Saturday, May 14, 2011

Stagnant wages

A Singaporean who migrated to Australia 40 years ago told me this story. In 1987, he saw an advertisement in a shop in Toa Payoh for an assistant, that offered a salary of $1,200 a month. He proudly told his friends in Australia that Singapore was making good progress and the salaries would soon catch up with Australia. But, the situation did not improve as expected.
Instead of going up, salaries had remained stagnant (and had actually declined) over the past 25 years. If Singapore had made progress, the salary for a shop assistant should be  $3,000 today - allowing for the change in cost of living. Instead of improving, the wages had stagnated. Many Singaporeans are being squeezed by the rising cost of living and stagnant wages.
Tan Kin Lian

LKY and GCT leaves the cabinet

Meeting Singaporeans in Sydney

Four Singaporeans contacted me by e-mail and offered to meet me in Sydney. I met a family for dinner this evening. They migrated to Australia 40 years ago, but still maintained close ties with Singapore and visited their family in Singapore regularly over the years. They are able to give me an interesting perspective of the difference in the thinking, values and way of life between the people and government of Singapore and Australia. They were very proud of Singapore in the old days and ask now, "What is happening in Singapore recently?" I shall write about this matter over the next few weeks.
I will be meeting other Singaporeans or talking to them over the telephone over the next few days.
Tan Kin Lian

Prepare for an increase in population

On the plane to Sydney, I saw an article in The Australian newspaper. There was some discussion about a proposal to increase the population of Australia. The government did not specify a numerical target but stated that the increase in population should be built based on the capacity of communities to cope with a larger population, i.e. the housing, schooling, medical and other facilities.

This is a different approach taken from Singapore - where the floodgates were opened and the inadequate facilities became evident caught the leaders by surprise. We should replace our old style of governance, which is based on behind the door planning by a small group of elites, who are out of touch with what is happening on the ground. We need to change our system of governance to be more open, transparent and participative. It will lead to better planning for the future, and reduce the negative impacts of bad planning.

Tan Kin Lian

Buying a life annuity

Here are some tips to retirees on how to select a good life annuity, i.e. one that gives good value to consumers. Ask Mr. Tan

A better transport system

We can build a better transport system in Singapore, rather than wait 10 years for new MRT lines to be ready. TKL website

Blogger is now back

I did not make any posting for the past 24 hours as blogger was out of action. It is now back in action. But I am now in Sydney.

Thursday, May 12, 2011

Video on Business Mail

Feedback to FISCA

If you have any feedback on FISCA, use the Enquiry tab at the FISCA website. It will be attended by the FISCA admin staff.

Business Mail - Overview

Here is an overview of Business Mail. It is written for businesses and consumers.

GST and Government Spending

This article explains the share of GST to tax revenue and how it is spent. TKL Website

Sydney 13 to 23 May 2011

I will be in Sydney from 13 to 23 May on holidays. If any of my blog readers wish to meet me in Sydney, send an e-mail to I will continue to update my blog, as the internet connection in Sydney should be quite good. However, it will not be as regular as when I am in Singapore.

FISCA website - buying a HDB flat

A FISCA committee member is writing a 3 part article giving tips on buying a HDB flat. Part 1 is now posted and is available to members after login. Go to

GST is unnecessary and bad

I have been against GST since its implementation. It is unnecessary and bad for Singapore. Here are my reasons.

a) There is no need to get revenue from GST in the first place. Unlike Western countries, Singapore does not provide much in welfare benefits, e.g. old age pension or unemployment benefit.
b) The Government already collect a lot of money from ERP, COE, land sale and foreign worker's levy.

So, the government does not really need this source of revenue. The introduction of GST (from 3%, 5% to 7%) has resulted in increase in the cost of living and added additional cost in compliance and collection. This also increased the cost of doing business.

I need your help to do some research for me, as follow:

a) How much is the GST collected in each year, and also the government surplus? (This will show that GST revenue is NOT necessary for Singapore)
b) Average income in Singapore and the number of taxpayers that earn above $100,000 and $500,000 a year.

I wish to write a paper to argue that GST should be scrapped entirely (and not just removed for essential items, or to reduce to 3% - as suggested by some opposition parties).

Tan Kin Lian

FISCA Educational talks

Here are the educational talks organized by FISCA in May 2011.

These talks are educational and useful, and guide you on how to invest your savings to get a better return. The talks are sponsored by SGX, so you only pay a modest fee. They are conducted by FISCA, with the view of educating consumers to choose the right financial products.

Swan Lake - a great performance

A great performance of Swan Lake. This is the first classical score that I heard 50 years ago, and loved it over the years.  TKL website

Wednesday, May 11, 2011

Tuesday, May 10, 2011

Monday, May 09, 2011

You can find out “afterlife” now

Read Anne Puryear’s book “Stephen Lives” and you can find out what afterlife is like from the spirit Stephen. Amazingly, it is the same as that described by Guru Harry in Tommy Wong’s book “Wisdom on How to Live Life (Book 2)”.
Tommy Wong’s book can be ordered here.

Paul Buchanan - A door cracks open in the little red dot

A Mandate for the Opposition

Hi, Kin lian,

ROUGHLY 1 in 3 voters endorses the Opposition. The percentage of total votes polled should rightly reflect the number of seats won, but it does not in the present system. A ‘proportional representation’ electoral system provides for a more equitable representation in Parliament. A 30% to 40% of total votes polled by the Opposition is, by any measure, a substantial mandate. A mandate for the Opposition, to continue both in and out of Parliament to push for greater transparency of policies and a greater accountability of actions.

Francis Tan tc.

Minister's pension

A letter explaining the pension paid to ministers has been posted in SGEP. Here is the direct link.

Dear Kin Lian
As an actuary, I am sure you can easily quantify the amount paid out in a year or the amount needed to be set aside for this pension.  It would probably run into billions a year and the public has a right to know.   Let not forget this amount is for life and pay out of our tax money.

I am not against pension system.  I think it is a good social safety net for all Singaporean.   Previously, public servants are getting a pension because their remuneration are lower than the private sector so it is a way to compensate them.   However, since CPF was implemented decades ago, still PAP does not have a transition mechanism to migrate the pension system for Ministers to CPF system.   

While I think that we may not be able to stop these pension payment to those who have retired due to contractual reasons, we should at least push the govt to review the system so as not to burden our future generations with such huge financial obligation.   As you are keenly aware, The longer we wait, the compounding effect of this financial burden will increase astronomically.


Sunday, May 08, 2011

Fat pension for ousted ministers

Dear Mr. Tan,
Some people feel sympathy for the ministers that are ousted in the general election, having lost the election at Aljunied GRC. They is no need for sympathy. The ousted ministers will not be paupers. Each person may be getting a lifetime pension of half a million or more a year. They can retire quite comfortably.

Are you sure of the figures? When does the pension start to be payable - from age 55 or 60, or 65?

Drop Life, buy Term, Invest the Difference

Dear Mr Tan,
At last I got a someone who can give advice objectively which I could not get from elsewhere. Your book 'Get Value From Your Life Insurance' is an eye-opener to me. I only started to read about financial planning a year ago when there was a major change in my life stage. I start to realize that saving in bank and CPF alone will not be enough to see me and my wife through retirement. This is so especially that we belong to the sandwich generation. Now at 40, my family commitment has increased financially and this is affecting my long term goals with retirement planning being more urgent than ever before as nowadays I find myself difficult in setting saving aside immediately after every pay cheque, even though I regard myself as a modest-living person and with no car. I'm currently reviewing my 3 existing whole life insurance policies which I bought during my early years when I've very little financial knowledge.

Your book provide an easy to understand determination of the effect of deduction and yield, but trying to interpreting the policy and its BI figure proves confusing with limited information in them. I'm a firm believer of 'buy term, invest the difference' ever since I started to know more about insurance planning. I will greatly appreciate, out of your busy schedule, if you could provide advice if my 3 existing insurance policies are worth continuing? Attached are the 3 polices for your review.

Will it be more advisable and worthwhile in terms of cost saving for me to get a decreasing term policy when my financial commitment start to lessen in my later stage of my life?

Recently in the market, there is a new product covers for early stage critical illness. May I know what is your opinion on this product?

Please read this FAQ and consult Vincent Sear

The book on life insurance is available from i-shop.

Household income gap

Growth in life insurance sales

The life insurance sales grew by 40% during the first quarter of 2011. However, the total assets grew by only 8% - a large part of it can be attributed to the higher stock market values. What account for the difference?

I suspect that a significant portion of the increase in sales is due to replacement of life insurance policies. Many insurance companies introduce new insurance products every year. Their insurance agents use the new products to get customers to stop an existing policy and "upgrade" to a "better policy". This is called "replacement of policy". When it happens, there is really no increase in sales. However, the insurance company usually count the new policy as a sale and does not deduct the termination of the existing policy.

When a life insurance company reports a spectacular increase in sales, the real increase may be quite small, as a large part can be attributed to replacement.

When the policyholder replaces a policy, the policy has to incur the upfront expense all over again. This can be up to 2 years of the regular premium or 5% on the single premium. The cost is exorbitant, and eat away the yield on the policy - giving a poor net yield. The policyholder is usually not aware about these high charges and may be misled by the high "projected yield".

Many investment-linked policies are still being sold on the high projected yield of 9%. The policyholder is not told that the net yield, after deducting the charges, is only 5% (i.e. a reduction in yield of up to 4%. If the real yield in the future is 6%, the net yield will only be 2%, which cannot cover inflation. This is a poor yield, considering the investment risk that has to be borne by the policyholder.

When an insurance agent approaches an existing consumer to recommend a new product, the consumer should reject the recommendation. There is a high risk that the consumer will be taken for a ride. I am not aware of any new insurance policy that make sense for a consumer, considering the high charges that are taken away to pay the agent and to make profit for the insurance company.

Read about the evaluation of the insurance policy from my book, "Get Value from your Life Insurance Policy', which is available from i-shop.

Tan Kin Lian

Insurance of gadgets

Have you insured your i-pad, mobile phone or laptop? Give me the details of the coverage and premium, and the insurance company that provide the cover.

Aljunied - putting into perspective

A view from a reader:
The five who lost Aljunied GRC last night basically went through what thousands of Singaporeans have gone through, which is losing their jobs due to competition.

Lessons from the General Election 2011

Here are 5 lessons that can be learned by observing the results of the general election 2011.  TKL website

Oppositon parties should have 25 seats in Parliament

Dear Mr. Tan
To be fair, we replace the 'first past the post' system with the 'proportional representation' system. This is what the GE results will look like this:

WP          Votes won 12.82 %            Seats won: 10.5
NSP                          12.04                                     9.8
SDP                           4.83                                      3.9

Francis Tan TC.

Managing a Town Council

One of the duties of the elected MP is to manage a town council. Many people probably worry about the lack of experience of opposition MPs i nmanaging a town council, although Low Thia Khiang and Chiam See Tong appeared to do this job quite well - but it could be an exception. The other opposition MPs, if elected, might not have the same calibre and dedication - and this uncertainty might have deterred the voters from voting for them.

I like to write a paper on what a new elected team of MPs should do to manage a town council well. They do not need to do the day to day work, as they can appoint professionals to do the job, but the town council needs to have a system of managing the expectations of the residents and responding to a crisis or emergency.

Can I have contributions to this topic, from people who have managed a town council before. What are the key strategies and "to-do" list? Please post your comments here, or send them to

Tan Kin Lian

New Foreign Minister

My guess is that Wong Kan Seng will be appointed the Foreign Minister. He as the Foreign Minister for a short period before he became the Home Minister. His long tenure with the Government gives him the experience for this job - at least for the interim period, until a new person can be found. I also expect Goh Chok Tong to take a more active role in this ministry, perhaps being the mentoring minister.

What do you think of the election results?

Here is Mr Wang's view.

Give your views in this survey.

Political parties in Singapore

The smaller political parties should merge and be a more credible force. See TKL's article in SGEP. Here is the direct link.

Nominated Ministers

It is time for Singapore to introduce of appointing ministers who are not Members of Parliament. Read my  article posted here.

Loss of Foreign Minister

We have lost an experienced foreign minister, George Yeo. Here are some ways to get him back into this position.

The PAP can call a by-election in one of its SMCs. George Yeo can contest in the by-election and is likely to be returned to Parliament and can continue as foreign minister.
This requires one of the elected MP to be willing to give up his or her hard won seat for the good of the country. Any takers?

Another approach is to allow a minister to be appointed that is not a member of Parliament. Read my Open Letter to the Prime Minister here. This open letter was sent out a few days before the election.

Tan Kin Lian

Pupsik Studios joins iShop

You can order baby products and gifts at iShop

We hear all your voices - PM Lee

Reform the Electoral System

Hi, Mr Tan
I'm happy WORKERS' PARTY scored a landmark victory!
Under a 'proportional representation' electoral system, where voting is party-based rather than constituency-based, the Opposition, would, as a whole, have won 40 percent of  the seats in parliament since they polled nearly 40 percent of the total votes in this election, which means that in a 100-seat parliament, the Opposition would have won 40 seats! A great performance.

New name for SGEP

SGEP was the abbreviation for Singapore General Election Portal. As the general election is over, and the next general election will come in 5 years time, we will rename SGEP as the Singapore Social Economic Portal (and retain the abbreviation of SgEP). This will be done on 1 June 2011. It will continue to post social, economic and political articles of interest to Singaporeans.

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