Committee of Supply Debate: Ministry of National Development
Hot market tamed, housing more affordable, says Khaw Boon Wan
S'poreans can get flat 'within budget'; plans afoot to help different segments
By Janice Heng, The Straits Times, 11 Mar 2015
PUBLIC flats have become more affordable in recent years, with many Singaporeans able to buy a home within their budget, said Minister for National Development Khaw Boon Wan.
To ensure that this remains the case for future generations, Mr Khaw said that the Government remains committed to quality housing that is within the reach of most Singaporeans.
"Every generation will be able to afford their own HDB homes. This is our promise," he said in the parliamentary debate on his ministry's budget yesterday.
Stressing the importance of home ownership, Mr Khaw said his ministry has achieved results in taming the red hot housing market. This was a hot topic in the 2011 General Election.
Resale housing prices have risen by about 37 per cent since their low in 2009, while new flat prices rose by just 15 per cent without grants. With grants, new flat prices rose by just 6 per cent.
"Measured against the (median) household income increase of 38 per cent, we can see that public housing affordability has substantially improved since 2011," he said.
As for whether cooling measures will be lifted, Mr Khaw said that the property market is in transition and that the Government "should not overkill".
Mr Khaw also cited a recent Housing Board survey which showed that people were willing to pay up to $300,000 for a new three-room flat, and between $300,000 and $500,000 for a four- or five-roomer.
In comparison, 90 per cent of new three-roomers last year were sold at below $250,000.
For new four-roomers, 81 per cent were sold below $350,000, and 89 per cent of new five-roomers were sold below $450,000.
"These are actual transactions. They paint a comforting picture of young Singaporeans being able to get their first BTO (Build- To-Order) flat, well within their expected budget," said Mr Khaw.
Home ownership has also been possible for the lower-income group, added Mr Khaw.
From March 2012 to July last year, 1,491 families with household incomes below $1,000 had booked two-room or larger BTO flats.
Yesterday, 24 MPs rose to ask about issues such as the affordability of housing. Ms Lee Bee Wah (Nee Soon GRC) was one of three MPs calling for the $10,000 income cap to be raised, while Mr Seah Kian Peng (Marine Parade GRC) and Mr Gan Thiam Poh (Pasir Ris-Punggol GRC) wanted flats with shorter leases for the needy.
Mr Khaw outlined plans to help different segments, from singles to public rental tenants.
Starting from May, half of all new two-room flats in non-mature estates will be set aside for singles, up from 30 per cent now.
The Government will look for ways to help non-first-timers who want resale flats near their parents, as well as public rental tenants who aim to own a home.
It is also prepared to raise the $10,000 income ceiling for public flats, as incomes rise, he said.
Khaw seeks 'soft landing' for housing market
MPs ask for ABSD adjustment for S'poreans to curb risky foreign property buys and excessive price corrections
By Lee Meixian, The Business Times, 11 Mar 2015
NATIONAL Development Minister Khaw Boon Wan is aiming for a "soft landing" for the housing market as "a market crash benefits no one", he said at Tuesday's Committee of Supply debate.
This was in reply to questions in parliament on the impact of government policies on the property market. The government was asked whether it would consider adjusting the Additional Buyer's Stamp Duty (ABSD) for Singaporean buyers when it is ready to unwind the cooling measures.
West Coast GRC Member of Parliament Foo Mee Har also asked at which point property cooling measures would be eased, in order to cushion any excessive price corrections.
While Mr Khaw did not directly answer the questions on the ABSD and the timing of policy changes, he agreed that the government "should not go into overdrive, and unwittingly undermine the retirement plan of our seniors who look to their housing assets for monetisation".
Earlier, Ms Foo had cautioned of the need to ensure that the "well intended" cooling measures are not overdone. "Given the huge new housing supply yet to hit the market and the impending rise of interest rates, we must be cautious that this downward price trend does not inadvertently get into a momentum and reach an unintended pace.
"Some industry players have told me that this is easier said than done. Their concern is that once a downward momentum begins, the downward pressure on prices may not be so easy to control, as we have seen in previous property cycles."
Lee Bee Wah (Nee Soon GRC) said that while the ABSD started out as an initiative to discourage unnecessary ownership of multiple properties, it has led to Singaporeans "who have spare cash" investing in riskier foreign properties.
"Coupled with low initial downpayments, and fewer restrictions in foreign property, Singaporeans are enticed to look abroad. This not only does little benefit to our economy, but puts our people at risk.
"I feel we should keep the Total Debt Servicing Ratio (TDSR) to encourage prudence in finance spending, but remove the ABSD for Singaporeans so they can invest in properties in Singapore."
MPs also noted that the cooled property market has made it difficult for retirees looking to sell their flats to right-size in order to fund their retirement. Those attempting to sell off their existing flat or private property within the six-month grace period before buying a resale flat are also struggling.
Since January 2013, Singapore citizens who already own a home have to pay an ABSD of 7 per cent on the purchase of a second residential property; this percentage climbs to 10 per cent on the third and subsequent property. This is seen as a measure to slow property investment and speculation.
Under the TDSR framework, borrowers' total monthly debt repayments (including car loans and credit cards) cannot exceed 60 per cent of their gross monthly income. This is a permanent measure to encourage financial prudence.
In his speech, Mr Khaw said: "Indeed, we should not overkill. The property market is in transition and it is a time that calls for vigilance and nimbleness. We will be careful."
He went on to share data to show how his ministry's efforts in taming the housing market has yielded results. HDB resale prices have risen from their previous trough in 2005. From 2005 to 2014, resale flat prices have gone up 87 per cent, while household income has gone up by 72 per cent.
Although Singapore is not yet at the 2005 affordability level, at least the affordability gap has narrowed from the 2011-2013 property market boom.
He added too that "sobering news" about the "acute" housing situations in cities such as London and Hong Kong put Singapore's "more benign situation" into better perspective.
During Tuesday's Committee of Supply debate, Mr Khaw also thanked MPs for their ideas on how to adjust the Lease Buyback Scheme. The new Lease Buyback Scheme, which is extended to four-room flats, takes effect in April.
He also said that he would mull proposals to introduce shorter lease tenure in some build-to-order projects to cater to different groups with varying needs. He will also consider raising the S$10,000 HDB income ceiling, after noting that couples are marrying later and income levels are rising.
More new flats to be set aside for singles
By Yeo Sam Jo, The Straits Times, 11 Mar 2015
SINGLES will soon have more chances at securing new homes.
Starting from May, half of the new two-room flats launched in non-mature estates will be set aside for them. This is up from the current 30 per cent.
This will provide greater assurance to singles and reduce their backlog of pent-up demand for flats, said Minister for National Development Khaw Boon Wan yesterday.
"While marriage and parenthood will remain at the core of our housing policy, I recognise that we are more diverse today as a society, with many Singaporeans remaining single," he said.
"Although most live comfortably with their extended families, many desire the privacy and stability of home ownership."
During the debate on the National Development Ministry's budget, Associate Professor Muhammad Faishal Ibrahim (Nee Soon GRC) noted that as many as 9,300 singles have been unsuccessful in their flat applications.
He asked if the ministry would consider increasing the flat quota or chances for singles.
Since July 2013, first-timer singles aged 35 and above and earning up to $5,000 a month have been allowed to buy two-room Build-to-Order (BTO) flats in non-mature estates. More than 18,000 singles have applied for flats so far, and half the number have been able to book one.
Two-room flats have proven popular and are often heavily oversubscribed among singles during BTO exercises.
In last November's exercise, for instance, close to 33 singles vied for every two-room flat launched in Sengkang.
About 5,000 such units were launched last year in response to the high demand, up from 2,600 in 2013. About 4,000 two-room flats will also be launched this year.
Mr Lim Sio Poh, 46, is one bachelor who successfully applied for a two-room BTO flat in Bukit Panjang last year.
The general worker in a recycling company has always lived with his parents in their four-room Yishun flat, but decided that he wanted his own place.
"It's a good opportunity - the flat is cheaper than resale flats and it's new. It's also a kind of investment for me," said Mr Lim.
After receiving about $28,000 in housing grants, his new flat cost him about $120,000. He plans to move into the Senja Road unit in the next two months.
Other singles are eyeing the resale market instead.
"I'd rather go for a resale flat that's three-room or bigger. There's more space and I can get the flat immediately," said property agent Alvin Ten, 34.
Post by Housing & Development Board.
MND looking into more flexible lease tenures for two-room flats
By Laura Elizabeth Philomin, TODAY, 10 Mar 2015
More flexible lease tenures and lease terms, which are currently only available under the Studio Apartment Scheme, could soon be offered for two-room flats.
National Development Minister Khaw Boon Wan said his ministry is looking into this idea, which several Members of Parliament have called for, to meet the needs of different groups.
Studio apartments have similar layouts and sizes to two-room flats but are cheaper because they come with shorter leases. This flat type was introduced in 1998 to provide options for seniors who wanted to right-size, as the Housing and Development Board (HDB) had stopped building two-room flats then.
Now that the HDB is building two-room flats again, Mr Khaw said they could consider the suggestion of shorter leases to “rationalise the studio apartment and two-room flat schemes”. “For example, if we have a new two-room flat scheme, offering varying lease tenure and lease terms, it may allow us to cater to different groups with varying needs, and in the process unify both schemes,” he added.
Mr Seah Kian Peng (Marine Parade GRC) had suggested such a move to give Singaporeans at different stages of life the option of owning a flat at lower prices.
Speaking during his ministry’s Committee of Supply debate today (March 10), Mr Khaw said: “MND and HDB are working on this, and will also gather inputs from the public.”
Property analysts TODAY spoke to suggested the Studio Apartment Scheme be scrapped, in exchange for greater lease flexibility for two-room flats.
The re-introduction of two-room Build-to-Order flats calls into question the necessity for studio apartments, said SLP International Property Consultants executive director of research and consultancy Nicholas Mak.
Elderly-friendly features in studio apartments, such as wider doorways and bathroom handrails, can be easily incorporated in new two–room flats, he added.
Mr Chris Koh, Director of Chris International, said some senior citizens are concerned about their fates if they outlive the current 30-year lease under the Studio Apartment Scheme, with others having the desire to leave the flat for their children.
“I would increase the lease to 60 years, giving these elderly people the assurance that they will still have their flat and allow the flat to also be passed down to the next generation,” suggested Mr Koh. “Because it is a 60-year lease, you can adjust the price (to) make it lower than that of a 99-year lease two-room flat.”
Century 21 chief executive Ku Swee Yong, however, pointed out that flexibility is provided under the Lease Buyback Scheme — elderly residents can choose lease tenures that best suit their needs and sell the rest back to HDB.
To cater to the group of seniors who are worried about the financial burden of buying a flat, he suggested: “Why not charge them a monthly lease for two-room units ... so it becomes a rental flat?”
Municipal Services Office ropes in more agencies
By Rachel Au-Yong, The Straits Times, 11 Mar 2015
THE coordinating office for municipal issues will link up with three more government agencies, as well as two town councils, to improve management of problems on the ground.
From next month, the Municipal Services Office (MSO) will work with the Building Construction Authority (BCA), the Singapore Land Authority (SLA) and the Urban Redevelopment Authority (URA) to handle issues associated with construction work and illegal parking.
This should accelerate the shift from an "agency-based approach to an issues-based one", said Minister in the Prime Minister's Office Grace Fu, who heads the MSO, in Parliament yesterday.
"It's not an easy move. It means breaking down silos amongst agencies, working closely with one another, and arriving at a consensus on how to deal with feedback."
The MSO was set up last October to address what Prime Minister Lee Hsien Loong described as a lack of inter-agency coordination in municipal matters. He cited the example of a walkway in Bukit Gombak - the site of a now infamous discarded fishball stick - that was not cleaned due to a lack of clarity on which agency was responsible.
It currently works with eight agencies, including the Housing Board and the police. Collectively, they handle around 42,000 municipal cases every month.
But Ms Fu noted that government agencies are not the only bodies which handle municipal services.
The MSO's challenges involve getting agencies and town councils to acknowledge ownership of the cases referred to them, provide progress updates, and follow MSO-issued guidelines on how to resolve cases that involve multiple entities, she said.
Responding to MPs' suggestions for the office to coordinate with town councils - which maintain and clean common areas in HDB estates - Ms Fu said that the MSO has just started trials with Jurong and Holland-Bukit Panjang town councils earlier this month.
"If successful, we will invite all town councils to participate in the working arrangements with MSO, without weakening (their) autonomy and authority in service delivery and in setting their service standards," she said.
Ms Fu also announced that the National Parks Board (NParks) will become the central agency for public greenery maintenance from June.
Currently, different agencies handle greenery-related issues depending on who owns the land. As such, they end up engaging different contractors to maintain the greenery, even that in the same vicinity.
"This is not ideal. We can do better," said Ms Fu. As such, NParks will take over grass-cutting works from SLA, national water agency PUB and HDB.
$450m to boost construction productivity
By Janice Heng, The Straits Times, 11 Mar 2015
A NEW three-year plan to boost the construction industry's productivity will focus on more prefabrication and further enhancing the skills of workers.
To support this Second Construction Productivity Roadmap, the Government is pumping in a fresh $450 million, said Senior Minister of State for National Development Lee Yi Shyan yesterday.
The new road map builds on the first in 2010, which focused on manpower, machinery and new building methods. The results from the first five-year plan, which ends this May, have been encouraging, said Mr Lee.
Site productivity - the floor area completed per man-day - has risen by 1.4 per cent each year since 2010.
"This is encouraging but we can certainly do more," he said.
Hence, the second road map will focus on building as many parts as possible in off-site factories.
These prefabricated parts - from walls to entire housing units - are then assembled on site, saving time and manpower on the ground.
Another aim is to build a skilled workforce. This is not just at the level of construction site workers, but further upstream at the design stage.
More funding will be provided for these efforts. The 2010 road map was accompanied by the first tranche of the Construction Productivity and Capability Fund, initially $250 million but later raised to $335 million.
The second tranche of $450 million, for June this year to May 2018, is expected to benefit about 7,000 firms.
The Building and Construction Authority said yesterday that about 70 per cent of the new sum will support technology adoption. From June, the funding limit for the Productivity Innovation Projects scheme will double to $10 million, for projects that improve productivity by at least 20 per cent.
The Workforce Training and Upgrading scheme will give subsidies of up to 90 per cent for locals in the industry. There will also be a new programme for Institute of Technical Education graduates and new diploma and postgraduate sponsorships.
Committee of Supply Debate: Prime Minister's Office
Better prospects for non-grads in civil service
Some will be hired under the same scheme as degree holders from Aug 1
By Charissa Yong and Nur Asyiqin Mohamad Salleh, The Straits Times, 11 Mar 2015
FROM Aug 1, non-degree holders joining the civil service to perform management support roles will be hired under the same scheme as most university graduates.
The move will close the gap in career prospects between university graduates and non-graduates, who currently come under different schemes and have different starting salaries.
With the extension of the Management Executive Scheme to include them, non-degree holders will start at a lower grade, with lower pay, than graduates.
But they will have greater opportunities to advance, and when they reach a specified grade, they will be assessed for performance and potential in the same way as their graduate colleagues at the same level.
The change is the result of a Public Service Division (PSD) study, announced last August, on ways to merge its main graduate and non-graduate schemes, and give officers a chance to progress on the same career track.
In announcing the change yesterday, Deputy Prime Minister Teo Chee Hean said: "Both degree holders and non-degree holders will be recruited on, and progress along, the extended Management Executive Scheme."
He added: "All officers in the same grade will be assessed for performance and potential in the same way."
Mr Teo, the minister-in-charge of the civil service, was speaking during the debate on the budget of the Prime Minister's Office.
Last night, PSD said in a statement that 5,700 officers on the existing Management Support Scheme can apply to transfer to the new scheme.
Currently, degree holders are mostly employed under the Management Executive Scheme at a starting pay of up to $3,260 a month, according to the Careers@Gov website. Diploma holders and those with A-level, higher Nitec or Nitec qualifications join the Management Support Scheme. Their salary starts from between $1,230 and $1,850 a month.
The new extended scheme was prompted by the Government's aim to do more to support the aspirations of non-graduates, following a call from a committee reviewing the career prospects of polytechnic and Institute of Technical Education graduates.
Mr Teo said yesterday the civil service is committed to helping its officers acquire deeper skills for their jobs, in line with the upcoming SkillsFuture initiative.
He also said, in his reply to Mr Inderjit Singh (Ang Mo Kio GRC), that the civil service looks beyond academic qualifications when recruiting officers. It also considers such factors as character, commitment to public service and interpersonal skills.
PSD social media officer Kaye Zhao, 32, welcomed the new scheme that gives management support officers a chance to contribute more at work.
Mr Yeo Chun Fing, general secretary of the Amalgamated Union of Public Employees, said the change "gives hope to non-graduates, who in the past were perceived to be stuck on a different scheme".
"Now, if you're good, you'll have a fair chance to progress," he added.
Human resource analyst Martin Gabriel, of local firm HRmatters21, said the civil service is "actually playing catch-up" to the private sector, where academic qualifications are less important than work performance.
But the Government's move is important as it sets the tone for all bosses to do the same, he said.
Pay rise for lower wage civil servants
By Charissa Yong, The Straits Times, 11 Mar 2015
FROM next month, the monthly pay of about 2,200 lower-wage civil servants, such as operations support officers in schools, will go up by $60 to $80.
It will keep their wages competitive, Deputy Prime Minister Teo Chee Hean said, adding that the move is in line with similar increases they received recently.
These Division IV officers - who were typically earning between $1,270 and $1,535 a month last June - had their basic pay raised by $60 to $70 each year in the past three years.
This follows the recommendations of the National Wages Council, noted Mr Teo, who is the minister-in-charge of the civil service.
Taken together with the regular salary adjustments made by the civil service, these lower- wage earners had received pay rises of about $300 to $330 from 2012 to last year.
This amounts to a 25 per cent increase in their monthly wages, over and above their annual increments, he added during yesterday's debate on the new budget for the Prime Minister's Office.
Mr Teo was replying to Mr Ang Hin Kee (Ang Mo Kio GRC), who had asked for an update on what was being done to improve the lot of lower-wage civil servants.
These officers are also offered more training opportunities.
For example, they are given cash under a Training Incentive Scheme to encourage them to upgrade their skills.
And starting from next month, their salary scales will be extended.
This means officers who have hit the ceiling in the existing salary scales can receive further pay increments when they upgrade themselves.
"We remain committed to improving the jobs and skills of our lower-wage civil servants," Mr Teo said, adding that the public service will continue to work closely with unions and make salary adjustments where necessary.
The Amalgamated Union of Public Employees yesterday cheered Mr Teo's announcements on the pay rise for lower-wage officers.
Said its general secretary Yeo Chun Fing: "The salaries of these civil servants are very low, so the built-in wage increases are quite significant for them.
"Every year, it enlarges their pay packet. They can then meet the rising cost of living."
Officer hopes to gain promotion by upgrading
By Charissa Yong, The Straits Times, 11 Mar 2015
MR LIM Teck Seng, 44, is a man with a mission.
The operations support officer at Beatty Secondary School is applying for a spot in a course on office skills at the Institute of Technical Education (ITE).
This would mean night classes after a long day of work for nine months. But the Division IV civil servant, whose highest qualification is from secondary school, thinks the effort will be worth it.
"If I can get this certification, plus a recommendation from my boss, I can eventually be promoted to Grade 1," he said. This is two grades higher than his current grade.
"So I'll do my best. But I must practise my typing as I type very slowly," said Mr Lim, who has worked at the school since 2005.
Yesterday, Deputy Prime Minister and Minister-in-charge of the Civil Service Teo Chee Hean said more training opportunities would be given to lower-wage civil servants to encourage them to upgrade their skills and progress in their careers.
Mr Lim, who has attended workshops on topics such as workplace skills, said his boss has been very supportive of him.
But improving his lot is up to him. "You must always be keen to learn and to help yourself. If not, whatever courses you go for will be in vain," he said.
Lower-wage officers will also get pay rises of $60 to $80 from next month, similar to the increments they have been receiving in the last three years.
Mr Lim, who makes about $1,500 a month, said he would spend the extra money on textbooks for his four children. "Every little bit more helps. The rest I'll save for rainy days."
Benchmark up but no change in ministers' pay
By Rachel Chang, Assistant Political Editor, The Straits Times, 11 Mar 2015
THE salaries of ministers have not gone up in the last three years even though the benchmark they are linked to has risen by around 3 per cent each year, Deputy Prime Minister Teo Chee Hean told Parliament yesterday.
The House had, in 2012, endorsed recommendations from an independent committee to link ministerial salaries to the median income - or the income at the midpoint - of the top 1,000 Singaporean earners, with a 40 per cent discount to reflect the ethos of political service.
Since then, this benchmark has risen in two out of three years, and dropped slightly in one year. Overall, it rose 3 per cent a year, said Mr Teo. "Because the changes in the benchmark have been moderate, we have not adjusted political salaries in these past three years," he added.
If it had been adjusted, a minister at the entry point of "MR4" grade, inclusive of bonuses, should get $1.2 million a year, but the Government has kept it at $1.1 million - the 2012 level, he noted.
The Prime Minister earns $2.2 million and the President earns $1.54 million.
The pay freeze applies as well to every office-holder, including ministers of state and parliamentary secretaries. MPs' allowances, too, have remained unchanged.
Mr Teo reminded the House that in the 2012 debate, the Workers' Party (WP) had agreed with the three key principles the committee used to derive political salaries.
They were that salaries must be competitive so that people of the right calibre are not deterred from entering politics; that the ethos of political service entails sacrifice and, hence, there should be a discount in the pay formula; and that there should be a "clean wage" with no hidden perks.
In particular, the WP's agreement that political salaries should be competitive "was a fundamental change from its past proposals", said Mr Teo. "This significant change helped the debate to arrive at areas of convergence."
He added yesterday that the WP's alternative formula of benchmarking ministerial salaries gave rise to a monthly starting salary of about $55,000, which is the same amount as the committee's recommendations.
The WP had proposed benchmarking the MPs' allowance to the starting pay of the "Superscale" grade in the civil service, and to make ministers' salaries a multiple of the MPs' allowance.
In 2012, Parliament also endorsed linking politicians' bonuses to the socio-economic progress of average and lower-income Singaporeans - rather than just the gross domestic product - and doing away with their pensions.
Mr Teo, who was replying to Mr Edwin Tong (Moulmein-Kallang GRC), said that since 2011, "the formula has remained stable and has worked well". "The Committee (to Review Ministerial Salaries) recommended that the salary framework be reviewed every five years. Given that things have been stable, we believe the framework remains valid, and we can continue to adjust salaries within this framework should there be a change in overall salary levels in