Saturday, March 15, 2014

Keep Rental Rates Affordable

It was reported that the Government will make data on rental rates available for small and medium-sized businesses, so they can make informed decisions on the renewal of their leases (“Rental data to be more transparent”; March 7).

This will not solve the problem of crippling rental cost in a tight market, but could make the situation worse.

Businesses need stable rental rates to stay viable over a long period. They should not be subject to uncertainty over a key component of their cost of operations because of short-term volatility in the speculative investment market.

I have two suggestions to deal with this problem.

First, we should revert to an earlier system in which the Government, through statutory boards – such as JTC Corp and the Housing Board – makes commercial and industrial properties available at affordable rates. The rent can be adjusted to take into account inflation and construction cost, but should be shielded from the speculative investment market.

Making a large supply available at moderated prices could set a benchmark for rental rates of private properties.

Second, the Government should encourage landlords and tenants of private properties to enter into long-term leases by offering property tax concessions for such leases.

The property tax rates could be fixed at a prevailing level for the duration of the lease.

Tan Kin Lian

* Article first appeared in ST Forum (14 Mar)

Improving financial literacy

Ang Yee Gary asked:
How do we raise the financial literacy of singaporeans? Should it be the job of govt or private sector?

The Government had been adopting the wrong strategy to raise financial literacy of the citizens. This is why so little is achieved after putting in so much effort.

The starting point should be to make sure that fair and trusted financial products are available to consumers. The financial literacy program can then educate consumers about these products.

This requires the government to come forward and tell the public which are the fair and trustworthy products. If they are not willing to take this action, who does the public believe? They can be easily conned by crooks, who make false promises.

In most countries, the regulatory agencies will take action against bad products and bring the wrong doers to court. But, the authorities in Singapore prefer to avoid this responsibility.

There are very few financial products being sold in Singapore that can be considered to be fair and trustworthy. Most of the financial institutions compete to bring out products that are confusing to consumers and have hidden charges to boost their profits.

Hidden charges by UOB credit card

Raymond Fong said,
Dear Mr Tan,
I am frustrated that UOB Cards is imposing hidden charges in the following manner. The amount in Singapore dollars displayed by the merchant that I see on my computer screen is the amount I am willing to pay. How can such the following practice by UOB be allowed?

Customers of UOB Cards should not use their UOB credit card when purchasing products online from merchant that are based overseas when they post their products in Singapore dollars. UOB will charge them with a hidden charge of 0.8%. This will not be reflected in their credit card bill as a separate charge, but as a total charge. For example, I just recently made a purchase of a product listed as SGD487.18 by the online merchant based overseas. I used my UOB credit card to pay, and my credit card bill was listed as SGD491.08. Please go check your UOB bills properly from now onwards. I have called UOB but the customer service officer said that it's cross border charge and it cannot be waived.

This is not true because Citibank Singapore does not impose such a hidden charge. I have been using Citibank credit card for years to do such purchases but Citibank has never ever pull this stunt on me before.

This is the first time after so many years that I switched back to using UOB credit card. I think I will stop using it further since I have no confidence when UOB will have other hidden charges again.

Most businesses in Singapore do not understand what is ethical and what is not. They are so greedy to make profit, that they will carry out unethical activities.
Blame it on the government for failing to set a good example, and for failing to take action against bad practices. They prefer to do nothing.

Friday, March 14, 2014

New talks under FISCA

A new series of talks to be conducted by Mr. Tan Kin Lian under FISCA is being planned. 
Details of these talks can be found here:

Mystery surrounding MH 370

The disappearance of MH 370 is baffling. 

1) There are two evidences that it crashed in the South China Sea, between Malsysia and Vietnam. There was the sighting by the oil rig worker and the debris captured by the China satellite. 

2) There was the radar reading by the Malaysia Air Force that it was diverted to the West and data readings that the plane flew for a few hours after being out of contact. 

In your view, which is more likely to have happened?

Government should bear the increase in health care cost

It is unwise for the Government to try and shift the burden of health care cost to the citizens. Already, the citizens are paying a lot of direct and indirect taxes and are not able to meet the cost of living.

A wise leader will use some of the budget surplus, which is estimated to be more than $30 billion a year based on IMF conventions, to meet the increase in cost, rather than expecting the citizens to chip in and shoulder the cost, as suggested by PM Lee.

Is he out of touch with what is happening on the ground?

Tuesday, March 11, 2014

How to encourage commuters to take the bus

Most people like to take the train in Singapore because the routes and the stations of the lines are clearly marked. They know the "map" by heart or can look it up easily.

What about the bus services? There are more than 200 bus services and 2,000 bus stops. How can anyone remember this system?

Even if they know what bus to take, they will not know which stop to alight. The stops are not numbered (unlike the train). They have to look for landmark (such as block 234 of ABC road). Who would know how to identify this stop, unless it belongs to his or her neighborhood.

Hence, most people avoid taking the bus, except for the service that they are familiar and they take it regularly.

There is a simple way for the Land Transport Authority to encourage more people to take the bus. And this is necessary to take some of the passengers from the overcrowded trains. If more people take the bus, the trains will not be over-crowded.

There are many apps that allow people to know which bus to take from A to B. Sometimes, they have to change the bus an an intermediate place to reach the destination. For example, take the bus from A to B and change to another bus to go to C.

The problem is, how does the passenger identify the stop to alight at B and the destination at C?

I have a simple solution, and it is explained in this article.

I have given this solution to the head of bus services in the Land Transport Authority one year ago. No action was taken. I have written to the CEO of the LTA recently. I have not received any acknowledgement yet.

Sunday, March 09, 2014

Easy way to mark test paper

This website allows a teacher to mark test papers from students using plain paper OMR. It can help the teacher to reduce the marking load, especially for regular tests.

Here are some tips on how to write good multiple choice questions:

Multiple choice test questions, also known as items, can be an effective and efficient way to assess learning outcomes. Multiple choice test items have several potential advantages:
Versatility: Multiple choice test items can be written to assess various levels of learning outcomes, from basic recall to application, analysis, and evaluation.  Because students are choosing from a set of potential answers, however, there are obvious limits on what can be tested with multiple choice items. For example, they are not an effective way to test students’ ability to organize thoughts or articulate explanations or creative ideas.
Reliability: Reliability is defined as the degree to which a test consistently measures a learning outcome. Multiple choice test items are less susceptible to guessing than true/false questions, making them a more reliable means of assessment. The reliability is enhanced when the number of MC items focused on a single learning objective is increased.  In addition, the objective scoring associated with multiple choice test items frees them from problems with scorer inconsistency that can plague scoring of essay questions.
Validity: Validity is the degree to which a test measures the learning outcomes it purports to measure. Because students can typically answer a multiple choice item much more quickly than an essay question, tests based on multiple choice items can typically focus on a relatively broad representation of course material, thus increasing the validity of the assessment.
The key to taking advantage of these strengths, however, is construction of good multiple choice items.

Learn how to learn for life

A German lady who has lived in Singapore for more than 30 years, once told me about her education in Germany. 
She attended a gymnasium, which is for the academically inclined. Most of the graduates go to university and proceed to academia. She did not pursue that route.
When she graduated from the gymnasium, the principal told her - the gymnasium teaches her the skill of learning on her own after graduation. The education is not about learning and remembering content.
How true. She came to Asia and was able to adapt to the new environment. She learned the language and culture of Asia, married a Singaporean and adapted a new way of life.
It will be nice for our education system to give this type of thinking and learning skill to our students, and not to be remembering content.

Prepare for a coalition government

Eric Ng 
Hi Mr. Tan,
What will happen if the G lost the GE and were voted out. The biggest opposition party win the GE in a watershed election, and did not win the parliamentary seats by over 50%, will the G and the winning opposition party form a coalition government or will the G become the opposition and the winning opposition party form a coalition government with a third party.

It will be a good outcome for Singapore if the PAP win less than 50% of the seats in the next general election.
The most likely outcome is they will continue to govern through a coalition government. This will lead to changes in some of the bad policies that have been pursued by PAP for the past three decades.
Singapore will see change, and a better future.
Some of the current ministers, who do not like the current PAP policies, are likely to change their focus and make better use of our reserves to improve lives for the people.

Tip for a new graduate

Alex Long asked:
Mr. Tan, my son completing his U soon and has been offered a job. What advice u have for him in term of insurance coverage and others etc.,? Thanks you.

Buy a 25 year term insurance policy, or the SAF policy, and invest the savings in the STI ETF. 
Give him this book,
Ask him to join FISCA ( and attend the financial planning talks, targeted at consumers. 
Avoid buying any life insurance policy (other than a 25 year term insurance policy) and give away 40% of the accumulated value to the insurance company. (Only idiots will fall for the trap).

Malaysian Airlines crash - MH370

Someone asked for my views about the MH370 crash, whether it was due to competition from budget airlines that lead to lowering of security standards. 

The airlines and airport authorities are so busy on useless security checks that they overlook a simple thing as someone travelling on a fake passport or on a passport that was reported to be lost. It is time for them to focus on the real risks, rather than following stupid SOP blindly.
Rather than asking for tighter airport security, they should review their current SOP and focus more on the real risks. They should be more alert, and adopt practical steps.
The risk of airline crash is less than 1 in 3 million flights, MH370 included. See the statistics here:

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