils from undertaking lift upgrading works. In a 2005 newsletter, the Hougang Town Council revealed:

“The residents did not have to pay as the Town Council was able to carry out the upgrading with funds from its accumulated surpluses.” (link)

So, the question is: Why is more than 1/3 of S&CC and 80% of the accumulated surpluses required to be transferred to the Sinking fund?

*Hougang’s last revision of the S&CC was in 1997. PAP-run Town Councils last raised theirs in 2004.

Death does not mean you don’t have to pay

Lastly, according to the Ministry of National Development website, with regards to deceased persons with outstanding S&CC Charges:

Clause 8 amends Section 39(14) to include the Personal Representative of a deceased lessee as a party who will be liable for any outstanding S&CC due from the deceased lessee. This is to overcome the operational constraints faced by Town Councils today in recovering outstanding S&CC in cases where lessees have passed away. (link)

Questions to ask before government allows S&CC to be raised again

In light of all the above information, and in anticipation of a potential hike in S&CC among all Town Councils, perhaps we should be asking some questions of the town councils and the government – before town councils again propose raising S&CC charges, as the channelnewsasia report on Punggol 21 quoted above seems to suggest they might.


Here are 20 questions to ask:

1. Why does the Sembawang Town Council (STC) need to have $269 million of funds? In contrast, for example, Aljunied has $93 million and Bishan-Toa Payoh has $139 million.

2. Why is the percentage of S&CC amounts to be put into the Sinking Fund so high? Why are town councils like Sembawang apportioning 39%, which is 11.4% more than the prescribed minimum?

3. What is the purpose of Sembawang Town Council accumulating $237 million in its sinking fund? Aljunied and Bishan-Toa Payoh have $67 and $96 million respectively. In contrast, Hougang Town Council has only $14 million.

4. Since only 10 per cent of the Sinking Funds can be utilised for lift upgrading, with the primary purpose of the sinking fund as stated above, why do we need to accumulate so much ? How often are works such as “the replacement of roofing systems, water tanks and electrical sub-systems, repainting, and major repairs” undertaken to warrant such huge reserves in the Sinking Fund?

5. Hougang has $14 million. How much funds do the opposition held town
council (OHTC) of Potong Pasir have relative to STC and other town councils?

6. Are OHTCs collecting too little, or is STC or other town councils collecting too much?

7. Are there any guidelines on how much town councils should collect in growing the Sinking Fund?

8. Are not both OHTCs and other town councils subject to the same guidelines?

9. Do OHTCs and other town councils collect as much as 39 per cent of S & CC (like STC) for the sinking fund? For example, the percentage for Aljunied and Bishan-Toa Payoh is 35 per cent.

10. What is the accumulated Sinking Fund to household ratio for each and every town council?

11. How many HDB flat-owners are in arrears on their S & CC? (HDB provided financial assistance to 28,386 HDB flat-owners last year.)

12. What is the rate of increase in S & CC over the last few years for OHTCs, relative to PAP-run town councils?

13. For one 1-room HDB flat renter in Aljunied Crescent, S & CC went up from $3.50 to $18.50 from 1994 to 2005 – about 428 per cent. Annual inflation during this 11 years was less than 2 per cent. How is it that the 1-room S & CC works out to an annual compound rate of increase of about 16 per cent per annum?

14. To what extent has the high proportion of S & CC chanelled to the Sinking Fund, resulted in higher increases in S & CC?

15. What is the norm for the percentage of private condominiums’ maintenance charges that go into the sinking fund? What is the norm in other countries’ town councils?

16. Why did the Pasir Ris-Punggol Town Council recently increase their late payment charge to a 2 per cent penalty interest per month for S&CC arrears late payments?

Why is the late payment penalty so high? It is equivalent to the 2% charged on credit cards which we believe is the highest for credit facilities in Singapore.

What are the late payment charges for Hougang and Potong Pasir town councils?

17. The S&CC for Pasir Ris – Punggol, Potong Pasir and Hougang town
councils for 3, 4 and 5-room flats are, respectively:

$36.50, $50.50, $63.50 (Pasir Ris – Punggol)

$35.50, $46.00, $58.00 (Potong Pasir)

$36.00, $48.00, $59.50 (Hougang)

Why is it that Punggol-Pasir Ris charges 2.8, 9.8, 9.5% more than Potong
Pasir, and 1.4, 5.2, 6.7% more than Hougang, respectively?

18. Why are PAP-run town council charging more for S&CC when they have economies of scales. For example, Yio Chu Kang Town Council has been “merged” with Ang Mo Kio Town Council (link) and Nee Soon Central and Nee Soon East Town Councils with Sembawang Town Council. (link)

19. Why was the Town Councils Act amended after the last General Election, such that there is now a compulsory transfer of 80% of the accumulated surplus to the Sinking Fund? As explained in Hougang Town Council’s letter to residents in September 2007, it “is also no longer (able to use) reserved funds which were accumulated in the past years through prudent management to cushion the shortfall which would have allowed the Town Council to further delay a revision of the S & CC”.

20. Has anybody ever asked the above questions?

Inform residents about funds collected

Before the government or town councils increase S&CC further, even for new towns like the upcoming Punggol 21-plus, these questions should be satisfactorily answered.

The Pasir Ris – Punggol Town Council should also make its latest financial report easily available to residents so that residents can make an informed decision on whether they would be willing to pay more for S&CC.

And while we’re at it, the HDB, which was quoted by the CNA report, should also reveal how they arrived at the conclusion that “81 percent of residents said they were willing to pay more for service and conservancy to enjoy the new flat designs. About half of them said they were willing to pay above S$10 more than the usual rates.”

One can only wonder if the “81% of residents” who “said they were willing to pay more for service and conservancy charges” are aware of the substantial funds which the town councils have already accumulated, along with substantial government grants for PAP-run Town Councils.

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Commentaries

Lim Tean criticizes Govt’s rejection of basic income report, urges Singaporeans to rethink election choices

Lim Tean, leader of Peoples Voice (PV), criticizes the government’s defensive response to the basic living income report, accusing it of avoiding reality.

He calls on citizens to assess affordability and choose MPs who can truly enhance their lives in the upcoming election.

Published

1 year ago

on

15 September 2023

By

SINGAPORE: A recently published report, “Minimum Income Standard 2023: Household Budgets in a Time of Rising Costs,” unveils figures detailing the necessary income households require to maintain a basic standard of living, using the Minimum Income Standard (MIS) method.

The newly released study, spearheaded by Dr Ng Kok Hoe of the Lee Kuan Yew School of Public Policy (LKYSPP) specifically focuses on working-age households in 2021 and presents the latest MIS budgets, adjusted for inflation from 2020 to 2022.

The report detailed that:

  • The “reasonable starting point” for a living wage in Singapore was S$2,906 a month.
  • A single parent with a child aged two to six required S$3,218 per month.
  • Partnered parents with two children, one aged between seven and 12 and the other between 13 and 18, required S$6,426 a month.
  • A single elderly individual required S$1,421 a month.
  • Budgets for both single and partnered parent households averaged around S$1,600 per member. Given recent price inflation, these figures have risen by up to 5% in the current report.

Singapore Govt challenges MIS 2023 report’s representation of basic needs

Regrettably, on Thursday (14 Sept), the Finance Ministry (MOF), Manpower Ministry (MOM), and Ministry of Social and Family Development (MSF) jointly issued a statement dismissing the idea suggested by the report, claiming that minimum household income requirements amid inflation “might not accurately reflect basic needs”.

Instead, they claimed that findings should be seen as “what individuals would like to have.”, and further defended their stances for the Progressive Wage Model (PWM) and other measures to uplift lower-wage workers.

The government argued that “a universal wage floor is not necessarily the best way” to ensure decent wages for lower-wage workers.

The government’s statement also questions the methodology of the Minimum Income Standards (MIS) report, highlighting limitations such as its reliance on respondent profiles and group dynamics.

“The MIS approach used is highly dependent on respondent profiles and on group dynamics. As the focus groups included higher-income participants, the conclusions may not be an accurate reflection of basic needs.”

The joint statement claimed that the MIS approach included discretionary expenditure items such as jewellery, perfumes, and overseas holidays.

Lim Tean slams Government’s response to basic living income report

In response to the government’s defensive reaction to the recent basic living income report, Lim Tean, leader of the alternative party Peoples Voice (PV), strongly criticizes the government’s apparent reluctance to confront reality, stating, “It has its head buried in the sand”.

He strongly questioned the government’s endorsement of the Progressive Wage Model (PWM) as a means to uplift the living standards of the less fortunate in Singapore, describing it as a misguided approach.

In a Facebook video on Friday (15 Sept), Lim Tean highlighted that it has become a global norm, especially in advanced and first-world countries, to establish a minimum wage, commonly referred to as a living wage.

“Everyone is entitled to a living wage, to have a decent life, It is no use boasting that you are one of the richest countries in the world that you have massive reserves, if your citizens cannot have a decent life with a decent living wage.”

Lim Tean cited his colleague, Leong Sze Hian’s calculations, which revealed a staggering 765,800 individuals in Singapore, including Permanent Residents and citizens, may not earn the recommended living wage of $2,906, as advised by the MIS report.

“If you take away the migrant workers or the foreign workers, and take away those who do not work, underage, are children you know are unemployed, and the figure is staggering, isn’t it?”

“You know you are looking at a very substantial percentage of the workforce that do not have sufficient income to meet basic needs, according to this report.”

He reiterated that the opposition parties, including the People’s Voice and the People’s Alliance, have always called for a minimum wage, a living wage which the government refuses to countenance.

Scepticism about the government’s ability to control rising costs

In a time of persistently high inflation, Lim Tean expressed skepticism about the government’s ability to control rising costs.

He cautioned against believing in predictions of imminent inflation reduction and lower interest rates below 2%, labeling them as unrealistic.

Lim Tean urged Singaporeans to assess their own affordability in these challenging times, especially with the impending GST increase.

He warned that a 1% rise in GST could lead to substantial hikes in everyday expenses, particularly food prices.

Lim Tean expressed concern that the PAP had become detached from the financial struggles of everyday Singaporeans, citing their high salaries and perceived insensitivity to the common citizen’s plight.

Lim Tean urges Singaporeans to rethink election choices

Highlighting the importance of the upcoming election, Lim Tean recommended that citizens seriously evaluate the affordability of their lives.

“If you ask yourself about affordability, you will realise that you have no choice, In the coming election, but to vote in a massive number of opposition Members of Parliament, So that they can make a difference.”

Lim Tean emphasized the need to move beyond the traditional notion of providing checks and balances and encouraged voters to consider who could genuinely improve their lives.

“To me, the choice is very simple. It is whether you decide to continue with a life, that is going to become more and more expensive: More expensive housing, higher cost of living, jobs not secure because of the massive influx of foreign workers,” he declared.

“Or you choose members of Parliament who have your interests at heart and who want to make your lives better.”

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Political observers call for review of Singapore’s criteria of Presidential candidates and propose 5 year waiting period for political leaders

Singaporean political observers express concern over the significantly higher eligibility criteria for private-sector presidential candidates compared to public-sector candidates, calling for adjustments.

Some also suggest a five year waiting period for aspiring political leaders after leaving their party before allowed to partake in the presidential election.

Notably, The Workers’ Party has earlier reiterated its position that the current qualification criteria favor PAP candidates and has called for a return to a ceremonial presidency instead of an elected one.

Published

1 year ago

on

5 September 2023

By

While the 2023 Presidential Election in Singapore concluded on Friday (1 September), discussions concerning the fairness and equity of the electoral system persist.

Several political observers contend that the eligibility criteria for private-sector individuals running for president are disproportionately high compared to those from the public sector, and they propose that adjustments be made.

They also recommend a five-year waiting period for aspiring political leaders after leaving their party before being allowed to participate in the presidential election.

Aspiring entrepreneur George Goh Ching Wah, announced his intention to in PE 2023 in June. However, His application as a candidate was unsuccessful, he failed to receive the Certificate of Eligibility (COE) on 18 August.

Mr Goh had expressed his disappointment in a statement after the ELD’s announcement, he said, the Presidential Elections Committee (PEC) took a very narrow interpretation of the requirements without explaining the rationale behind its decision.

As per Singapore’s Constitution, individuals running for the presidency from the private sector must have a minimum of three years’ experience as a CEO in a company.

This company should have consistently maintained an average shareholders’ equity of at least S$500 million and sustained profitability.

Mr Goh had pursued eligibility through the private sector’s “deliberative track,” specifically referring to section 19(4)(b)(2) of the Singapore Constitution.

He pointed out five companies he had led for over three years, collectively claiming a shareholders’ equity of S$1.521 billion.

Notably, prior to the 2016 revisions, the PEC might have had the authority to assess Mr Goh’s application similarly to how it did for Mr Tan Jee Say in the 2011 Presidential Election.

Yet, in its current formulation, the PEC is bound by the definitions laid out in the constitution.

Calls for equitable standards across public and private sectors

According to Singapore’s Chinese media outlet, Shin Min Daily News, Dr Felix Tan Thiam Kim, a political analyst at Nanyang Technological University (NTU) Singapore, noted that in 2016, the eligibility criteria for private sector candidates were raised from requiring them to be executives of companies with a minimum capital of S$100 million to CEOs of companies with at least S$500 million in shareholder equity.

However, the eligibility criteria for public sector candidates remained unchanged. He suggests that there is room for adjusting the eligibility criteria for public sector candidates.

Associate Professor Bilver Singh, Deputy Head of the Department of Political Science at the National University of Singapore, believes that the constitutional requirements for private-sector individuals interested in running are excessively stringent.

He remarked, “I believe it is necessary to reassess the relevant regulations.”

He points out that the current regulations are more favourable for former public officials seeking office and that the private sector faces notably greater challenges.

“While it may be legally sound, it may not necessarily be equitable,” he added.

Proposed five-year waiting period for political leaders eyeing presidential race

Moreover, despite candidates severing ties with their political parties in pursuit of office, shedding their political affiliations within a short timeframe remains a challenging endeavour.

A notable instance is Mr Tharman Shanmugaratnam, who resigned from the People’s Action Party (PAP) just slightly over a month before announcing his presidential candidacy, sparking considerable debate.

During a live broadcast, his fellow contender, Ng Kok Song, who formerly served as the Chief Investment Officer of GIC, openly questioned Mr Tharman’s rapid transition to a presidential bid shortly after leaving his party and government.

Dr Felix Tan suggests that in the future, political leaders aspiring to run for the presidency should not only resign from their parties but also adhere to a mandatory waiting period of at least five years before entering the race.

Cherian George and Kevin Y.L. Tan: “illogical ” to raise the corporate threshold in 2016

Indeed, the apprehension regarding the stringent eligibility criteria and concerns about fairness in presidential candidacy requirements are not limited to political analysts interviewed by Singapore’s mainstream media.

Prior to PE2023, CCherian George, a Professor of media studies at Hong Kong Baptist University, and Kevin Y.L. Tan, an Adjunct Professor at both the Faculty of Law of the National University of Singapore and the NTU’s S. Rajaratnam School of International Studies (RSIS), brought attention to the challenges posed by the qualification criteria for candidates vying for the Singaporean Presidency.

In their article titled “Why Singapore’s Next Elected President Should be One of its Last,” the scholars discussed the relevance of the current presidential election system in Singapore and floated the idea of returning to an appointed President, emphasizing the symbolic and unifying role of the office.

They highlighted that businessman George Goh appeared to be pursuing the “deliberative track” for qualification, which requires candidates to satisfy the PEC that their experience and abilities are comparable to those of a typical company’s chief executive with shareholder equity of at least S$500 million.

Mr Goh cobbles together a suite of companies under his management to meet the S$500m threshold.

The article also underscored the disparities between the eligibility criteria for candidates from the public and private sectors, serving as proxies for evaluating a candidate’s experience in handling complex financial matters.

“It is hard to see what financial experience the Chairman of the Public Service Commission or for that matter, the Chief Justice has, when compared to a Minister or a corporate chief.”

“The raising of the corporate threshold in 2016 is thus illogical and serves little purpose other than to simply reduce the number of potentially eligible candidates.”

The article also touches upon the issue of candidates’ independence from political parties, particularly the ruling People’s Action Party (PAP).

It mentions that candidates are expected to be non-partisan and independent, and it questions how government-backed candidates can demonstrate their independence given their previous affiliations.

The Workers’ Party advocate for a return to a ceremonial presidency

It comes as no surprise that Singapore’s alternative party, the Workers’ Party, reaffirmed its stance on 30 August, asserting that they believe the existing qualifying criteria for presidential candidates are skewed in favour of those approved by the People’s Action Party (PAP).

They argue that the current format of the elected presidency (EP) undermines the principles of parliamentary democracy.

“It also serves as an unnecessary source of gridlock – one that could potentially cripple a non-PAP government within its first term – and is an alternative power centre that could lead to political impasses.”

Consistently, the Workers’ Party has been vocal about its objection to the elected presidency and has consistently called for its abolition.

Instead, they advocate for a return to a ceremonial presidency, a position they have maintained for over three decades.

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