How to help the lower and middle income.

This article will emphasize on how to help the lower and middle income The purpose of this article is what can be improve on this key point. So I will start off with the first point: "Create opportunities for higher income for all"

" Create opportunities for higher incomes for all".

The emphasis in this section is about the lower and middle income group. Finally, realized that the middle class people are so sandwiched and forgotten over the past few years. After looking through, it did not state anything that can help the middle class, but instead going back to the lower income group again. Seriously, how do you really improve the middle class by just stating a few vague points and emphasize on productivity again. Middle class people are not factory workers, it is not about their productivity that you need to emphasize on. IT is about what kind of environment that you give them to make them grow.

Let me state my points on how to improve and help the life of the middle class people.

1. First, the inflation is too high, especially the exponential growth in HDB flats. HDB flats growth should tag to the median income growth for all first time buyers (HDB Flats have to be made cheaper). You should increase the ceiling according to the income growth over the years so as to cater to inflation and the purchasing power of Singaporeans.
2. Focus on hiring Singaporeans first. Many countries have regulations to protect the people in this portion. MNCs are here to grow our people but not here to suppress our wages and bring in their fellowman to reap our economic.
3. Investors will come in as we are a tax haven in our region and also our stable environment. Continue to be a tax haven in this region and provide them with experience people in different fields instead of having them to be cab drivers and dish washers which are totally waste of resources.
4. Have a group setup to help these middle class PMET. They really need help more than others. It is not by giving them vouchers and rebates that will help them. But getting them a job and helping them to go through the depressing process of retrenchment.

"Improving the life of the lower income"

Lower the price of the HDB flats, make it really truly affordable. Their wages had not increased much over the past few years, So are we going to give them the change again to continue suppressing them?
The data can be found in my previous Article on HDB and Median income.


Conclusion
Sometimes, we have to be realistic and drill down to the problems that causes great distress to the people. Inflation is pretty high right now, due to the rising cost of almost everything including HDB flats, causes our inflation to reach 5.5%. Government has a part to play to help curb the inflation. Do not always used market prices, increase of operation cost or some weak reasons and try to convince the people. We are not who we are 30 years back and the world has changed. Competition is really needed for those million dollar ministers to stand at their toes.

Regards
Raymond Lim

Interview with Razor TV

This is the clip on my interview with razor TV.

My Interview with Razor TV after Media Conference

HDB and Median Income, is HDB affordable?

In this article, I will be touching on the median income of Singaporeans living in different segment of HDB flats. At the same time I will touch on the HDB Resale Price Index comparing to our income.

Information extracted from SingStats (http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf)

The table shows the Median household income over the past 10 years. If you observe careful, you would realized that the change of real income from 2000 to 2010 is 19.2%, while the average household income real change from 2000 to 2010 is 26.1%.

Now let us look at the Median monthly household income from different segment of people living at various categories of HDB flats.

Anyone who reads the above data could comprehend what is the median income of individual who live in different segment of HDB flats can afford to buy.

From the following graph prepared by Lucky Tan, which shows the Resale Price Index comparing with the Median Houshold Income. (http://singaporemind.blogspot.com/2010/04/mah-bow-tan-we-dont-fudge-numbers-part.html)
 

Looking at the table below, it  shows the resale index over the past 10 years.
(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatResaleIndex?OpenDocument)

By looking at the HDB resale index graph, it shows how much a HDB flat has increased over the past 10 years.  Comparing to our median income, can we keep up with the tremendous increase of the HDB flat? Since the new HDB flats are tag to market rate but comes with subsidize, do you think our income increase as much and as fast as our HDB flat prices do?

The table above show our affordability for first time buyers, base on the income level cap and taking up 30 years of loan. Seriously, do you want to pay for 30 years of loan?

Conclusion

During the 1996, HDB resale market was at its highest peak back then. There was a property crash not long after that during the 1998. So any average Joe who read this HDB resale index graph will understand that what goes up will come down. There is no such things as "infinity" property appreciation. So what we trying to remove, is the concept of using your HDB flat as a retirement tool which is not feasible in the long run. There should be sufficient retirement fund in your CPF to help in your retirement. While HDB flat should be a home not a speculative tool, which should be sold cheaply to first time buyer using a cost plus model (Tag to inflation and administrative charges). If property can crash once, it will crash the twice. This is a financial cycle and many countries had been through it. So end of the day, what we want to achieve is to provide everyone with really affordable HDB flats where Singaporeans do not need to be enslaved to their housing loans.

Below are some examples of it.
http://en.wikipedia.org/wiki/Irish_property_bubble

http://en.wikipedia.org/wiki/United_States_housing_bubble

P.S. There are so many examples on the interenet, please google it if you have the time. Thanks for reading my article.

Regards

Raymond Lim