Saturday, May 17, 2014

How to determine a fair wage?

What is a fair wage? How is this to be determined? The answer to this question is important, as it sets the foundation for a fair and vibrant society. 

There are three main methods to determine the fair wage, as adopted by most countries:

a) By collective bargaining between the the workers and the employers
b) By government decree
c) By leaving to market forces

All of them do not work well. But it seems that method (a) has a better chance of working well, as shown is some successful countries, such as Germany.

Singapore follows method (c) and the results have been quite poor, leading to a high wage disparity.

In my view, the right answer is a combination of the three methods, and to use the modern tools to achieve it. A wage panel can be formed to determine the recommended wages for the various types of jobs, after considering the inputs of the workers, relative difficulties of the jobs, and adjusting the wages yearly based on supply and demand (i.e. market forces).
Employers are allowed to employ workers within a margin from the recommended wages.

Introduce flexibility in CPF withdrawal

After thinking much about the CPF, minimum sum scheme, and getting the views of other people, my conclusions are:

1. The CPF is generally a good scheme
2. The minimum sum scheme is a good feature, as it requires people to keep some savings for the future
3. The current level of the minimum sum scheme, with 50% to be pledged in property, is reasonable
4. The member at age 55 should be allowed to withdraw up to one-third of their savings and this can take higher priority over the minimum sum. This will reduce the monthly payout at age 55, but it is the choice of the member.

Why do I have to pay to file a return to ACRA?

I submitted my annual return to ACRA. It took me 1/2 hour to make the submission including an occasion where the browser hang and I have to re-enter the website. 

After completing the transaction, ACRA required me to pay $20. I opt to pay by credit card. In the process of making payment, the eNETS hang. So, my transaction cannot be completed.

It is ridiculous. Even making a payment is a hassle. And why must ACRA ask the business user to pay the $20 to make a compulsory submission? Why can't the forego this unnecessary step?

Help-desk has to be more helpful

I called the ACRA helpdesk. And I got reminded on how inconsiderate our government agencies are.

They force me to hear all kinds of "nonsense" and after pressing "0" to talk to an officer, I am asked to wait many cycles for an officer to be available. 

ACRA does not seem to know that people have other matters to attend to. 

This is also the style of most government agencies. They really know how to give trouble to the public and then make them waste a lot of time on their so called "helpdesk".

Simplify websites of government agencies

As a business owner, I have to comply with regulations from many government agencies, i.e. ACRA, IRAS, MOM, CPF, etc.

Many of their websites are designed in a complicated manner, requiring the public to spend a lot of hours to make a simple submission. Their payment systems are a hassle. 

If you need help and have to call their so-called help desk, you also have to spend a lot of time. 

I have given this feedback to the government agencies on many occasions during the past three years. Nobody bother to make any change.

I am sure that this problem is faced by many other people. This increases the operating cost in Singapore and make Singapore an expensive place to do business, and this high cost is passed to the consumers.

Make Singapore more pedestrian friendly

Our town planners design roads and crossings to be friendly to cars and unfriendly to pedestrians. 

The put barriers in the middle of the road to force pedestrians to walk a longer distance to a traffic crossing. These barriers are not helpful. 

If there are no barriers, the pedestrians can use their judgment on crossing the road, when there are no cars. If there are cars, they will walk to the crossing.

In housing estates, the do not provide short cuts for pedestrians to reach the road or bus stops. The pedestrians have to walk the long way, along the roads used by cars.

Even large commercial or industrial buildings are fenced in, forcing pedestrians to walk the long way to the main gate. This may be for "security", but is it really necessary?

I have a gut feel that the town planners in other cities are more friendly towards pedestrians.

Wednesday, May 14, 2014

Checking passport against Interpol database

I read a Yahoo report that Air Asia has decided that they will check the passports of their passengers against the Interpol database of stolen passports.

They claimed to be the first airline to decide on making this check. I think that it should be quite inexpensive to do the live checking, as it can be handled by computer link.

I am disappointed that Singapore Airlines did not make take this decision earlier to be the first airline, and to get mentioned in the international press.

It seems that Air Asia is more "on the ball". Singapore Airlines has missed a chance to show that they are still innovative and ready to respond.

This is how it can be done:

At the time of booking, the passenger has to provide the passport number. As each booking is confirmed, i.e. the ticket is issued, the airline can make a live check against the Interpol database to make sure that the passport is valid. It should be quite easy and inexpensive. If the passport is invalid, the billing will be REJECTED. It should be a SIMPLE PROCESS to build automatically into the system.

Bad communication from the public sector

The app "MyTransport" from LTA has a function to show the bus stops for each bus service. It shows the bus stop number and name, but leave out the road and KM of the stop. 

I emailed to LTA to suggest that the road name and KM should be included, as they are part of the printed guide for the bus service. 

I could not find an email address to send to, so I sent it to the LTA head of communications, with a request to forward it to the relevant person.

I did not receive any reply or acknowledgment from this communication head. It is a bad practice not to give a simple acknowledgement.

Four weeks later, I received an e-mail reply from another officer than they have considered my suggestion and will be adding the road name but will not be adding the KM, which they consider to be not useful. 

I immediately gave a reply, "Please call me at 66599611 to discuss with me. The KM is the most important information". 

I also found that my telephone number and email was clearly stated in the original email. It is bad to make a decision without understanding the problem.

This is an extremely bad practice, that is quite prevalent in our government agency. 

Even our ministers do not reply or acknowledge suggestions given to them. They may be busy, but they do have an army of assistants who could reply on their behalf. The bad behavior is now being followed by their subordinates in the civil service.

Tan Kin Lian

Personal savings for the future

Many people found that they do not have any savings when they reach age 60 and their CPF savings is locked into the minimum sum. Some of them have debts to pay.

There is nothing much that can be done for the older people, except for the CPF policy to be changed.

For younger people, especially those who have just started work, I wish to give the following advice:

1. Set aside 15% of your income as personal saving, in addition to the compulsory savings in the CPF.
2. Invest your personal savings in the STI ETF to get a good yield over the long term. This investment is better than bonds, or investing in individual shares.
3. When you buy a property, make sure that the monthly installments can be paid entirely from CPF savings. Do not buy an expensive property that require you to pay cash, in addition to the CPF savings.

These principles are explained in my book "Financial Planning for Young People", available at

Review of CPF policy

Many people have expressed in the social media that they are not happy that the CPF savings cannot be withdrawn at 55 or even 65. They felt strongly that the government did not have the right to delay payment and are doing so, as they do not have the funds to pay back the CPF.

It is quite easy for the government to print money to pay back the CPF, so this "lack of funds" is not the reason.

The stated reason of the government is that it is better for the savings to be withdrawn in monthly installments over the lifetime. This is why the CPF Life was being introduced.

While I understand the genuine intent of the government, I believe that they are following the wrong policy and are not aware of the problem faced by the ordinary people.

Here are the underlying problems:

1. Many citizens do not have any savings besides CPF. Some of them have accumulated debts (e.g. due to unemployment or education of their children) and need the CPF savings to pay off these debts.

2. The high cost of HDB flats have wiped out most of their personal savings and CPF savings, leaving them with with no spare funds to withdraw, after setting aside the minimum sum.

3. For people who are short of funds, their immediate need is to have access to the money now, rather than to keep it for the future.

It is important for the government to recognize the real financial issues facing many people, and to review their current policy of continuing to increase the minimum sum.

Tan Kin Lian

Monday, May 12, 2014

Malaysian Airlines MH 370 went missing on 8 March 2014. There were 270 passengers and crew on the plane.
A crisis management expert told me that the handling of the crisis during the first few days was a disaster. He explained the difficulties that had to be faced by the crisis team - insufficient information, unreliable information, the need to decide on what can or cannot be released and many other issues.
Daily briefings were given to the family members and to the media. The responsible officials took and answered questions. The ad-hoc answers, which were outside of the official scripts, sometimes became the source of further confusion and distrust.
The families of the missing persons on the plane were most distraught and emotional. They wanted to know what was happening and what was being done to locate the plane and to save the lives of the passengers. They did not get answers that they like to hear.
Later, the handling become more professional, as a crisis management expert must have been called. Still, the family members felt that information was being withheld and that wrong information was being given to them deliberately. There was a high level of distrust.

I wish to share my perspective about the underlying challenges and how they could be handled better.

Blog Archive