Tag Archive | recession

Step one to another 1985 recession?

When I read the article (see below) in Business Times yesterday about the much respected Prof Lim Chong Yah calling for wages for the lowly paid to rise by leaps n bounds over three years and at the same time to cap pays of $15K and above per month for the same period, I thought it was a belated April Fool’s joke.

So I copied the article and circulated it to the usual folks on my email-list with the heading “I don’t believe this!”

What was more unbelievable were two of the three replies I got.

First, from my elder brother, who wrote: “I think Prof Lim has proposed a jolly good idea. I’m sure true Singaporeans and foreigners with goodwill who earn $15000 and more per month will not mind a 3 year moratorium. The government should seriously consider this proposal.”

Second came from a friend with deep family ties to the PAP. 🙄

He wrote: “I actually agree in principle with what Prof Lim is trying to do. Since the PAP decided to make millionaires out of its ministers by using private sector remuneration to justify ministers’ pay, we have been grossly (and increasingly)  overvaluing the worth of those at the top and undervaluing that of the average Joe and those at the bottom ranks of our workforce.

“We copied this predatory practice from the US, which is quite different from the fairer and more social- centric compensation system of the European countries. It has resulted in an ever-widening income gap between the haves and have-nots,  which has been cleverly disguised as  the  effects of globalisation.

“And those articulating this bs are the same people who run our country and businesses – the latter hired guns, not entrepreneurs who put their own money on the line , and who are the direct beneficiaries of this predatory practice.  They also happen to control the press and other media, and there is a danger that this bs may morph into a mainstream value.

“As the saying goes, repeat a bs often enough and you begin to believe in your own bs. But increasing inequality in our society is not sustainable in the longer run, as social tensions must increase as a result, leading to more explosive implications for our society. Prof Lim is indeed a wise man in trying to shock us out of slipping into this malevolent stupor.”

I might have concluded that I am in the minority of one if not for another giddy headed old gal — and makan kaki– like moi who replied thus: “Yeh so what’s the point of me bringing my grand kid to go for kumon, Julia Gabriel in hope he can go to RI, Hwa Chong ha?Better to go for carpentry classes and maybe learn to cha kway teow!!! Come to think of it my part time maid could have come up with the scheme! What is his pay?? Jen the furious.”

Then I discovered that one dot.seng says it all for me. So no, I’m not in the minority in my reaction; certainly not of one; perhaps not even of 10,000!

But then, what’s the use, if the Government buys Prof Lim’s line of thinking and acts on it?

I shudder at that prospect, remembering that Prof Lim presided over the National Wages Council when the Government went on another high-wage policy binge. Hope we won’t see a repeat of that experiment in the early 1980s that led one establishment maverick to blast — after the event. 🙄

“The 1985 recession was a self-created recession. Between 1981-1985, we had a policy in government to uplift from no-skill to high-skill. What the government did was impose very high CPF. The CPF went up to 50%. All costs went up, but at the same time there was no incentive given to encourage companies to upgrade. Just pure punishment.”

Business Times – 10 Apr 2012

Lim Chong Yah suggests second wage revolution

3-year plan to cut income inequality, foreign labour use


(SINGAPORE) To tackle rising income inequality and an excessive reliance on cheap foreign labour, one prominent local economist is proposing a three-year restructuring plan that includes a wage freeze for top income earners and sizeable pay hikes for the lowest paid.

This ‘bold and iconoclastic’ proposal seeks to complete the wage revolution of 1979 to 1981, says Professor Lim Chong Yah. He helmed the National Wage Council (NWC) from 1972 to 2001 and as its founding chairman had a pivotal role in that first, radical three-year wage restructuring exercise.

Then, the NWC had recommended a 20 per cent across-the-board increase in wages a year, including higher contributions to Central Provident Fund accounts and to the Skills Development Fund, which grants companies training subsidies.

Speaking to an audience of about 50 at an Economic Society of Singapore public lecture yesterday, Prof Lim outlined another three-year solution to Singapore’s ‘two Achilles’ heels’ – the sharp rise in low-wage foreign workers and rising income inequality – while raising productivity.

This features a sizeable pay hike for the lowest-paid workers, regardless of nationality or age, earning less than $1,500 per month over three years. He proposes a cumulative 15 per cent rise in the first year, another 15 per cent in the second, and 20 per cent in the third. This increase would be channelled, in equal parts, to the worker’s take-home pay, his CPF Retirement Account, and the Skills Development Fund.

At the top end of the income ladder, Prof Lim proposes a three-year wage freeze for those earning $15,000 or more a month. But he stresses, the intention is not to ‘frighten the geese that lay the golden eggs’ as there will be no pay cut, pay ceiling or super-taxes imposed.

As for the middle income, he proposes pay hikes ranging from a quarter to a third of that received by the lowest-income group, part of which will go into the CPF Retirement Account. The government should also match contributions to the Skills Development Fund to demonstrate its commitment to the restructuring effort.

Prof Lim envisions all operating details of this proposal being discussed and decided on by the tripartite NWC, as was the case in 1979, to ‘forge consensus by the three tripartite social partners’.

He acknowledged readily that national economic restructuring is ‘much more difficult’ now than it was three decades ago, given the changed political, economic and socio-economic climate. But he thinks that Singapore still has effective tripartism and a government and civil service with integrity and ability, so what is needed is ‘national will’ in the face of ‘the problems of economic success’.

In response to questions from the floor, Prof Lim said that his proposed scheme is unlikely to have a significant negative impact on unemployment – now at record lows – and that high-quality foreign investment will continue to flow into Singapore in pursuit of strong fundamentals.

Asked about the pace he proposes, which seems swifter than the government’s target of a more gradual 30 per cent rise in median incomes in the 10 years till 2020, Prof Lim said that some ‘shock’ is needed to ‘check, halt and if possible reverse’ the rise in income inequality.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved


ERP: defenders & critics

OK, to show I’m not against the ERP per se, only its apparent insensitivity to changing economic circumstances, (see previous post) I shall run the emls of friends who defended the system first, followed by those who endorsed my criticisms.. both interspersed by my riposte, where useful…

I’ve had many more replies but have not included them since they didn’t address the ERP on Saturdays question but lamented about the economic situation, the traffic situation around where they live etc…  


1. I drive to town on Saturdays quite often, and I make sure I leave around 10. I still pay a measly 50 cents on the CTE. At that time, traffic on the expressway can be very heavy so I suspect that might be a justification for imposing ERP on Saturdays.

Moi: Then after the morning rush, y need to maintain ERP all day and even kick up the charges from 7pm– on a Saturday, leh!?

2.It’s so easy to lose sight of the objectives of ERP. Allow me to refresh – essentially, LTA has put in place a system to move away from ownership-based taxes (upfront purchase tax and annual road tax) to one more equitable balanced against usage. But since usage cannot easily be tracked (given that the odometer can be easily tampered with) and given that ERP is too expensive to be implemented nationwide, the better option therefore is to implement ERP in the areas that tend to be more congested (basically killing 2 birds with one stone). Yes, it’s not perfect as to be able to quickly adjust for changes in traffic conditions, month to month or day to day, but fact is that the revenue generated (albeit not very perfectly, but then what is) allows LTA to pass on reductions in the annual road tax and every few years, reduced purchase tax.

Stop missing the forest for the trees. What is more relevant is to ask yourself the question – if you consider yourself an average road user, are u paying more or less under this system i.e look at TOTAL COSTS of car ownership. If the answer is the latter, stop complaining becos otherwise what you get back in one form, be prepared to pay for it with another, and probably costing more. 

Btw, I think your headline is most “dangerous”. If you believe in that headline, then the following are all relevant. And if you can get all the following wishes granted, trust me…I’ll be the first to pack up n leave this country before it implodes

Wake up, SCHOOL FEES! S’pore’s in deep recession..
Wake up, GST! S’pore’s in deep recession..
Wake up, TAXES! S’pore’s in deep recession..
Wake up, CORPORATE PROFITS! S’pore’s in deep recession

Moi: Wah, are you Raymond Lim’s behind the scene adviser?
2. Frankly, I don’t think he can argue as well
Moi: Actually, ERP can be dynamic: in the same way that it’s able to measure the number of miles travelled per hour and then calculate if a particular section of the road or area has heavy traffic… .. if not perfect now, get the systems engineers to work on it…
2. Of course we can try to develop the most equitable, state of the art ERP system (like pegging charges to income of driver/owner, age, degree of urgency of usage, type of vehicle, market value …) but at what price. And who do u think will ultimately pay for it…

Moi: If we can slay sacred cows and suspend our most cherished beliefs, eg reserves, work fare etc, we can surely as a goodwill if not feel good gesture, suspend some of the ERP charges for a Saturday…cost equalisation is a long term thing; if we stick rigidly to the long term while there’s a fire, we wld surely be burn to death; it’s like being in a theatre: the ideal is to let the old (pple like me, say it be4 u say it, ok), infirm and young to get out first.. does it mean the able bodied near the door are to be stopped fm getting out first, to fulfill the ideal? That is not being sensible..
 2. Of course we must be prepared to slay sacred cows if and when warranted, if within our means and without compromising further measures. But surely, to facilitate an old lady who decides she cannot wait for another time, another day to do her shopping at Central Mall specifically….

Moi: Yes, since u have suggested those other cuts, i wld be happy to see them, hehe!


1. I hope your letter gets a bigger audience – well written and should get into the ST Forum! Agree with you on every point!  With this climate, its ridiculous!

2. While most of us understand the rationale behind ERP, I cannot understand why LTA needs to impose $2 ERP for entry into North Bridge Road area on Saturday and $1.00 for travelling along PIE (Eunous gantry) at 7.00am! Good feedback. I hope LTA read it. 

3. Should direct this article to the Mininster of Transport or even the PMO

Moi to 1, 2 n 3: Nah, friends, I think we should get over our hang-up of hoping to elicit official response by writing to ST Forum. Because everyone feels they will only get a reply when they write to the newspapers, it becomes self-fulfilling, and the Govt pays attention only when grouses appear in the ST.

It’s time frens for us to break free from that mindset and hence the ST’s “power” since we do have alternative channels for bringing legitimate concerns to the powers that are. And one channel is the Internet; another the viral effect of email dissemination. Let’s use them..

4. I agree; they have got it all wrong on Saturday. The roads are so empty and yet they charge, right up to the evenings

5. I know your feeling all too well because I recently sent Betty Khoo to see a friend at the Merchant Court Hotel, paid an ERP fee to get there, and then got zapped with another $2 charge when I exited.
But having been in the car business (and reporting about the car business) for almost my entire working life, I can see logic in the ERP at a macro level.
It is at the micro and operational level that civil servants fail badly. The gantry you are complaining about was erected to stop cross-town traffic during weekdays, which I feel was a valid reason.. However, after setting the automatic timer on the charges, nobody bothered to monitor the situation and fine-tune it to actual conditions.

6. Please give my warmenst regards to your Mum. She is very sharp even at 85. I would have “fone” in the mind well before that.

You are right about the ERP on Saturdays. I believe the retailers had screamed about this but was like water off a duck’s back ….. during the good times.

  7. yup there’s *danger * in z zone—hahaha 

there was a time when u got out of the PELU place , wich u might tink is in z cbd until u wanna go to funan centre n u gotta pay again

i wish smone, mayb dose guys at gothere.sg, can map out these danger zones..

8. Thank you for bringing up.  I have been suffering in silence.  The charges can be within a short distance. Crazy…

9. Lay on, McDuff!
Moi: Wow, when an ex-MP can give such encouragement, I shall “drive” on, thru another ERP. For those not acquainted with the play, Macbeth, here is the following line: “And damn’d be him that first cries, ‘Hold, enough!'”
The words, meaning “go for it, Macduff, let’s fight to the death!”, were spoken by Macbeth before Macduff killed him in combat. Hopefully, my ex-MP friend isn’t making any predictions for himself or those wanting a less onerous ERP regime on Saturdays.

The score so far is two for the ERP and 9 against (or 10 including moi; mayb even 11 after including my Internet “friend” Blur) ERP’s Saturday and multiple restricted zone within a zone charges. No guessing what the overwhelming majority thinks!