SPEECH ON THE OCCASION OF THE TWO HOUSING MOTIONS

I had the opportunity to speak on the occasion of the debate on 2 housing motions standing in the name of hon NCMP Mr Leong and the Minister for National Development in the House. In my speech, I explained why I preferred the second motion. In particular, I felt it important that the Government continue with its approach of giving more help to those have less as well as ensuring that we keep the interests of future generations of Singaporeans in mind. I also defended the Government’s VERS against the hon Member Mr Leong’s characterisation of it. My speech may be accessed through the link below.

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Mr Murali Pillai (Bukit Batok): Mr Speaker, Sir, I have the invidious task of going after Mr Sitoh Yih Pin, I do not think I can match his energy, even though he is 60 years old and I am born five years later. Please allow me to first deal with the Motion in the name of the hon Non-constituency Member of Parliament Mr Leong Mun Wai and to contrast it with that standing in the name of the Minister for National Development.

On the first Motion, I have no quarrel with the need for this House to review public housing per se, to ensure that public housing is kept affordable, accessible and inclusive for every Singaporean of each generation. Hon Member Mr Leong suggested that the second Motion precludes this review notion. I do not think that is the intent. In fact, Prime Minister Lee Hsien Loong himself committed in this House that all public policies will be reviewed. But he also said that the values that the PAP Government stands for, that remains firm. And the values embedded in this Motion, about providing our Singaporeans with affordable and accessible housing, taking care of the interest of the current and future generations of Singapore — those values, as far as I am concerned, are immutable.

I strongly reject the insidious premise of the first Motion; that the review is required “in order” to deliver affordable and accessible housing, which is to say that this Government is not doing so now for the majority of Singaporeans.

Respectfully, there is no basis for this allegation. I will show why this first Motion rings hollow and sounds naive. Today, as hon Members before me have said, Singapore has a very high rate of home ownership of 90%. This makes Singapore as having the highest rate of homeownership in the world. In comparison, close to 70% of European Union residents own their homes. In Switzerland, it is about 39%, in the UK and US, it is about 65% respectively.

The United Nations (UN)-Habitat issues publications to provide reliable and independent documentation of housing programmes across the world. In its 2020 report on Singapore, the authors made the following points: (a) more than 80% of Singapore residents own and live in public housing provided by HDB; (b) this addressed the housing unaffordability and accessibility problem that we encountered in the 1960s.

Not only that, the quality of public housing in Singapore is high. The hon Nominated Member of Parliament Mr Cheng Hsing Yao spoke eloquently about this and the factors that have contributed to this. It is embedded with various upgrading programmes, at a cost that is borne largely by public funds. There is supportive infrastructure and amenities too like MRT stations, schools, shopping centres, swimming pools, sporting stadia and other facilities.

How does this compare with other countries? We need only ask the well-travelled Singaporeans amongst us. The fair minded will say that we compare very favourably and I fully agree with the hon Nominated Member of Parliament Mr Cheng that Singapore is one of the most liveable countries in the world.

The UN-Habitat report is from a reputable international organisation that does not have to humour Singapore. What the hon Non-constituency Members of Parliament have suggested in their Motion is at variance with the report.

Now let me outline the difference between the first Motion and the second Motion. The first states aspirations without cost — hence it is naive. The second requires pain and choice. The first speaks as if everyone is entitled, the second requires us to respect the differences in society.

Let me put this more plainly — the second Motion bears the signature of two key components of the PAP Government — socialism and long-term planning. First, it requires that the Government balances the different interests within the current generation, showing us that there are contestations among different groups even today. In this, the Government’s philosophy has been socialist — that the least among us must have the most.

Second, the Motion requires us to make a difficult political choice — to be fair, not just to the citizens of today, but to those of tomorrow. This is difficult because we must resist the political temptation to pander to the voters of today who decide based on the tangible benefits which they can see and experience, rather than any notions of fairness to people to whom they owe nothing — the citizens of tomorrow.

And yet, this PAP Government is a strange creature that feels this debt, and in housing, as in so many other policies, including most recently, climate change adaptation, it has committed itself to the long-term.

On housing affordability, it may be useful to bear in mind how Singapore compares with the OECD countries. An average household in the lowest quintile of an OECD country spends 37% of the household income on housing. For the middle-income households, this translates to 31%. In fact, they spend most of their money on housing as compared to other essentials such as food and clothing, education and health.

Let us compare this to Singapore. The hon Minister had recently explained that the Government provides subsidies and grants to allow the vast majority of Singaporeans to purchase homes which are about five times their annual incomes and he also mentions that this compares very favourably to cities like London, Los Angeles, Sydney and of course, Hong Kong too.

The Progress Singapore Party (PSP) Members of Parliament dispute this. They feel that the servicing of the mortgages through the CPF presents a cost, even though it may not be accompanied with cash payment for most of the Singaporeans. Now, I want to highlight that you can only use the Ordinary Account of the CPF to fund housing instalments. The Special Account is preserved, the Retirement Account is preserved. At the end of the day, what is the PSP referring to as cost? This is really our retirement. So, when the people, the residents pay through CPF and when they sell their house, they get a refund, it is really to secure their retirement. Now, if this is not a good idea, then what is PSP’s proposal to take care of the retirement needs of such people?

Indeed, in the 2022 Urban Land Institute Asia Pacific Home Attainability Index, Singapore’s public housing was ranked as the most affordable. This speaks volumes.

I do recognise that there are fellow Singaporeans who feel that housing has become very expensive and out of their reach. For example, one third of the cases in my Meet-the People Sessions now relate to housing matters — and quite a few of them are young people who are on the queue for flats, just like what Mr Sitoh Yih Pin had said.

Here, I want to acknowledge that they are anxious because the wait has been longer than expected for their flats and with rents being so expensive, the pain of the wait is very real. It is difficult, but useful, for us to distinguish the problem of a delay in getting a flat with the problem of affordability. The comparison I gave just now, as well as the fact that many Singaporeans can service their mortgages through CPF alone speaks volumes.

On the problem of delay, as may be recalled, building across the world was affected by the pandemic and Singapore is no exception. The HDB, as we heard from the hon Minister, is dealing with the problem decisively by building 100,000 units between 2021 and 2025, and that, I understand, is the forecast of the demand. The hon Member Ms Hazel Poa has suggested ramping it up to the numbers we saw in the 1980s, but is that a wise idea? I cannot put it better than what Mr Sitoh had said. Be careful of what you wish for, because if you were to do it wrongly, then the sellers will get upset. Then we will get back to Parliament and somebody will be making arguments on behalf of the sellers. So, it has to be a very calibrated approach to make sure that you build in accordance to what the market can absorb, at the same time, deal with the aspirations of Singaporeans. It is a balancing act.

Let me give you a comparison. In Hong Kong, it was announced that they are building 30,000 temporary public housing units over a five-year period. This is a temporary solution and it seems to me that they have a more difficult housing problem. The current waiting time in Hong Kong was reported to be 5.6 years. With this temporary solution, the government intends to cut it down to 4.5 years. In Singapore, the median waiting time is between four and 4.5 years and is expected to come down to below three years by 2024.

The hon Member Ms Poa had suggested the waiting time should also include time of an unsuccessful applicant, but as what the hon Minister had said, there are several ways for one to acquire a BTO flat. You can apply for an SBF flat, you can apply for a BTO flat in a mature estate and you can apply for a BTO flat in a non-mature estate. So, these are different pathways. To just blanketly measure waiting time for all these cases together does not make sense, but qualitatively, we are already measuring it, because for those in a non-mature estate who have priority, the Minister already said they will get their flat within three tries.

The Singapore ownership figures I highlighted does not, however, speak for the 3% in our population of Singapore residents who cannot afford to own their homes. For them, they are provided with public rental housing. This compares favourably with a number of other countries. In Hong Kong, it is 29% for social housing units; for Netherlands, it is 32%.

Monthly rents payable by Singaporeans depends on their household income. At the lowest range, for those who earn $800 or less and have not owned subsidised housing before, it is between $26 and $33 per month. Although global comparisons are available, it makes the most sense to compare such rents against the next available option in Singapore — the private market. Hon Members will not be surprised to hear that such rooms go for 10 to 20 times more in the private market, even on a shared basis.

Not only that, I should also mention that our Government has specific policies to support households in rental flats to own homes. In the past decade alone, 7,800 rental households have progressed to home ownership. That is heartwarming and laudable!

I hope I have shown the underlying socialist bent in our public housing policy. During the chaos of the 1960s, many Singaporeans lived in squalor and only 9% of our population were in public housing. Then-Prime Minister Lee Kuan Yew envisioned a Singapore where all Singaporeans will own their own flats so that they will have tangible stakes in our nation.

This is the thing about public housing. Housing is not just for housing’s sake. Housing can drive progress in connected areas such as better education outcomes from our children who live in better conditions, higher productivity and economic growth. With economic growth and generation of surpluses, we can then invest more in public housing. That was the virtuous circle that Mr Lee and his team built.

That may have sounded like a pipedream then. But, almost 60 years later, it is clear we have made substantial progress in achieving this vision. Singapore has been transformed and Singaporeans’ fortunes have changed for the better. The hon Member Mr Leong said that historically, units were sold without HDB accounting for land cost. I dispute that, because when I looked at the financial statements of HDB, they have calculated that since 1960, about $40 billion plus was owed by HDB in relation to the land cost of the land upon which public housing was provided. It is monitored and it is certainly in the books.

Our Government continues to invest heavily in public housing programmes, building affordable and high quality public housing estates. At the same time, the investments and policies are carefully calibrated to ensure that the interests of future generations of Singaporeans are protected too. Much credit for this belongs to the past and present officers of HDB who were encouraged to think boldly and creatively to deliver on its mission of providing affordable and high-quality public housing units to generations of Singaporeans who have ever higher expectations and aspirations. We owe them a huge debt of thanks.

These officers and those in the Ministry of Finance too, think of Singapore as an immortal being playing an infinite game. This means planning for the very long time and, as an economist said, “We will all be dead but our children and grandchildren and everyone we care for still live on.”

With respect, having regard to what has happened over the past six decades, for the hon Non-Constituency Members of Parliament to insinuate through this Motion that public housing in Singapore is neither affordable nor accessible is rather rich.

This may be an opportune time for me to deal with the point that hon Member Leong Mun Wai made in his speech in this House about Voluntary Early Redevelopment Scheme (VERS).

He said VERS is not a viable solution to the lease decay problem. This was because Singaporeans are expecting VERS to be like Selective En bloc Redevelopment Scheme (SERS) for all, meaning there is an expectation for residents to be paid.

With respect, I question the hon Non-Constituency Member of Parliament’s assumption that Singaporeans are expecting VERS to be like SERS for all. He is, respectfully, playing a dangerous game.

It may be useful to understand the factual context clearly. A person buying a BTO flat, say, in his early thirties, will get a 99-year lease. In such a case, there will be more than sufficient remainder of the lease at the point of his retirement in his sixties or seventies.

This asset can be monetised through programmes such as the Silver Housing Bonus scheme or Lease Buyback Scheme. All these can provide them with decent financial support.

The hon Member Leong Mun Wai appears to be adverse to such monetisation. What then would be the implications? How then would you support some people in these situations who want to enhance their retirement expenditure? What is PSP’s proposal to that?

For those who have purchased resale flats, they would know the remaining length of the leaseholds beforehand. This would allow them to make informed choices before purchasing the resale flats.

For example, they may decide to purchase resale flats that may have substantial remainders that will allow them to monetise the assets like owners of BTO flats or they can decide to buy leaseholds which are long enough for them to stay in their homes until the end of their lives, which will naturally mean that the opportunity to monetise their assets will not be as good.

Whatever the reasons, they know when the leaseholds apart will expire.

Against this context, it seems to me unreasonable for a person who purchase a resale flat, knowing full well when the leasehold expires, to then expect to get compensation that is substantially more than the value of the tail end of the leasehold under VERS.

It may be useful to remember what the Prime Minister said in his 2018 National Day Rally speech. He specifically made the point that there was not much financial upside to VERS as compared to SERS.

Given what the Prime Minister had said, I struggle to understand why the hon Non-Constituency Member of Parliament Leong Mun Wai contends that Singaporeans are expecting VERS to be like SERS for all. What he is in fact asking Singaporeans is to dream an impossible dream and then ask the Government to make it true.

If we were kind, we would say he is being naive. But if we were honest, we would say something else.

I seek Mr Leong Mun Wai’s permission to engage in a thought experiment to better understand the proposal that PSP made in its manifesto for General Elections 2020 — compulsory SERS for all old flats. That was the alternative to the PAP’s VERS.

If we were to go back to what the Prime Minister has suggested or rather dealt with in his 2018 speech, he referred to three estates — Bedok, Ang Mo Kio and Marine Parade. He mentioned that all of them were built around the same time, between the seventies and the early eighties. I did a calculation. They probably have about at least 117,000 units.

If all these flats were to be SERS-ed, what would be the compensation that PSP proposes to pay, given the position that Mr Leong Mun Wai took in his Adjournment Motion?

He would very well know the compensation that Ang Mo Kio SERS units get. As a median, it is about $411,000 per unit. If you were to just multiply the units, I get a figure of at least $40 billion. As I understand, that is the market rate. What is being suggested is a higher rate so that there is some cash from VERS — just like SERS.

So, what would then be the amount? Just to give you some comparison, our spend for our annual budget is about $100 billion. This is coming in at $40-plus billion just at market rate. I would be grateful for Mr Leong Mun Wai’s elucidation of the PSP’s proposal that there should be compulsory SERS for all flats.

I now turn to the Motion standing in the name of the Minister for National Development.

I support the Motion for its underlying philosophy of socialism and its long-term policy orientation. I would like to contribute several suggestions to ensure that the less fortunate amongst us will continue to be well looked after.

First, as I alluded to earlier, the importance of ensuring that our public housing scheme provides all Singaporeans with access to affordable homes extends to well beyond the specific purpose of providing roofs over our heads.

One area that I am concerned about is how our housing policy is connected with the development of human capital.

Singapore has done quite well in this area. In the most recent World Bank Human Capital Index, Singapore ranks as the best country in the world in human capital development. A child born today in Singapore will be 88% as productive when she grows up. I have no doubt that this percentage is contributed in part because of our successful housing policy. This is an encouraging statistic but more can be done to develop our children in stable and conducive housing environments that will allow them to be the best they can be.

From time to time, I come across cases involving single mothers, with their children in tow, asking for urgent housing assistance because they have consented to the division of matrimonial properties in divorce proceedings, which in my respectful view, does not adequately take care of the needs of their children —

Mr Speaker: Mr Murali, you have slightly over a minute left.

Mr Murali Pillai: Alright, Sir. I will just make this suggestion and I will go to my conclusion.

This presents a problem for HDB because as a matter of policy, it does not directly allocate homes to persons to be fair to all Singaporeans in the circumstances.

So, what I am suggesting, Sir, is for a system to be implemented, which allows HDB to provide inputs upstream during the divorce proceedings so that this can be taken into consideration by the Court to make the just and equitable decision with regard to the needs of the child.

I will now conclude, Sir.

I chose the second Motion over the first not because of any partisan politics but because I prefer the hard truths over soft lies. There is no point in making vainglorious promises without a way to deliver. There is no courage in forsaking the future for the present. These are the two fatal flaws of the first Motion.

The second Motion commits us to providing affordable housing to Singaporeans today in a way that bends the laws of the market to give the most to those who have the least. This is socialism in action. It also commits us to an ideal beyond the political — that all of us in this House owe a duty as much to the Singaporeans of tomorrow as those of today.

The second Motion asks a lot of us. It is by no means an easier choice but I believe it is the right one.