Monday, February 14, 2011


Feb 12, 2011

Housing affordability of key concern
This is the fifth of a special 10-part series in which The Straits Times explores some of the key issues expected to be tackled in the Budget on Feb 18. Property, utility rebates, bigger grants and higher income ceilings top list

By Jessica Cheam
ASK Mr Chandra Mohan what he hopes for when the Budget is announced next week and he will tell you matter-of-factly: utility and rental rebates.

The 65-year-old, who works in an events firm, lives in a three-room rental flat in Woodlands with his mother and sister, paying about $100 a month.

Because his mother has had a stroke and requires 24-hour care, the siblings have faced financial difficulties in recent years. They had to sell their four-room HDB flat in Sembawang a few years ago.

'If we can get some form of rental-flat or utility rebates, it would help us cope with rising costs,' he said.

In the longer term, the family hopes to own a Housing Board flat again, maybe with the help of grants for needy families.

Families like Mr Mohan's should be at the top of the priority list for measures in the upcoming Budget, said West Coast GRC MP Cedric Foo, who chairs the Government Parliamentary Committee for National Development.

Any rebates would be of help and additional housing grants for needy families should be considered, including raising the income ceiling to qualify for them, he added.

Those in the sandwich class are also hoping for measures to help them combat rising housing costs and living expenses. Take civil servant Charan Jaipragas, 26, for example. He recently bought a resale HDB maisonette in Taman Jurong for $495,000 with his fiancee.

Even though they received a housing grant of $25,000 from the HDB, the purchase wiped out their savings. 'Any rebates will help us young households,' he said.

Experts whom The Straits Times spoke to had differing views on whether measures in the Budget would address home buyers, owners or both. Most said the usual staples of property, utility and service and conservancy rebates could be announced.

Some said the Budget could see larger housing grants, perhaps for the lower-income households, and flexibility on who qualifies for the grants.

'The traditional remedies of upgrading of old estates, increasing the supply of HDB flats and sharpening the differential between Singaporeans and PRs (permanent residents) (in terms of benefits given) may again be applied,' said OCBC economist Selena Ling.

KPMG Advisory tax partner Leonard Ong said: 'We hope to see the one-off 40 per cent property tax rebate given for owner-occupied residential properties in the 2009 Budget reinstated in the current Budget.'

Ernst & Young tax services partner Choo Eng Chuan feels, however, that higher housing grants could further fuel the property boom. 'This could make prices rise further, making the situation worsen indirectly,' he said.

Prices of HDB resale flats, which rose 14.1 per cent last year, have hit new records on the back of a recovering economy.

Mr Choo feels that the growing income gap is also a big concern and traditional measures such as rebates for HDB dwellers would be more effective in addressing this divide.

One thing that the Government could do is to perhaps raise the income ceiling to qualify for the Central Provident Fund housing grant, he said.

The ceiling for each household is now $8,000 or $10,000, depending on the type of flat. 'As the economy grows, salaries do get higher, so this is something they could review,' suggested Mr Choo.

Feb 14, 2011

Overcoming inequality and the income gap
This is the sixth of a special 10-part series in which The Straits Times explores some of the key issues expected to be tackled in the Budget on Feb 18.

CLEANER P. Thanalakshmi, 40, and her husband illustrate a key issue that will again dominate this year's Budget: the growing income gap.
She was a housewife until two years ago, when she started work as a cleaner at the National University of Singapore to better support her family of five. She now makes $900 a month, and gets Workfare.
Her husband also works two jobs: as a lorry driver by day and a cleaner by night. He makes just above $1,700 a month.
The couple could do with enhancements to the Workfare Income Supplement scheme, such as a higher income ceiling.
They would also gain from greater financial support which MPs and others have called for to lift the lot of low-wage workers. This could take the form of subsidies such as rebates for conservancy and utilities.
But Madam Thanalakshmi's most fervent wish, beyond such handouts, is for bursaries and grants to help out with her three daughters' education expenses.
Her oldest daughter P. Sridevi, 19, is studying at a private education institution for a bachelor's degree in biomedical science. She wants to be a doctor. To make ends meet, she gives tuition to primary school pupils.
Her second child, who is 16, attends a special school as she has lower learning ability, while her third girl is 11 and in Primary 5.
MPs and economists expect that even as the Budget offers rebates to low-income families like theirs, who benefited from ComCare, the Edusave, Medifund and ComCare endowment funds will also be topped up to ensure no one in need of education, medical or social support is left wanting.
More importantly, such targeted financing will help ensure their children are not denied opportunities to better their lives and that of their families.
DBS Bank economist Irvin Seah expects such disbursements to the low-income to amount to as much as $7.2 billion worth of special transfers - double the amount dished out in 2006 by the Government to share surpluses at the end of its last five-year term.
The funds, he believes, will help alleviate - though not fully reverse - the widening income gap between Singapore's bottom and top earners which the Government has flagged as a problem it is committed to tackling.
The average incomes of the top 20 per cent of households rose by 53 per cent - from $12,091 to $18,472 - from 1997/98 to 2007/08.
By comparison, the average incomes of the poorest 20 per cent of households were kept down as a result of globalisation, competition from emerging economies and new technology.
They fell by 2.7 per cent over the same period - from $1,309 to $1,274.
Singapore Management University economist Davin Chor, however, says it is not realistic to expect the Budget to be a cure-all for lower-income earners, even as some of these expected measures are much-needed.
This is because the skills gap that has depressed their wages is a structural phenomenon that requires medium to long-term solutions, he feels.
Dr Chor therefore hopes the Budget will 'set the stage for a longer-term conversation about what more we might need to do to upskill and uplift lower-income households'.
Such a discussion will, among other things, seek to ensure that children from low-income homes have equal access to education and health care, but also an extra boost to spur them on and break out of a cycle of poverty.
But it should also look at how adults can continue to pick up new skills, as well as how women and retirees can re-enter the workforce and if needed, find work on flexible terms.
This is why North West District Mayor Teo Ho Pin hopes there will be more resources to build the capabilities of the low-income group to help them level up in the mid to long term, beyond direct monetary disbursements which only address short-term concerns and may not be sustainable.
He adds: 'We need to look at providing more pre-school subsidies and financial assistance for their children. This will ensure they continue schooling, which is an important factor in helping this low-income group to get out of this financial trap.'

Feb 15, 2011

Easing the squeeze on those in the middle

This is the seventh of a special 10-part series in which The Straits Times explores some of the key issues expected to be tackled in the Budget on Feb 18

ON THE surface, Mr Lai Shiu Ming, 53, seems to be managing fine on a monthly salary of $2,000.

But the senior deployment officer at a security agency has two elderly parents to take care of, and a 13-year-old son in secondary school. His wife is not working as she helps take care of his parents.

He hopes the Budget will spell some relief for him, especially when it comes to his parents' medical expenses and his son's school and tuition costs.

Even as a significant chunk of help is targeted at the bottom 20 per cent of households, MPs and economists expect the Budget to also ease cost pressures on the broad middle rung.

Particularly hard-hit are those in the lower middle-income category like Mr Lai, who do not qualify for various assistance schemes but whose household income falls between $1,800 and $4,000.

They are often squeezed - or "sandwiched" - by two or three kinds of financial burdens: elderly parents who may be retired or unable to work; young school-going children; and dependent family members who may have chronic medical conditions or need constant care.

Adding to their woes is the fact that, in recent years, most households in the bottom 20 per cent saw very slow rises in their real incomes.

Last year was an exception, when average real incomes for the bottom 20 per cent rose more than 5 per cent.

The trend of slow income growth, called median wage stagnation, is a global phenomenon, but hardest-hit are those with heavily dependent family members.

Jalan Besar GRC MP Denise Phua notes that the cost of caring for dependent elderly and ill parents can be daunting, and nursing homes can cost over $2,000 a month without subsidies. It is a hefty burden even for a household making two to three times that amount.

She feels the Government should consider more lenient means-testing criteria for nursing homes, or income tax reliefs to help families who care for the aged at home.

North West District Mayor Teo Ho Pin suggests a direct allowance or grant that families can tap on for equipment the elderly need, such as wheelchairs and walking aids, or even nursing care.

Medisave and MediShield could also be reviewed to allow families to use the funds for such needs, he adds.

At the same time, Dr Teo feels it is important to encourage the better-off in the community to contribute time and resources to help less able families who feel squeezed, as is being done at the North West Community Development Council.

This way, he says, the community need not always turn to the state for assistance and subsidies.

MPs also hope the income ceiling for existing assistance schemes for those with children can be raised.

These include the Centre-based Financial Assistance Scheme for Childcare, the Kindergarten Financial Assistance Scheme, and the Student Care Fee Assistance Scheme, which could be made more accessible for the lower middle-income group.

Currently, only families with a household income of $1,800 or below are eligible for the first two schemes. Those with a household income of $2,500 or below are eligible for the third scheme.

Holland-Bukit Timah GRC MP Liang Eng Hwa notes that many parents in the middle-income bracket are burdened with tuition and enrichment class expenses, which can come up to several hundred dollars per child - a significant amount if their household take-home pay is $3,000.

He feels that grants to this end, as well as for low-cost tuition classes like those run by self-help groups, would help boost the morale of such families as they try to move up the income ladder.

"Every parent recognises that education would make a great difference in the child's life and would want the best education for his child," he says.

"We need to cheer parents on and let them know they are not alone in this journey."

Economist Davin Chor of Singapore Management University adds that he would not be surprised if additional tax reliefs are given to those with children or elderly dependants.

In the case of Mr Lai, who does not pay income tax but is not eligible for schemes like Workfare, he hopes the Budget will offer cash grants that his parents and son can draw on.

Feb 16, 2011

Parents worried about cost of education
This is the eighth of a special 10-part series in which The Straits Times explores some of the key issues expected to be tackled in the Budget on Feb 18

By Jane Ng
REPUBLIC Polytechnic student Pavitra Jayaraj almost could not complete her assignments last month when her Internet link at home was cut off over an unpaid bill.
Her father, Mr Kuttalingam Jayaraj, 53, who has been unemployed for the past four months, said he was also behind in the monthly $800 housing loan payments for the family's four-room flat in Ang Mo Kio.
'Things like computer and Internet are no longer a luxury. When the Internet line was cut off, her studies were affected, she couldn't do e-learning,' said Mr Jayaraj. He used to work as a driver and a talent scout before he was laid off.
His wife is a patient-care assistant at a hospital, and they have a son, aged 26, who is a part-time security guard saving up to take a diploma course.
Ms Pavitra, 21, who hopes to read law in university, said she wakes up at 4.30am every day to study as she is aiming to get a scholarship.
'My parents said if I can't get a scholarship, it would be difficult financially, so they prefer that I work. That stresses me out because I want to get a degree,' said the student, who is in the top 10 per cent of her cohort.
Last year, Ms Pavitra, who is on a loan scheme to pay her polytechnic fees, received a $2,000 study award from the PAP Community Foundation and a $300 grant from the Eurasian Association, part of which was used to pay bills when her father lost his job.
With the three local universities and five polytechnics announcing fee increases last month, more than half of the 15 parents interviewed said the cost of education is a top concern, even though there are bursaries and financial help from the institutions.
Taxi driver Michael Ong, 50, said he has been working longer hours to save up for his son's education expenses.
'I have no choice, school fees are becoming more expensive every year,' he said. His son, in Secondary 4, hopes to enter a polytechnic.
Besides parents' concerns on fees, educators raised the issue of the quality of education in pre-schools and private institutions, which they hope will be addressed in Budget 2011 on Friday.
The quality of pre-school curricula was discussed in previous Budgets, but Mrs Josephine Teo, who chairs the Government Parliamentary Committee for Education, hopes this will be given some air time again this year.
'I hope more can be done to raise the quality of educators. In mainstream education, we do a lot. Maybe there can be National Institute of Education-like training for pre-school teachers,' she said.
Former minister of state for education Aline Wong, who is now an academic adviser at SIM University, said there should be more generous grants for pre-school teacher training.
'Raising pre-school teachers' salaries is an incentive for better qualified persons to enter the profession. The costs of better qualified teachers can be shared between three parties: the Government, parents and community,' she said.
She also hopes the Government can consider extending the Edusave scheme to children under six who attend accredited pre-school centres.
In the area of higher education, private schools which run degree programmes in tie-ups with overseas universities hope the Government can consider subsidising the programmes for Singaporeans.
Chief executive of the Singapore Institute of Management Lee Kwok Cheong said that with the introduction of the Edutrust quality mark, there is a now a benchmark for quality if the Government were to consider introducing a subsidy.
'The subsidy will not go to the private schools, but will allow Singapore to upgrade its human capital with more people who are able to get a degree,' he said.
The tuition fees at SIM range from $15,000 to $30,000 - comparable to what the three universities here charge after subsidies - and 80 per cent of its students are Singaporeans or permanent residents.
In the area of special education, MP Denise Phua hopes there will be more support for special needs students in post- secondary schools like the Institute of Technical Education or junior colleges. This could include having more allied educators at that level or paying for sign language interpreters for hearing-impaired students.
'I hope we can address the 'step-children' syndrome to ensure that special needs students are not addendums to be remembered after education policies are developed,' she said.

Feb 17, 2011

Parents want more govt help to raise Junior

This is the ninth of a special 10-part series in which The Straits Times explores some of the key issues expected to be tackled in the Budget tomorrow Longer childcare leave, lower maid levy on their wishlist if S'pore is to boost birth rate
Longer childcare leave, lower maid levy on their wishlist if S'pore is to boost birth rate

By Li Xueying

WHEN secretary Karen Chew, 42, realised she was having not one, but four babies, she went into shock.
'I went for abortion counselling,' she recalled. 'I could see that it would be a huge liability. Money was an issue, finding caregivers was also an issue.'
That was nine years ago.
She and her service engineer husband Ivan Lo, 42, have long since come to terms with their bundles of 'liability' - now a quartet of loveable, energetic girls.
But the stress remains.
From fretting over the cost of diapers and milk powder (grocery runs to Johor Baru were made twice a month), to childcare (the Baby Bonus funds ran out after two years), the couple now worry about education and 'bringing them up right'.
Like many parents and experts interviewed, Ms Chew wishes the Government could give more help - from longer childcare leave to lower maid levies.
Despite efforts over the past decade, Singapore's total fertility rate (TFR) continued to slump, hitting a low of 1.16 last year.
Government leaders have kept mum on whether the Budget will indeed contain goodies to encourage the stork. The only hint has come from Minister in the Prime Minister's Office Lim Boon Heng, who said last weekend that he personally hopes for bigger infant care subsidies.
Meanwhile, the Community Development, Youth and Sports Ministry is reviewing a financial aid scheme that offers childcare and kindergarten subsidies to needy families.
But a response from the National Population and Talent Division in the Prime Minister's Office indicates that less, rather than more, may be in the offing.
It noted that the Government made 'significant enhancements' to the Marriage and Parenthood Package in August 2008. These included longer maternity and childcare leave, and more Baby Bonus handouts and childcare subsidies.
'Given that the enhancements... have been in place for just 2-1/2 years, we should allow more time to assess the impact of these measures, before considering further adjustments,' the agency told The Straits Times. 'We should also recognise that encouraging Singaporeans to have children is a complex issue which goes beyond monetary incentives.
'We need to examine further the cause of low national TFR, despite the efforts by the Government to encourage married couples to have more children.'
The latest Census data shows that the baby shortfall is on two fronts: More Singaporeans are staying single; and while families with two children remain the norm, more are having just one child.
Experts attribute the trend to two Cs - culture and cost.
On the first, they note that as the proportion of singles increases, more are removed from the childbearing population because 'marriage is (still) seen as a necessary precondition for having children', said Professor Gavin Jones of Asia Research Institute (ARI).
At the same time, Singaporeans' aspirations are geared more towards achieving material goals first and having children later, said UOB Group economist Chow Penn Nee. This, in turn, is related to the 'outdated' culture that childcare is women's work, ARI's Prof Jean Yeung said.
She pointed to how women are expected to shoulder most caregiving responsibilities 'thus compromising their careers. So many young women do not want to do it, and they do not need to do it'.
The costs of childbearing fall into various categories.
There are financial costs. These include the cost of living expenses, education and childcare fees. High property prices also 'make it hard for young couples to get into the property market. So they have fewer kids', ING Bank economist Tim Condon said.
Then, there are stress costs: Concern about whether children can get ahead, the need to arrange tuition and enrichment programmes, said Prof Jones.
So what can be done?
Paternity leave would help underscore the co- parenting role of fathers, the experts said.
Ensuring high-quality childcare that is accessible to most parents is 'absolutely crucial', said Prof Yeung. Demographer Yap Mui Teng of the Institute of Policy Studies hopes to see a more systemic support for Singaporeans to study further or upgrade their skills 'without being penalised' if they take time out to have children.
Ultimately, such measures do cost taxpayers money, the experts acknowledged.
This is why Mr Condon believes that 'immigration will remain the preferred approach' to tackling the low TFR.
Prof Yeung added: 'If any country is to take the idea that children are public goods, it has to be serious about sharing the costs of bearing and rearing children.
'Singapore has resources, and building human capital should be a high priority.'
That would be music to Ms Chew's ears, surely. As she juggles being a mother and her job, she said of her children: 'When they are sleeping, I feel they are so adorable. When they are fighting, I wonder, why do I have so many kids?'

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