On Nation and State

May 24, 2011

The followup: After the 2011 GE

Filed under: 2011 GE — Some group @ 2:44 pm

After all the dust has settled, we are in a better position to gauge the implications of this GE, as well as our predictions beforehand.

The wild cards: Social media / those who have never voted.

It is clear that first timers in previously uncontested districts are essentially no different from those who have the privilege to vote in every GE. What is more contentious though is the importance of social media. While it is hard to quantify how it swayed the minds of voters, what is obvious is that the Internet has helped to diminish apathy among younger voters, which ultimately is a far more important outcome than any single election result alone. An engaged youth will ultimately shape Singapore in a far more decisive manner by ensuring that politicians hear the voices of the people. With the rise of social media, politicians of all stripes cannot afford to take voters for granted, which can only be a good thing.

The electoral contests: Our forecast.

While this election did make waves, with a 6 point swing against the PAP, the cube rule failed in this GE. However, there were quite a few near-misses, such as Joo Chiat SMC and Potong Pasir SMC.

Three dynamics influenced the results of all contests:

  1. The rampant unhappiness among the populace
  2. The increased standing of the WP compared to the other opposition parties
  3. The power of the incumbent effect / working the ground.

Keeping these three factors in mind, a short look at our electoral guide is in order.

Aljunied GRC: With the souring electorate and a better WP in play this time, combined with the WP fielding a strong A team, Aljunied fell to the Opposition for the first time. The WP now needs to translate this gain into a palpable difference in policy outcomes.

Hougang SMC: Even though the departure of Low Thia Khiang left Hougang potentially up for grabs, the combined effect of the national wave and the WP’s strong brand name  were much stronger than the loss of incumbency. So much that the WP in fact obtained an even stronger victory margin than the last GE.

Potong Pasir SMC: In hindsight, we should not have been too surprised that this seat was going to be close. Without factors #2 and #3, coupled with a narrow victory margin in the 2006 GE, this seat should have been expected to be close to begin with.

Punggol East SMC: The voters have spoken. In an extreme manifestation of factor #2 (the reputational advantage of the WP against the other opposition parties), the SDA managed to scrounge a miserly 4% of the vote compared to the WP’s 41%. This when the WP candidate was a newcomer and when the SDA had spent more time and energy in this area beforehand.

However, it seems unlikely that Punggol East will fall soon, given that the PAP easily managed to obtain more than 50% of the vote despite the 3-cornered fight.

Marine Parade GRC: The most devastating blow ever dealt to Emeritus SM Goh, which is most probably attributed to the combination of local issues (in particular, negative public sentiments about Tin Pei Ling’s perceived ineptitude) and the massive wave of discontent washing over the electorate.

Ang Mo Kio GRC: The only constituency in which the PAP gained vote share compared to 2006. Again, this can be attributed to the fact in which a strong WP slate was replaced by a RP team that were greenhorns to the electoral campaign.

East Coast GRC / Bukit Panjang SMC, the controls: The national wave against the PAP was strongly reflected in our  controls. The WP gained vote share in East Coast from 36.1% of the vote to 45.2%, while the SDP also made a definite improvement in Bukit Panjang SMC, from 22.8% of the vote in 2006 to 33.7% in 2011. While part of these gains should also be attributed to improvement in the respective parties, it is quite obvious that the national wave was very real.

The bird’s eye view: What comes ahead.

The increased number of qualified opposition MPs will further liven up Parliamentary debates as well as give policies the scrutiny they deserve. Yet potential pitfalls remain. The WP will need to stay coherent and united despite the diverse voices in the political scene. Thus, it will be interesting to see if the WP’s party unit holds. On this count, while Eric Tan’s resignation does not bode well for this measure, it is too early to draw definitive conclusions.

The more important question is to see how relations between the WP and other opposition parties hold up. Having established its reputation as the leading opposition party in Singapore, it remains to be seen if the WP and the other opposition parties can continue to cooperate. As Punggol East SMC has shown, the WP is held with far more regard than the rest, which might lead to tension and increasing rivalry.

Keeping interest up in the opposition cause, as well as translating that interest into tangible results, will be the ongoing challenge for all Opposition parties. The fervour we have seen online could potentially be unleashed into a game changing force in tight contests. Question is whether they will do it. Nicole Seah’s call for campaign donations and volunteers should be seen as a first step in that direction.

This election has also served as a wakeup call for the PAP. From the PM’s maiden apologies during the heat of the election campaign period to the massive Cabinet reshuffle after the elections, it is quite obvious that the PAP has realised the need for reform. Whether the epochal ministerial changes and the setting up of a committee to review political salaries constitute a first step towards change from within, or are merely a perfunctory, populist gesture to appease the ground remains to be seen.

On a final note, let us remember this: if we should give credit for the Opposition for fielding strong teams and contesting vigorously in these elections, then credit should also be due for PM Lee’s administration. Sure, while the electoral reforms he made were small and cautious, he could have easily gone the other way like his predecessors to reinforce his political stranglehold and stifle competition. Without this, we doubt we would see such intense interest in the elections.

May 5, 2011

The Electoral Guide: What to watch for on Polling Day

Filed under: 2011 GE, Election forecasting — Some group @ 11:34 am

The Wild Cards

The power of social media, as well as the indications of voters who have not had the chance to vote in the recent past, will be put to the test in this election. Is the deluge of online voices of dissent on Facebook and sociopolitical blogs representative of feelings on the ground? Will they translate into actual votes? In this unprecedented election where all except one constituency is contested, how will voters in previously uncontested wards vote? All these questions will only be answered on Polling Day.

The Battlefields

Aljunied GRC: The defining race of the election which bears no further explanation. A titanic battle lies ahead, and it remains to be seen if the politics of hope or the politics of fear will triumph. A win for the WP will be taken as a mandate for it to push its policies forward. Conversely, a PAP hold on this area, despite having fielded competent opposition candidates, will be viewed as an immense setback for the Opposition, diminishing its credibility and leading to the loss of WP representation in Parliament.

Hougang and Potong Pasir SMCs: Without incumbents to defend their seats, this will be an important test of the staying power of the Opposition. Will longtime supporters of Low Thia Khiang and Chiam See Tong defect without their presence? Or will they continue to support their successors?

Punggol East SMC: This race will be a test of the standing between the PAP, WP and SDA. It will be interesting to see if the PAP will obtain more than 50% of the votes there. Doing so will indicate that the PAP will be difficult to unseat in there even in a two-way contest. In addition, if the WP manages to attract a significant fraction of otherwise SDA voters, this will cement the impression of the WP as the dominant opposition party to watch.

Marine Parade GRC: The GRC which raised eyebrows about the fairness of the GRC system,  this will be a test of how significant the so-called Tin Pei Ling factor is. Will swing voters cast their votes in a manner to express their frustration with the system? One thing will not change however: Nicole Seah will remain a force to be reckoned with in local politics, even if she does not triumph.

Ang Mo Kio GRC: In his maiden electoral contest in the 2006 GE, PM Lee swept 66.14% of valid votes from the WP team which had been widely dubbed as a ‘suicide squad’. This time round, PM Lee will be receiving the report card for his team’s performance over the last five years. Whatever the result, expect PM Lee to analyse the electoral returns for his district really closely for signs of trouble ahead.

East Coast GRC / Bukit Panjang SMC, the controls: Both constituencies are having a face-off between the same parties. In addition, both candidate teams are similar. This will let us see to what degree the ground has become “less sweet” over the last five years. In the 2006 GE, the PAP did marginally worse than the national average in East Coast GRC with 64% of the vote. It is wards like this that will be critical if the Opposition intends to take power, and thus we are watching this race closely for its potential long-term ramifications. In contrast, Bukit Panjang SMC broke the most strongly for the PAP, with 77% of the vote, and will thus, as an uncompetitive contest, will be the cleanest gauge of how much discontent has been brewing. Specifically, it will also suggest how successful the SDP rebranding effort has been.

Our Forecast

Despite the foolhardy nature of forecasting without any hard data, we think a vote share of 60% for the PAP sounds reasonable. According to the Cube Rule, this would translate to 5-6 constituencies in Opposition hands, a marked improvement from the two currently in Opposition control.

Yet practical considerations suggest the actual figure is likely to be lower. There are no other obvious constituencies ripe for the taking after Aljunied GRC. Any other opposition gains will thus come from dark horses: races that have fallen out of the spotlight but are in reality competitive. Predicting what other constituencies will fall, other than Aljunied GRC, is thus likely to be a futile exercise.


Whether you are a PAP or an Opposition supporter, the coming election will be critical to the long term future of both the PAP and the Opposition. Watch the results closely!

April 29, 2011

How many constituencies will the Opposition win? The Cube Rule speaks.

Filed under: 2011 GE, Election forecasting — Some group @ 3:08 am

With Nomination Day over, we can predict to some precision the likely outcome of this GE. This insight is derived from the Cube Rule, which allows us to forecast the number of constituencies won based on vote share alone.

Basically, the Cube Rule states that : In an 2-party electoral system like ours, the number of constituencies won by each party will generally follow the ratio of  (A: B)^3, with A and B being the opposing parties.

This rule worked well for the last GE, in which 16 constituencies were contested. The PAP won the election with approximately 2/3 of the vote, suggesting that the Opposition would win only 1 constituency to 8 PAP wards, or in other words, slightly less than 2 wards. This proved to be true, as the Opposition retained control of Potong Pasir and Hougang.

So how about this year? Out of 27, 1 (Tanjong Pagar) was uncontested, and another (Punggol East) has a 3-cornered fight. This leaves 25 contested constituencies with 2-way contests.

With that, take your pick at the result this year! A list of realistic outcomes (in our view) are shown below.

The maths suggests that even if the PAP does not lose vote share this year, the Opposition stands a good chance to win another ward. Of course, take that with a pinch of salt!

EDIT: Corrected a calculation error!

April 26, 2011

Making Sense of the Workers’ Party Manifesto 2011

Filed under: 2011 GE — Some group @ 12:48 pm

At 67 pages long, the WP manifesto is far more detailed than the SDP Shadow Budget, or the recent PAP manifesto (which is mainly an extension of current policy). Much thought has evidently gone into the creation of this document, and it is an important contribution to the debate over our future.

The remainder of this document will summarise what (in our views) are the largest proposals in the WP manifesto, be it for good or for bad.


1. Unemployment insurance scheme

This is a proposal worth considering, especially given our heavy reliance on foreign trade, leaving our economy extremely vulnerable to cyclical unemployment in which workers are retrenched through no fault of their own. In the 2006 Budget Debate, Finance Minister Tharman Shanmugaratnam questioned the need for an unemployment insurance scheme, given our existing retrenchment protection scheme, “a well-established scheme which is more or less working”. However, under the current scheme, the amount of retrenchment benefits “is subject to negotiation between the employee and employer” which is far from a level playing field. Even Shanmugaratnam himself later acknowledged that there is scope for improvement.

Rather than dismissing this proposal straightaway for ideological reasons, it makes better sense for the government to adopt a policy along these lines, drawing lessons from successful case studies such as Germany and South Korea.

Yes, it may encourage some to put off looking for work, but we must remember that this will be a small minority, especially if coupled with Workfare (payments to low income workers) and a well designed unemployment insurance scheme.

2. Mandatory basic hospitalisation insurance scheme

Our skimpy social security net needs improvement. It is tragic that the most important element of our health insurance system, Medishield, automatically sunsets after 85 years of age, when recipients need the care most. It is even more tragic that Medishield could impose exclusion of certain congenital conditions from claim while still offering coverage. A mandatory basic hospitalisation insurance scheme, as raised by the WP, would go some way in addressing the problem.

That is not to say it is perfect. Several proposals, like the inclusion of HIV/AIDS treatment and preventing the scheme from adjusting premiums with age, will vastly increase premiums on the young and able bodied. It is also unclear if removal of subsidies to government hospitals after this would fully pay for this new program. But the key ideas behind the proposal (universal coverage and a capped lifetime payout) together will represent a vast improvement from the status quo, where those after 85 are left to fend for themselves using their savings.


1. Abolition of Nominated Member of Parliament Scheme

This seems to run counter to WP’s aspiration towards a ‘First World Parliament’. Since its inception in September 1990, Nominated Members of Parliament (NMPs) have provided constructive alternative, and often critical, views on government policies, making valuable contributions to public policy. In the event that our Parliament has a higher proportion of Opposition seats, the role of NMPs becomes even more pertinent: as non-partisan members, they would be able to keep check on both the ruling and opposition parties, ensuring that political parties put national interests first. With checks and balances coming from both opposition parties and non-partisan NMPs, Singapore can then strive to build a First World Parliament which we can truly call our own.

2. Pegging prices of HDB flats to the median incomes of eligible Singaporeans

As far as possible, government intervention should be avoided due to its attendant inefficiencies. WP’s call for price control in the housing market, albeit well-intentioned, would open a can of worms, including shortages and possibility of a black market, as real-world examples in New York City and Finland illustrate. Instead, as proponents of market-based solutions, we prefer that MND abandons its current policy stance of ‘asset enhancement’ and reverts back to ‘affordable housing for all’. From there, the government can then focus on policies to curb demand (controlling the influx of immigrants and restricting speculation in the residential property markets) and increase supply (building more high-rise apartments, designing high-density cities). These, we believe, are better and sustainable solutions in the long run.

Rather than debating over land values, subsidies and price pegs, isn’t it far more intuitive to target the root causes to regulate prices? That has stumped us throughout the fiery salvos exchanged between the PAP and WP recently. The people deserve a better debate than what we are having now.

To sum up, for all its flaws, the WP has put up a credible manifesto to the people. Though some critical details remain missing (e.g. funding some programs), it should be remembered that this is ultimately not a Budget. In fact, the document is far more detailed and audacious than the PAP manifesto!

If the detail behind a manifesto is what makes a party credible, then the WP easily has outshone the PAP.

April 20, 2011

Political Factcheck: Land prices are a total distraction to the housing debate

Filed under: Economic Policy, Political Factcheck — Some group @ 3:16 pm

With the elections coming, the PAP and WP are squabbling about the cause of rising housing prices. Recently, both parties have focused on the cost of the land used to build these homes.Yet, land prices are at best a distraction to the entire housing debate. At their worse, they are entirely irrelevant. High land prices are the symptom, not the cause of high housing prices. This insight can be derived from David Ricardo’s analysis of rent, easily found in any economic text, and instantly applicable to everyday life.

For example, why is food in Newton Circus that much more expensive than the typical hawker? It is tempting to claim that the high prices are due to the high rents there. But that gets the order wrong. Hawkers in Newton Circus can command higher prices due to the much higher traffic there, that are mostly willing to pay for food.Newton Circus fully well knows that, as do all other potential tenants who want to rent shop space there. The large potential profit from selling food at Newton Circus leads to tenants bidding up the cost of renting shop space.The high demand for space in Newton Circus is derived from the high prices tenants there can charge. To say the reverse is confusing cause with effect.What relevance does this have on the housing situation? Everything!

Homes are getting expensive not because the Chief Valuer is valuing land so highly. Rather, the Chief Valuer knows that people demand land not for land’s sake, but for its utility in building homes and the like. And thus they, just like Newton Circus, respond to this and mark up the price of land. They closely follow the changes in the housing market

All this has no effect whatsoever on the prices of homes. Only the profit margins of the HDB and property companies are affected. The reason why resale prices are spiking has everything to do with the lack of supply and excessive demand in the housing market. And we will all be better off if both the PAP and WP focused their attention on the real issue instead.

March 10, 2011

The Conservative Soul: A call for small Government

Filed under: Political Commentary — Some group @ 3:13 pm


I used to view the world in black and white: either X was good, or it was bad. Through this lens, the PAP was a responsible party interested in governing, while the Opposition were an extremist fringe.

But as I matured, I increasingly viewed this perspective as flawed. For all the good that the PAP was doing, the fruits of growth were, and still are, increasingly concentrated among the rich and powerful. And despite how much the PAP tried to sell Opposition ideas as extreme, one could not deny that they had a point: the entire playing field was skewed towards the ruling party.

Thus began a long trek towards the lonely political center. It was this context that allowed me to see that just as the PAP’s interests do not coincide with the nation, the current Opposition is too fragmented and incoherent to become a viable replacement anytime soon.

It is also this position that has led me to realise that there are issues that neither the PAP nor the Opposition actually intend to tackle. For it is not in their interest to curb the influence that Parliament has over the nation.

For through its extended rule, the PAP has strengthened the power of Parliament such that there are no effective checks and balances. The presidency in the current form is almost powerless, while the judiciary is severely hamstrung. The electorate only gets to voice its opinion during the rare election, and thats when said voter’s district is actually contested.

Much hay has been made about the need for political reform. But to date, there has been no serious proposal from the parties  that would actually change this state of affairs. Though the PAP and the Opposition seem as though they are on opposing ends of the political spectrum, in reality this is a false duality.

We need small government; a government that recognises that it can be wrong. One that intervenes only when it needs to. For government activism leads to unintended consequences. This was the case for the IRs, and this will not be the last case.

What I call for is a government that knows meritocracy is incomplete without equality of opportunity. Meritocracy on its own will only entrench power among those who make it to the top first. A conservative government will therefore ensure we move as a nation. This will involve higher taxes targeted at the rich, an idea the PAP refuses to consider.

What I call for is a government that actually recognises that it is a representative of the nation, not the nation itself. Major policy changes should be put forth to the public to decide, not steamrollered through Parliament.

What I call for is a government that respects the role of individuals in society. It should respect individual choices when they do not affect others, for no one else knows what is best for them. Such a government would treat all minorities equally, and decriminalise homosexuality.

That is the government that we should have, and that is government worth fighting for.

February 27, 2011

The political character of the SDP Shadow Budget 2011

Filed under: Budget 2011, Economic Policy, Uncategorized — Some group @ 2:16 am

After a through reading of the SDP Shadow Budget, I have expanded on my earlier thoughts.:

It contains numerous contradictions

This is best illustrated by the conflict between A14 and C11

A14 justifies the breakup of GIC and Temasek by explaining the logic against government intervention in economic planning:

“Co-opting successful entrepreneurs into state-mandated committees is counter-productive because, governed by the internal logic of the establishment, they become hidebound by the culture of conservatism, hierarchies, and ministerial edict and become reified(sic), unable to identify the trends and patterns of consumer behaviour.”

Yet, C11 audaciously goes on to state:

“The government will encourage the establishment of SMEs in the organic foods, environmentally-friendly and eco-friendly products, and ecotourism sectors. These sectors have been selected because they are growing in terms of market share and reflect lifestyle shifts in the nation.”

A prime example of ministerial edict justified via internal logic, no?

And then there is C31:

“The Foreign Worker Levy payable by employers will, instead of being returned to the Government, be divided equally between the employees on Work Permits and the employer.”

Effectively nullifying the existence of the Foreign Worker Levy. Coming straight after C30, which implements a Singaporeans First Policy. It is thus unclear if the SDP shadow budget will actually reduce immigration and foreign workers at all, depending on how strict this Singaporeans First Policy is.

Dramatically expands the role of government into the economy

While the document does expand civil liberties in the social arena, it shows a willingness to intrude into the free market. For example, there is C63, the creation of a minimum wage policy.

Following closely behind is C39, reducing university fees by 50% in public universities for Singaporeans and freezing them until 2015. Along similar lines is C49, freezing public transport fares at 2010 levels till 2015.

These two proposals are in effect price ceilings, which will in the end lead to massive shortages and underprovision of university places and public transport, unless the government steps in with massive subsidies.

And then there is C70:

A Utilities Commission will be created to implement the return of electricity and water to the public sector. The Commission will determine, upon open and transparent consultation with the public, the utilities rate.”

Definitely a step back for good economics. It seems as though the previous lessons and rhetoric on government waste and inefficiency (exemplified by A14) was totally forgotten.

I am not a budget specialist, but it is quite likely that the spending increases (as per C17), coupled with the lack of similar rises in taxation, will lead to deficits, which will worsen the inflationary pressures in our economy.

All in all, there is a lot for small government conservatives to worry about.

An inherently political document

The SDP uses this budget to advance its own agenda, while pretending that this is in the greater interest. I was very interested to read the justifications behind the repeal of the Political Donations Act and the amendment of the Newspaper Presses and Printing Act.


“The government will also repeal the Political Donations Act in order to encourage local NGOs to flourish and regional and international NGOs to relocate to Singapore, thus opening up a new economic sector.”


“Likewise the Newspaper Presses and Printing Act will also be amended to encourage Singapore to become a centre for the international media industry which commands a large source of job creation.”

If you have not realised, these are rather contrived rationales to support their case. There are far better uses of government resources to promote growth than to repeal/amend legislation that have no guaranteed results and at best, just might lead to a little more economic growth. (I challenge anyone to find a developed country that has the media/NGOs form a large fraction of the economy relative to other sectors)

Don’t get me wrong. There are genuine reasons why we should reform the bills above.

But if the SDP wants to do so, then it should campaign transparently its rationales to the public. We do not need more lies or half truths.

What we need is transparency in government, and this does not set a good precedent.


My impression has turned for the worse after reading the entire 26 page document.While there are still good ideas, the entire proposal is not fully thought out and incomplete (e.g. there is a total lack of  Revenue Estimates).

While this is in part understandable: it is not like the SDP had the entire Ministry of Finance to help them draft this budget, this should not diminish the criticism of this proposal.

For if we demand high standards of accountability from the PAP, we should ask for the same from the SDP, what more with its fervent cries for transparency and fairness in government. The release of such a contradictory budget laden with populist sounding measures (all while Mr Chee claims there are none) convinces me that the SDP is just a party of unprincipled hacks that is fundamentally like the PAP. It is unserious and plainly aimed at attaining power.

We deserve better. And we can do better.

February 17, 2011

A quick reaction to the SDP shadow budget

Filed under: Budget 2011, Economic Policy — Some group @ 3:23 pm

While the shadow budget released by the SDP is technically not purely a budget (several areas, like amending the Newspapers and Printing Presses Act, are unrelated to the budget), it provides a useful insight into the mindset of the SDP. The efforts taken by the SDP to prepare this budget should be commended, and it marks a step forward for the opposition. It will be interesting to compare this budget against the actual budget released by the Government.

Much however hinges on the details and actual numbers, so until the SDP releases the full document, the analysis below, which is mostly based on what I have read, should be regarded as preliminary.


  • Graduated GST: While basic necessities may not form the majority of expenditures in poor households, every bit counts. Furthermore, as necessities form an even smaller part of the average family budget, the impact to the Budget faced by the loss of GST revenue should be minimal. All in all, this stands to be an easy way to make GST less regressive.
  • Amend Newspapers and Printing Presses Act: It is quite clear that the government has too much power over the local papers. My only quibble would be that this proposal is better off in a standalone bill.
  • CPF liberalisation: Personally, I feel that there should be an option for individuals to withdraw their CPF monies at any point in time, so long as they have at the Minimum Sum in their accounts. However, to prevent abuse in the system, this must be paired up with a provision preventing people from reinvesting their savings into the CPF after they withdraw their funds.
  • Including a developmental budget in the MFA: Compared to our military budget, the MFA receives fairly scant attention. Much is made among our neighbours about our large defence spending, something which I view as excessive. In this regard, I am in agreement with the SDP: we should strike a more equal balance between diplomacy and deterrence.

Good, needs refinement

  • Family Credits: I support this, but not for the reasons provided by the SDP. Rather, as more and more government aid schemes are developed based on income, the take home pay of the poor on these aid schemes may actually start to fall as their incomes rise, as they receive less aid from multiple programs or are disqualified entirely. This creates the perverse incentive of the poor to remain poor, something that this scheme, by merging all aid programs into one, will prevent.
  • Lowering Ministerial salaries: I definitely agree that the salaries of government ministers are excessive. But pegging them to median income only seems misguided. It will only encourage ministers to look at the short term, or worse still, goose up the population with massive giveaways just to push up median incomes.
  • Replacing the ISA with an Anti-Terrorism Act: The ISA in its current form is too expansive, but scrapping it entirely seems too extreme. I do not know how the proposed Anti-Terrorism Act looks like, but for now, I would focus on making the process more accountable.
  • Reducing defence spending: As stated above, I do find the defence budget too large. Yet simply shaving off billions without identifying what exactly is to be cut is not good policy. As for the related policy of reducing the NSF liability to 1 year and moving to a fully professional army, I think such measures are better off in a public debate, rather than simply rammed through Parliament. The IR disaster should caution all about the limits of politicians.

Bad, could be improved

  • Divestment of GIC and Temasek: It should be noted that much of our accumulated CPF savings/ budget surplus are in these entities. While we definitely should be greater private sector involvement in the economy, it need not and should not involve disbanding these highly successful SWFs. For instance, we could just mandate that these SWFs should not hold controlling stakes in Singapore companies.
  • Higher government expenditure as a share of GDP: I fear this is a backdoor to runaway spending. More details and justification should be given, backed up by sound analysis. Saying that “some” feel that the current state is encouraging low productivity is not enough. Especially when one considers that private companies tend to be more efficient than government regulation.


  • SG First employment policy: This seems likely to add an unnecessary burden to the thousands of small and medium enterprises that make up the backbone of Singapore, without much effect. For example, would every Singaporean family with a foreign domestic helper be affected? The implementation side needs to be fleshed out, but it doesn’t look good.
  • A minimum wage:  A full analysis can be found here, but in short, a minimum wage will lead to wage rigidity, putting more of  those who desperately need money out of work.
  • Making HDB a non-profit statutory board: Sounds good, just like what the masses wanted, until one realises that this will probably lead to speculators swooping down to buy cost price HDB flats, and reselling them on the market to make a killing. This will further increase the long queues for HDB flats, preventing those who really need affordable homes from getting them.
  • University Fee reform: Cutting university fees by 50% and freezing them till 2015 for locals sounds great to halt the rise in the cost of living, yet it signifies nothing. While large, education is not exactly the main driver of inflation now. Food, transport and fuel are. This smells like a giveaway, and I expect attacks to come from the PAP on this.

There is much to look forward to in this proposal; yet there is also much to fear. I find it hypocritical that while the SDP rails against election goodies, it places similar policies into its budget that are ineffectual at best. Yet there are several interesting ideas that should be explored.

Still, I cannot deny that progress has been made. The preview looks promising.

But numbers don’t lie.

And I shall wait for the numbers.

January 15, 2011

Census 2010: Our rapidly ageing population and future working class pain.

Filed under: 2010 Census, Statistics — Some group @ 3:14 am

With the advance 2010 census data out, this chart shows the greatest economic challenge we will face.

The above is a population pyramid comparing the total population of ALL residents (citizens and PRs). There are 3 major points to note.

Massive resident population growth…

In 10 years, we have grown by nearly 500,000 residents to 3.77M residents. This marks a 15.2% increase over the period, which works out to an average growth rate of  1.4% annually.

But the growth is in the wrong areas

Despite the overall large increase, the number of residents below 10 has actually fallen, from 482 thousand to 410 thousand. Conversely, those aged above 85 have increased by nearly 67%.

The baby boomer generation is retiring

In the next five years, the number of retirees will spike dramatically. While 111 thousand residents would have reached the retirement age in the past five years, nearly 192 thousand will do so in the next five year period. And this is going to get far worse before it gets better, judging from the large peak in the graph.

What does this all mean?

To understand this, lets look at a projection by the US Census Bureau one generation later. Welcome to Singapore in 2030.

In this graph, you can literally see the burdens of the old crushing the futures of the young. The working age will not only have to save for their retirement/children, but also support an ever growing number of retirees.

What does this mean? Much has been said about the growing need for a strong social safety net, facilities for the elderly etc etc.

What has been implicitly left out is the role on tax policy.

While we in this regard will be better off than Japan and other greying countries due to us having CPF and reserves (rather than say, government pensions), the state will still have to spend more on the aged through welfare and more healthcare subsidies.

All this means that our current state of budget surpluses and *relatively* low taxation will not last, especially as growth slows down. As hundreds of thousands retire, not only will they reduce the workforce, they leave the tax base. Government revenue comes from a shrinking pool of workers.

Which means either taxes go up on these workers, or the tax base is widened.

From current indications, the government is choosing the second route: Widening the tax base by moving towards consumption taxes rather than income taxes, as well as massive immigration.

A rather unpalatable choice that lies ahead for the government and for the people.

With the populace being so angry way before the real storm comes, what will happen in 2030?

December 19, 2010

Do contested large GRCs favour the PAP?

Filed under: 2006 GE, Election forecasting — Some group @ 8:56 am

In view of the upcoming elections, we have been spending our time working on doing a more refined analysis based on local rather than national factors.

Instead of comparing national results across time, we are trying to see if local demographics have measurable impacts on local results in contested wards of the 2006 GE. Comparing differences in results would then give us a clue on how important each factor really is.

Due to the incumbent effect, we have excluded opposition held wards from the analysis. With this in mind, we currently have 10 data points out of 14 contests in PAP held wards, and this is set to increase.


So first up: Do larger contested wards i.e GRCs measurably lean towards the PAP?

The surprising answer is: Not measurably.

PAP vote share in the last election versus number of voters.

While there is a small effect, it is unimaginably negligible. For instance, increasing the number of voters in a ward by 100,000 would only favour the PAP by 0.4% more than otherwise expected. Furthermore, the relationship is far from being statistically significant.

Now, I’m not denying that GRCs do favour the PAP, in the context of a weak opposition that is unable to marshal sufficient candidates. By deterring independent candidates, they also reduce the vibrancy of local politics.

What the numbers suggest though is that once there are enough contenders to contest a GRC, its sheer size compared to the usual SMC is actually not a big obstacle as is often imagined.

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