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National Development Minister Mah Bow Tan announced this move yesterday and also gave a peek into new rules being studied to stop abuse of the rental scheme.

1. HDB will scrutinise the assets, including private property, of siblings and children of applicants to ensure they rely first on family, not on rental flats.

2. Another will require flat sellers to deposit part of their sales proceeds into their Central Provident Fund (CPF) accounts.

These likely changes are part of a government move to address the sharp rise in demand for rental flats, with many people joining the queue even when they have other housing options. Minister Mah said the supply of rental flats will be raised by 20 per cent to 50,000 flats, in three years. They are leased for two years at what he called ‘ridiculously cheap’ rent which has stayed the same for 30 years. It can be as little as $26 a month. This fuelled the trend he noted: an increasing number of old folk who want ‘to cash out of their flats and ask us for rental flats’.

The other three rules that may get the green light:

• When owners sell, they will have to put into their CPF account the subsidy they had enjoyed when they bought their flat from the HDB. The amount could be about $30,000 to $40,000. (Currently, those who receive a government grant of $30,000 to $40,000 when they buy an HDB flat in the resale market will have to put that grant back into their CPF accounts when they sell their flats.)

• Scrapping the current rule that allows a person to apply for a rental flat only if he has not sold a property in the past 30 months.

• The main measure of neediness now is a monthly household income of no more than $1,500. Soon, the HDB will also look into the applicant’s children’s ownership of private property and if the person’s siblings and children have the means to support him.

On home loans:

Fuelling this trend are financial institutions which are jumping on the bandwagon to launch attractive and creative loan packages to capture a bigger slice of the lucrative mortgage market.

1. Refinancing your home loans

2. Pegged rates versus fixed rates
With Sibor falling steadily, it is not surprising that many customers are opting for new Sibor-linked packages or refinancing from a fixed-rate package to a Sibor one. Still, some customers are confused when faced with a choice of a three-month or a 12-month Sibor-pegged home loan package.

3. New home loan packages
i) MortgageOne Sibor
ii) Interest-only loans This is useful only if:
• If she has an intention to buy multiple properties and would like to pay only the loan interest and keep every cent possible;
• If she has other alternatives to invest at higher returns; or
• If her cashflow is very tight.

For full details on loans, please look for a loan specialist

Summarised from Sunday Straits Times 24th Aug 2008

In NTUC INCOME for all startup or companies, besides public liability and workmen injury act, they are now required to cover with fire insurance or other property related insurance (eg home insurance etc)

Implications: Credit has been tightening, pol and raw material prices increase, house prices edging down but not collapsing. OECD lead indicators show 6-9 months ahead of economy shows negative. Conclusion is to stay disciplined and risk adverse.

Extract and summarized from The Edge 11 Aug 2008

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THE Federal Reserve’s decision to cut interest rates in response to the US financial market crisis of the past year is a bad mistake that will lead to higher inflation, a former Bank of England official said. In a paper presented at the Federal Reserve’s annual conference in Jackson Hole, Wyoming, the London School of Economics professor Willem Buiter, comes down hard on the Fed for misjudging the effects of the US housing market slump.

‘The Fed over-reacted to the slowdown in economic activity,’ Mr Buiter writes. ‘It cut the official policy rate too fast and too far and risked its reputation for being serious about inflation.’

‘The official policy rate is a rather ineffective tool for addressing liquidity and solvency issues,’ he adds.

As rising default rates on home mortgages and falling house prices in the US housing market impacted the value of financial assets worldwide in the past year, the Fed cut its benchmark borrowing rate down to from 5.25 per cent last summer to the current 2.0 per cent, and has held them steady at the past two policy meetings.

Mr Buiter agrees with the general consensus at the Fed, which is only now beginning to be questioned, that asset price bubbles cannot be adequately dealt with through monetary policy.

However, Mr Buiter writes that proper regulation might have done what the federal funds rate cannot. By sitting idly by while investment banks and hedge funds were taking wild risks in financial markets, the Fed itself holds some responsibility for the developments of the past year, the author argues.

‘I do not agree that the best that can be done is for the authorities to clean up the mess after the bubble bursts,’ says Mr Buiter.
The European Central Bank and the Bank of England do not entirely escape Buiter’s sharp critique. He praises them for resisting pressure to push interest rates lower, but says they too have threatened the independence of central banks by erring on the side of doing too much.

‘All three have allowed themselves to be used as quasi-fiscal agents of the state, providing subsidies to banks and other highly leveraged institutions,’ Mr Buiter says.

The implications of these actions are far reaching, the author says, and will be felt in the form of inflation pressures that are already showing up prominently in the latest data releases.

US consumer prices jumped 5.6 per cent in the year to July, the highest reading since the early 1990s. Against that backdrop, the central bank’s credibility has already been tarnished, according to Mr Buiter. ‘The Fed’s reputation for maintaining price stability has been severely dented,’ he said in an e-mail interview.

Another key error on the central bank’s part was to overestimate the role of falling prices on overall economic activity, and to give too much credit to the productive use of purely financial businesses.

‘Much of it is privately profitable but socially wasteful churning, driven by regulatory arbitrage and tax efficiency considerations,’ concludes Mr Buiter

Original Article from Reuters and Straits Times

According to statistics, Singapore’s current fertility rate of 1.29 children per woman is far below the replacement level of 2.1 children. Last year, 37,000 babies were born in the city-state, far short of the more than 50,000 needed. Insufficient number of births would threaten future economic, labour and defence requirements.

Since Singapore’s population of 4.6 million is composed of 25 percent who are foreigners the government is encouraging more others to come and make Singapore their home.
Under the incentives in the latest package, enhanced tax rates can be claimed for income earned this year. The rebate for working parents is:

5,000 Singapore dollars for the first child,

10,000 Singapore dollars for the second and

20,000 Singapore dollars for subsequent children.

Paid maternity leave will increase from 12 to 16 weeks for mothers.

In the speech, PM Rally’s Speech was summarised in following key points:

To the Chinese in his Chinese Rally Speech:
- Tackle inflation costs of food, oil, ERP etc ($5000 given to 3 room families, energy saving lamps etc)
- Pressure due to influx of Foreign workers, New immigrants and fear of insufficient jobs
- Getting more singles to get married and encourage more babies (eg by giving more maternity benefits)

To the Malay in his Malay Rally Speech:
- Increase in self-help among Malay educated to enphasis on education and building up the community (esp dysfunctional families), eg Medaki Funds
- Rebuilding mosques

To all in his English Speech

PM Lee has mentioned a no. of issues. I extracted and condensed his transcript for those who wishes to read more. The most important thing he would want Singaporeans to know: While building careers is important to most, Mr Lee’s plea to Singaporeans to also put emphasis on marriage, on family – “Make these your priorities, have a full and happy life.” He said.

Pls look and download the 3 transcripts (the Speech in English is the longest – more than 40 pages)
National Day Rally Speech 2008 transcript (English)
to-the-chinese-prime-minister-lee-hsien-loongs-national-day-rally-2008.pdf
to-the-malay-community-prime-minister-lee-hsien-loongs-national-day-rally-2008.pdf

In Singapore I was struck by reality when huge amount of workload await me the last few days, clearing thousands (literally more than 1000) emails. I believed Singapore was probably ranked in the top 5 in terms of highest work stress. No wonder most people would like to earn more at a better quality of life and set their eyes overseas..

Then again some may say it may be a “Grass is greener on the other side” mentality..

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Actual News Article:

A NEW study on ageing and retirement has sprung some surprising findings.
The study, commissioned by the Tsao Foundation for Successful Ageing, found that:

Two-thirds of Singaporeans surveyed have considered moving to another country to retire. A slower pace of life and the lower cost of living are key reasons why they have thought of moving.

92 per cent of those surveyed said they don’t expect their children to live with them in their old age. While the survey did not ask the respondents why they felt that way, Dr Mary Ann Tsao, president of the Tsao Foundation, said the findings have huge implications for society.

For example, Singapore has to examine if there are enough services to help the elderly who live alone.

The survey polled 300 people aged between 21 and 55 years and found that generally, Singaporeans are confident about ageing and retirement.

New extracted from Straits Times 20th Aug 2008

For your information, if you set aside the minimum sum of $106,000 fully in cash,
you will be receiving $910.00 for your monthly payment from your Retirement Account
when you reach Draw Down Age (DDA). If you set aside half of the minimum sum of
$106,000 in cash and the other half in the form of property pledge, you will be
receiving $455.00 for your monthly payment from your Retirement Account when you
reach DDA.

You may wish to visit our website at www.cpf.gov.sg and use our online Minimum Sum
Payout Calculator to check the estimated payout period. To use the calculator, you
are required to indicate the amount you have set aside in the Retirement Account
when you reach age 55 (excluding interest).

CPF Homepage> Members> Calculators & Games > CPF Minimum Sum Payout Calculator

Alternatively, you may click on the following link.
https://www.cpf.gov.sg/cpf_trans/ssl/financial_model/mss_cal2.asp

For further clarification, please contact us at 1800-227 1188 from Monday to Friday.

Pls feel free to see new postings after 18th August

workmen-injury-act-explained.pdf