Wednesday, 3 March 2010

Yet More Government Ridiculousness

The bottomline argument on this 1k-own-a-flat thing:

Tharman: A 2-room flat costing $100,000 can be owned on a $1,000/month income by attaining a combined grant of AHG + SHG that works out to be (up to) $60,000, thereby allowing the home-owner to service a 30-year loan of about $40,000 by paying $161 every month (maybe from CPF?).

Almost everyone else: The AHG and SHG are awarded only if a person with low income of $1000 is married, which implies a family. Assuming a family of two parents and one child (which is less than ideal according to our state planners) that eats $2 chicken rice for every meal, they will incur 3 x 3 x 30 x 2 = $540 cost on food. Taking transport into account, they may spend another $180 (which is a very conservative estimate). Even if the family does and buys nothing else and pays off the 30-year loan via CPF, the family has only a savings rate of $280 per month which, realistically, is very hard to get by with (considering inflation rates, illness, PUB bills, etc).

Once again the anger comes from a rather obvious disconnect between what the people believe they can get by with and what the government thinks the people should get by with, topped off with very poor public relations. At a more implicit level, another issue arises - is owning a house not simultaneously important as having savings? Most people would agree that the two are not independent issues; we don't think of owning a flat if we can't save, and at the same time if we do not have a place to live how are we supposed to start going about making ends meet? Yet Tharman's assertion implies that this is possible.

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