Tuesday, December 23, 2008

Don't be blunt

I agree with Minister Lim Boon Heng (Today, 23rd Dec 2008 - page 1). Not that I am a staunch PAP supporter or that I am anti-opposition or that I am a union member. If anything, I am more apathetic politically, so my view this time around, as in many of the past cases I have commented on, is purely based on reason, and perhaps a bit of self-interest. Well, ok, that's a lot of self-interest.

I agree that the Central Provident Fund (CPF) should not be cut in these recessionary times because, as Mr Lim has rightly pointed out, it is a blunt instrument. It will cut the real wages of workers whose organisations are making money in these depressed times just as much as for those organisations which are bleeding red, or at best are just floating above water right now. Now why should workers, salarymen, in profitable companies, be asked to give more of the profit generated through their effort to their employers? So that these employers can buy another couple of houses at depressed prices, and/or mop up shares of blue-chip companies at a bargain, all to their own benefit? If the workers' Unions even contemplate this, they should be run out of the Union house. And since the CPF contribution rates are uniform across the board, then workers in those companies doing badly should also not be touched.

Let's not have a situation where the employers, the bosses, have their cake and eat it too. They can cut the bonuses, other variable wage components and even reduce wages, as suggested by the Union leaders, but not the CPF. We salarymen depend on the money in the CPF account to pay for the roof over our heads We have no choice. Imagine every HDB dweller dumping their houses because they cannot make the mortgage payments. We'll have a crisis worst than the recession on our hands, a situation perhaps akin to the sub-prime mortgage problem in the US. We also need the CPF savings for our retirement years. The government has been harping on the possibility that Singaporeans, in spite of their CPF, may not have enough to retire with. So don't pare it down, don't reduce the quantum of contributions from the employers. Otherwise, reasons for the Retirement Accounts and whatnots that are cooked up from time to time by the government (in good times) will look so hollow.

Singaporeans may be an obedient and disciplined workforce, but we are not stupid. While we do not want to go to the extremes that some American Unions have gone, we need to look out for ourselves too.

Image: morgueFile.com. Author: Dani Simmonds


Daniel Ling said...

Hi, i agree tat CPF shouldn't be cut. But at the same time, isn't there any other ways?

By cutting CPF, i agree tat Housing Loans will be affected. But cutting wages will also affect directly the disposable income of the workers.

Thus both options is a negative to the normal workers.

But if u sincerely ask me to choose, i rather they cut CPF then Wages. Since not everyone is paying for a Home. And if u r indeed paying for a Home, u can top it up with cash.

Anonymous said...

The more important question is:

Does PAP have any other solutions to the recession?

Me thinks Lim is only putting up wayang. His acting partner Lim Suey Suey will be arriving at the scene soon.

Kaffein said...

I don't buy the CPF reduction. CPF is part of your money. It's not that housing prices have come down to a mere 150k for a 5-room flat!

So in actual fact, if CPF has to be cut, the HDB prices have to be reduced proportionately too.

But we don't see that happening, right?

We Singaporeans seem to be at the mercy of the government each time. Instead of using better creative policies to bring prices and inflation down, it's always the common man who must suffer. When times were good, did you see your CPF contribution go up?

It's like the government increasing the NS service from 2 to 5 years, and then later change to 3 years to make themselves feel magnaminous and make you feel good about it.

Actually you've been shortchanged.


Daniel Ling said...

Hi Kaffein,

I agree with u... quite a number of times, there is Increase and subsequent decrease which some pple will be thankful of.

I do not noe about the NS duration but 1 tat i remember is the Tariff. Raised 21% and after which decrease by 24% (Can't really remember) which effectively is only less than 3 ~ 9%

Another is the ERP where during periods there will be reduced charges.

Another is Road Tax where recently there were some discount.

And another is GST which raised to 7% and we r given rebates.

And finally CPF Cut which hasn't been reinstated.

Anonymous said...

People who have bought homes on a 30 year mortgage and depending entirely on their CPF money to pay for these overprice homes have themselves to blame. In what reality does one think they will have a job or can work for 30 years continuously to pay their huge mortgages? These people have to learn it the hard way.

If you have to cut CPF to save jobs, then so be it. You don't live in a paradise.

peter said...

If u wanna cut cost, then cut everything. From CPF to housing loan interest rates......

Politicians and preachers can go to bed together. This is why I don't believe in what these 2 kinds of people talk.They talk illusionary things BUT people believe them.