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PAP’s cock-ups since the 1980s

In Political economy, Political governance, Public Administration on 11/07/2018 at 9:53 am

In Is PAP in “decline and disintegration”? I wrote that PAP was in stagnation phase that began in 1990

A regular reader, a retired NUS professor lists the things the PAP got wrong since the 1984.

[S]everal major PAP blunders started in 1984 during the election campaign of that year

1. elected president: LKY had already reached 60 by that year, and this was then the public sector retirement age; so he had to face the question whether he was stepping down; the thinking at the time was to move to the presidency – under the then constitution, parliament would decide; he being who he is, the position would not be merely ceremonial, but it must be his legal background that made him uncomfortable, and a decision was made to enhance the position; the resulting controversy led to his undertaking not to be the first elected president, Goh Chok Tong’s decision to invent the post of Senior Minister to keep LKY in the cabinet, the elected president Ong Teng Chong’s conflict with cabinet, regular embarrassment about a 3-men committee rejecting candidates causing a no contest, etc

LKY could have just retired in 1990, started a newspaper column (modern idea would be blog), a charity/research foundation, a senate, and he would have remained the most influential person in the country, taking into consideration his son and his 2nd cousin were both in cabinet; it was quite unnecessary for him to feel insecure about his own place in singapore society even if he held no elected office; if he had been a blogger posting articles daily, every important person in singapore, the cabinet ministers especially, would have eagerly read them as soon as they were posted

2. HDB asset enhancement: during the campaign LKY got annoyed by opposition claiming “your HDB apartmen[t] is on 99-year lease; you dont really own it”, and announced “HDB will stop building in opposition districts”; at the time I actually did not understand why that should cause anyone to worry; but the Northeast MRT line provided part of the explanation – no population increase, no new infrastructure; the Mathias Yao–Chee Soon Juan Straits Times Forum series of letters provided some more – poor infrastructure, lower HDB value; with HDB apartments traded on the open market (previous owners are allowed to go back and buy a new apartment from HDB after 5 years).. Soon Permanent Residents, who are not entitled to buy from HDB, buying on the open market caused the HDB asset values to rise beyond affordability

3. CPF: with people living longer, the idea of delaying CPF money return was raised in 1984 and initial reaction was negative; again LKY was annoyed; soon the idea of minimum sum was adopted, later compulsory annuity, which would have been workable if most people can still get a substantial part out in cash at 55; with the weak salary increases in the past decade or so (partly because of foreign labour, e.g., IT used to have highest paid new graduates, before the industry bought in PRCs and Indians) and low interest rate, more and more people found themselves not meeting the minimum sum requirement, and every increase in minimum sum value makes more people angry

2011

[M]uch of PAP’s recent electoral adversity was self inflicted; the major examples I recall

1. James Gomez case 2006: LKY, Wong Kan Seng and George Yeo spent far too much time talking about a minor issue (LHL and GCT both kept quiet – they could afford to); the Aljunied voters punished George Yeo, and WP identified the electorate as vulnerable, put effort into the ground work and won it decisively in 2011

2. Tin Pei Lin case 2011: it was sound strategy to find some younger, especially female, faces, but the party should have made the effort to find someone with a track record as a political operator in her own right, not just a polished presenter with management consultancy experience recommended by a personal connection; I also believe if they introduced her at the end, after people have grown bored with all those familiar CVs of civil servants, generals, professionals, executives, etc, she might have enjoyed a better reception, so they botched the presentation in addition to selection

3. Joo Chiat case 2011: it was also sound strategy to replace old by young, but Charles Chong is older than Chen Soo Sen so the change could not be justified on that ground; Chen also enjoyed certain personal support which did not readily transfer via party loyalty; Workers Party ended with nearly 50%

4. Hougang case 2012: Teo Chee Hean dwelt far too long on Yaw Shin Leong’s personal and business failings, which Yaw’s former supporters preferred not to be reminded of, whereas upbeat talks about the wonderful things PAP would do for Hougang if elected, might have more fully exploited the unexpected opportunity; after the Hougang moralizing, the Palmer case was a particularly hard blow – PAP candidates are like anyone else

[W]hether the party would learn from these mistakes, and whether it would make new ones in 2016, is of course to be seen; given the resources available; it certainly has the potential of doing much better

Looking at the above, one is left wondering why the Oppo parties couldn’t and can’t (WP is expected to lose Aljunied in next GE) make a more serious dent in the PAP’s popularity with 60- 70% of the voters? Only Tan Cheng Bock (ex-PAPpy) can.

Is it repression and fear?

Or is the PAP juz lucky what with the quality of Oppo leaders: clowns like Lim Tean (Lim Tean: A disgraceful chamber of horrors), Goh Meng Seng (Silence of Goh Meng Seng) and Pritam Singh (WP distributing unsafe food (pass expiry date) and getting financial advice of cybernut resulting in having to take down misleading video after Lawrence Wong kicked Bayee’s ass)?

Email yr answers pls.

 

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Tharman joking again? Or trying to BS us?

In Economy on 30/08/2015 at 4:39 am

But before I go to Tharman, let me quote Dr Chee on the problems facing some, many S’poreans (certainly not me)

the 2014 report by Credit Lyonnaise Securities Asia which showed that almost half of households in Singapore live from paycheck to paycheck with little or no savings. This is middle class that we’re talking about. They are just one major bill away from financial ruin. This can come in the form of an accident, health problem, or some other foreseeable catastrophe.

What is less surprising is the report’s finding that the majority of our elderly indicated that they are not saving. How can they when they have hardly anything to live on after they’ve paid up their HDB loan? What’s more, the little that they have is withheld under the Minimum Sum Scheme.

But what’s particularly disturbing is the finding that a high proportion of Singaporeans in their 30s and 40s are also unable to save.

How did all this come about? The cost of living in Singapore, of course, plays a major role. In 2001, we were the 97th most expensive city in the world. In a short span of just over 10 years, we hopped, stepped and jumped to becoming the most expensive city in the world, according to the Economic Intelligence Unit.

Full text of speech at *. I commend it for your reading.

Singapore’s social and economic policies, which work hand-in-hand, are long-term strategies that have been in place long before the 2011 General Election. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam made this point on Friday (Aug 14) in a speech at the SG50 Special Distinguished Lecture, organised by the Economic Society of Singapore.

He spoke of support for the very young, starting with broad-based quality in the public school system in Singapore. When a person enters the workforce, there is Workfare where the Government tops up the wages of low-income workers. In housing, the Government went about it in a “very determined way” to ensure homes remained affordable for low- and middle-income couples, Mr Tharman said.

For seniors, the Central Provident Fund remains a critical pillar of support and the Government has introduced features like the Pioneer Generation Package and the permanent Silver Support Scheme, for the low-income elderly.

“This has been a shift that started a full 10 years ago and step-by-step, we moved up our support by intervening with people who are young, intervening in the working years and increasingly now in the senior years. It’s not just an innovation in the last five years,” Mr Tharman said.

“And I recognise of course, there’s some political cunning, saying this all came about because of GE 2011. I’m sorry it didn’t. The world did not start in 2011. We made very clear our intentions and our motivations in 2007. We made clear it was going to be a multi-year strategy and step-by-step, starting from the kids when they are young, through working life, into the senior years.

“We have been moving towards a more inclusive society step by step and we intend to continue on this journey. Learning from experience, improving where we can. But this is not a result of 2011.”** I also commend you read the rest of CNA article below because it’s a good summary of the PAP’s views on “Life, the Universe and Everything”.

Now you know why I put Dr Chee’s remarks first. How can the recent goodies be part of a 10-yr plan given the dates of the reports quoted by Dr Chee: in or around 2914.

If the PAP administration had been working since 2005 or 2006, why weren’t the results not shown in the data?

Remember Tharman’s previous attempts at telling jokes

https://atans1.wordpress.com/2014/07/10/property-tharman-trying-to-crack-jokes-again/

https://atans1.wordpress.com/2013/11/11/tharman-trying-to-tell-jokes-again/

https://atans1.wordpress.com/2012/05/03/telling-coc-jokes-ministerial-coc-needed/

Related posts

https://atans1.wordpress.com/2012/08/24/why-tharman-will-be-the-next-pm/

https://atans1.wordpress.com/2015/07/24/tharman-also-from-bizarro-spore/

https://atans1.wordpress.com/2014/03/31/another-minister-tries-telling-jokes/

But maybe, Tharman the real aristocrat (no not juz s “natural” one: he like VivianB are from ACS), thinks we are daft peasants and workers?

 

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*Full text of Dr Chee Soon Juan’s speech at the SDP’s 35th Anniversary Dinner on 15 August 2015:

Mr Jeffrey George, Chairman, SDP, colleagues, ladies and gentlemen,

In 1995, during the Ordinary Party Conference at which I was first elected Secretary-General of the SDP, I gave an address about the need to invest our time and effort building up a strong foundation for the party.

I related the fable of the Three Little Pigs and how it was important to erect our house with bricks rather than with sticks and straw. Only with a sound foundation could we build a premier party that we all wanted to see the SDP become.

By foundation, I meant that we had to ground the party on principles – principles that allowed the people the freedom to think and express those thoughts, principles that ensured that we enhanced opportunity for all to succeed, not just the privileged, and principles that grounded us on the idea that power is measured by our ability to care for the weakest among us.

By foundation, I also meant taking the time and having the discipline to put up considered policy papers by conducting research and consulting the people.

In the years that ensued, I was repeatedly criticised – even by those in opposition circles – for being out of touch with the masses and being too academic in my approach. My critics also argued that Singaporeans were interested only in bread-and-butter issues; democracy and political freedom were Western concepts unsuited to the Asian mind.

I never bought the propaganda because unless someone can show me that Singaporeans are somehow different from the rest of the human race or possessed DNA that made us inherently desirous of being constantly told what to do, I cannot but conclude that these views are propagated by the powerful few who want to keep the status quo.

Rising prices, stagnant wages

I have maintained that without our political rights, we cannot protect our economic interests and well-being. Recent trends have proven me correct.

Take, for example, the 2014 report by Credit Lyonnaise Securities Asia which showed that almost half of households in Singapore live from paycheck to paycheck with little or no savings. This is middle class that we’re talking about. They are just one major bill away from financial ruin. This can come in the form of an accident, health problem, or some other foreseeable catastrophe.

What is less surprising is the report’s finding that the majority of our elderly indicated that they are not saving. How can they when they have hardly anything to live on after they’ve paid up their HDB loan? What’s more, the little that they have is withheld under the Minimum Sum Scheme.

But what’s particularly disturbing is the finding that a high proportion of Singaporeans in their 30s and 40s are also unable to save.

How did all this come about? The cost of living in Singapore, of course, plays a major role. In 2001, we were the 97th most expensive city in the world. In a short span of just over 10 years, we hopped, stepped and jumped to becoming the most expensive city in the world, according to the Economic Intelligence Unit.

This is not just happenstance. It came about through deliberate planning by the PAP. For instance, the Government rewrote the Banking Act and Immigration policy to court High Net-Worth Individuals to Singapore. As a result, we have the highest proportion of millionaires and billionaires in the world. The massive inflow of foreign capital places enormous upward pressure on prices in the country.

At the same time, we imported en masse cheap foreign labour to do the lower-skilled jobs. This puts downward pressure on wages of the locals. It also has the unintended effect of lowering labour productivity levels. The government has often repeated that wages cannot outstrip productivity. The result is that real wages continue to languish.

This double whammy of rising costs and stagnating wages is what is making lives financially so tough for Singaporeans.

And what about our youth? The future looks anything but hopeful. They now have to compete with foreign students – who are getting generous financial assistance from the state – for places in our universities. And when they graduate, they have a tough time finding jobs. If they do end up with a job, many are underemployed engaging in low-paying or low-skilled positions.

And with the high HDB prices, housing has become largely unaffordable for young couples.

All this means that for our younger generation, opportunity is diminishing while stress and anxiety are increasing.

This has caused many Singaporeans to leave the country. Unfortunately, they are ones whose talent and skills we need most. Lee Kuan Yew, himself, admitted that this development is a serious problem.

So what does the Government do? Instead of examining its policies that gave rise to these problems in the first place, it opens up our immigration doors to let foreigners in by the millions ostensibly to augment innovation and job creation.

But the more people we let in, the greater the competition for opportunity, the more stressful life in Singapore becomes, the more Singaporeans choose to leave and on goes the downward spiral.

The situation has deteriorated to the point that the PAP acknowledges the problem. Both Lee Kuan Yew and Lee Hsien Long have said that without foreigners, we cannot attract investments and create jobs.

Unchecked power

How did we come to such a tragic state? After more that 50 years of uninterrupted PAP rule, we cannot produce a citizenry, or at least retain one, which can keep our country going without having to rely on foreigners?

But even as the SDP saw the situation deteriorate, our hands were tied. There was little we could do because our rulers decreed that the media had to be controlled, political parties could operate only under the most restrictive of conditions, and fundamental freedoms were tightly proscribed.

As a consequence, the ruling party’s power was unchecked. The result is a slew of problems, of which I have just mentioned a few, that our society has to grapple with.

Authoritarian control has another effect that is less obvious, perhaps, but no less damaging to our nation. It has to do with our effort to build a knowledge-based society. The fact that we are so reliant on foreigners and foreign corporations to drive our economy is more than a subtle hint that we’ve not been very successful in this endeavour. This is because a political system which demands conformity does not, and cannot, admit of knowledge creation.

Which leads me back to the point that I made at the beginning of my address, it is the same point that I have been making for the last 20 years: Without political freedom, that is, freedom of speech, assembly and association, we cannot regenerate our economy.

What’s the solution?

The question is not whether the present system will continue to serve Singapore well because clearly it can’t. Even PAP stalwarts like George Yeo have openly called for its reform.

Rather, the question must be how are we going to go about making the necessary changes. There are several areas that we must deal with if we are going to get out of the rut in which we currently find ourselves. But I will confine my answer to the one that is most obvious and immediate: elect SDP candidates into office in the coming elections.

I will point out two incontrovertible facts to underscore why it is crucial to have the SDP in the next Parliament. The first is that we are the only party that has consistently iterated that our political rights and our economic progress are two sides of the same coin, they are inextricably bound. Without advancement in our political rights, problems regarding our economic and social well-being cannot be addressed.

Second, we are also the only party to have drawn up a bold new vision for this nation and crafted alternative policies to take the country closer to that vision. There is nothing worse than asking voters to vote for change when they don’t know what that change is or might look like. We have articulated for society a future that can be better and more secure than the one we have presently. We are advocating a system where the people have the means and the responsibility to shape their own future.

In other words, we want to give voters a reason to vote for the SDP, not just against the PAP.

We want to build a system where debate, reasoned argument, and free choice is highly valued; thick on logic and persuasion, thin on rhetoric and coercion. We want the government to listen – really listen – and be responsive to the wishes and needs of the people. This can only happen with a competent, constructive and compassionate opposition in Parliament – an opposition like the SDP.

SDP’s values

But while it is important to ensure that our future is one predicated on prosperity, we don’t want to advocate ideas that focus exclusively on material wealth – not if it means having to lose our soul and the very essence of being human. And being human is to care for our fellow human beings, to show compassion to those less fortunate than us.

When did we become so callous to suffering? When did we become numb to the fact that our elderly have to clear our tables and wash our toilets or collect cardboard just to live out their remaining years on this earth? I don’t believe that we are such a nasty people. I believe that we have been led astray. We have become so indifferent to the plight of the weak and the powerless because we’ve been told for decades that no one owes us a living, that it’s every man for himself.

We must find our way back, we must find our soul again because a people without a soul is a people who will not find life, life in its most profound sense.

We must impart wisdom that invites an individual to enter the door of his conscience – the conscience that speaks loudly and clearly of our values – that people come before profits, rights before riches and wisdom before wealth.

This is who we are, this is what we stand for and it is what we must strive to uphold. These values keep us united as Singapore Democrats, it is what is going to help us succeed as a party and, most importantly, it is what is going to bring this Republic of Singapore a better future.

It has taken us time to get to where we are today but it has been necessary. We have toiled hard, tilled the soil, planted the seed and with the sweat of our brow and the tears of our spirit, painstakingly cultivated the tree of democratic progress. May it bear fruit this election.

Thank you.

**Rest of CNA report:

He added that what is unique about Singapore is that there is “broad-based upliftment”, with jobs, rising incomes and homes for every Singaporean.

“Without social strategies, without strategies that made it possible for people to develop their potential, through education, without the housing policies that gave everyone a sense of ownership, provided a sense of equity in our society, it would have been impossible for our economy to have succeeded,” said Mr Tharman.

POLICIES HAVE TRANSFORMED OVER THE YEARS

He noted that Singapore’s policies have shifted over the years. The first three decades were focused on the basics – economic survival, job creation, and providing education and housing. And the poor received few subsidies, he said.

“It worked because our economic strategies worked. Jobs were created, incomes did rise and homes went up in value steadily and the economy improved. Social well-being went up without the whole array of social policies, by just focusing on the fundamentals,” Mr Tharman said.

Social policy came to the fore in the 1990s. The Government rolled out policies such as the Edusave scheme for young Singaporeans and Medifund for those who could not afford hospital bills. They also introduced housing grants for the resale market to help more Singaporeans own homes.

“But it is only in the last 10 years, starting from around 2006, 2007, that we made more decisive shifts, a more decisive rebalancing in order to ensure we remain an inclusive society. We needed to mitigate inequality. We had seen in a decade earlier in the mid-1990s when inequality had risen, similar to the trend in most advanced countries. We needed to do more to mitigate inequality,” he said.

SINGAPORE’S LEVEL OF INEQUALITY NOT HIGH BY INTERNATIONAL STANDARDS

But Mr Tharman noted that Singapore’s level of inequality, before taxes and Government transfers, is not particularly high by international standards.

He said: “The question then is, what happens after taxes and transfers? Because all governments do want to mitigate inequality, have some redistribution, in order to reduce them. And we do too. There are some countries that in fact achieve a very large reduction in their Gini coefficient, which is about distribution through taxes and transfers.

“The classic cases in Scandinavian economies and to some extent in the United Kingdom and other European economies – those have seen a significant reduction. But the first point we must recognise is that the reduction in inequality that they have seen, the reduction in their Gini coefficient goes hand-in-hand with a very heavy burden of taxation on their population. It is not just about taxing the rich – it is the middle, the broad middle class in the society that pays a very high tax rate. Consumption tax and income tax.”

A MORE INNOVATIVE SOCIETY

Mr Tharman also spoke of the need for a more innovative society, for every company and person to “unleash their innovative spirit” to move from adding value, to creating value through research and development and new products.

That is how Singapore will survive, said the Deputy Prime Minister. He said the country is already beginning to see some results. For example, there are aggressive schemes to support start-ups and help small and medium-sized enterprises upgrade and internationalise.

He said the Government will also take the lead to invest in all Singaporeans – throughout their life.

He noted: “This is why SkillsFuture is a major investment to our future. A major social and economic investment in our future. We are not anywhere near maximising our potential. In fact, no country is anywhere near maximising their potential and we intend to be in the lead by continuously investing in every Singaporean.

“Not many of us, let’s invest in every Singaporean. So we keep improving through life, keep learning something about ourselves, we did not know about. A strength, ability, an interest. And we are going to provide the resources, the facility all around the island to make this possible.”

ON FOREIGN WORKERS AND RESKILLING SINGAPORE WORKERS

Following his speech at the Economic Society of Singapore, Mr Tharman fielded several questions from the audience, including one on foreign workers in Singapore. He said they play an important role in keeping Singapore globally competitive.

Said Mr Tharman: “There are many jobs where you just won’t be able to find enough Singaporeans to do it. And second, because there are many foreign employees who come with expertise and long track records in particular fields that really add to the global teams in Singapore being competitive globally.

“So that is the real strategy,” he said. “In Singaporeans’ own interest, you must have globally competitive teams in Singapore. But if it’s all foreigners, you do not have Singaporeans in the team. Then that is not a sensible economic strategy. So our strategy is to have a balance. Make sure Singaporeans are at the core system – core not just in a regular jobs, core not just in back-end office work, but core in innovative teams and in order for them to be in globally competitive teams.”

Mr Tharman also explained why it is important to reskill Singapore workers. “It is a good thing that we are able to add labour-saving technologies in a labour-short economy,” he said. “We are a labour-short economy so we need every form of labour-saving technology. And the right solution is to make sure that anyone whose job becomes redundant because technology takes over is reskilled, and is able to have another good job.

“And we tend to be as active, as energetic as we can in this through SkillsFuture and through our subsidies as well to help people tide over and learn a new skill.”

He said the society has to help everyone keep up with the pace of change. “Make sure they are not treated as an unemployed statistic becoming an employed statistic, but they are citizens who must feel that they are all part of the team, and if you lose your job, we take care of you and ensure you can be part of another team. That culture of respect for blue collar workers is really something we need to develop.”

– CNA/ms

Tpt minister looks after shareholders, the poor and the disabled?

In Infrastructure, Public Administration on 15/01/2014 at 4:27 am

What about other disadvantaged S’poreans?

The Public Transport Council (PTC) will release its decision on raising fare adjustments for public transport tomorrow and a reasonable person would conclude that fares will go up based on what Minister for Transport Lui Tuck Yew wrote  on a Facebook post on Monday.

“I told (PTC chairman Gerard Ee) that the government was ready with our package for the low-income workers and persons with disabilities and that we would like to announce this together on Thursday. These two concession schemes will be fully funded by the government,” wrote Mr Lui, stressing that the schemes would make transport fares much more affordable for both groups.

Isn’t he telling the PTO, pls feel free to help out the tpt companies (and their shareholders*) because the govt (us tax-payers, including said poor and disabled: remember that they too pay GST) will absorb the increases for said groups.

Mr Lui also said that the discount under the scheme for low-income workers would lower their fares to around the same levels as 10-15 years ago, depending on the journey. Meanwhile, the discount for those with disabilities will be “even more significant”.

Hey what about retirees and those who never got pay rises?

BTW, the WP’s silence on nationalisation is deafening, even though WP Low told us last yr that WP still believes in it. I have my doubts  https://atans1.wordpress.com/2012/12/14/wp-changes-mind-on-nationalising-smrt-sbs/

Backgrounder: In December, transport operators SBS Transit (SBST) and SMRT applied to the PTC to raise bus and rail fares this year, with SBS – Singapore’s biggest bus operator – citing cost pressures.

—–

*Some shareholders do get a free lunch:despite claims by scholar and ex-general running SMRT that its biz model is broken:

Using back-of-the envelope calculations and figures in annual reports, since it was listed SMRT (over a decade ago) has paid S$562.79m in dividends to Temasek, and ComfortDelgro has paid the S’pore Labour Foundation (a statutory board affiliated to the NTUC) dividends of  S$150.46m*since 2003 (Comfort and Delgro merged in 2003, and SLF had a stake in Comfort). The amount that ended up with the government was S$713.25m, with SMRT contributing 79%. But ComfortDelgro is likely be the main beneficiary of the S$1.1bn bus plan**, given that, at present, SBS Transit (a listed co 75% owned by ComfortDelgro) provides most of the buses. Taz an example of how messed up things are.

The funds’ flows also show that the government is putting back all the dividends it received from these two companies and then adding 35% more. So it’s wrong to say that the SMRT and ComfortDelgro are getting free lunches. At most the government is subsidising their lunches by 35%.

The government should get credit for ploughing its share of the “loot” (as the proponents of nationalisation would put it and MPs Puthu, PAP, and PritamS, WP, might put it), but it doesn’t. Taz how messed up are.

(Incidentally, one could reasonably argue that the other shareholders — and the minority shareholders of SBS Transit, remember ComfortDelgro owns around 75% – are getting a free lunch while the government returns its share of the dividends. But let’s nt get into that today.)

https://atans1.wordpress.com/2012/03/02/oh-what-a-tangled-web-we-weave-mrt-comfortdelgro-and-the-government/

Small wonder that foreigners snapped up ComfortDelgro at gd discount last year though tapering caused some wobbles https://atans1.wordpress.com/2013/06/17/when-raising-fares-sbs-smrt-govt-dont-have-this-problem/. Now above price bot. in.

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SMRT: Rights issue coming?

In Infrastructure on 08/10/2013 at 5:54 am

Reading the u/m, I can’t shake the feeling that a rights issue is coming: the capex and running costs seem to call for it. Given that the share price has fallen from the 1.40ish level (at the end of July), to the present level of 1.29, it  might be interesting to buy if one expects a rights issue is in the offing. A rights issue will signal that Temasek expects dividend levels to be maintained at current levels, or slightly reduced, not slashed drastically. It took the results of 1Q 2013- 2014 to bring the shares to below the 1.34 level, a level brokers had been targeting since January.

Let you know if I buy after I buy. BTW, still not bot ComfortDelgro https://atans1.wordpress.com/2013/06/17/when-raising-fares-sbs-smrt-govt-dont-have-this-problem/. Share price recovered 10% while I was thinking about it (blame QE reprieve). Shares are now near the price that institutions took a placement off the S’pore Labour Foundation.

CREDIT ratings agency Standard & Poor’s (S&P) has lowered its outlook on SMRT Corp from “stable” to “negative” over concerns about its financial position, particularly its cash flow.

S&P said [on 27th September 2013] that the transport operator’s operating expenses are higher than expected. It also pointed to high capital spending over the 12 months to June, while noting the uncertainty over government financial support such as funding for the firm.

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid=435478142-19258-9361788629

“… the lack of timely government support could delay a recovery in SMRT’s key financial metrics.”

SMRT’s “moderate” financial risk profile is weakening, S&P added.

It said it expects the group’s bottom line will be hit by increased operating expenses such as wages and repair and maintenance costs, without the offsetting factor of higher fares.

S&P added that SMRT’s capital expenditure will likely remain high at about $600 million.

It noted that the group’s capital spending will likely ease in 2015 as it implements a new rail financing framework. This, in turn, will ease its debt situation.

“Nevertheless, we base this on a positive and timely outcome for the ongoing discussions between the company and the Government.”

S&P said SMRT’s business risk profile remains “excellent”, backed by its dominance in Singapore’s rail sector.

Its passenger numbers have grown steadily over the past two years despite breakdowns in December 2011.

The agency predicts that passenger numbers will continue to rise as the economic environment improves and it retains its dominant position here.

S&P continues to believe that the likelihood of “extraordinary government support” for SMRT Corp is “extremely high”.

It said: “This is based on the company’s critical role as a provider of essential public transport service in Singapore, and its very strong link with its majority owner, the Government, through Temasek Holdings, which owns 54.2 per cent of SMRT.”

When raising fares, SBS, SMRT & Govt don’t have this problem

In Infrastructure on 17/06/2013 at 5:33 am

SBS and SMRT are grumbling loudly that their present biz model (after delivering golden rivers of dividends for Temasek and the S’pore Labour Foundation) doesn’t work. SLF even sold 8% of SBS’s parent at a huge discount to the market price. Great move as this was done before market meltdown. (BTW, at current price, tempted to buy into ComfortDelgro. It closed last Friday at 1.755, up 3% from Thursday. The co’s fundamentals havenot changed since institutions bought SLF’s stake at 1.94. It is likely that when they bot from SLF, they would have been given assurances of the fundamentals at that price.)

And govt has been pouring our money ($1.1bn and counting) at the public the transport system. And the Wankers’ Party remains quiet* about its Manifesto call to nationalise the public transport system.

If the PAP govt weren’t concerned that it would lose votes if fares were raised without a marked improvement in service standards, fares would have gone up by now to keep the dividends flowing. Screwing the public (by making the public pay-and-pay) is the PAP way pre the 2011 GE and PE.

Anyway, SMRT, ComfortDelgro and the govt should be grateful that this doesn’t happen here when faresw are raised: Protests against bus and underground fare rises in the Brazilian city of Sao Paulo have turned violent.

Police fired rubber-coated bullets and tear gas, and detained more than 200 people. Police say they seized petrol bombs, knives and drugs.

Violence has also been reported at protests in Rio de Janeiro.

Prices for a single ticket in Sao Paulo were raised on 2 June from 3 reals ($1.40, £0.90) to 3.20 reals ($1.50, £0.96).

http://www.bbc.co.uk/news/world-latin-america-22899748

For that, they have to thank people like this TRE reader

My Middle name is AhLong:

We need to organise a movement similar to BERSEH of Malaysia now to demand clean election. We need to ensure a proper way to secure and account for the ballot boxes en-route to the counting station …We must demand at the counting station, after all ballot boxes are accounted for and examined, all the ballot tickets should mixed into a single bunch and count from there. In this way, the sly election department will not be able to get the data for gerrymandering in the next election.

Finally, to have a level of playing field, election department should NOT be under PMO!

If he is serious, he should be trying to organise shumething, instead of juz bitching anon. His use of the word “We” is simply a way of saying “You”.He juz wants to let out hot air, like VivianB, Auntie and her favourite Singh, the M’sian gals from S’pore Writers, and the Nairs, Gopalan and Rajan. He doesn’t want to do the hard slog, like Low, Ah Huat, Ah Lian, the NSP’s Dynamic Duo, the Ravis (M and P) and Team SDP. If you’re wondering why Siow is not on the list, he’s away in the US until year-end. And no, he is not attending the CIA’s regime change course.

*To be fair, Low mentions it in passing, now and then.

Oh what a tangled web we weave: MRT, ComfortDelgro and the Government

In Infrastructure on 02/03/2012 at 5:58 am

According to the Christian doctrine of the trinity, there is only one God but God is three persons: the Father, the Son ( Jesus Christ) and the Holy Spirit. But each person is God, whole and entire.

Well our public transport system is some sort of trinity: the government*, ComfortDelgro and SMRT. Except while they are legally separate entities, in practice there is a kind of blending. This makes the Christian doctrine of the trinity easy to understand by comparison.

I’ll use the flow of funds between the companies and the government to illustrate an example of S’pore’s unique trinity at work. Using back-of-the envelope calculations and figures in annual reports, since it was listed SMRT (over a decade ago) has paid S$562.79m in dividends to Temasek, and ComfortDelgro has paid the S’pore Labour Foundation (a statutory board affiliated to the NTUC) dividends of  S$150.46m*since 2003 (Comfort and Delgro merged in 2003, and SLF had a stake in Comfort). The amount that ended up with the government was S$713.25m, with SMRT contributing 79%. But ComfortDelgro is likely be the main beneficiary of the S$1.1bn bus plan**, given that, at present, SBS Transit (a listed co 75% owned by ComfortDelgro) provides most of the buses. Taz an example of how messed up things are.

The funds’ flows also show that the government is putting back all the dividends it received from these two companies and then adding 35% more. So it’s wrong to say that the SMRT and ComfortDelgro are getting free lunches. At most the government is subsidising their lunches by 35%.

The government should get credit for ploughing its share of the “loot” (as the proponents of nationalisation would put it and MPs Puthu, PAP, and PritamS, WP, might put it), but it doesn’t. Taz how messed up are.

(Incidentally, one could reasonably argue that the other shareholders — and the minority shareholders of SBS Transit, remember ComfortDelgro owns around 75% — are getting a free lunch while the government returns its share of the dividends. But let’s not get into that today.)

What a mess. Even the government implicitly accepts that the present “rojak” system of organising the public transport here is not something that it would have introduced, if it had been prescient:

— it is is now planning to publicly funding the bus fleets of Comfort Delgro and SMRT with S$1.1bn; and

— in 2009, the then transport minister, a private sector PAP “catch” (“retired’ after the 2011 general election when the WP almost won the GRC he was helming) that joined the government was trying to fix the system while not admitting that the system was broken even then. (Thank Alex Au’s write-up on this for reminding us what that minister said in 2009.)

So it is no surprise that the the WP’s call in its 2011 general election manifesto to nationalise the public transport system**** is getting a lot of support (the nationalisation, not the WP’s call) from netizens. There may be merit in a nationalised public transport system: instead of being run for shareholders who are only interested in profits, and dividends, the system is run for the benefit of commuters. One of these days, I may run through the arguments. But don’t hold your breath. I think the debate is sterile as it all depends on one’s assumptions and definitions.

Sorry, back to the “rojak” system:  in the short-term, there is a problem of overcrowded buses. And this problem needs fixing. Nationalising the system ain’t as easy as passing a law. Shareholders have to be compensated and this requires valuations to be made, and agreed upon, or adjudicated. And it ain’t as though the shareholders are FTs. As mentioned earlier:

— Temasek owns 54% of SMRT; and

— The S’pore Labour Foundation, a statutory board linked to the NTUC, holds 12% of Comfort Delgro. SLF is Delgro’s single largest shareholder.

(Incidentally these stakes especially Temasek’s controlling stake shows how absurd the system is. S’pore has public transport private monopolies that are partially owned and controlled by the government. And the government regulates the fares and the routes. And as mentioned earlier, the government’s share of the dividends are now ploughed back and added to, but not appreciated by the public.)

Meantime, who is to run the system, and fund the fleet expansion? Public has to wait while these issues are sorted out? It’s OK for those critics who don’t use public transport that often, especially those who have one car per family person. But most S’poreans are not that fortunate.

To me, the government spending on the buses is a pragmatic quick fix both for the public and itself. The commuting public (self included when forced to travel during peak periods, admittedly a rare occurrence) gets less annoyed with the government, while the government is seen as publicly responding positively on a matter of public unhappiness.

As to the concern that the system is being fixed to bring more FTs in, let’s reserve judgement on that. Too early to even speculate. To even speculate, shows the level of mistrust that some people have of this government. I’m not one of them.

So while longer term, nationalisisation may be the best way to run a public transport system, it ain’t a short-term fix. The short-term fix is what the government is doing, throw money at the problem.

Critics should focus on whether the fix is the most cost-effective means of solving an immediate problem, not focus on a possible long-term solution. They should be making a case (not juz asking) for ComfortDelgro and SMRT to make massive rights issues to fund bus fleet expansion. Or asking for detailed details on what taxpayers get in return? Or how to ensure that the other shareholders don’t get a free lunch because of the S$1.1bn package.

Plenty of things to do to keep the government on its toes.

BTW, the full quote in the title is:

Oh what a tangled web we weave,
When first we practise to deceive!

——-

*I’ve simplified: there is a universe within the government — including the Land Transport Authority, the Ministry of Transport, the committee that fixes train and bus fares, the S’pore Labour Foundation, the Minister of Finance (owner of Temasek), the Singapore Civil Defence Force and the police force.

**Dodgy this calculation as I’ve used a dodgy, lazy assumption, but near enough for all but CFAers, or investment analysts, or myself when analysing an investment)

***The government has allocated S$1.1bn to the purchase of 800 new buses, 550 of which will be paid for by the government (that is, through public funds), with the remaining 250 paid for by the PTOs. The S$1.1bn is also to fund running costs over the next 10 years. More on the use of the money, and an assurance that the operators will not benefit because it is a subsidy for us commuters. [Last sentence is an update on @ March 2012 at 9.00am]

****Unless the WP has quietly ditched this too like its benchmarking of ministers’ pay to the poor. I am not being mean or nasty. In January 2012, Gerald Giam had to be reminded in a private conversation where I was present that nationalisation was in the party manifesto for the 2011 general election. GG seems to have difficulty remembering things. He had some problems in parliament during the ministers’ salaries debate.