Goh Meng Seng: Higher HDB grants will enable greater opaqueness

[Sammyboy RSS Feed]

An honorable member of the Coffee Shop Has Just Posted the Following:

HDB Higher Grant is Good?

The debate on how to reduce HDB prices have started since I have raised this issue way back in 2010. There are two main methodologies:

1) Reduce the listing prices of New HDB flats directly according to Cost-plus formula.

2) Increase HDB grants.

These two methods may or may no result in the same pricing in New HDB flats. But even if they did, they will have very different implications on the whole Government budgetary situation even though the impact on those Singaporeans buying their First HDB flats is the same.

The reason is that whatever HDB pays for land used to build these new flats, will be paid to SLA and all these money will go straight into the Reserves. This is one of the reasons why PAP can keep boasting about having exceptional ability to accumulate reserves. But wait, once these money goes into Reserves, it means that it will no longer be accountable to public scrutiny as the management of reserves is totally opaque and unaccountable to anyone! (President, you say? Look at what President Ong TC got from PAP when he asked for details!) It would practically mean that if more HDB grants are given to first time buyer without direct price control on the HDB prices, all these government grants will go straight to the reserves which will be managed in a very opaque way and not accountable to parliament nor public scrutiny.

Such transfers of government funds from its current account would have severe implications on the overall budgeting. It would mean that there will be relatively smaller funds for Education, Healthcare, Transport etc as compared to no grants given at all.

This is not to say these are real “subsidies” because the PAP government still make money from the land sales which is very much higher than their purchase price through the Land Acquisition Act.

- http://www.tremeritus.com/2013/08/21...rong-with-pap/


Click here to view the whole thread at www.sammyboy.com.