7. The Govt keeps delaying the return of our CPF money because of Temasek and GIC losses.
There is no way to prove or disprove such conspiracy theories because of the secrecy surrounding these sovereign wealth funds.
Those who understand accounting know that losses or gains on portfolios are due to accounting rules such as mark-to-market, and losses or gains are not realised until investments are disposed. But unlike banks, Temasek or GIC are not subject to regulatory capital requirements and thus they do not need to make cash calls just to shore up balance sheets because of paper losses.
Based on the strength of the Singapore Govt’s balance sheets, there is no reason for Temasek or GIC to need more cash because of investment losses, realised or otherwise.
Will this suffice to convince the conspiracy theorists?
8. CPF erodes the value of our money because it pays less interest than inflation.
Let’s see. The complaint is that the longer people leave $$ in CPF, the more they lose because the interest rate is lower than inflation. Some even demand that the Govt pay Singaporeans higher than market interest rate because it uses CPF money to fund Temasek and GIC investments. This is only fair, they argue, because they could have invested their money to earn a higher return if not for CPF.
Superficially, the assertion is true because CPF doesn’t pay higher than CPI, unless CPI drops below 4%. But it seems people forget that CPF contributions are tax-exempt. So if you’re in the 5% marginal tax bracket, right away you save 5% on the money you contributed to CPF.
Obviously, the higher your tax bracket, the more you benefit.
And while the CPF interest rate is not fantastic, it is based on the average FD rate of the Top 3 local banks, with a floor of 2.5%/4%– which our Govt must be regretting now, in today’s low-interest rate environment.
I think it’s a very reasonable interest rate especially with the tax-exemption.
More importantly, if you’re not happy with the CPF interest rate, there’s many things you can do to increase your returns.
You can invest your OA and SA funds in gold, unit trusts, stocks, shares, govt bonds, investment properties, etc. There’s hundreds of investment choices.
And while there are still some restrictions against high-risk investments and limits on how much one can invest in each asset class, one is basically not short of choices if one is searching for higher returns. Those who understand financial planning would treat their CPF-linked investments as the low-risk part of their portfolio.
So the argument that CPF erodes the value of our savings cannot be sustained. If one is not willing to take responsibility for managing one’s CPF savings, and doesn’t use the tools at one’s disposal, how can one blame the Govt for eroding the value of one’s savings?
Further, the PAP Govt also regularly provides CPF top-ups, usually in election years. Since CPF money can be used to pay for property, it’s nearly as good as getting a cash handout from the Govt, because practically everyone has or will have a mortgage to service.
In these respects, what’s not to like about CPF?
9. The school system set by PAP has made Singaporeans into rote-learners, deprived of creativity and entrepreneurial spirit.
I don’t think this is the fault of PAP in particular, or school systems in general at all!
Public schools exist to teach a standardised syllabus in a common way. That’s the only way one can ensure common standards and thus be able to compare performance at a nationwide level.
That explains why many entrepreneurs or creatives dropped out of school. Einstein did. So did Bill Gates. Larry Ellison. Steve Jobs. Etc. Because if you’re really creative or entrepreneurial, you’ won’t stay in school and be bored stiff! Even the liberal American school system wasn’t good enough for these entrepreneurs, not to mention geniuses like Einstein.
So if Singaporeans aren’t entrepreneurial, how can it be a fault of PAP in particular or the Singapore school system in general?
The only thing that can be said is not enough Singaporeans dared to drop out of school, like Sim Wong Hoo, to pursue their dreams.
Whose fault is that? PAP’s? Or parents’?
The Singapore school system has many flaws– too many exams, too pressurised, too stressful, etc. But to criticise it for not producing entrepreneurs or creatiives is unfair.
10. The govt is responsible for today’s mess because of its ill-conceived “Two Is Enough” campaign. That’s why we have all these immigrants and all these problems today.
I was a young boy in the 70’s when I saw those two cute girls on the Two Is Enough campaign poster. I still remember the govt giving incentives for women who sterilised themselves.
I believe the Two Is Enough campaign was the right decision at the time.
Singapore was very poor in the 70’s. We were not really confident how well we could survive without Malaysia. We had no natural resources, very little foreign reserves. We just had an oil crisis. Unemployment, even poverty, was not uncommon. Having too many mouths to feed was a real concern.
But by the 80’s, the Govt realised it was no longer necessary. In fact, they were concerned that grad women were not marrying or reproducing. Hence the famous grad mothers policy that got LKY lots of flak, along with the setting up of SDU and later SDS.
The govt tried to promote marriage, and they changed their tagline from “Two Is Enough” to “Have three, or more if you can afford it.”
So I think it’s unfair to criticise this govt for a policy decision that was appropriate at the time, particularly as they made adjustments and changes as Singapore’s economic circumstances improved.
The question is, why don’t Singaporeans have more babies? And are so many foreigners really needed for Singapore to compete in the global economy?
In my view, the former is not due to the Two Is Enough campaign. People make such decisions based on their own views about children, and on their assessments on how suitable Singapore is as a place to have more children.
I have only two children for a variety of reasons. I have no time for more, I can’t afford a big enough house for more, it’ll cost a lot more for me to raise another child and send him to university, etc.
Unless Singapore can change dramatically, unless there’s more space for children and more time for ourselves, I just don’t think most Singaporeans will want more children, whatever the baby bonus.
Some people will blame the govt for making Singapore a high-stress, high-density and fast-paced country, which is not supportive of big families. But I think a big part of it is just circumstances. We’re like New York, not New Zealand. This is the wrong place to ask for more babies. Given Singapore’s situation, I don’t think we could ever be like New Zealand, just like New York could never slow down.
As for the latter question, I think it would take economics experts to answer properly. My view is yes, we do. I work in Bangalore these days, there are so many Indians around me it’s unbelievable. But I don’t think they are stealing jobs from Singaporeans. The unemployment stats also do not support such a view.
This does not mean the Govt should not do something about overcrowding, or that it should not have a Singaporeans-first employment law. But to say that Singaporeans can’t get jobs because of foreigners cannot be substantiated by the statistics.