In 2009, the health minister Khaw Boon Wan suggested that Singaporeans should considering the option to send their aging parents to a nursing home in Johore, where the cost is much lower than in Singapore.

He received heavy criticism online for this suggestion. He was considered to be insensitive and inhumane for making this suggestion. Singaporeans then wanted the government to make nursing care more affordable in Singapore.

What Singaporeans did not realize is that the government was already giving heavy subsidy for nursing home care. But the cost is still high due to high rental and cost of foreign workers to take care of the aged residents. It will be difficult to reduce the high cost which is inherent in the system.

The strong negative reaction to this suggestion is largely emotional. It is not rational.

RATIONAL APPROACH
We should approach it rationally. What are the advantages and negative points about staying in nursing homes in Johore?

The advantages are:

a) Low cost of nursing home - due to lower rental and wages of nurses and other staff.

The possible negatives are:

a) Quality of care
b) Difficulty of visiting parents, due to the delays in the checkpoint clearance.
c) Not able to use Medisave

ADDRESS THE NEGATIVES
The negatives can be addressed.

The government can approve the nursing homes that have an adequate quality of care. Medisave can be used to pay the fees for these nursing homes. The government can provide a subsidy.

These approved facilities should also have facilities for families to see and talk to their aged parents remotely using Internet technology and also be assured that the parents are properly cared for.

Families can visit their parents during the off peak hours when the checkpoints are not busy. Over the longer term, the authorities on both sides should improve the clearance system to remove the delays.

JOHORE IS SAFE
This is a perception that Johore is not safe. It is largely exaggerated.

Many Singaporeans travel to Johore regularly. Some are now living in Johore. They said that Johore is quite safe in most areas. There are places to avoid, but this also applies to Singapore.

OTHER COUNTRIES
This situation is not unique to Singapore. In many high cost countries, the aged opt to stay in a nursing home in a nearby country where the cost is lower.

CONCLUSION
We should encourage our government to help develop this option by approving nursing homes in Johore that meet the standard of care, provide subsidy and allow the use of Medisave to pay for the fees.

Tan Kin Lian

WOTC - $20 million budget on Summit

I asked this question in the Wisdom of the Crowd - Was it worth for Singapore to spend $20 million on the Trump Kim Summit?

Here are the responses:

50% - We are spendthrift and wasteful.
25% - It was well spent as we received much global publicity.
25% - A large part was sunk cost, the variable cost was small
0% - The Summit was a big disappointment.

Yes - 50%. No - 50%

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=703

WOTC - Pessimistic about Singapore

I asked this question in the Wisdom of the Crowd - What makes you pessimistic about Singapore?

Here are the responses:

39% - Leaders who abuse their power
28% - Leaders who are incompetent and inexperienced
25% - Leaders who are arrogant
8% - Leaders who are spendthrift.

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=704

WOTC - Optimistic about Singapore

I asked this question in the Wisdom of the Crowd - What makes you optimistic about Singapore

Here are the responses:

52% - None of the above
30% - Hard working and well educated people
12% - A good geographical position
6% - Good government, capable and non-corrupt

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=705

Medishield Life is in a mess

Medishield Life is in a mess. I received this email from an angry citizen

Quote
Medishield-life is a betrayal of Singaporeans to foreigners (who become new citizens).

Isn't it blatant DOUBLE STANDARDS when Singaporeans have "to pay the accumulated sum of premiums not paid previously, with compound interest" i.e., any payments unpaid since 2015 (year of start of medishield-life) but New Singapore Citizens and Permanent Residents don't have to pay medishield-life premiums since their birth year or 2015 (whichever later), but just since "within 1 month of attaining permanent residence" .

The reason why Singaporeans living abroad have to back pay ALL unpaid medishield-life premiums is premised upon the concept of 'pre-funding'

MOH used to justify high premiums collected when a citizen is young so as to accumulate sufficient cohort linked reserves in the medishield-life fund so that premiums can be reduced for the same cohort in old age.

Thus the need for previously exempt Singapore citizens "to pay the accumulated sum of premiums not paid previously, with compound interest" even though zero claims were made against medishield-life (owing to the very rigorous exemption qualifying criteria such as not being allowed to stay in Singapore for more than 140days over 5 years).

However, MOH is only too eager to give NEW citizens and foreigners a FREE LUNCH by saying: New Singapore Citizens and Permanent Residents will be required to join MediShield Life, generally within 1 month of attaining permanent residence.

MOH is also being DISHONEST to retain the 'prefunded' portion of medishield-life of PRs who relinquish their PR status to return home.

The fact that MOH treats new citizens better than old ones and swindles PR returning home shows that the Singapore government is corrupt and is a crafty and wicked organization.
Unquote.

HDB flat less than 60 years selling at lower prices

Dear Mr Tan,

During the course of engaging more agents to sell my flat, I encountered one very special case that wish to share with you.

Now I know why some neighbours are selling much more below valuation and drag down the resale mkt.

I came across one agent that advertised " engaged me considered your flat sold".

Oh my god ......
Upon meeting him, very impressed with his marketing approach. Then come psycho to sign 3 mths exclusive rights, but showing you very low figures of people selling much below values by him. Informed me that mkt will go down further and further if you don't sell now!

I asked him will he pressure me to sell at any offer ? His commission is not cheap at 2 percent. So to him selling low by 20k Or 30k not much Impact. To me, his strategy is to sell fast at any offer!

I can imagine those old illiterate people being con by him !
What Is your view ?

REPLY
The agent is not acting in the interest of the client. You can lodge a complaint to the CEA - Council of Estate Agents.

MY COMMENT
This flat has less than 60 years of leave. By not acting fast, the government is causing a lot of problem to the owners of these old flats.

WOTC - Employee CPF contribution

I asked this question in the Wisdom of the Crowd - Should employee CPF contribution be voluntary?

Here are the results:

43% - Yes. This allows the employee to use the money to pay rent, buy a short lease property or pay medical expenses.
23% - No. The employee will spend the money away.
20% - Yes. The employee cannot afford to have compulsory savings.
14% - Yes. The contribution to Medisave can be stopped.

Yes - 77%. No - 23%

See the breakdown of the votes and pie chart in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=701

WOTC - SGX Bursa Link

I asked this question in the Wisdom of the Crowd - Why did Dr. Mahathir wish to review the SGX Bursa link?

Here are the responses:

37% - He wants Bursa to have a bigger share of the transactions.
27% - He wants to use this review as a leverage to reduce the penalty payable on the cancellation of the High Speed Rail.
20% - He thinks that most of the business will come to Singapore.
17% - He wants to make life difficult for Lee HL.

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=702

Capitalism or socialism?

Most people think that a free market system that gives high income is better for a country. Singapore is an example of a country that has per capita high income.

I wish to share a different perspective.

Ten years ago, I asked a Russian couple. Was Russia better at that time or when it was under the communist system.

The woman, who was a retired teacher, said that Russia was better under the communist system. Why? She explained that although they were poor, the cost of living was affordable and they enjoyed security of employment. They could enjoy culture and interaction with other people.

The man, who is a small businessman, said that Russia was better under the free market system. Why? He was able to get more business.

I visited Jakarta regularly. I was surprised that the ordinary workers that earned a low wage was able to raise a family with several children. Why? Because their cost of living was low.

What is my conclusion?

For most people, the important measure is the wages relative to the cost of living. A good system ensures that the wages are adequate to meet the cost of living and leave aside some saving. This is the system in most European countries.

On some countries, such as America and Singapore, most of the working people have to struggle with wages that are not adquate to meet the cost of living. Furthermore, they face the uncertainty and insecurity of jobs. They can be easily retrenched.

Maybe 10% of the population are doing well. Maybe 1% are extremely wealthy. These people are doing extremely well under the free market capitalist system. But the remaining 90% have to struggle to get by.

The people living in countries with high income and exchange rate also do well when they travel to the countries with low cost of living. But how often do we travel to enjoy this benefit to enjoy the benefit? Maybe the 10% can afford to travel, but the remaining 90% might find it difficult.

What is a better system?

I prefer the European system. They have a nice balance between capitalism and socialism. They seem to produce a better outcome for the people. That is why the Scandinavian countries have scored high in the index of happiness.

The system used in the European countries is not perfect. But on balance, they seem to be better than the high inequality in other countries.

Tan Kin Lian

Healthy competition from Malaysia

Malaysia finance minister Lim Guan Eng said that it is time Malaysia beat Singapore at its own game and gave the island nation healthy economic competition.

He noted that Malaysians and the government needed a can-do spirit to excel against its southern neighbour.

I wish to identify some of our strengths and weaknesses in this healthy competition.

Singapore's strength:
a) Critical mass of business within a small geographical area
b) Better business connection and connection within the region and globally.
c) Stronger financial resources.

Singapore's weaknesses:
a) High cost of doing business
b) High dependence on "foreign talents"
c) A rigid approach to doing business and lack of creativity

How will we fare in this competition?

I think Malaysia will fare better because they are leaner, hungrier and more entrepreneurial. They will beat us over a period of 5 to 10 years. Even the foreign investors will find Malaysia a better place to invest in.

What can Singapore do? We have to address our weaknesses. We should improve efficiency and cut wastage. We should reduce our cost of doing business. We have to adopt a more flexible approach.

What if we fail? This is not a serious problem. Some of the talents and business will flow to Malaysia. It has been flowing to Singaopore over the past three decades. It is time for the flow to reverse.

If that happens, there is still a good side. Our cost of living and cost of housing will drop. We will not be overcrowded. The exchange rate will move from 3 to 1 to perhaps 1.5 to 1.

Some Singaporeans will move to work in Malaysia. Why not? They have more space and the quality of life might be better.

Tan Kin Lian

Voting in World Trade Organization

A researcher told me that the World Trade Organization work on the principle of concensus. All countries have to agree before a resolution is passed by WTO.

Because of this concept, it is difficult to get any meaningful resolution passed by WTO. Some country will object for their special reason. The resolution has to be changed to a convoluted form to get it approved by concensus.

As a result, the WTO is "stuck" and is not able to get any meaningful resolution passed in recent years.

A more proper system is to get resolution passed by 90% of the votes and be binding on all.

This still leaves the question of whether the resolution should be weighted by size of country.

One approach is to allow the countries to choose the number of votes that they wish to be classified under, e.g. 1 vote to 5 vote and for the country to contribute to the budget of WTO according to the vote.

If a country opts for 5 votes, they will contribute 5 times of the fee compared to a country that opt to have 1 vote.

I don't know if I have identified the problem of WTO correctly. I hope to get some views on this issue.

Tan Kin Lian

Act against phishing websites

Recently, there has been an incresase of cyber crime, especially in phishing websites.

I wish to suggest the following steps be taken by the Police to deal with this crime.

a) Set up a special unit to handle this kind of crime. I believe that this unit is already in existence.

b) The special unit should set up a sting operation. This involves acting on the phishing website and making entries that will catch the culprits in action.

c) Get the internet service provider to block the phishing website - to prevent other users from falling into the trap.

Tan Kin Lian

Make banking transfer more secure

We are now allowed to make an internet banking transfer be quoting the bank account number.

I suggest that the name of the payee should also be spelled correctly. If the name and bank account number does not match, the transfer should be rejected at the point of submission.

MAS or the Association of Banks should set up a database to show the bank account number and payee name for the purpose of this verification.

This will increase the security of banking transfers.

Free trade or protectionism?

The trade war between America and China is getting very ugly. Both sides are imposing tariffs on imports from the other country.

Most economists and the media writes about tariffs being bad for the global economy. I wish to give a different view. I think that tariffs may be a good tool that governments should be allowed to use.

IN FAVOR
Here are the reasons in favor of tariffs.

a) It allows the governments to protect jobs and ensure that their citizens are employed. The tariffs against imports can be raised to a level sufficient to achieve this goal.

b) The taxes collected from the tariffs is an important source of revenue for the government. Most governments are running very high levels of deficits due to insufficient tax revenue.

NOT IN FAVOR
Here are the reasons given by economists against tariffs:

a) It discourages the efficient allocation of resources. Free trade allows the goods to be produced in countries that has the most efficient means of production and will bring down the cost of the products.

b) The tax will increase cost to consumers.

I agree that tariffs or protectionism will increase the cost of the goods that are produced. But this is an acceptable price for society to pay to ensure that all their citizens are employed.

I also agree that the tax will increase cost to consumers. This is no different from imposing a goods and services tax that is levied on all purchases.

LOWER COST OF TAX COLLECTION
The tariffs is targeted only on imports. It also reduces the cost of collecting the tax as it is collected in bulk on the import, rather than at the retail level for each purchase by consumers.

SERVICES
The tariffs should also be imposed on services. For example, a company that uses an outsourced service overseas should be required to pay a tariff on these services.

The outsourced services are for call centers, accounting, billing and other office functions.

GOVERNMENT SUBSIDY
Some government may give subsidy to their industries to lower their cost of production.

I find this measure to be acceptable. If another government is willing to subsidy the production of goods, it should benefit the consumers of the importing country. Why should the consumers complain about it?

If this affects jobs in the importing country, the government can introduce tariffs to protect these jobs.

EXCISE TAX
If the country is successful in getting most of its production done internally, how is the government going to collect tax to meet its expenses?

It can impose an excise tax on the goods and services that it produces. Unlikely GST, this is collected in bulk for each company and is not done at the retail level on its individual sales to consumers.

REDUCTION OF GLOBAL TRADE
With tariffs and protectionism, there will be a reduction in global trade. This is not a bad outcome.

Local production means the less need for transportation over long distances. It helps to offset the higher cost of local production.

The reduction in global trade will affect countries, like Singapore, that makes a living by providing logistics services. This is a separate matter. Let these countries find other ways to create jobs for their citizens.

CONCLUSION
There is an assumption that global free trade is good.

While this is true in certain aspects, it also has its bad consequences. It causes unemployment, stagnant incomes and large inequality in most countries.

My view is that protectionism also has its good points. It ensures that the jobs of the citizens can be protected and they can earn a higher income to match the cost of living.

Which is a better system? I go for protectionism.

Tan Kin Lian

Take action against cyber attacks

There is an increase in cyber attacks, especially phishing cases.

https://www.todayonline.com/singapore/cyber-threats-singapore-go-phishing-attacks-see-biggest-jump?cid=emarsys-today_TODAY%27s%20morning%20briefing%20for%20June%2020,%202018%20%28ACTIVE%29_newsletter_20062018_today

I believe that the authority should take stronger steps to deal with this crime. If they can censor the internet by blocking undesirable websites, I don't understand why they cannot block the phishing sites.

It is a matter of will and priority.

WOTC - Raise more children

I asked this question in the Wisdom of the Crowd - What is the best way to encourage families to raise children:

Here are the responses:

54% - Give free schooling and medical treatment to children.
44% - Give a monthly allowance of $500 for each child
3% - Increase the tax incentive and baby bonus

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=699

WOTC - Prices of infrastructure project

I asked this question in the Wisdom of the Crowd - Are we paying the right price for infrastructure projects?

Here are the responses:

58% - We are paying far too much
29% - The tender system can be manipulated
8% - We are paying the right price based on open tender
5% - We are paying a higher price for better quality

Yes (acceptable) - 13%. No (not acceptable) - 87%

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=700

Salary of CEO of Temasek Holdings

Mr. Tan
What are your views about the suggestion that Ho Ching earns more than $100 million a year? This is stated in the following article.

http://www.tremeritus.net/…/should-temasek-ceo-ho-ching-be…/

Reply
I am surprised that here salary, as CEO of Temasek Holdings, is not disclosed.

Our listed companies have to disclose the salaries of the top executives.

Although Temasek Holdings is not a listed company, it needs to set a higher standard of transparency than a listed company, because it is owned by the state and is accountable to all the citizens.

I wonder if this question has been raised in Parliament before and if it has been answered by the finance minister or the prime minister?

Naming of roads

I like the system of naming roads in Malaysia. For example, a road named as Setia 3/12 wil indicate Setia as the area, 3 as the main road and 12 as a small road connecting to main road 3.

I find the system of naming roads in Singapore to be chaotic. For example, we have Sin Ming Avenue, Sin Ming Drive, Sin Ming Lane, Sin Ming Road - all of which are of similar width.

I would refer the roads to be name Sin Ming 1, Sin Ming 2, Sin Ming 3 and the small roads that connect to the main road to be Sin Ming 1/1, Sin Ming 1/2, etc.

Stop the bad habit

It is a habit for many staff to be browsing the internet with their mobile phone when they are on duty.

We see this bad habit all over the place - at reception counters, stores, restaurants, offices.

The supervisor and manager should pay attention to this matter and tell the staff to stop this bad habit.

This is not new. In the past, before the days of the mobile phone, the bad habit is to gossip with colleauges.

Tan Kin Lian

Less risky to employ ex-offenders

There was some discussion over a recent event where an ex-offender, who had served a jail sentence for a criminal offence, was denied a licence to work as a security guard.

The reasoning from the Police, who is the licensing authority, was that his background could post a risk of a repeat offence.

Apparently, the decision was supported by a member of Parliament.

I disagree with the decision.

The risk is small for the following reasons:

a) The ex-offender would have learned his lesson. He would know of the heavy price for the offence. A repeated offence would be met with more serious punishment.

b) The employer would be put on notice of the previous offence. They would pay more attention to this risk. With this additional precaution, the risk of its repeated occurence will be small.

We have to change our mindset towards risk evaluation and mitigation. The government can set a good example for the country to follow.

Tan Kin Lian

Upgraded KTM system

If Malaysia decides to change from a High Speed Rail to an upgraded KTM system, Singapore has the following options:

a) Reject the change as it is a fundamental change from the original agreement and insists that Malaysia pays compensation under the agreement.

b) Accept the change and let it terminate at Jurong East station.

c) Agree to drop the original project, as it does not make economic sense to Singapore. As this is a mutual agreement, no compensation is payable.

Option (a) will lead to another dispute in the International Court, similar to the dispute over Pedra Blanca.

Option (b) does not make sense to Singapore. Why invest $5 billion (my estimate) to develop the link to Jurong East, when the revamped KTM service is not likely to generate the traffic expected from HSR.

Option (c) seems to be the best solution. It will be neater for both countries. Let Malaysia decide what to do with its railway system. It could be the start to build a relationship of trust and friendship with Malaysia.

I hope that a phone call will be made, initiated either by Malaysia or Singapore.

Tan Kin Lian

Verifying a customer

I find this practice to be quite idiotic and harmful.

Company X call a customer on his mobile phone and said - We are from company X. Are you Mr. Y? Please give me your NRIC for verification.

Is it really necessary to verify the customer by asking the NRIC?

After all, company X is calling the customer on his mobile phone. Surely, the chance that someone else is holding the mobile phone is very low?

Even if the mobile phone is being held by an unauthorized person, that person is not likely to answer the phone?

Quite often, the information is not likely to be secret. So this verification is not necessary.

To make matters worse, company may ask additional questions for verification, such as the types of accounts being held by the customer.

There is another risk - How does the customer really know that the caller is really from company X?

Many organizations in Singapore adopt this practice. They seem unable to see this matter from the perspective of the customer.

Worse, they must be following a standard practice that is prescribed by some "higher authority" or they are just copying the practice of other organization mindlessly.

Tan Kin Lian

WOTC - Attract and retain teachers

I asked this question in the Wisdom of the Crowd - How can we attract and retain teachers?

Here are the responses:

66% - Offer reduced work load for the same salary
17% - Offer better promotion prospects
12% - Pay higher salaries
5% - Reduced work load for lower salary

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=697

WOTC - $20 million spent on budget

I asked this question in the Wisdom of the Crowd - Should Singapore spend $20 million to host the Trump Kim Summit?

Here are the responses:
31% - It will soon be forgotten. We will not have lasting benefit.
29% - It is worth spending this money to put Singapore on the world map.
29% - It is spendthrift and wasteful
12% - It will give us the return through future tourism

Yes 41%. No - 59%

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=698

My bad experience in filing an annual return

I have to file my ACRA return today.

ACRA is quite inconsiderate. They designed a complicated system for submitting an annual return. I have to download a 16 page PDF to guide me through their process.

After I entered by business UEN number, I received a message that I have to update my Electronic Register of Members and Share Capital.

I have to search for where the link to update this item. I have to go through a website that has hundreds of confusing links. I could not find the place to update it.

I called their hotline. It was another nightmare. After listening to many irrelevant and distracting messages, I finally managed to speak to a staff.

The hotline staff helped me to go through the complicated steps. The information needed to update the share register was quite complicated. She had to help me.

I finally managed to complete the return. I saved the transaction and have to come back again to complete it.

I asked to complete a survey. It asked me to rate my experience from 1 (poor) to 6 (excellent). I entered 1. It was not accepted. I was asked a few times. I entered 1. They were all rejected. Finally, I was told that I had exceeded the calls.

What a sham!

Tan Kin Lian

Lessons from the World Cup 2018

I am following the World Cup 2018 with some interest.

Around the year 2000, the prime minister Goh Chok Tong set Goal 2010 - to qualify for the finals of the World Cup 2010.

We did not achieve the goal in spite of great efforts made to promote football. We organized the S League and imported many football "talents".

This goal has since been dropped. I thought that a country with a small population, like Singapore, would not make it.

I was pleasantly surprised to learn that three of the teams who qualifed for the world cup have a population smaller than Singapore - Croatia, Serbia and Iceland. Iceland has a population less than 10% of Singapore.

These teams also performed well in the first round of the World Cup. the beat or drew with teams from bigger countries.

To do well in the World Cup does not depend on the size of the country. Although bigger countries have an advantage, the small countries could also perform well through a better system of developing their footballers.

So, it must be something else that cause Singapore to fail in this goal.

It could be some of the following factors:

a) No passion and time for sports - for most of the young people
b) National service disruption for promising players
c) Lack of innovation in identifying and dealing with other problems.
d) Insufficient recognition for sportsmen?

Tan Kin Lian





Can you add other factors?

Allow CPF members to invest in an CPF index fund

Many CPF members complain about the low rate of interest paid on their accounts - 2.5% for the ordinary account and 4% for the other accounts.

They have the option to invest in shares using the CPF Investment scheme. However, some members had bad experience with this scheme the past or are not familiar with how they can make the investment.

I suggest that CPF should set up one fund, which is well diversified in shares, as an option for members. This fund can be invested in the top 30, 50 or 100 blue chip shares in Singapore. It should have low management fees, e.g. 0.2% per annum.

CPF members can apply to transfer some savings from their ordinary or special accounts to be invested in this index fund.

The top 30 shares in Singapore, covered by the Straits Times Index, earned an average return of 9% per annum (or maybe slight lower) during the past 20 years. While the return may be volaltile from year to year, the long term average is quite attractive. Investors can be educated to take a long term view.

At present, the CPF members can invest in the STI ETF using the CPF Investment Scheme. But it is too troublesome for most people.

If the CPF set up its "index fund" option, it would be much easier. More people will choose this option and get a better long term return. They will not complain about the low rate of interest on the default CPF savings, because they have the option to take some risk and get a higher return.


Tan Kin Lian




Tan Kin Lian

WOTC - Likely outcome of the Summit

I asked this question in the Wisdom of the Crowd - What is the likely outcome of the Trump Kim summit in Singapore?

Here are the responses:

39% - A major breakthrough
37% - A limited success
13% - A dismal failure
11% - A wasted opportunity

Success - 76%. Failure -24%

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=695

WOTC - Will Singapore play a major role in the Summit

I asked this question in the Wisdom of the Crowd - Will Singapore play a major role to achieve a successful outcome for the Kim Trump summit?

Here are the responses:

56% - We will only provide the venue and security
23% - We will try to help but will not be able to contribute
10% - We will help the two parties to find a win-win solution
10% - There will be a mess up someone.

Yes - 10%. No - 90%

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=696

Allow CPF savings to be withdrawn in full at 65

Many CPF members ask for the right to withdraw their CPF in full at age 55. This was the provision prior to 1987. In 1987, the mininum sum scheme was introduced to hold back a portion of the CPF savings.

The minimum sum started at $30,000 in 1987 and had been increased over the years. It is now at $181,000 and will continue to be adjusted upwards every year.

A large percentage of CPF members (maybe more than half) is not able to meet the minimum sum. In effect, they are not allowed to withdraw their CPF savings except for a small sum of $5,000 at age 55.

Many of these CPF members are aggrieved. They want to withdraw their CPF savings at 55 as originally promised.

I like to give my view on this matter.

Life expectancy has improved. It will be too early for the CPF savings to be withdrawn at 55. But I suggest that the CPF savings should be allowed to be withdrawn in full at 65.

This means that the minimum sum scheme should be scrapped.

CPF members can continue to keep their savings in the CPF after age 65 or invest in CPF Life. This should be made voluntary.

My approach is - do not make CPF Life compulsory, make it attractive.

CPF can offer attractive terms to encourge members to invest in its CPF Life scheme (which is a life annuity). This can be achieved by operating the scheme on a not-for-profit basis and keeping the administrative expenses low and investing the funds in government bonds yielding 4% p.a.

Some people may opt to withdraw their CPF savings fully at 65. They have their reasons. Let them make the decision that suit their own financial planning.

There is a risk that some of the retirees will squander away their savings. We have to accept this risk. We can only reduce it through financial counselling.

We can simplify the CPF scheme by removing the minimum sum scheme. Currently, there are too many confusing regulations involve in managing the minimum sum scheme.

Tan Kin Lian

Why do we need two separate schemes?

I met two elderly men at the bus stop in North Bridge Road yesterday. They recognized me.

Man - Mr. Tan, why do we need to have CareShield? Can it be merged with MediShield? I am confused about two policies and having to pay two different premiums.

TKL - I agree with you. It is better to have one scheme that provide both types of benefits.

A few days earlier, I met a young couple in their thirties. They have not heard about CareShield. They will be asked to contribute to CareShield when it is launched in one or two years time.

Many people will be asking many questions when their money is being deducted.

The more scheme, the more confusion.

Breakdown of the $20 million budget

It is becoming quite clear that the $20 million spend by Singapore on the Trump Kim summit is excessive.

Does this include the sunk cost? Does this also cover the expenses of the US delegation?

It would be wise for Lee HL to give a breakdown of this budget. By keeping the citizens in the dark, he is inviting all kinds of speculation and distrust.

Tan Kin Lian

WOTC - Goals of education

I asked this question in the Wisdom of the Crowd - What is the most important goal of education

Here are the responses:

63% - teach children on character and values
32% - prepare children for the working world
5% - teach children to read and write
0% - select the best students to be scholars

See the breakdown of the votes and pie chart in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=693

WOTC - Separation of powers

I asked this question in the Wisdom of the Crowd - Which is most important for "separation of powers"

Here are the responses:

27% - independence of the Election Commission, CPIB and Public Prosecutor
27% - Transparency and accountability
24% - Limited tenure for the prime minister and ministers
24% - Parliament, Court and Government to play different roles

See the breakdown of the votes in
http://www.wisdomofthecrowd.sg/chart.aspx?ID=694

#HearMeOut and SG Conversation

During the first week, I had to write most of the feedback to these two platforms. I am now getting good contribution from the public.

You can read the feedback here and also contribute your own feedback.

#HearMeOut
www.tklcloud.com/feedback/latest.aspx

Sg Conversation
www.tklcloud.com/conv/latest.aspx

You can view the feedback on your mobile phone by clicking the above links.

Build a relationship of trust and friendship

Han Fook Kwong wrote an article in the Sunday Times: Time for Singapore and Malaysia to discard old stereotypes.

KL's moves since May 9 polls raise hopes that the country will become a more just soceity based on rules of law.

In the long term, a Malaysia that is doing well, is stable and democratic and governed by competent people based on the rule of law is good for Singapore. A Malaysia that is divided, full of racial tension and always on the verge of the next political crisis is bad for Singapore.

I agree with Han Fook Kwong. Wholeheartedly.

The buiding of a relationship based on trust and friendship with the new government in Malaysia can start with a phone call.

It will be a call made by our finance minister Heng Swee Keat to his counterpart in Malaysia, Mr. Lim Guan Eng. Mr. Lim had said in an interview with Channel New Asia that he hope Singapore can help Malaysia to cope with debt.

Mr. Heng can ask - how can Singapore help?

Mr. Lim will probably bring up three areas:

a) Can Singapore waive the penalty of 500 million ringgit (SGD 150 million) for the cancelation or deferment of High Speed Rail?

b) Can Singapore return the CPF savings of Malaysians who have returned to work in Malaysia?

c) Can Singapore give a long term loan to Malaysia on favorable terms of repayment.

If I were the finance minister of Singapore, I would agree to the first two requests. They will not be costly to Singapore. It will be helpful to Malaysia and can be the start of a relationship based on trust and friendship.

However, I would not be able to agree on my own. I will suggest to Mr. Lim that Dr. Mahathir can call Lee HL to confirm the agreement.

There will be no need for any "package deal" for these two items. The agreement will be based on trust and friendship.

If Malaysia needs Singapore to help on the third item, the discussion will be more difficult. What is the favorable term that Malaysia would like to have and how much will it cost Singapore?

Would Malaysia be prepared to offer some benefit to Singapore in exchange - such as the extension of the water agreement, the sale of sand and use of air space?

But I would decouple this difficult discussion from the earlier items that are not costly, and would help to build a good relationship.

What are your views?

Tan Kin Lian