His approach only has probability of working if the government neuter itself and a host of other extractive, rent-seeking concerns in order to maintain overall competitiveness of Singapore.
Highly unlikely to happen since this will hit the establishment in the pocket directly and if history indicates anything, the people who are holding the cards have zero courage to interrupt the money flow into the reserves, TH and GIC.
At least his approach is bold and stir people to talk. The government's response is no response at all since it only concentrate on the poor but not the squeezed middle class.
Some of the forummers already said it, the only change you will see is only when GINI stays below .5 for more than a decade. Then we will see the PAP thrown out and perhaps a chance of overturning the neo-merchantile practices of the government.
What u say is true, there is really no critical thinking in Singapore. S'porean brains like Kinana has been so lobotomized by the PAP, they cannot put 2 and 2 together. In the mid 70s to mid 80s it was not unusual to have a household income of $2500, but u could buy a HDB flat for as low as $50K. I recall NUS grads coming out were earning $1000 - $1200 a month than. Now, 30 years later, NUS grads (if they can find a job) are earning $1800-$2000 per month, but the a new flat now costs easily $350K. Since the PAP controls most of the inputs of public housing construction, this is just deliberate policy on their part to earn extra money. Back than, the HDB really sold u a flat at close to their cost. Now, the markup for them is a few hundred %.
So, what is the implication of just this one input factor (housing)? We know there are many other input factors controlled by the govt. lile utilities, petrol prices, vehicles, etc. But lets just examine this one housing factor.
Lets say the HDB reverted back to its policies of the 70s today and sold u a flat at cost or close to it. U would pay maybe $100K for a small unit and maybe $170K for a larger unit, versus $350K - $700K today. Your bank loan will be correspondingly smaller and your monthly mortgage payments might not exceed $700 per month. With a household income of under $2500, u can easily make your payments and pay for other items. U can take lower paying jobs because you will not be underwater. In today's economy, if you don't have a $3500 job, how to make payments on your new flat, and living expenses? With lower housing costs, people can accept lower wages, and the competitive nature of singapore is better, not to mention inflation is manageable. The price of housing trickles down everywhere. Kopitiam who pay less for their coffee shops from HDB will charge lower rents, and hawkers renting the stalls can charge lower menu prices and still recover their cost and make a living. And so on and so on.
LCY either knows this and does not speak out or is really so dumb that he cannot see it. There is no free lunch in economics. The govt. wants to put money in its coffers by fleecing sinkies into paying for inflated price flats. This results in everything going up in price and hurting S'pore's appeal to MNCs. The PAP counter that by bringing in over 1.5 million FTs who can and will accept much lower wages. This pleases the MNCs and allows them access to cheap labour. Why can FTs accept lower pay and sinkies cannot? That's because their cost base is in their home countries of China, India, Burma, etc. Its not in Singapore. They are not sending their kids to school here, or buying HDB flats etc. If they do this, they will be on the same playing field with sinkies. Instead, they rent a flat, 10 people stay in it, they cook there, occasionally rob a sinkie, and live very frugally. If you pay an FT $1500 a month, he can $1000 back to his family in his home country every month. For SGD $1000, his family will live like kings in his home village back in India, or China, or Burma, or Bangladesh, where ever he comes from.
What LCY does not realise is that for many sinkies, they have been living under less than ,5 GINI for a long time now. For FTs with cost base in their home countries, a GINI of .50 is still ok for them. No problem. If it gets much worse for them, they just go back, and by that time, they can retire nicely with the money they earn in S'pore. Unfortutnately, the PAP is now in a vicious cicle which they cannot get out off. Raise cost of living to singaporeans = put money in their coffers = bring in massive FT to maintain competitiveness = more impoverished singaporeans.
