Monday, 6 October 2014

Revisiting the White Paper

The Population White Paper was debated over a year ago, and it invoked a lot of responses.

Here's a ST forum letter that was savaged in a blog post.

And an excerpt of that forum letter:
The real issue is how we can control the cost of living - and, by implication, the labour component for businesses - and the rise of commercial rents, as well as ways to improve productivity.

I used to be amazed that a plate of fried rice in the United States could cost US$15 (S$19), and worry that this could happen in Singapore if inflation is not controlled.

A question from that letter and the answer (text in red is the response):
- Do we need new hawker centres that come with hefty rents and associated rising food prices?
[There are so many problems with this question, I don't even know where to start. This is an example of a compound question. Let me just get to the basic question: Do we need new hawker centres? First, what do you mean "NEED"? You can argue that everyone can start packing sandwiches to work, or buy an electric kettle (if you workplace does not have hot water) and bring cup noodles. Then you don't NEED hawker centres. Wives can start COOKING at home (you lazy useless wives you! you know who you are!) And husbands too! This is the new age! Start doing your part! Stop eating out so much!
 The extract below is from two points in the original blog, rearranged here for focus.
This letter is actually representative of what people are thinking, and the confusion and contradiction in what they want.
They want a slower pace of growth and development, but they do not quite understand what that means. Or rather they SAY they want a slower pace, when what they actually want is contradictory or even illogical. 

What do you mean by slower? Train runs every 15 minutes instead of every 2 minutes during peak hour? Then no. Banks only open from 9 am to 3 pm Mon to Fri only like in many developed countries? No. Shops open 9 am to 6 pm Mon to Fri, and 10 am to 2 pm on Sat and closed on Sun? No. Slower development? HDB flats waiting period to stretch to 6 years? NO! Or what did you mean by slower pace? Wait 30 minutes to get served in a restaurant? Walk to the McDonald's 2 km away because you can get there in 30 minutes, and the feeder bus only comes every hour?
The final portion of the post covers a subject I have covered previously - hawkers.
About Rent, Hawkers, and the cost of doing business:
Yes. Rent is one aspect of costs. But thinking that controlling rent will reduce costs is simplistic at best and assumes hawkers are idiots.
Look at any rent-controlled hawker stalls where the hawkers either bought their stall about 25 years ago (and so pay no rent, and so have sole control over their rent costs) or are "legacy" hawkers who were given 30-year rent-controlled leases that are a fraction of the open market value of their stalls.

Yes, their prices ARE lower.

But what are their operating hours? Because their rent is low, they only need to cover their variable costs. After they have earned enough, they close for the day and take it easy. Do I blame them? Of course not! Hawkering is a tiring and trying job, and most of them have been at it for years. They deserve to take it easy in their silver years.

And they deserve to take it so easy, some of them have leased out their stalls (these are the ones that bought their stalls almost 30 years ago). And the rental? Market rate of course.

Why? Why are these hawkers so greedy? You may ask.

What would you do? You put up your stall for rent. Someone offers you $1000. Great! practically free money, you think. But before you can accept, someone else offers you $1,500. Then another $2,000. Then another offer of $2,500. And finally $3,000.

So which idiotic hawker will turn down $3000 monthly rent for a $1000 monthly rent?

So now HDB or NEA (or whichever govt agency is in charge of hawker rental) sees this. How should they charge rent?

Yes, market rental is NOT the way forward IF we want cheap hawker food. But understand than cheap rent will mean hawkers will do the minimum necessary to cover their costs, to earn a decent living and then close for the day, because they want to take it easy too.

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