Additional CPF housing grant for lower income to be increased to $30,000

Additional CPF housing grant for lower income to be increased to $30,000
Household income ceiling to qualify for grant will be raised to $4,000
THE government will increase the maximum additional Central Provident Fund (CPF) housing grant to the lower income to $30,000 and raise the household income ceiling for the grant to $4,000.
A new scheme will also be introduced to make it easier for older Singaporeans to monetise their Housing Board (HDB) flats.

These were all part of a slew of housing policy changes announced by Prime Minister Lee Hsien Loong yesterday during his National Day Rally speech.

HDB housing policy forms a major pillar of the government’s strategy to narrow the income gap and help the elderly build a retirement nest-egg - major themes in Mr Lee’s speech.

About 85 per cent of Singaporeans live in HDB flats.

Home ownership through an HDB flat is the ‘best form of social welfare for citizens, as it gives every Singaporean a stake in Singapore’s success’, he said.

‘When we help you to buy a house and give you something which is valuable and which is rooted in Singapore, when Singapore grows, property values go up, your flat value goes up.’
To help more of the lower income own their own homes, the cap on the Additional CPF Housing Grant, which was introduced last year, will be raised from $20,000 to $30,000, which is substantial considering that a three-room flat cost $120,000 if bought directly from HDB, said Mr Lee.

More people will also become eligible for the grant as the household income limit will be increased from $3,000 to $4,000, said Mr Lee.

About half of all households here have an income of $4,000 or less.

The prime minister also said that the government will pave the way for elderly Singaporeans to unlock the value of their flats and convert it into a stream of income to supplement their retirement expenses.

The government in 2005 made it easier for the elderly to downgrade to HDB studio apartments sold on a 30-year lease.

An alternative to this will now be offered to elderly Singaporeans - aged 62 and above - living in two or three-room HDB flats, said Mr Lee.

These are the people, unlike those living in bigger flats, who do not really have the luxury of monetising their flats either by renting out a spare room or downgrading to a smaller place.

Under the new scheme, HDB will buy back the tail-end of the lease on their flats and leave them with a shorter lease of 30 years on the same flat.

The flat owner will then receive the payout from HDB in two parts - a lump sum paid upfront and monthly payments for the rest of his or her life which will serve as a form of annuity.

‘A 30-year lease is quite long but we are also studying what happens if it turns out that 30 years is not long enough and have some arrangements if you live longer,’ said Mr Lee.

The Ministry of National Development is looking into this, he added.
Source :  Business Times - 20 Aug 2007

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CPF stretched to provide cover for ageing population

CPF stretched to provide cover for ageing population
Higher returns, later drawdown age will make retirement savings last longer
By GENEVIEVE CUA

THE guaranteed interest rate under the CPF scheme will rise by one percentage point for amounts up to $60,000, in an effort by the government to make retirement savings last longer.

A secure retirement: Deferring the drawdown by a year will earn the account more interest, and make it last two more years till 82
In addition, the age at which drawdowns on the Minimum Sum can begin will be raised progressively so that the savings can stretch further.

The government will also legislate the re-employment of workers, to take effect from 2012. Initially companies will be required to re-employ workers up to age 65, and later up to 67.

For the CPF scheme, some form of annuity will be made compulsory for those below 50, said Prime Minister Lee Hsien Loong yesterday at his National Day rally speech.

Mr Lee said the CPF Board will pay one percentage point more on the first $20,000 of Ordinary Account balances, and on up to $60,000 on a member’s combined accounts comprising the OA, Special, Medical and Retirement Accounts.
‘When CPF started, life expectancy was 60, 61. Now it’s 80 years old. So we need to make three changes: Firstly, improve the returns on the CPF savings; secondly, draw down the CPF savings later so that they will last longer; and thirdly, to cover the risk of living longer than expected.’

- Mr Lee on the need to bring the CPF system up to date

‘You cannot just suka-suka write any number; must be properly justified and must pass muster and inspection by the Elected President, which is the way we have done it.’

- Mr Lee on the $700 million cost for the one-point CPF interest hike

‘When people give me free things, I don’t accept. Why, when I can afford to pay? But if they say, OK, you are a friend, we give you a discount, then I think ‘OK, friends can accept kindness’.’

- Mr Lee,
quoting nanogenarian Lee Siew Lan

Mr Lee said: ‘I think we must improve the returns on the CPF. And I think our main focus is to help the lower and middle income groups.’ Half of active CPF accounts have less than $45,000. These are members who are working and contributing to their accounts.

With $45,000, Mr Lee said: ‘… you are not poor but I would not think it is wise to strongly encourage you to go and play the stock market. Why? First, you don’t have enough savings. Secondly, you may not have the expertise. Thirdly, you should not expose yourself to excessive risks…’

The CPF Board will be taking the route of enhancing the existing risk-free framework. More than half of the active members will get one per cent more on all their balances.

The $60,000 of funds can still be used for housing and medical expenses. But it cannot be invested through the CPF Investment Scheme.

This is expected to cheer the majority of members, who appear to prefer the safety of the guarantee. Private sector investment fund managers and insurers, however, may be disappointed as a higher guaranteed rate raises the risk-free bar which their funds have to beat, even if it applies only to up to $60,000 of funds.

Investor education efforts to date have set out to encourage individuals to step out of the comfort zone of a guaranteed rate.

The concern has been that a relatively low guaranteed rate of 2.5 per cent may not keep pace with inflation or cover the risk of a shortfall in funds.

As at March 31 this year, a total of $25.9 billion OA funds, and $5.7 billion of SA funds were invested in a mixture of stocks, funds and insurance policies. There is still another $57 billion of OA funds and $23.8 billion of SA funds that are uninvested.

For amounts in excess of $60,000, members are still free to invest through CPFIS.

Mr Lee said a percentage point more in the annual interest rate will make a big difference. A young man who starts work at 21 earning $1,700 a month, and buys a four-room HDB flat, will earn about $20,000 more in interest by the age of 55.

The hike will cost the government $700 million initially. The cost will rise as members save more in the CPF. The cost, said Mr Lee, is equal to the entire government grant to the HDB every year of $750 million.

There will be no change to the concessionary HDB loan rate formula.

On drawdowns, members are currently required to set aside the Minimum Sum at the age of 55. This is drawn upon from the age of 62 in monthly payments. But if the account is drawn upon too early, a retiree may outlive his savings. Based on the current scheme earning 4 per cent in interest, the annual income from the Minimum Sum lasts 20 years, after which the account is depleted.

Deferring the drawdown by a year will earn the account more interest, and make it last two more years till 82. But more people will live past 82, in particular women, said Mr Lee.

As the government legislates re-employment until 65, the drawdown age must be raised progressively as well.

In 2012, the year when re-employment of workers will be required, the drawdown will begin to rise, and will reach 65 by 2018. Members who are currently 58 or older will not be affected. For those 53 and younger, the drawdown age will go up to 65.

Mr Lee said the move may not be popular. ‘But we have no choice. People are living longer, we have to work longer, and we’ve got to start drawing on the reserves later. Therefore we have to start moving now.’

For older workers in their 50s who are affected by a later drawdown age, a one-off bonus interest will be paid to their Retirement Accounts. A bonus will also be paid to those who voluntarily defer their drawdowns, even if they are currently 58 and older.

Annuities are a solution to the need for an income in retirement, said Mr Lee. But few people opt to convert the Minimum Sum into an annuity as Singaporeans do not understand annuities.
Source :  Business Times - 20 Aug 2007

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PM moves to tackle income gap

PM moves to tackle income gap
CPF returns to be increased, retirement pushed back, flats monetised for older owners as govt widens security net
By CHUANG PECK MING

AS the forces of globalisation widen the income gaps worldwide, Prime Minister Lee Hsien Loong unveiled a comprehensive strategy to make sure that the poor in Singapore - who are also likely to be elderly - have enough savings to fall back on.

The most eye-catching of these moves involves a hike of one percentage point on the first $20,000 in the Ordinary Account of the Central Provident Fund - and on up to $60,000 in the combined CPF accounts - as the government seeks to provide a bigger nest-egg for old age.

But no less significant are moves that will ensure that Singaporeans, who are living longer, also retire later and that HDB flats provide not just shelter but also a stream of income as citizens age.

Another key area that will underpin the government’s strategy is education. A fourth publicly-funded university will be built as Singapore tries to raise the qualifications and earning power of the next generation of workers.

‘Somebody did a study in Singapore and we found that for every year longer you go to school, you can expect your wages to go up by 14 per cent,’ said Mr Lee in his National Day Rally speech last night.

His point: The payoff on education is going up and it is the best way to level up the society and reduce income gap.

Currently, 23 per cent of each cohort goes to a publicly-funded university. ‘We aim to raise this now to 30 per cent of the cohort … by 2015,’ said Mr Lee. This would mean an additional 2,400 university places for students as well as a new university, with its own unique character and strengths, to take its place alongside NUS, NTU and SMU.

But while waiting for these payoffs down the road, Mr Lee addressed the most pressing issue facing Singapore today - its rapidly ageing population.

Not only are Singaporeans making fewer babies, they are also living longer, with the risk that they will run out of money in their later years. Mr Lee recounted the case of a 72-year-old who retired at 55 and then ruefully told labour chief Lim Swee Say: ‘I didn’t know I was going to live so long.’

The government will pass a law under which, from 2012, workers reaching the retirement age of 62 will be offered re-employment till 65 and eventually till 67.

The revision in CPF returns is also significant. It means that more than half of the CPF active members - those still contributing to the fund - and mostly those in the lower and middle income group will enjoy the higher return on all their CPF balances.

CPF members can still use the $60,000 - on which they will get higher returns - for housing and medical care but not for investments because, as Mr Lee said: ‘This is long-term money and you leave it with us and we will treat it like retirement funds and we will give you the highest interest rate’.

Beyond $60,000, the status quo stays. ‘If you have more than 60k, you should be able to look after yourself,’ Mr Lee said.

As retirement is pushed back, the drawdown age (DDA) of the CPF Minimum Sum will be delayed until 65 from the current mark of 62.

But the DDA will be raised progressively over a number of years, starting in 2012 when the re-employment legislation is introduced.

To encourage the re-employment of older workers, Mr Lee said the government will double the grant - to $200 monthly or 20 per cent of salary - to workers aged 60 under the Workfare Income Supplement.

Upgrading and renewing housing estates is another major front the government is working on for a more even distribution in income. Mr Lee said it will raise the CPF housing grant introduced last year for the lower income group, from $20,000 to $30,000. This will cover about half of all Singapore households.

To make it easier for the lower income group to monetise their flats, HDB will buy back from older owners - those aged 62 and above - their 2-3 room flats at the tail end of the lease and leave them with a shorter lease of 30 years on the same flat.

Improvements will be continued to be made to new and old housing estates, but the upgrading programme itself will be fine-tuned to combine more precincts for upgrading and to home in more on practical improvements within individual flats.

Source :  Business Times - 20 Aug 2007

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Bank shares heavily traded with focus on UOB contracts

Bank shares heavily traded with focus on UOB contracts
By Alvin Foo
BANK stocks have been taking centre stage in recent weeks due to the troubled sub-prime mortgage market in the United States, and the spotlight has been on warrants of United Overseas Bank (UOB).
‘UOB’s share price has fallen sharply over the past few days, and a rebound looks likely in the near term,’ said Mr Ooi Lid Seng, Societe Generale’s vice-president of structured products for Asia, excluding Japan.

‘It is currently hovering around the support at $19.90. If the share weakens further, another support can be seen around the $18.50 level.’

Mr Ooi highlighted one of Societe Generale’s UOB call warrants, which expires on Feb 4 with a strike price of $20.70.

‘Investors who hold a positive view on UOB may consider this warrant. It’s just slightly out of the money.

‘Fundamentally, Singapore banks remain one of the best capitalised banks, and UOB would be a main beneficiary when the uncertainty clears up,’ he said.

UOB’s call warrant closed a cent lower at 20 cents last Friday, with a volume of two million units.

Since hitting a peak of $24.20 recently, UOB’s share price has plunged to $19.90 as at the end of last week.

Earlier this month, UOB revealed that it had $392 million in collateralised debt obligations (CDOs) investments, with $91 million in high-grade, asset-backed securities.

Its subsidiary, UOB Asset Management, manages $11.7 billion in CDOs for clients, of which $3 billion are in high-grade, asset-backed securities CDOs.

UOB, which recently reported a second-quarter profit of $585 million, has no direct exposure to or investment in this portfolio, as the risks are borne by institutional investors. It also does not have direct exposure to US sub-prime mortgages.

CDOs are securities backed by a pool of bonds and loans, including mortgages, and lie at the centre of the US mortgage crisis. Millions of home owners in the US are having trouble paying instalments, which is undermining credit markets.

Source :  Straits Times - 20 Aug 2007

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Stock declines may hurt certain real estate segments

Stock declines may hurt certain real estate segments
By Fiona Chan, Property Reporter
SOME say the fortunes of the stock and property markets are inextricably linked.
Property industry watchers say, however, it is too soon to tell if the recent stock market volatility - and a feared global credit squeeze - will spoil the party for the booming property market.

‘We’re waiting to see how severe and how prolonged the volatility will be,’ said Ms Tay Huey Ying, director of research and consultancy at Colliers International.

At least one economist, however, believes that there will be a definite, although gradual, impact on sectors that have seen a high level of foreign participation - high-end homes and offices.

Citigroup economist Chua Hak Bin said the recent volatility ‘will slow down property market transactions, especially for the luxury end of the residential segment’.

The recent sharp run-up in home prices in the luxury end of the market has been supported by ‘generally very favourable liquidity conditions’, but volatility in the stock market could dampen this trend, he said.

He added that so far this year, about 28 per cent of home purchases have been made by foreigners - a segment ‘more sensitive to global market conditions’.

In addition, over the last six months, ‘about 9 per cent of residential transactions were company-related purchases, and chances are, these companies are going to face tighter credit conditions’, he said.

Dr Chua expects demand for commercial space to also start cooling down. He said financial institutions - a big driver for the office demand - may scale back their hiring.

He added, however, that the impact on local home demand is likely to be limited for now. ‘Ultimately, local demand will be more conditional on jobs, on generally the overall economic growth and wage gains,’ he said.

Colliers’ Ms Tay agreed, saying if the stock market volatility ends soon, the property market may not feel any pain at all.

‘In the short term, the primary sale market will remain active, as we’ve seen for projects like Soleil @ Sinaran.’ About 80 per cent of the development’s 417 units were sold in only two weeks.

‘But the secondary sale market may slow down a bit, as people with no urgent need to buy may refrain from committing until they see the full impact of the sub-prime mortgage crisis,’ she said.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, said ‘on the whole, the property market is still quite sound’.

‘This is not the Asian financial crisis,’ he said. ‘If investors become convinced that it is a more localised problem in the United States and Europe, they will still be cautious, but I don’t think there will be panic selling here,’ he said.

Source :  Straits Times - 20 Aug 2007

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Rising worries over credit fallout’s effect on growth

Rising worries over credit fallout’s effect on growth
S’pore can achieve 7-8% expansion if markets steady in 2 months: Experts
By Bryan Lee

CONCERNS are growing that the current liquidity crunch hammering the world’s stock markets may spill over into the ‘real economy’ - our factories, our shops and our businesses.
The mood is in stark contrast to the frothy optimism engendered by the economy’s strong 8.6 per cent growth in the second quarter.

Local economists may not be cutting economic growth forecasts just yet but they are on high alert for any sign that the ongoing financial turmoil is hurting consumer spending and business investment.

So far, experts reckon that the Singapore economy can still hit the recently raised official economic growth target of between 7 per cent and 8 per cent - if markets stabilise within the next two months.

Otherwise, growth might slow to between 5 per cent and 6 per cent, according to one economist’s projections of a ‘realistic bad case scenario’.

‘The most likely scenario for Singapore is that we will be at the top of the official forecast range,’ said Action Economics economist David Cohen. ‘There’s no reason why it has to spiral into a financial crisis,’ he said.

Pointing to the last stock correction in March, he said there were worries then that the selldown would spiral out of control and feed back into the real economy.

‘But things just calmed down as people looked around and appreciated that the global economy was pretty strong, as were corporate earnings.’

Still, Mr Cohen admitted that he is a little less bullish than a few weeks ago, when strong second-quarter economic data saw economists racing to bump up their forecasts for the year.

CIMB-GK economist Song Seng Wun said that there have been no signs so far that consumer spending has been affected by the ‘wobble’ in the financial markets.

He pointed to the recently launched Soleil @ Sinaran condominium in Novena which has been ‘keenly bid’ for.

‘The stock market has been doing so well in the past few years so that even if it falters, the local market is still up for the year,’ he said.

However, it will be a different story if financial markets continue to head south.

‘If the turmoil continues for more than two months, then the real economy will be hit,’ said Mr Song. ‘The impact could be felt in the early part of the fourth quarter.’

Citigroup economist Chua Hak Bin said electronic exports, financial services and property are the three most vulnerable sectors here.

Financial services, which have been a key growth driver, may slow to 10 per cent growth, from 17 per cent, as companies pull back on initial public offerings and other capital market activity, he said.

He added that there are signs that deals are being postponed, while the fast- growing hedge fund sector may slow if hit hard by the financial fallout.

Electronic exports will suffer if stock market losses and falling home prices cause American consumers to tighten their purse strings, while rising borrowing costs for companies may stifle business investment across the world.

Singapore’s booming luxury property market is also a likely victim as foreign investors have been a key source of demand in the sector, said Dr Chua.

The combination of these could shave 1 to 2 percentage points off economic growth, but the construction and pharmaceutical industries should prove resilient, he said.

Source :  Straits Times - 20 Aug 2007

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Worst may be over for Asian equity markets

Worst may be over for Asian equity markets
Threat of China intervention likely to keep predatory hedge funds at bay
By Goh Eng Yeow, Markets Correspondent
MARKETS IN CRISIS

IT IS almost a foregone conclusion that Asian bourses will experience a boost when they reopen for trading today, following the strong recovery on Wall Street and European bourses last Friday.
But apart from the initial upsurge in prices, no one is expecting the turmoil engulfing Asian markets to subside any time soon, until Wall Street sorts out its mess.

What the Fed did last Friday was make cash available to US banks at a cheaper rate by cutting its largely symbolic discount rate from 6.25 per cent to 5.75 per cent.

Some view the move as another step in helping financial institutions, a way to ‘buy time’ to sort out the billions of dollars in mortgages made to marginal US borrowers.

But others are betting that the Fed will do a complete bailout by cutting its more crucial fed funds rates next month.

And the almost universal consensus is that there will be another global shake-out in share prices if this rate cut fails to materialise.

Here in Asia though, another view is forming. Besides keeping an eye on the Fed, traders will have to watch China closely, as its US$1 trillion (S$1.54 trillion) in foreign reserves gives it considerable financial clout in Asia.

Indeed, it was the fear that China might unleash its huge reserves to protect its big investments in Hong Kong that halted the fierce attack mounted by hedge funds on Asian stock markets last Friday.

This helped share prices in Singapore and Hong Kong to stage a dramatic rebound even before the Fed made its move - after these markets had suffered one of their worst losses in 20 years.

And traders are hopeful that the worst may now be over for Asian markets, as predators switch to easier targets elsewhere.

Until the mortgage crisis in the United States dominated financial headlines recently, Asia had been the compelling story - high octane-charged economies, companies with strong earnings growth and robust balance sheets and rapidly developing capital markets.

But in the past three weeks, bourses from Mumbai to Sydney turned wobbly as the US financial contagion spread to Asia. This was despite the fact that most Asian banks do not have a direct exposure to US mortgages.

Last week, the selldown’s pace threatened to accelerate.

After two days of relative calm, the benchmark Straits Times Index (STI) fell by up to 12.6 per cent at one point between Wednesday and Friday, its biggest loss in a week since January 1998.

And the selling, described by some as ‘irrational and indiscriminate’, was across the board. Even stocks which had been relatively immune from the turmoil were not spared.

Analysts say the selldown could be due to hedge funds unwinding their positions as they became hit with the double whammy of big losses in their stock holdings and redemption calls back home.

Asian bourses such as Singapore had been a hot spot for investments, luring many of the 8,800 hedge funds to park their funds here. But while Asian firms have strong balance sheets, the buyers of their shares are highly-leveraged, said Citigroup chief Asian strategist Markus Rosgen.

‘A hedge fund manager who borrows 70 cents for every $1 he invests can’t afford to take a 30 per cent loss on the stock. Should that happen, his fund will be gone,’ he observed.

But this is only part of the story, said some older traders, who recalled similar bouts of panic selling a decade ago during the Asian financial crisis.

Last week’s market turmoil had been compounded by predatory hedge funds selling down heavily to capitalise on the woes of distressed sellers.

These older hands observed that the setting last week was almost perfect for a repeat of the massive meltdown encountered in Asian bourses in mid-1998.

Back then, fears over the impact of a strengthening yen on Asia lured hedge funds into mounting attacks on the region’s already weakened currencies and stock markets.

Hedge funds, wanting to claw back something after gains on Wall Street had almost been wiped out, could, until last week, pick on bourses like Singapore and Hong Kong which were still up in double-digit percentage terms on the year.

Their strategy: To aggressively short-sell across the region and cause share prices to plummet. These short-sellers could reap fat profits by scooping up shares of fundamentally sound firms at basement level prices.

Last Friday, the last chess piece was almost in place. In a scenario reminiscent of the 1998 meltdown, the Tokyo bourse crashed 5.4 per cent as the yen rose sharply against the US dollar and other currencies.

As distraught investors with massive yen loans rushed to unwind their positions, hedge funds added to the chaos with their massive short-selling. At one stage, this caused the STI to dive 190 points, while Hong Kong’s Hang Seng Index crashed 1,295 points.

But the older hands noted that the predatory hedge funds might have failed to notice that there is a big difference between now and 1998.

In 1998, Asian markets were also unnerved by fears that China might devalue the yuan.

This time, however, China’s economy is booming and the clamour is for a yuan revaluation. And the last thing that Beijing would want is a financial meltdown as it prepares to showcase itself to the world with next year’s Summer Olympics.

So just as share prices were at their lowest ebb last Friday, Hong Kong suddenly got a boost on unconfirmed talks that mainland Chinese funds were snapping up the shares of giant Hong Kong-listed China firms.

This was sufficient to send the Hang Seng up by nearly 1,000 points in its final hour of trading. The STI followed, gaining 168 points in two hours.

Some traders surmise that given the stunning recovery made by Singapore and Hong Kong, hedge funds could have sustained massive losses from their short-selling strategy.

This will give Asian markets time to recover from the past three weeks of selling down, as the predators look for easier targets elsewhere.

What should investors do in the meantime?

Some analysts contend that while firms are still reporting robust earnings growth, share prices have fallen to bargain levels.

Others believe that while a further slide is unlikely, given the likelihood of China’s intervention, upside in Asian stocks will be capped by the many uncertainties on Wall Street.

In all, they argue that investors should stand back, in case there are still some falling knives.
Source :  Straits Times - 20 Aug 2007

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Mindy Yong
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St Regis Hotel to hold job fair for 400 posts

St Regis Hotel to hold job fair for 400 posts
By Lim Wei Chean
ST REGIS Hotel Singapore, which opens in December, is looking to fill more than 400 positions ranging from housekeepers to butlers.
Hotel general manager Yngvar Stray, 42, said the hotel will hold a job fair at the Arts House next Thursday and Friday.

The 299-room St Regis Hotel in Cuscaden Road is the first high-end international hotel to open here since the $400 million The Fullerton opened in late 2000.

The hotel is one of three 20-storey blocks, which includes the posh St Regis Residences.

The entire development by the Heong Leong Group is estimated to cost $900 million.

The challenge at hand, said Mr Stray, is to hire the ‘right people with the right attitude’.

Mr Stray, who was general manager of hotel W Seoul-Walker Hill in South Korea, was with Sheraton Towers Singapore as director of rooms 10 years ago.

Foremost is the hiring of the 40 butlers for which the brand is famed for worldwide.

One basic criterion is that the butlers must speak at least one other language besides English.

They will undergo intensive training, including speech lessons to eradicate colloquialisms like the Singlish ‘lah’.

For that, the hotel is looking globally because they want individuals who have experience with all kinds of guests.

Although Mr Stray will not disclose the room rates, the Asia-Pacific president of Starwood Hotels and Resorts Worldwide Miguel Ko had indicated at the 2004 groundbreaking ceremony that St Regis will command the highest rates in the market.

Then, Mr Ko had said that rates will be 8 to 10 per cent more than the highest in town.

Five-star hotels like Four Seasons Singapore or Ritz Carlton now command rates ranging from $500 to more than $1,500.

As Mr Stray put it: ‘We are positioned to come in at the very top end of the market, for which there is clearly untapped potential in Singapore.’
Source :  Straits Times - 20 Aug 2007

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Building blocks of a new heartland

Building blocks of a new heartland
PM’s policy changes to Workfare, CPF and HDB steps to building a better Singapore
By Chua Mui Hoong, Senior Writer
THOSE who have worked with Prime Minister Lee Hsien Loong say he’s a problem-solver, someone who likes to sink his (mental) teeth into a problem and work out a solution.
It’s said he missed the minutiae of policy-making when he became premier, as he had relished the intellectual challenge of finessing policy details which was now left to underlings.

There has always been a certain ‘let’s roll up our sleeves and get on with it’ attitude to the man.

It certainly came across last night, as Mr Lee delivered his fourth address to the nation in the annual National Day Rally.

This, after all, is the same PM who had said at 2am, in the wee hours after the May 6 General Election last year, after thanking voters: ‘We have a lot of work to do and we will start now.’

Just 15 months later, it’s clear the PM and his Cabinet - especially Mr Lim Boon Heng who oversees ageing issues; Dr Ng Eng Hen, the Manpower Minister; and Mr Gan Kim Yong who chairs a tripartite committee on older workers - have not been idle.

Announcing changes to the Workfare Income Supplement scheme that will give out more money to older workers, PM Lee said:

‘Better not wait, let’s move now.’

That statement could well be the motto of this Prime Minister.

Two changes announced last night bear singling out:

The 1 percentage point higher return on the first $60,000 in each worker’s Central Provident Fund (CPF) account; and

The plan to let elderly folk ’sell’ the remaining years of the lease on their Housing Board flats back to the HDB in return for cash in hand.

Together, they will improve markedly the retirement security of the ah pek and ah soh in the heartland.

After the symbolic iconoclasm of 2004, the promise of an exciting cityscape in 2005 and last year’s themes of foreign talent and technology, this year’s Rally speech returns to ground zero where it most matters: the heartland.

His eye firmly on the political core of Singapore, Mr Lee promised an ‘upgrade’ of the once-widely popular upgrading programmes to spruce up HDB estates.

Heralding a new era of HDB acronyms, he said the Main Upgrading Programme (MUP), which has begun to lose its lustre, will become HIP (Home Improvement Programme).

The change is more than just in name: HIP promises a facelift for interiors of HDB flats, whereas MUP was mainly a programme to improve common areas like corridors and void decks.

In fact, it is well known among estate agents and residents that flats built in the boom of the 1980s suffer quality defects like spalling concrete, as developers rushed to meet quotas.

The HIP programme thus turns a potential liability for the Government - ageing flats with defects - into a political advantage.

The annual Rally speech has always been part motivational address, part performance and part progress report.

Mr Lee has in the past four years also used the occasion to celebrate the successes of ordinary folk.

This year, he celebrated Singapore’s elders, heartland schools and philanthropists.

He flashed pictures and told stories of some Radin Mas residents: the 91-year-old feisty cleaner who still ‘moonlights’; the Malay ketupat king; the samsui woman in red headscarf talking to MP Lui Tuck Yew - who was ‘in a shirt to match’.

Mr Lee, father of four, also displayed a soft spot for Singapore’s students in heartland schools, growing a tad emotional when he praised Mayflower Primary in Ang Mo Kio for bringing out the creative spark in their young charges.

He also lauded philanthropists like businessman Sim Wong Hoo and the late Dr Ee Peng Liang. As Mr Lee reminisced about Dr Ee on stage, his son Gerard in the audience grew misty-eyed.

Mr Lee also displayed a humorous streak, acting out a little exchange between Minister Lim

Swee Say and an elderly resident, and correcting with comic timing Minister Mentor Lee Kuan Yew’s recent remark that there were a ‘few dozen’ centenarians in Singapore: a ‘vast under-estimate’ as there were actually more than 500, said Mr Lee.

Beneath the ebullience and hearty demeanour, however, lies a serious, dedicated policy-maker.

A look at his speeches since he became PM in 2004 shows Mr Leehe has been consistent in objective: a focus on helping the elderly and low-income earners.

Last night’s announcements, together with the Workfare policy formalised this year, form the big building blocks of policy that will ease the burden of ageing for future generations.

The most exciting part of his speech - which wowed the audience as many craned forward in their seats for a better view - was on changes to the HDB heartland.

In the audience, Hougang MP Low Thia Khiang sat watching the pictures with others.

For the first time, opposition and Nominated MPs were on the guest list for the Rally. Mr Lee, who has made the word ‘inclusive’ his own hallmark, extended a special welcome to them at the beginning of his two-hour English speech.

Mr Low must have wondered if the promised improvements will benefit residents in his opposition-held Hougang ward - but Mr Lee did not specify.

With the aid of satellite photos, snazzy zoom-in technology and animation, Mr Lee showed plans of new towns like Punggol 21 with flowing rivers and green parks, as well as pictures of rejuvenated ageing estates like Alexandra.

‘Akan datang,’ he promised, using the Malay term for ‘coming soon’.

While the pictures were gorgeous, it is surely the policy changes to CPF, Workfare and HDB that will make a bigger impact.

For this 38-year-old, Singapore suddenly seems that much more attractive a place to grow old in.
Source :  Straits Times - 20 Aug 2007

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Injecting new life into old Dawson estate

Injecting new life into old Dawson estate
KEEP THE OLD: Landmarks such as a wet market and plaza will be kept to lend a sense of history.

SOME 10,000 new HDB and private flats are set to sprout up in the laid-back Dawson estate in Queenstown, injecting new life in the area.
Prime Minister Lee Hsien Loong revealed this last night when talking about how old estates are still valuable in Singapore’s housing landscape, as they have great potential for redevelopment.

‘We are redeveloping selected sites within these estates one by one.

‘But where we can clear a big piece of land, we can transform the whole area and make it like a new estate.’

This process is already unfolding in Dawson, which is bounded by Commonwealth Avenue, Alexandra Road and Margaret Drive.

New flats have been built, some as part of the Selective En-bloc Redevelopment Scheme (Sers).

But pockets of empty land remain, allowing construction of new flats in three HDB precincts.

These new blocks will be integrated with a new park to be built on top of the covered Alexandra Canal, which snakes through the estate.

Showing sketches of the park made by prize-winning architects, some of whom are young people, Mr Lee joked: ‘This is public housing, not condominiums.’

These plans will turn the area around and make it look vastly different from its past facade, when it was home to flats built by the Singapore Improvement Trust (SIT) - the predecessor of the HDB, said Mr Lee.

But along with the new will be an effort to preserve old landmarks, said Mr Lee.

These will include the wet market along Commonwealth Avenue, and the plaza at the nearby town centre.

‘We will keep these, because it gives you a sense of history and place, and we will integrate these into the new design,’ said Mr Lee.

Retaining the memories and character of the place in the new developments will give ’something extra’ to bring people back, said Mr Lee.

The new developments are something chemist New Chee Wee, 27, who lives with his parents in a four-room flat in the area, looks forward to.

‘It is a quiet area to live in but that’s not a bad thing because its peaceful.

‘Still, we miss some of the typical things you find in an HDB estate, like… many provision shops. It will be nice if we can get more of these when the new flats are built.’

Source :  Straits Times - 20 Aug 2007

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Punggol 21 reborn - and jazzed up as well

Punggol 21 reborn - and jazzed up as well
By Lynn Lee
PUNGGOL 21-PLUS: Water sports facilities, parks with jogging and cycling tracks, and al-fresco dining are some of the highlights of the new Punggol. — PHOTO: HDB

AN ELABORATE plan to turn Punggol into a vibrant residential town is finally taking off, some years after shrinking demand for new homes stalled the project.
The plan, first launched as the Punggol 21 vision in the late 1990s, has also been jazzed up, said Prime Minister Lee Hsien Loong last night.

‘So this is Punggol 21-plus,’ said Mr Lee to chuckles from the audience.

Among other things, the north-eastern coastal suburb will have water sports facilities for kayaking and canoeing, gardens and parks with jogging and cycling tracks, and al-fresco dining.

The sprucing up of Punggol is part of the Housing Board’s bid to keep public housing estates relevant to new generations of Singaporeans, said Mr Lee.

‘Most Singaporeans live in public housing… so we are continually finding ways to improve our public housing and meet new needs and expectations.

‘Each new estate has been an improvement on the previous one,’ he said.

The transformation of Punggol, once known for pig farms and seafood restaurants serving chilli crab, was derailed by the Asian economic crisis of 1997.

Plans for around 80,000 private and HDB homes with parks and seaside villages housing shops and food stalls, had been announced a year earlier.

Construction began in 1998 but the brakes were jammed when demand for new flats nosedived.

As a result, only some 16,000 flats, home to around 42,000 residents, dot the landscape there now.

But with Singapore’s sparkling economy of the past few years, demand for new homes is on the rise. Punggol will be the site of many of these.

Zooming in on high-resolution images on a screen, Mr Lee gave a blow-by-blow account of the area’s transformation.

For a start, the Punggol and Serangoon rivers will be dammed up to create a freshwater lake. A waterway will run through the estate, linking both rivers. Blocks of flats will dot its banks, starting from the town centre, which will have malls, retail outlets and outdoor dining.

‘If you look outside, it’ll be blue and green in lots of places. We’ll have trees, plants, shrubbery by the water… make it cool, make it eco-friendly. A good place to live,’ said Mr Lee, as the crowd ooh-ed and ah-ed.

The project will take some time to be completed, he said, as it involves some 18,000 HDB and private flats.

Logistics executive Chen Hui Zhen, 28, said she cannot wait to try out water sports. She has lived in the Punggol area for six years and recently bought a new flat there with her fiance.

‘It’s good news for us. All this development means the value of our flat will go up if we do think of selling it,’ she said.

Mr Lee also took the opportunity to highlight a development upstream of Punggol - in Sengkang.

There, a new community club with four swimming pools, an indoor sports hall and a football field is being built. There will also be a waterway for people to enjoy water sports and activities.

Going back to the Punggol 21-plus vision, Mr Lee said it will add to Singapore’s reputation as a city with ‘fun and buzz’.

But even as Singapore reinvents itself, it will need to retain the qualities the country is known for: being clean, green and safe, said Mr Lee.

‘It’s quite important that we keep that brand recognition, even as we acquire new attributes and new lifestyles.’

Source :  Straits Times - 20 Aug 2007

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Housing

Housing
Prime Minister Lee Hsien Loong announced a slew of upgrades to housing in Singapore. For one, the new Home Improvement Programme will replace the current Main Upgrading Programme and will focus on small practical repairs like spalling of ceiling concrete and new entrance grilles and new toilets in flats.

And a new Neighbourhood Renewal Programme will replace the current Interim Upgrading Programme.

Source :  Straits Times - 20 Aug 2007

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Private estates can tap govt funds for minor upgrades

Private estates can tap govt funds for minor upgrades
PRIVATE housing estates are to receive government funds to pay for small-scale estate improvements. The funds, which are from the National Development Ministry’s Community Improvement Projects Committee (CIPC), were previously given only to HDB estates.
Prime Minister Lee Hsien Loong said the move was meant to make private estates feel less ‘neglected’ in the Government’s upgrading efforts. Yes, they had earlier got a bite of the upgrading cherry under the Estate Upgrading Programme (EUP), which pays for major works such as new parks and covered drains.

‘But even then, private estates sometimes feel like they are stepchildren, neglected,’ said Mr Lee.

Opening up CIPC funds to these estates was an idea that Minister of State (Finance and Transport) Lim Hwee Hua and her committee had come up with, he said.

He had asked Mrs Lim to see what more could be done for private estates. Mrs Lim, he noted, had a close interest in the topic because the private homes in Serangoon Gardens are part of her ward.

The committee’s second recommendation, which the Government has also accepted, is for the EUP to be revamped. All the different works, such as lighting, streets and carparks, will now be done together in ‘one big bang’, said Mr Lee.

Source :  Straits Times - 20 Aug 2007

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Lower-income families get more help to buy flats

Lower-income families get more help to buy flats

LOWER-INCOME families will now find it easier to buy a Housing Board flat, thanks to a bigger housing subsidy and a more generous income ceiling for the subsidy’s applicants.
The Additional CPF Housing Grant, which is given to low-income families, will be increased to a maximum of $30,000 from $20,000 presently.

And the monthly household income ceiling for the grant will also be raised to $4,000 from $3,000 - allowing more than half of Singapore’s households to qualify.

These moves are to allow more people to own a flat and share in the success of Singapore through rising home values, said Prime Minister Lee Hsien Loong in his National Day Rally speech yesterday.

‘Look at the three-room flats today. If you had bought a three-room flat in the early 1970s, it would have cost you maybe $8,000.

‘Today, a three-room flat is worth $160,000, in some places more,’ he said.

‘It’s been a fabulous investment, you’ve had a house to live in, you’ve got a nest-egg which will see you through your retirement.

‘If you take care of it well, you have through this HDB home ownership… participated in the growth of Singapore, bought shares in Singapore, backed this ‘Singapore Inc’ and made it succeed.’

At $30,000, the new maximum value of the Additional CPF Housing Grant effectively means that the Government is subsidising about a quarter of the cost of a three-room flat, PM Lee said.

‘A three-room flat new from HDB today will cost you about $120,000, so $30,000 of that is a lot of money.’

Currently, only families which earn $3,000 a month or less can take advantage of the grant.

Its extension to households with a monthly income of up to $4,000 means that it will now cover about half of all households in Singapore.

Hopeful flat buyer Derek Bay, 36, cheered the news yesterday.

‘A three-room flat in Bukit Merah is roughly $200,000, so a subsidy of $30,000 definitely will help me a lot,’ said the sales co-ordinator, who is now living with his parents.

Mr Eugene Lim, assistant vice-president of property agency ERA Singapore, said the move will be ‘instrumental in driving up demand for new flats’.
Source :  Straits Times - 20 Aug 2007

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After 17 years, home upgrading schemes to get a makeover

After 17 years, home upgrading schemes to get a makeover
Focus on small practical repairs in flats, inclusion of non-standard items in precinct upgrading
By Jeremy Au Yong
UPGRADED UPGRADING: This map shows the estates which are targeted under the new upgrading plans. Most of those slated to receive the Home Improvement and Neighbourhood Renewal Programme treatment are ‘middle-aged’ estates. — PHOTO: NANYANG POLYTECHNIC

OWNERS of Housing Board flats will have something new to look forward to as the home upgrading programmes get rejigged.
One of the biggest changes comes in the form of the new Home Improvement Programme (HIP).

It will replace the current Main Upgrading Programme and will focus on small practical repairs like spalling of ceiling concrete and new entrance grilles and new toilets in flats.

The new programme was announced by Prime Minister Lee Hsien Loong during his National Day Rally speech together with a slew of upgrades to housing in Singapore.

The HIP is targeted at what Mr Lee called ‘middle-aged estates’, which are estates with flats built more than 20 years ago such as Bukit Batok, Jurong East and Hougang.

They are not quite as old as Queenstown but not quite as new as Punggol.
The programme will be piloted in Yishun and Tampines.

A new Neighbourhood Renewal Programme (NRP) will replace the current Interim Upgrading Programme (IUP).

Where the latter was only for individual precincts, the former will combine two or more precincts to take advantage of economies of scale.

Said PM Lee: ‘Bigger area, larger scale, we can plan more and better facilities.

‘We will still have standard items like barbecue pits, community gardens, reflexology footpaths, covered walkways and so on. But now we can also consider non-standard items like a street soccer court or a skating park.’

What these items are will be decided by the residents.

Said Mr Lee: ‘We will have a budget, a menu; you will have a town hall meeting…You decide what you want for your own community.’

In explaining the decision to replace the two schemes, Mr Lee noted that they had been around for 17 years and said: ‘I think it’s time to upgrade the upgrading programme.’

The changes were welcomed by residents in middle-aged estates and property analysts.

Mr Mohamed Ismail, chief executive of real estate firm PropNex, saw the HIP as a scaled-down version of the MUP. And that would mean more people will benefit.

‘The MUP tends to favour creating additional space like an extra room. The details of the new one are not out yet but it seems like it focuses on enhancing individual units. In that case, it would require fewer resources and can be done faster.’

Mr Eugene Lim, vice-president of property firm ERA, agreed and added that such a scheme would make upgrading work more tolerable.

‘MUP is quite disruptive. It’s like living in a construction site for two years. The HIP looks to be more focused on improving liveability, and won’t involve a lot of hacking.

‘I think as a lot of flats are getting older, this move addresses a real need,’ he said.

Taken together, Mr Ismail said the HIP and NRP will ‘definitely enhance the neighbourhood overall’.

Engineer Lim Shin Yen, 27, who bought a four-room flat in Woodlands with her husband last year, hopes the new programmes will be unrolled faster.

‘On the one hand, I think I’d like more major work done on the flat. On the other hand, this way we won’t have to wait so long to get upgrading,’ she said.

Source :  Straits Times - 20 Aug 2007

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