My eyebrows rose thrice, part 1: Earn $1,000, buy a flat

With a larger opposition presence in parliament, ministers and People’s Action Party (PAP) backbenchers have become more aggressive in making the case that government policies do indeed help the more disadvantaged in society. This became particularly notable during the recent parliamentary sittings when the first budget post-general election 2011 was debated. In defending their “virtue”, I see the PAP side resorting to soundbites several times. Have they been coached by public relations people?

The trouble with soundbites is that in achieving their effect by reducing an issue to a memorable phrase, they must necessarily over-simplify. And someone like me will react by saying: Hold on a minute, what does that oversimplification gloss over or conceal?

Thrice it happened in the last three days as I perused the parliamentary reports in the Straits Times, and I shall devote a short commentary to each of them. In this article, I address the assertion that someone who earns only $1,000 a month should be able to buy a flat.

It began with Finance Minister and Deputy Prime Minister Tharman Shanmugaratnam casually remarking that 98 per cent of Singaporeans below 35 earn at least $1,000 and are able to buy flats. It was the threshold of $1,000 a month that raised collective eyebrows, mine included. Housing minister Khaw Boon Wan then explained on 2 March that:

Said Mr Khaw: ‘This piece of comment caused a stir precisely because it sounded so incredible.’

Mr Tharman was referring to a new two-room flat, he explained. He pointed out that the subsidised price of new two-roomers was about $100,000, if the applicant is a first-timer. He will also be entitled to housing grants of up to $60,000.

‘So the net selling price to him is about $40,000, and the monthly mortgage payment of such an HDB loan can be fully recovered from his Central Provident Fund contribution,’ said Mr Khaw.

He added that most two-room applicants earn above that income ceiling, pointing out that their median income based on recent [Build-to-Order] launches stood at about $1,400.

— Straits Times, 3 March 2012, The maths of buying a flat with a $1,000 monthly income, by Daryl Chin

Out came the back of the envelope.

Let’s say a worker earns $1,000 a month in basic pay and does so over his entire working life. Each month, he takes home $820, and sees $340 creditted into his Central Provident Fund (CPF) account — the latter made up of contributions of $180 by himself and $160 by his employer, based on CPF rates as last revised 1 September 2011.

Let’s assume he takes out a 25-year loan at 5 percent interest per annum. His interest and repayments of principal will be roughly as in the table at right. As you can see, he will be able to make the necessary payments from his CPF contributions alone, provided he devotes the bulk of his CPF inflow to those repayments for most of the 25 years.

So yes, Khaw is right. But what are the implications?

1. It’s a two-room flat, i.e. it has just one bedroom

2. With just one bedroom, how is he going to raise a family?

3. With only $880 in disposable income, how much can he possibly save?

One might argue that if he gets married, even to another person earning $1,000 a month, the couple’s ability to pay for the flat and their disposable income doubles. They might then be able to afford a three-room flat (i.e. two bedrooms). But . . .

4. If the spouse has to continue working, how are they to have children? How are they to help pay the costs of their own elderly parents?

5. There is still the same difficulty with saving, especially if they have children.

6. At the end of their working lives, they will have very little in personal and CPF savings. How are they going to retire?

7. Often, Singaporeans pay for medical care through their CPF savings too. Can this couple, their children and elderly parents afford medical care when most of their CPF is dedicated to servicing a housing loan?

8. And that’s assuming that this worker and his spouse do not suffer any prolonged period of unemployment over three decades. Given Singapore’s track record of cyclical swings, that’s not a good bet to make.

9. Khaw seems to imply that the mortgage loan covers 100% of the nett purchase price and that the buyer does not have to provide any down payment in cash. I don’t know if this is always the case, but I will use the same assumption as he did. If this is wrong, then that’s another hurdle.

Taken together, what we have is a picture of the minister being right only if we treat the question very narrowly. The moment we try to understand social well-being wholistically, the parts don’t add up.

That, unfortunately, is a strand that can be traced through many of the government’s assertions each time they are challenged about people’s well-being, whether we’re talking about healthcare, social mobility, income inequality, or in this case, housing. They score on specific points, but only if taken in isolation.

We should not accept such narrow framing.

79 Responses to “My eyebrows rose thrice, part 1: Earn $1,000, buy a flat”

  1. 1 tan 3 March 2012 at 17:44

    DPM said specifically “a family with $1000 income can own a flat”.
    So we’re not assuming a single person but a nucleus instead.

  2. 3 Serendib 3 March 2012 at 18:21

    I believe the first-time buyer would qualify for an HDB loan at 10bps above the CPF-OA rate – ie 2.6% pa in interest costs. This would be cheaper than the 5% rate you’re currently using.
    In fact considering that only CPF OA can be used for housing loan repayments and the $1000 earner only receives $217 into his OA every month, the Ministers’ claim can only be supported on the assumption that it’s an HDB loan and interest will continue to be only 2.6% pa over the 25-30 year term of the loan. Even though commercial housing loans may give a lower interest than this currently, it’s foolish to assume that rates will be so low over many decades.

  3. 4 Yeoh Lian Chuan 3 March 2012 at 19:11

    Alex – I think your numerical computation was incorrect.

    You assumed a 5% interest rate and called it “conservative”.

    However, you didn’t take into account HDB’s concessionary rate loans – See eligibility criteria at, which is how most HDB flats are financed and certainly at the low end.

    The interest rate for this is pegged at 0.1% above the CPF OA rate so assuming a 5% interest is not realistic, let alone conservative.

    You may want to try to bring down the eyebrows and re-do your sums …

    Best, Lian Chuan

    • 5 Baey Tee Shit 4 March 2012 at 10:49

      For a $1000/mth salary, the total CPF contribution is 340. Of which $217 goes into OA which is allowed for purchase of property (HDB as well). So the interest rate will be 2.6%. My housing loan from the bank is at 1.92% (wowowwoa… something wrong? can the subject obtain the same bank loan from this bank? or if the subject gets it from private bank, are they still entitled to all other assumptions made for this purchase? Mr Lian?) The fact remains that there will not be anymore money for retirement unless they sell the 2rm flat and live …where? No money in CPF for the children’s education (provided that they are brave enough to think of having children at all). And these low wage earners are not likely to have job security given the competition in this area for more submissive foreign workers who unfortunately can get dumbed in drains for falling sick and no one will know or help them. Our govt doesn’t seem to come in to ensure that the real cost of foreign worker is maintained at a humane standard. So, is this back to the individual singaporeans again and if so, then what is the govt for? what is the police for? why have the court?

    • 6 Descended 4 March 2012 at 15:11

      How is this family to ensure 1) continous 25 yr of employment 2) medical costs 3) education 4) retirement 5) child care?

  4. 7 arockefeller (@arockefeller) 3 March 2012 at 21:11

    I was shocked last week when I was looking for GDP figures on the net and noticed that Singapore is now the third richest country in the world in terms of GDP per capita.

    Since independence the PAP has justified almost all its policies by stressing the need for rapid economic growth. It has often argued that growth must come first, and then other things like freedom can be considered.

    With Singapore now one of the richest countries in the world, the time has come to start spreading some of the wealth around. There’s no use pushing GDP even higher so that the richest can buy yet more expensive cars while the poorest citizens are unable to afford flats. It’s time to look at some different ways to spend all that money, and higher low-end wages and a more equal distribution of wealth would be a good place to start.

    • 8 Gordon Lee 4 March 2012 at 03:27

      GDP per capita is high because the average working week is 46 hours.

      • 9 Gintai_昇泰 6 March 2012 at 00:38

        Correction it is solid 44 hrs per week NOT including meal break. If you add the required meal break of 1 hrs (of course u need to eat right? So it’s stupid in a way) – it becomes 51 Solid working hrs ! We work like slave indeed and all our money is locked away via CPF and so may fees and taxes which need not elaborate here.

    • 10 Lye Khuen Way 4 March 2012 at 15:38

      Yes, I joked last Sunday (26th Feb) with my in-laws that I am also feeling “rich”, except that my bank accounts & CPF balances seem to have many missing zeros, unlike a certain Lim !

      How ironically, if anyone one of us lesser mortals were to be kidnapped overseas, all because of our status as Singaporeans- World 3rd Richest citizens…..

  5. 11 Anonymous 3 March 2012 at 21:31

    I think the housing grant of $60,000 is given on a case-by-case basis.
    The actual amount a person gets depends on many factors which are not transparent, I believe.

    Then the next question is how many are earning that kind of salary and how many of them actually receive the full subsidy?

    Scaling up, what about those families earning $2000 per month, $3000 per month, etc. Are they allowed to buy a 2-room flat? If not, can they afford a 3-room flat? What is the amount of grant vis-a-vis the cost of the flat? Are they barely making ends meet too?

  6. 12 George 3 March 2012 at 21:43

    Presented in a vacuo, in isolation divorced from the realities of life on this island, the Minister can make all sorts of claim in parliament. But as soon as it is hit by the first ray of light such as yours, his case vaporises and vanishes in a cloud of dust. Whoosh!

  7. 13 George 3 March 2012 at 21:44

    …like in some Count Dracula Hollywood movie!

  8. 14 Redemption 3 March 2012 at 22:59

    Tharman went on to say $1300 and $1500 can get bigger flat didn’t he?
    Are we going to have another calculation on that?

    Let me do a simple primary maths calculations for the balance $880
    One plate standard chicke rice at hawker centre $2.5 – $3
    One hot coffee $80 cents – $1
    3 meals a day $12-15.

    Just to fill the stomach already cost $380-$450 a month.
    Paying PUB bills and some other grocery bills $150-$200
    Transportation $80 or so.
    Every time he reaches his pocket for 50cents, he is going to think very very hard.

    With the balance $$, won’t be enough to raise a dog let alone a human.
    How to start a family?

    And how many 2room flats are they going to BTO?

    Can’t believe Singapore No.2 man can present this in his parliament speeches.

    • 15 Cheong 4 March 2012 at 11:23

      How about doing a math sum based on $4000 salary and prove that we can own a Sentosa Cove apt?

    • 16 Gintai_昇泰 6 March 2012 at 00:42

      You just said it! You hit the nail hard at the correct place. It’s no use if an artillery of MIWs keep harping on the $1,000 able to buy HDB flat. What about survival? So many things to consider. Actually our gut feelings know that it’s not true yet they insist. You just show it with figures for all to see. Opp MPs shld do what you just did and ask them!

  9. 17 Anonymous 4 March 2012 at 00:12

    I think narrow framing is an apt description of this blog post.

    You took one point – $1k can buy flat – expanded it to a lifetime of earning $1k/mth, then laid it on the government that 1k/mth for lifetime won’t cover unforeseen contingencies? Taking the entire budget and doing an analysis would definitely have been something more on par with the level of journalism we’ve come to expect from you.

    • 18 jem 4 March 2012 at 11:35

      Usually, people who earn $1000 per month don’t really have the education or skills to be able to move up to a higher paying job later in life. With the mass import of foreign labour, the employer doesn’t have much of an incentive to increase salaries either. You can check with the cleaners and see if they’ve gotten much pay increases over the year.

      Also, Alex mentioned unemployment, so he did mention that it might not be 1k/mth for life. It might be 0.00/mth for some months of that life.

  10. 19 FUT 4 March 2012 at 00:17

    I agree that such narrow framing should not be accepted. But perhaps it does not look as bad if it was compared to the situation maybe 10 years ago? I recall that the Minister was trying to also show Gerald Giam the progress made?

  11. 20 Anonymous 4 March 2012 at 00:18

    I am a Singaporean that works in China and traveling on business now. I still live in a HDB flat. I can assure you that at least you CAN in Singapore and that is a good thing. In China, there is not a snowflake’s chance in hell that you can do the same, even in the county. Yes, there is not much left after the deduction BUT the conditions of the houses are better, exactly because they are owned and not rented. In China, even if they are owned, the conditions of a lot of the building are not good. Why compare with China, why not wish for something better? Because after traveling the world and seeing a lot of otherwise, SG is overall, still a cheaper place to stay for the same standard of living (security, food safety, etc).

    • 21 FT in PRC 4 March 2012 at 10:07

      I totally agree with the guy working in China. I’d lived and worked in China for 4 yrs and I agree with you that the PMEs (my grad colleagues and subordinates) earning a combined household income of CNY6-10K are far worse off than many here, as the apartments in downtown tier-1 cities in China are much more unattainable, causing many to rent and crash-bunk with their friends or relatives; or better still stay in the outskirts which requires them to commute with hordes of other migrant workers, white-collars and foreign talent like me on their public transport.

      The conditions of their mid-ranged downtown housing is also quite poor, cos the condo mgmt unlike HDB won’t be bothered spruce up the estate once every five yrs. A 3-yo apartment can look like a 8yo one due to poor maintenance.

      • 22 Any 5 March 2012 at 02:11

        Why compare to China? Ha, unless you are trying to say we more or less have the same governance except the packaging is different.

      • 23 Cheong 5 March 2012 at 14:35

        Some people just like to compare apple to durian..what to do?

    • 24 jem 4 March 2012 at 11:28

      Why is anything that happens in China even remotely relevant to what happens in Singapore? Can a person with a household income of S$1000 move his family to China and stay there? Or can he stay in Singapore but instead pay for the costs he would have incurred in China?

    • 26 Descended 4 March 2012 at 15:17

      FT IN China – I travel too to alot of places. In Malaysia one can get a landed house for S100K and even a better one in Indonesia or Philippines. Have you been there?

  12. 27 Gurmit 4 March 2012 at 00:35

    The $1000 income applies to a married couple because an unmarried single can’t buy a BTO flat.

    • 28 Lye Khuen Way 4 March 2012 at 15:49

      Right Gurmit !
      Problem is that this married couple will be critisized by the you-know-who for not having children or more children.
      Frankly, I dod not see how they can afford to have any children.
      Sorry, I used the word ” afford”.
      Am sure some ministers will correct me. We have such & such subsidies / scheme/. Unless that couple married because of a rubber-malfunction, no sensible human beings would want to bring into Singapore of all places children that they can ill-afford to nuture.

  13. 29 Elizabeth 4 March 2012 at 02:11

    I wonder if the same warped math could be applied to their salaries. Like if we took 30% from each politician and spread it out to the needy, how many could be benefit, etc.

  14. 30 Anonymous 4 March 2012 at 02:21

    Current interest rate is 1.1 to 1.2%. How did you come to 5%? HDB offer a 2.6% nett interest. You are obviously bullshitting here.

  15. 31 Anonymous 4 March 2012 at 02:23

    Assuming that I agree with your analysis, do you have a proposed solution to this problem ?

    • 32 Baey Tee Shit 4 March 2012 at 11:01

      Yes. Increase the subsidy for the POOR people in owning the flat so that they don’t have to empty their CPF. Do not have a moving goal post for withdrawing CPF at retirement.
      Regulate employment and increase policing of companies employing foreigners. Implement quota for frequency of selling and reselling of HDB flats to prevent inflating HDB prices due to speculations. If anyone is rich enough, go speculate in private properties. HDB should be reserved as basic necessity, not for churning wealth. PRs should not be allowed to buy flats for renting out the whole flat (locking of one room not allowed).

      • 33 Lye Khuen Way 4 March 2012 at 15:58

        Cut the crap about Subsidy and Grant. Just be HONEST about the Cost and add some decent fee for admin.

        The selling price of that 2 room BTO will suddenly dropped to say ,S$75K.

        Then if there are hard-up cases that need more help, yes, sell them at a subsidy of S$40k, and if still need to, give another special grant of S$20K.
        End result S$15K ! Magic, you say.
        Broad daylight brobbery is what has been happening all these years with our so-called Subsidised Market rate HDB flats from the HDB>

  16. 34 gg 4 March 2012 at 02:34

    Excellent analysis and argument as usual.

  17. 35 Roy Lee 4 March 2012 at 07:33

    Maybe the ministers shud get paid $1k a mth n live in a 2 rm flat for a yr with their families n have first hand experience before commenting or they shud just shut the fuck up.

  18. 36 atans1 4 March 2012 at 08:05

    His use and qualification of interest rate used better than yrs. ))))))

  19. 37 yuen 4 March 2012 at 08:05

    actually, the PAP ministers are rather poor at crafting sound bites; “family earning $1000 can afford HDB flat” is actually not much of a sound bite; it does not make poor families any happier, and is probably more for the well off to hear and feel complacent about; further, it should have been fortified with qualifying phrases to make it attack proof

    in contrast, the opposition has been much more successful in this domain, e.g. “first world opposition” “let us be Wei Zheng”; I doubt you can think of equally good sound bites from the government side

  20. 38 sumin 4 March 2012 at 09:44

    Why so many people taking issue with the exact interest rate? YB said his 5% assumption was meant to be conservative, and anyone who is doing very long-term financial planning of 20 – 30 years will know that interest rates move, and it is better to be conservative.

    Taking issue with the entire article just because YB did not use today’s interest rate (which only applies if the buyer qualifies for the concessionary loan — not guaranteed) is another form of isolated thinking. Sounds to me like some ministers out to score points over detail, as the article calls it, but losing sight of the big picture.

    Or maybe MIW are lurking here?

    • 39 james.L 4 March 2012 at 16:45

      Hmmm… you may be on to something. What I noticed is that 4 or 5 comments have been harping on the 2.6%. Why would the 4th or 5th bring it up again? Didn’t they read that others have mentioned it before? Why is it that so many people seem to know the HDB concessionary loan interest rate at their fingertips?

      It looks coordinated to me, like somebody sent out a mailer to a squad of internet hachetmen advising people to highlight the interest rate to discredit the article.

  21. 40 Jammie Wong 4 March 2012 at 10:20

    Alex, why the assertion of $800 disposable income?
    what about: GST Voucher, Workfare, U-rebates, Medifund, etc?
    what about HOPE: ?

    ..also, what about initiative to improve salary? the assertion that cleaner now earns $1000 a month? ..what about possibility of dual-income? what about median-income who apply for 2-rm is $1400?

    Why the inclusion of aged-parents and children in $800 income …without including grants and subsidies for the aged-parent themselves and children?

    • 41 yawningbread 4 March 2012 at 14:41

      Because all these things you mentioned — rebates, grants, subsidies — come and go from one year’s budget to another, whereas once you sign a mortgage, you can’t wish it away. I’m not saying the $1,000-income fella can’t afford a flat. I am saying he can, that Khaw is right . . . but . . .

      As for factoring salary increase, what’s the track record been for people earning low salaries over the last 15 years?

    • 42 notpleased 4 March 2012 at 22:41

      that’s because grants and subsidies are not 100% yours but parents and children are yours and yours to keep for life whether you are earning $800 or $800K 🙂

  22. 43 Thor 4 March 2012 at 10:27

    I am a little discouraged. The YSW debacle has seems to have tainted the opposition and the public has largely bought the narrative which the MSM has sold them. Even when you tried to balance the picture, they unleashed legal letters. It is frustrating that the middle aged Singaporeans do not seek alternative sources of information. Thus, all they see about this raging debate online is the defence of the statement in the MSM. Is politics everywhere the same? In my heart, I cannot accept or reconcile that we are a rich nation who pay their ministers and MPs handsomely, but there are so many poor people amongst us, including children who lose out just because the playing field is not level even before they start their education. I am losing hope. We get the government we deserve. Sigh.

  23. 44 May 4 March 2012 at 10:43

    Assuming the person takes out a mortgage from HDB (which he most likely would), the interest is 2.6% or whatever rate is 0.1% more than the interest he receives for his CPF savings; that’s almost half that of your 5% assumption.

  24. 45 Wholesale fashion 4 March 2012 at 10:51

    Let us try to stick issue to issue. Khaw’s calculations are correct. Indeed a family can buy a flat with $1k even though I find it incredible initially. Being able to afford a decent material life is another matter altogether.

    • 46 Lye Khuen Way 4 March 2012 at 16:09

      Just a word or two o that dreaded word ” affordability”.

      I can stretch that argument to say that I can afford a S$100K car on a S$4K / month pay. Pay 10 years, park the car at home and drive only 20km per week, etc….

      Pray that COE goes much higher, then they will say you make money !

      MBT got away with his HDB affordabiilty BS. Believe, most young people are now not so taken in so fast.

  25. 47 Robin Low 4 March 2012 at 11:02

    There is a big assumption that these 2 room flats are built like studio apartments, with everything, move in condition.

    On the contrary, most of them at $100k, would require light fittings, a kitchen, water heater and furniture for it to be livable. At $1k per month, how much can be saved to have $10k for renovations?

  26. 48 CAN 4 March 2012 at 11:20

    Since Tharman claims a family CAN buy a flat with a $1k family income,..

    lets pay him (& those ministers who agree with him) a $1 Toto ticket instead of their regular million dollar salary.

    After all, the Toto ticket CAN make him a million dollars if he touches first prize.

  27. 49 Psy-Ops 4 March 2012 at 11:27

    Not only do they frame issues narrowly, they deny you access to relevant or sufficient information.

    Even though you know in your gut that you are right, when you are not allowed to get enough information to build your case. So, by default, you are forced to accept their narrowly framed arguments.

    This form of modus operandi is detrimental to a society

  28. 50 Wai 4 March 2012 at 12:40

    Alex, I am with you that we shld not accept such narrow framing. But would like to point out that you have gotten some facts wrong on this. First, the interest rates, which some have already commented on. Second, any money in cpf used for medical expense would come from medisave account, whereas payment for housing mortgages will be from the ordinary account. The amount of housing loan installments does not affect the ability to use cpf for medical expense.

    • 51 yawningbread 4 March 2012 at 14:43

      Firstly, Medisave is often insufficient and people top up with cash. Secondly, while the CPF Ordinary Account may cover the mortgage, what is left for retirement?

  29. 52 Statistician 4 March 2012 at 12:59

    Rather than making assertions in parliament about a family “could” or it is “possible” to own flats, its best to remove such abstraction and provide actual statistics of families with $1000 income who have bought flats, when they made the purchases, whether they are in arrears in the payments, are they funding it fully via CPF, etc

  30. 53 Anonymous 4 March 2012 at 13:23

    Let me repost here on behalf of a friend as TS is TCSS… and TCJ also startd TCSS to confused the ill informed.

    Here’s a quick maths for the MPs and readers who are not sure abt HDB mortgage and CPF:
    In Tharman’s hypothesis of 1k TOTAL INCOME
    *Interest rate of 2.6%
    *HDB mortgage 40k over 30years: $161
    *Couple buys house at 30 years old, 40K loan over 30 year period.

    Husband $700/mth: OA $132
    Wife $300/mth: OA $48
    Total OA: $180
    Difference to loan sum: +$19/mth , +$1140 (5 years)

    When the couple reaches 35-45 years old:
    Husband $700/mth: OA $97
    Wife $300/mth: OA $14
    Total OA: $111
    Difference to loan sum: -$50/mth , -$6000 (10 years)

    When the couple reaches 45-50 years old:
    Husband $700/mth: OA $88
    Wife $300/mth: OA $13
    Total OA: $101
    Difference to loan sum: -$60/mth , -$3600 (5 years)

    When the couple reaches 50-55 years old
    Husband $700/mth: OA $60
    Wife $300/mth: OA $8
    Total OA: $68
    Difference to loan sum: -$93/mth , -$5580 (5 years)

    When couple reaches 55-60
    Husband $700/mth: OA $53
    Wife $300/mth: OA $7
    Total OA: $60
    Difference to loan sum: -$101/mth , -$6060 (5 years)

    Tharman and Khaw totally forgot that CPF is not a constant flat rate across your entire life time, it depreciates as you age. Therefore if the couple were to buy a flat and take up a loan of $40,000 from HDB, 30 years period ending at the age of 60, IT IS NOT ENOUGH!!
    There is already a total of $20,100 over the 30 years loan period. WHO IS GONNA HELP THEM? IS IT YOU, Tharman or YOU Khaw? Or any of the readers here who still think it is possible? Khaw is correct: IT IS INCREDIBLE!!

    1) We can also do e math with only husband working with S$1k.
    2) Don’t even start suggesting that their kids will be able to help out with the financial at home, at this kind of income who dares to give birth?

  31. 54 Yuhui 4 March 2012 at 13:35

    Some comments:

    #2: Theoretically, the couple can still raise a family, albeit sacrificing privacy. Our forefathers did that and with large families.

    #7: Housing loans are paid from the Ordinary Account, while medical expenses come from Medisave, yes? So servicing a housing loan entirely through CPF OA shouldn’t affect one’s ability to pay for medical care.

    #9: Unfortunately, the calculations don’t account for stamp duty, legal fees, furniture, fittings…

    • 55 notpleased 4 March 2012 at 22:51

      Please…don’t look back. Our forefathers’ time is way over. When I was in P1, the tuckshop noodles cost only 5cents. Now, in my son’s school tuckshop, the cheapest bowl of noodles cost 70cents. My father bought his district 10, 3 rm Holland Close flat for only $9K. Now, it is going at $480K for a tiny 3 rm flat in the same area!

  32. 56 Wahlauey 4 March 2012 at 13:45

    Maybe he meant $1000 in monthly savings (after tax, expenses etc). Save $12K a year, mathematically possible.
    Or maybe Tharman just joined a new cult, breathe air, no need to eat, drink or pay for living expenses. You make $1K, save $1K.

  33. 57 Hsq 4 March 2012 at 15:37

    A reader posted in mr lucky tan’s blog, think he makes a lot of sense.

    Asking $1000 family income to buy 2 room flat is brilliant, why?

    Do you even know what is unspoken about the poor buying 2 room flats?

    The poor has always been able to get 1 or 2 room rental flats from government at very cheap rentals…

    Government figure out, instead of building flats and renting it out at loss (the rental are super cheap, can never recover the cost of the land, and building cost), why not get the poor to buy the 2 room flats…

    At least they can recover a significant amount of the sunken cost compared to just renting it out…

    The poor would now be motivated notto be delinquent in their payments as they are now “owners”…

    Brilliant isn’t it? Milking money out of the poor…


  34. 58 jentrifiedcitizen 4 March 2012 at 15:49

    i too was disturbed to read the govt’s insistence that $1000 or less can get u a flat. My questions immediately were same as Alex and others, what about cost of living expenses?? I also question the premise of Singaporeans ‘ desire to own a flat. This is a culture nurtured by our government to make everyone own a flat as much as possible partly to make us responsible for ourselves and not burden the state. But by doing do so, many young adults start off with a lifetime loan to pay off. for the poor families earning less than $1k monthly, should that be their priority to worry about this burden of a lifetime loan? I dont have the answers but I know that if I were poor, i would be trying to be debt free and deal with the day to day cost of living such as food, paying for healthy care and my kids’ education first. In many other countries, many of the poor tend to rent and not own their homes which makes it more flexible in some ways to manage expenses. here, it is an obsession that one must own a home no matter what. again, i stress there are no easy answers but perhaps it is time to question the premise of buying a home regardless of income levels. I do know though, that for housing to be more affordable, URA needs to review how it calculates the cost of state land for sale for development and HDB needs to relook at how it costs the pricing of the flats.

  35. 59 A balanced view 4 March 2012 at 15:52

    I’m sorry but this article and the subsequent comments did rouse me somewhat. Everyone accuses the minister of not knowing the ground and theorizing. But the truth is, on this matter, most of the people here are theorizing as well. I hazard that few knows what it’s like to be living with that kind of income.

    When I was young, I lived in a one-room rental flat, with a single income from my mother. If this grant was there at that time, we would have jumped on it. You do not know the difference it makes to our dignity to be able to say we own a place rather than to say we are renting from the government.

    When you are in that situation, you don’t think about retirement, or savings, or all of the other things that Alex mentioned. How we wished for a flat that we could call our own!

    Over time, my mother’s skills improved and she was paid a bit more, and we had some lucky breaks, and we eventually bought a three room flat. What a change it made to how we felt! We struggled, but we studied hard and eventually finished university, and now our lives are good. All the examples above who hold the income at $1K are not realistic. Incomes do rise. Skills do improve. Certainly there are those who are handicapped or otherwise disadvantaged who will find it hard, but many who are poor are victims of circumstances. There is absolutely nothing wrong with them. They just need a steady roof over their heads, a chance to be educated, trained, and their lives will improve.

    Now, there are all kinds of grants, for kids to go to school, for books, even for school pocket money. The poor does get a lot more help than we did when I was young. Is it challenging? Yes, of course. But I don’t know what is the point of Alex’s article. Is it that those with $1k income should not buy? Is it that the government should give out a lot more, so that the poor can also have enough to save, to start a family, to care for their elderly? There are other grants and solutions for these other issues, let’s not mix them up.

    On the point of housing, what should the unfortunate who are making that $1K a month do? Rent from the government? Live with their relatives? I would say, take the grants and the flat anytime.

    • 60 yawningbread 4 March 2012 at 16:24

      > But I don’t know what is the point of Alex’s article.

      Perhaps you’d like to read the last 3 paragraphs again. The point was: one can be right on a small detail when framed in isolation, but miss the larger issue. Don’t be fooled by a minister crowing about being right or doing so wonderfully over one element, without looking at side effects.

      If you were looking for an opinion from me whether or not those on low incomes should buy or not buy a flat, you’re on the wrong article. That was never the point of the article. Perhaps you thought it should have been — and therefore couldn’t find a clear opinion from me — but why did you think that? Why did you think the issue was only that and no other?

      • 61 A balanced view 4 March 2012 at 16:53

        Thanks Alex for your explanation. I think the “side effects” really depend on the families in question. And there are many other grants to help them in those other “side effects”. Buying the flat doesn’t disqualify them from these other grants. I just wanted to share from personal experience that it is heartening to hear from the minister that such grants are available, and that I feel good that the low income can own flats that way. That’s not to say that there’s nothing left to be done; there’s plenty left to do. But I feel this particular point should be viewed positively rather than pilloried.

    • 62 Pauls 5 March 2012 at 00:33

      This type of ‘argument’ – if one can charitably call it that – has become a mainstay of our national discourse. It has the following structure: a member of a disadvantaged class steps out, or is trotted out, as a shining example of how Singapore’s ‘incorruptible’ system allows even those in such disadvantaged circumstances to rise up. With hard work and perseverance – and the benevolence of our political overlords, to whom we can only be grateful – s/he has made it. Therefore, the implication is that anyone/everyone else in similar circumstances would be able to make it too. This in turn invites the insinuation that anyone in similar circumstances who doesn’t is probably not working hard or persevering (remember, no ‘crutch mentality’!). It also makes critics who aren’t of that disadvantaged class look like their criticism is caviling and baseless, since they don’t have the benefit of personal experience. Overall it deflects criticism from the govt itself and frames the issue as one of personal circumstances and fortitude.

      I take real exception to this type of rhetorical diversion and want to expose its fallacies.

      Without denigrating the real personal struggles that people such as “A balanced view” may have undergone, it must nevertheless be borne in mind that:

      (1) Anecdotal evidence is not, a priori, representative. I.e. what may have happened in your case may not necessarily come to pass in another case.

      (2) Unless there is evidence to show that such anecdotes are truly representative of the general case – that such outcomes are widespread – then they merely show what can happen in exceptional circumstances. A responsible policymaker who is concerned about all the people of that disadvantaged class – and not just the exceptional ones – should not be able to retire peacefully to his pillow at night just because a hardy (or lucky!) few can make it.

      (3) Evidence of a personal nature does not necessarily trump other forms of evidence. I.e. just because you experienced relevant circumstances does not mean that all and only people in your situation are (most) qualified to weigh in on the matter.

      (4) Gratitude can be misplaced. Nobody should be required to feel grateful toward someone performing a *duty* which is *expected* of them. Thus if you are moved to defend the govt’s position or policy, do so on its real merits, and not because you think people should be grateful to the govt. (A govt that does not view its service to the people as a duty expected of them is one that has no moral standing. A govt should never be in a position to *demand gratitude*.)

      • 63 A balanced view 5 March 2012 at 12:21

        Hi Pauls, I agree with you that it shouldn’t be generalized. I do not mean to show with this example that everything else that the government does is right. It’s simply one example that I share from personal experience, and my point is that I just can’t see why it is a bad thing that low income citizens can own a flat, with grants from the government.

        I fully agree with you that evidence of a personal nature does not trump other forms of evidence. But what other kinds of evidence has been shared here except theoretical conjectures, back of envelope calculations, and just pure emotional rants? I would say my personal experience trumps these.

        There are many here who say that the minister has to take $1k salary to know what it’s really like, so the “personal experience” argument has been used both ways, i.e., to say that the minister needs personal experience to create proper policy, but yet say that someone with personal experience like mine doesn’t necessarily count.

        I also agree with Edna’s view below that mine is a little of a fairy tale, that we managed to finish university, but my neighbours kids (my mother still keeps in touch with some of them) managed to finish O levels, ITE or poly, and were able to afford to buy flats rather than rent them. Lives do improve. What evidence is there that lives, in general, don’t? Where is the evidence that the poor Singaporeans (again, in general) are entrenched in their poverty?

        I think it’s strange on the Internet. Everyone is either an out-an-out PAP supporter, or an out-an-out opposition supporter. I am neither. I have my issues with our government, healthcare costs being one of them – I’ve seen healthcare costs destroy a few families. But I just want to share that on the issue of housing, I think it’s great that there are these grants for the low income to own flats. I’m just confused why everyone thinks it’s a bad thing.

    • 64 Pauls 6 March 2012 at 02:09

      “I think it’s great that there are these grants for the low income to own flats. I’m just confused why everyone thinks it’s a bad thing.”

      This isn’t actually the issue I was responding to in your comment, but I should clarify: I don’t actually think it’s a bad thing that housing grants for low income earners exist; in fact in the current paradigm it’s probably necessary. And I imagine most commentators share similar sentiments.

      Instead, reactions to the $1000 comment seem to express either plain incredulity (‘Really meh?’), or take umbrage at the *way this assertion is made* (and NOT at the assertion that housing grants are available).

      Commentators may object to the fact that the existence of such grants, considered in isolation, may technically speaking allow someone to own a flat, but practically speaking may not be feasible when considered together with someone’s other day-to-day needs.

      Or they may object that the $1000 claim relies on specific assumptions that are difficult to replicate, and may not be applicable to many people, so making such a claim without being explicit about the riders seems disingenuous.

      Or they may object that this particular scenario has been cherry-picked, obscuring the fact that those in other income brackets may fall through the cracks because they earn too much to qualify for the schemes alluded to but too little to pay market rates without govt assistance, thereby drawing the angst of those who feel like they might perversely be denied assistance that is available to others.

      Whatever the case may be, the way such an incredible assertion is made makes it *seem* like an exercise in public relations obfuscation, and people may be tired of being told yet again that the govt is working miracles for them when common sense or everyday experience suggests otherwise.

      Your puzzlement over the reactions generated may thus stem from a misidentification of the issue that people are actually responding to.

  36. 67 Sgcynic 4 March 2012 at 17:58

    Simply put, for ministers who are in charge of running the country and having to see issues at a macro level with all the inter-connected impacts from policies, they sure know how to frame their replies and box in their arguments into isolated idealised case studies. That’s why we have lost so many along the way as they move ahead and we stay together.

  37. 68 Edna 4 March 2012 at 18:00

    A balanced view is giving us a very nice fairy tale. I truly wonder how many % of such fairy tales actually happen amongst the lot of lower income group Singaporeans and families?

    Please take a reality check.

  38. 69 Chow 4 March 2012 at 18:52

    Tharman and Khaw may be right, but I certainly wish they had laid all their assumptions out at the very start. In general, when presenting new findings based on theory, it is necessary to lay out all the assumptions so others can follow your working and make sure that no mistakes have been made. Given the lack of such details, it makes sense to assume that the conditions imposed were very restrictive and is thus rarely applicable to the general population who earn $1000 a month.

    In my opinion Tharman would have done better to release the full workings (assumptions and all) as to how he came to that conclusion. Even if the conditions were found to be overly restrictive, one could only point out to him that such calculations are rarely achievable in real life, at which point he could (if he were shrewd enough), point out that they were working to make it easier for people to access all that aid and whatnot and how they are working really hard to improve the wages and opportunities for these people. As it is, this mass speculation over how they arrived at that conclusion becomes another millstone around their necks because it looks as though they are keen on hiding something and that they are out of touch.

  39. 70 Robox 4 March 2012 at 23:32

    A $1K salary MIGHT actually be enough for the purposes of owning a HDB flat.

    But isn’t that assuming that payments for said flat are the only expenses one incurs? How much of that grand sum of $1K will be left over to pay for ALL your other monthly expenses after you make your monthly payments towards your flat? What if you were earning such an unfathomable sum, the sole breadwinner of the family married to a stay-at-home mum looking after the requsite 2.1 kids that you obediently had from listening to the PAP government’s propoganda?

    Is 1K still enough?

    Make no mistake of the true subtext of this piece of PAP propoganda:

    1. If you are earning as little as $1K, it really is YOUR fault – as always has been the PAP’s unspoken mantra – because you didn’t study hard at school.

    2. Since this is your fault, we have no obligation to address the gross income inequality that resulted in your $1K salary even if your boss is reaping $10B from your sweat and tears. Needless to say, no minimum wage legislation is necessary.

    3. But we are not the orgres that all those opposition f**ks are making us out to be: we are a caring and compassionate government, and we have plenty of mightily generous schemes to help you and your family. The only catch is that since we have decreed that $1K is enough to own your own flat, you might not qualify for our largesse. (However, if you do, the indebtedness you feel to us that we intended with this scheme might translate into votes come the next GE.)

    In the meantime shut up, sit down and accept all the abuses that come with the lack of labour protection laws.

  40. 71 patriot 5 March 2012 at 00:20

    Me would say that with the many reports of families earning few hundred dollars incomes staying in three and four room HDB Flats applying for assistance, indeed these people do ‘owned’ HDB Flats.

    However, owning(bought) a flat and later utility supplies got cut-off, kids not attending school and may even be malnourished due to poor meals. Licensed debt collector comes a calling now and then and if help does not arrived, the flats are repossessed, so what if the family is approved to buy a flat?.

    It true that with a LOW INCOME, one can STILL buy a Housing Board Unit, but along the way, some ‘owners’, even if it is just a few that got evicted due to arrears; what is there to sing about the Housing Scheme in place?

    Lower Income Singaporeans wish that housing can be made less expensive for them, be it purchase or rental, so that their families can have shelter. Needless to say, they have nowhere to make home or to even get a place to clear their bowels and clean themselves when they cannot afford a roof over their heads. This is the REAL problem.


    • 72 Gintai_昇泰 6 March 2012 at 00:57

      In a way the Minister is corre t to say that $1,000 FAMILY income can buy a small flat. If it is not true then he will be accused of lying right?
      But what he didn’t me tion is how many got it? Can it last long ie he wont get evicted due to arrears like retrenchment or sickness etc. The key is long term and also the immediate needs of the family surviving on less than $1,000 after CPF cuts. With children and parents to take care honestly can this family survive? Unless he lives on water and air my fur feelings tell me not possible. That is the crux of the matter.

  41. 73 Png Kiok Khng 5 March 2012 at 08:27

    Fully agree with the part about putting point across in isolation. The housing affordability issue has always been argued that way for as long as I can remember. Take the 2 room flat example, it takes 25 years to pay for the flat and will possibly take another 30+ years to build CPF retirement nest egg assuming no increase in the withdrawal limit during that period. Make sense?
    One might add that this does not help fertility rate too although some might argue whether it make sense for these low income earners to propagate.

  42. 74 Ivan 5 March 2012 at 08:35

    people should just stop whining about this calculation.. being able to buy an apartment for $1000 a month on a combined salary is better than pretty much anywhere else in the world, with cash leftover still..

  43. 75 The 5 March 2012 at 09:13

    Household income of $1,000. Say, take home pay after CPF contribution and conservancy and other charges, is $800.

    Assume 3 meals at a hawker centre at $12 per person per day = $720. What’s left over is $80 a month. Is the couple expected to walk from Ang Mo Kio to Yio Chu Kang to work? Can they afford to fall sick?

  44. 76 Chanel 5 March 2012 at 11:05

    Someone pointed out online that there are pretty strict restrictions for if a person is to qualify for the “subsidy” and “grants” that Khaw alluded to. These include the person having been continuously employed for 12 months and the flat must be in non-mature estate. As if these 2 conditions are harsh enough, the govt actually build very few of such flats!!!

    What Tharman, Khaw, Tan Chuan Jin and Josephine Teo said about a person earning $1,000/month being able to “afford” to buy a HDB flat is only technically possible if we ignore the other important elements of that person’s life. For eg. that person must be bloody sure that he doesn’t fall sick or lose his job (which is a real possibility with the govt’s ultra-liberal immigratio policy and lowering of business costs by allowing almost unlimited cheap foreign labour).

  45. 77 Chanel 5 March 2012 at 11:10


    This was what Tharman said:

    71. We made major moves in the last 5 years, major interventions – Comcare; Workfare in 2007; enhancing housing subsidies very substantially. I would like to assure Mr Gerald Giam, who might not have caught up with all the developments, that our enhanced housing grants for lower income families are such that a family with a monthly income of as low as $1,000 can now purchase a small flat. 98% of our younger cohorts, those who are below 35, earn at least $1,000 of income a month. A family that earns a bit more, say $1500, can purchase a medium-sized flat.

    He was referring to household income of $1,000/month. Under your scenario of the new spouse also earning $1,000/month thus doubling the household income to $2,000, Tharman will say that this family can “afford” to buy a “medium-sized” flat.

  46. 78 reservist_cpl 5 March 2012 at 14:22

    It’s like saying 4D is fair. Spend a few dollars and win a fortune, only problem is that it only applies to a very small proportion of those who qualify/win.

  47. 79 Lim Bt 5 March 2012 at 21:26

    PAP likes to give exceptions to convince the people – the $8 medical bill that Khaw BW paid. Exceptions are used as though they are the norm. So be con at your own risk.

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