WP's housing proposal irresponsible, says Mah
Ask how it is going to pay for the plan in its manifesto, says minister
By Teo Wan Gek
NATIONAL Development Minister Mah Bow Tan yesterday called the Workers' Party (WP) 'irresponsible' for proposing cheaper HDB flats without explaining how it planned to pay for them.
The government subsidy on new HDB flats already adds up to $1 billion a year.
If the WP wants a larger subsidy, does it plan to fund it by cutting government spending in other areas, Mr Mah asked, because 'you can't get something for nothing'.
'Is it going to come from education? From health care? From defence? They didn't say.
'Or if they say it is not going to come from any of this, are they going to raise taxes? Or are they going to dip into the reserves?' he said in his first response to the opposition party's housing proposals contained in its manifesto.
The WP's proposal to peg the prices of new HDB flats to median incomes of households that qualify to buy them, instead of to resale market prices, would also lower the value of Singapore's one million homes, Mr Mah warned.
He called it 'an asset devaluation policy', as opposed to the People's Action Party's asset enhancement policy.
This is because the markets are interlinked. So, a reduction in new HDB flat prices will have an impact on the resale flat market.
'Flat prices will be devalued, they will be depressed,' he said.
'What happens to those people who want to sell, who are in mortgage arrears? It will be negative equity.'
These are some of the implications of the ideas the WP is testing out in its manifesto and which 'they have not thought through', the minister said on the sidelines of a Urban Redevelopment Authority event yesterday.
He also responded to WP chairman Sylvia Lim's comment that the impact on resale flat prices will take some time to filter through the system because new HDB flats are subject to a holding period.
Mr Mah's response: 'That is like saying don't worry, the tsunami is going to hit you, but only in a few hours' time.'
Like other ministers who have spoken on the WP manifesto, Mr Mah urged Singaporeans to ask the opposition party for more comprehensive answers.
As the WP has said it aspires to form the Government, that must mean it also plans to implement the policies it has proposed.
'If they are going to implement these policies, then they better tell Singaporeans what the implications are, what the full repercussions of the policies are rather than just talk about one aspect of it,' he said.
'The manifesto does not talk about where the money is coming from. I think that is irresponsible.'
Mr Mah also said that the WP's intention seems to be to reduce flat prices.
While it has not said by how much, Mr Mah yesterday gave some estimates of the cost of the Government's housing programme, to give a sense of the large sums involved.
The HDB plans to build 22,000 flats this year. Assuming the average cost of a new flat is $300,000, the total bill for this year would be $6.6 billion.
If the WP hopes to reduce flat prices by, say, 20 per cent, that would mean an extra subsidy of $1 billion dollars.
'Where is the WP going to get this extra $1 billion?' he asked.
Mr Mah also rebutted WP council member Gerald Giam's point that the high prices of HDB flats were due to the PAP's asset enhancement policies of the past 20 years.
There is nothing wrong with giving Singaporeans an asset, and even less so in making sure that asset grows in value, said the minister, who has been in charge of housing since 1999.
'I want to say we are proud of the asset enhancement policy. The policy is what has given almost all Singaporeans a home of their own, a home that is also an asset.
'It is an asset that grows in value over time, with the growth of the economy and also with all the upgrading programmes that the Government has put in place,' he said.
[email protected]
Ask how it is going to pay for the plan in its manifesto, says minister
By Teo Wan Gek
NATIONAL Development Minister Mah Bow Tan yesterday called the Workers' Party (WP) 'irresponsible' for proposing cheaper HDB flats without explaining how it planned to pay for them.
The government subsidy on new HDB flats already adds up to $1 billion a year.
If the WP wants a larger subsidy, does it plan to fund it by cutting government spending in other areas, Mr Mah asked, because 'you can't get something for nothing'.
'Is it going to come from education? From health care? From defence? They didn't say.
'Or if they say it is not going to come from any of this, are they going to raise taxes? Or are they going to dip into the reserves?' he said in his first response to the opposition party's housing proposals contained in its manifesto.
The WP's proposal to peg the prices of new HDB flats to median incomes of households that qualify to buy them, instead of to resale market prices, would also lower the value of Singapore's one million homes, Mr Mah warned.
He called it 'an asset devaluation policy', as opposed to the People's Action Party's asset enhancement policy.
This is because the markets are interlinked. So, a reduction in new HDB flat prices will have an impact on the resale flat market.
'Flat prices will be devalued, they will be depressed,' he said.
'What happens to those people who want to sell, who are in mortgage arrears? It will be negative equity.'
These are some of the implications of the ideas the WP is testing out in its manifesto and which 'they have not thought through', the minister said on the sidelines of a Urban Redevelopment Authority event yesterday.
He also responded to WP chairman Sylvia Lim's comment that the impact on resale flat prices will take some time to filter through the system because new HDB flats are subject to a holding period.
Mr Mah's response: 'That is like saying don't worry, the tsunami is going to hit you, but only in a few hours' time.'
Like other ministers who have spoken on the WP manifesto, Mr Mah urged Singaporeans to ask the opposition party for more comprehensive answers.
As the WP has said it aspires to form the Government, that must mean it also plans to implement the policies it has proposed.
'If they are going to implement these policies, then they better tell Singaporeans what the implications are, what the full repercussions of the policies are rather than just talk about one aspect of it,' he said.
'The manifesto does not talk about where the money is coming from. I think that is irresponsible.'
Mr Mah also said that the WP's intention seems to be to reduce flat prices.
While it has not said by how much, Mr Mah yesterday gave some estimates of the cost of the Government's housing programme, to give a sense of the large sums involved.
The HDB plans to build 22,000 flats this year. Assuming the average cost of a new flat is $300,000, the total bill for this year would be $6.6 billion.
If the WP hopes to reduce flat prices by, say, 20 per cent, that would mean an extra subsidy of $1 billion dollars.
'Where is the WP going to get this extra $1 billion?' he asked.
Mr Mah also rebutted WP council member Gerald Giam's point that the high prices of HDB flats were due to the PAP's asset enhancement policies of the past 20 years.
There is nothing wrong with giving Singaporeans an asset, and even less so in making sure that asset grows in value, said the minister, who has been in charge of housing since 1999.
'I want to say we are proud of the asset enhancement policy. The policy is what has given almost all Singaporeans a home of their own, a home that is also an asset.
'It is an asset that grows in value over time, with the growth of the economy and also with all the upgrading programmes that the Government has put in place,' he said.
[email protected]
