Monday, May 2, 2011

Playing around with statistics, PAP style: Whence all the rosy statistics?


The PAP regime loves to use statistics to buttress its claims that it is governing well and therefore deserving of the highest salaries among political leaders in the world.

Little is it known that the statistics give only half the story and not the complete picture of the reality on the ground. With the mainstream media firmly in its control and the academicians silenced, PAP leaders can simply pluck figures out of nowhere to confuse, mislead and hoodwink Singaporeans.

Let us examine the statistics quoted by PM Lee in his recent 2010 National Day Rally speech followed by that made by other PAP leaders.

1. GDP growth of between 13 to 15 percent this year:

PAP leaders are obsessed with GDP figures and often use the numbers to convince Singaporeans that the country is prospering under its rule.

Not surprisingly, PM Lee quoted the economic growth forecast of between 13 to 15 percent this year to support his claims that the Singapore economy is booming which justify the need for more foreign workers.

What PM Lee did not tell us is that the figures are merely a “rebound” from the contraction in our economy we suffered in 2008 as a result of the global financial crisis.

Singapore’s economy shrunk by 6.6 percent in 2008 and 2.1 percent in 2009. Considering the fact that our GDP has decreased by 8.7 percent in the last two years, it really only “grow” at between 5 – 7 percent this year which is not a stellar performance compared to that of regional economies including politically unstable Thailand (7 percent).

Furthermore, the growth is not entirely unexpected with the worldwide recovery from the financial crisis.

When Singapore became the first Asian country to enter into recession in 2008, PAP leaders claimed that there was nothing much they can do about it as being an open economy, Singapore is heavily dependent on the performance of the global economy. Hence, Singapore’s GDP growth this year can be attributed more to the recovery of the global economy than to the stewardship of the PAP regime.

GDP growth is hardly an accurate indicator of the quality of life in any country and has come under intense criticisms from many well-known economists such as Nobel Laureate Joseph Stilgitz.

PM Lee only waxed lyrical about GDP growth, but chose not to highlight the other aspects of the economy to Singaporeans:

- median income wages of Singaporeans which has remained more or less stagnant at $2,400 monthly for the last ten years.

- the widening income gap between the poor and the rich.

- the percentage of GDP gains which goes to the foreigners.

In other words, though the Singapore economy is growing, the fruits of its growth is not shared equally among all Singaporeans and it does not necessarily translate into a better life for most of us as the cost of living, especially that of public housing has far outpaced growth in real wages.

2. Low unemployment rate of 2.2 percent:

PM Lee used our “low” unemployment rate of 2.2 percent to dismiss the concerns of Singaporeans that foreigners are taking away our jobs.

Not only is the figure highly inaccurate, it is unbelievable as well. The Manpower Ministry lumps Singapore citizens together with PRs in all its statistics.

The 2.2 percent unemployment rate includes that of PRs too which means that the actual unemployment rate for Singapore citizens may be higher as PRs usually need to hold a stable job before their application for Singapore PR are approved in the first place.

The figure also does not include Singaporeans who have give up looking for a job altogether or those on short-term contract jobs.

MOM also does not publish the underemployment rate for Singapore citizens which may be a more accurate reflection of the reality on the ground since it includes those who are on contract jobs.

3. Majority of Chinese immigrants in last ten years come from Malaysia:

PM Lee tried to reassure Singaporeans that they are not being “overwhelmed” by the mainland Chinese with another half-baked statistics – he said that Singapore accepted 81,000 Malaysian Chinese as citizens between 1999 and 2009 as compared to only 13,000 mainland Chinese.

What he did not tell us is the fact that the mainland Chinese only start coming to Singapore somewhere after 2006 when the flood-gates are flung open for them and the Malaysians have been coming to Singapore for the last thirty years or so.

In order to enable Singaporeans to assess the situation better, PM Lee should give us a breakdown of the origins of the immigrants who were given Singapore citizenship in each of the following year between 1999 – 2009 which will tell us if the numbers of immigrants from China are growing.

We need to know if the percentage of mainland Chinese among the immigrants is on an upward or downward trend over the last decade so as to reach a reasonable conclusion if Singapore is indeed being “sincized” by the PAP’s immigration policy.

This piece of important statistic is glaringly missing from the Department of Statistics. Why are they hiding it from us?

4. Singapore needs immigration due to its low Total Fertility Rate of 1.22:

A few days after the National Day Rally, PAP strongman Lee Kuan Yew defended the PAP’s ultra-liberal immigration policies that Singapore needs immigration to boost its low Total Fertility Rate (TFR) of 1.22, which is well below the replacement rate of 2.1.

In an interview with Straits Times, he added that he hopes the newcomers will increase our TFR by having two or more children.

What was not mentioned is the fact that the immigrants aren’t increasing our TFR at all for the last ten years.

Between the years 1999 and 2009, the number of citizens and PRs had increased by 504,200 though the total population had exploded by 1,028,900. [See Ref #1 below]

The Resident Live Births in 1998 was 41,636 and only 37,277 in 2008 – the TFR actually dropped from 2.08 in 1998 to 1.48 in 2008. [See Ref #2 below]

If the immigrants are having more children than Singaporeans as claimed by Lee, then our TFR should actually increase and not decrease.

Lee should reveal the TFR for the new citizens for the last ten years for Singaporeans to judge for themselves if they do contribute to our fertility. If their TFR is less than 2.1, it can only mean that the immigrants are not having more children as they are subjected to the same financial constraints as native Singaporeans.

To compound matters, the immigrants will grow old too in a few years’ time which will only impose an increasing strain on our stretched public healthcare system.

Are the new citizens increasing our birth rates or our aging population?

5. Low income tax of 18 percent:

It is a common public misperception that Singapore has one of the lowest income rate in the world at only 18 percent and we need to pay more taxes if the government were to provide more social welfare benefits for us.

What is lesser known is the fact that Singaporeans are indirectly taxed by other charges such as GST, ERP, COE which actually increase our “contributions” to the state.

It is also not true that all citizens of welfare states like Australia have to pay taxes amounting to 50 percent of their annual income. Australia, Canada and New Zealand have a bracket-based income tax system like ours – only the top income earners have to pay close to 50 percent of income tax while the middle class pay between 20 to 30 percent of their income with the poor paying nothing at all.

Though the citizens of these states have to pay higher taxes, they enjoy higher wages and domestic purchasing power than Singaporeans and not forgetting the fact that their education and healthcare are completely paid for by the state.

6. CPF’s interest rates of 2.5 percent is higher than the banks’:

Senior Minister Goh Chok Tong defended the CPF system on the grounds that it offers Singaporeans a guaranteed interest rate of 2.5 percent which is not found in any financial institutions.

What Singaporeans are kept in the dark about is the fact that the CPF’s interest rate is far below the annual inflation rate of 3 – 6 percent meaning that our CPF savings actually lose value over the years.

Besides, most of our CPF funds are tied up with our mortgage loans and not earning any interest from the state in the ordinary accounts. If we sell our homes, we will have to pay CPF the “interest” which would have accrued had the funds remained in our OAs and not used to pay for the housing loans!

Lastly, let us not forget the fact that we will probably never get back our entire CPF before we die. Under CPF Life, we can only withdraw a monthly amount from our CPF accounts after we reach 62 years of age and not the full lump son meaning that there will always be a proportion of our money left in the hands of the state.

7. Singapore has one of the “lowest” crime rate in the world:

The PAP regime kept using Singapore’s low crime rate as justifications for a variety of repressive laws put in place to curtail the political and civil rights of Singaporeans so as to pre-empt an alternative power base from emerging to challenge its political hegemony.

According to Singstat, Singapore’s crime rate in 2009 is 661 per 100,000 or 6.61 per 1,000 (source: Singstat) which is not that impressive when compared to the rest of the world. (read here)

It is only slightly better than Malaysia (6.97 per 1,000) which PAP leaders have often jeered at being a crime-ridden nation and worse off than Colombia (4.98 per 1,000).

How is it possible that drug-infested Colombia has a crime rate lower than Singapore’s? It depends on the way the statistics are being compiled and manipulated.

When we view the same issue from a different perspective of income inequality, Singapore actually has one of the highest number of prisoners per 100,000 among developed nations in the world:

8. HDB flats are affordable because they cost no more than 30 percent of our monthly pay:

Despite the evidence showing otherwise, PAP leaders continue to insist that HDB flats are “affordable” to the majority of Singaporeans as they cost no more than 30% of their monthly pay.

HDB’s deputy director Mr Ignatius Lourdesamy wrote to the Straits Times Forum last year that HDB flats remain affordable to eligible first-time households as they use between 21 to 25 per cent of their monthly income to service their loans on new and resale HDB flats which are well below the international affordability benchmark of 30 per cent. (read letter here)

Though he did not state it explicitly, he is likely to be referring to the average shelter-cost-to-income ratio (STIR) or the proportion of total before-tax household income spent on shelter. The shelter-cost-to-income ratio is calculated for each household individually by dividing its total annual shelter cost by its total annual income. A STIR higher than 30 per cent is conventionally taken as indicating a serious housing affordability.

What the PAP regime did not tell us is that the annual income used in the calculation of STIR is before taxes. After accounting for taxes and other miscellaneous expenses, the STIR may drop below 30 percent.

Using another more commonly used index for housing affordability – the Median Multiple reveals that most new and resale HDB flats are clearly NOT AFFORDABLE to the majority of Singaporeans based on their median monthly salaries now.

Read more here.

9. HDB flats are “heavily subsidized” by the PAP regime:

When HDB revealed in its annual report that it suffered a loss of $2 billion dollars last year as a result of subsidizing first-time home buyers, few buy its story.

In November 2009, Member of Parliament Chiam See Tong asked how much HDB flats cost and the profit margin added to the cost when selling the flats to which National Development Minister Mah Bow Tan replied in Parliament:

“The total cost of building flats varies based on when we build, where we build and what we build. It includes cost of land, as well as cost of construction of the flats and ancillary services. It varies from $230,000 for a 3-room flat in Punggol to $530,000 for a 5-room flat in Tiong Bahru.”

He added that HDB does not price its flats based on cost-plus-profit, but at a discounted market price. Together with the Additional Housing Grant, which varies from $5,000 to $40,000, the subsidies amount to about 20 per cent of the market price for 4-room flats, on average.
                                       [TODAY, 24 November 2009]

The picture will become clearer if Mr Mah provides us with the exact breakdown of the construction and land cost of the flats which he has declined to do so.

The anomaly can probably be explained by the “left pocket to right pocket syndrome: The land used for construction of HDB flats is owned by Singapore Land Authority, a statutory board under the PAP regime.

SLA sold the land to HDB at marked up prices which resulted in HDB making a “loss”. However, the PAP regime still make a “profit” in the end because they own SLA.

Read more here.

10. Median income outstripped resale home prices:

In an extensive interview with the Straits Times on 7 April 2010 to defend his dismal track record, Mr Mah claimed that contrary to populat opinion, housing prices have not moved faster than household incomes in the past decade.

To substantiate his claims, he revealed figures collated by the HDB and Department of Statistics which shows that the median household incomes actually outstripped resale home prices from 1999 to 2009:

“So, when people say prices have moved faster than incomes, it’s not true…Realistically, in the last 10 years, prices have moved in tandem with income – except the last year. And this was an anomaly,” Mr Mah added.

[Source: Straits Times, 7 April 2010]

His fuzzy statistics was later debunked by Reform Party CEC member Hazel Poa, a former PSC scholar.
The statistics used by Mr Mah appeared to be so because the prices of resale HDB flats are low and remain stagnant during the years 2000 – 2006:

As we can see from the above figures, the RPI remains in the range of 101 – 104 from 2000 to 2006 and only start picking up in 2007 before reaching a record high in 150.8.

The price increase is contributed largely by the rising demand fueled by immigration in the face of limited supply of new flats built by HDB.

Now if the base year is shifted to 2006 when the prices start picking up instead of 1999, the graph will appear to be drastically different:

[Source: Hazel Poa's blog]

As the above graph has depicted clearly, if the base year of 2006 is used, the resale price index (RPI) would have far outstripped that of median household income (MHI)


Remember the famous saying by Mark Twain:
“There are lies, damned lies and statistics”

The next time a PAP leader plucks some obscure figures out of thin air, stop and ponder for a while and you will soon realize that you have been “smoked”.

Reference 1
Table A5 – Population 1871-2009,
Pg 27 or PDF Pg 37/72

Reference 2
Table A12 – Live Births and Birth Rates, 1980 – 2008,
Pg 44 or PDF Pg 54 / 72

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