Voting for party you trust to manage your money

[h=2]Voting for party you trust to manage your money[/h] August 16th, 2015 | Author: Contributions


Vote for a party whom you trust to manage your money and town council
According to the Channel NewsAsia news report “Vote for a party whom you trust to manage your money and town council: DPM Teo” (Aug 14) – “”Essentially what happened was this: Hougang town council was running a deficit, they took over Aljunied, a town council which was in surplus (following the 2011 General Election).

They took over Punggol East from Pasir Ris-Punggol town council which was also in surplus. Now the whole Aljunied-Hougang-Punggol East Town Council (AHPETC) is in deficit,”
“How did that happen, how did a large surplus turn into deficit? Where did the money go?”

Why did AHPETC run into a deficit?

Some of the possible reasons why AHPETC went into a deficit may be

… the legislation is such that when a town council is won by a different party in an election – 100 per cent of the accumulated surplus
has to be transferred to the sinking fund

… the town council’s software was taken away in what is now known as the “$2 AIM company” saga

… $14 million of grants were held back even whilst the process of the audit team was on-going and not completed yet

Voting for a party whom you trust to manage your money

As to “make sure they’re the ones you want to manage your money” – what about the non-transparency of the difference between the returns derived from our CPF funds, relative to the interest that we get on our CPF?

WP’s performance in Parliament?

Mr Teo also took aim at the Workers’ Party’s track record in Parliament, saying their silence on some issues stood in contrast to their boisterous rallies:
Why was it only recently disclosed that our CPF funds are managed by GIC – when a former Manpower Minister replied to a question by WP’s Low Thia Khiang in Parliament in 2007 that GIC does not manage CPF funds, and a former Prime Minister also said that there is no link between the GIC and CPF funds?

Win battles lose war

* Submitted by TRE reader.

Source: The Online Citizen

PAP town council “incurred huge deficit” in 1997

NOVEMBER 20, 2014 BY ANDREW LOH IN MAIN STORY · 13 COMMENTS



If you thought the Workers’ Party’s Aljunied-Hougang-Punggol East Town Council (AHPEC) is the first or the only town council to have ever run into a deficit, you would have to think again.

Several People’s Action Party (PAP) town councils have also run into the red over the years.

In fact, AHPETC’s deficit may not even be the biggest one either.

For example, the Straits Times reported in July 1997 that a People’s Action Party (PAP) town council had “incurred a huge deficit”.

But more of that later.

First, let’s take a little walk down memory lane, and start from whence the concept of the town council was introduced.

And here, we need to visit Ang Mo Kio – you will see why in a bit.

According to the Town Councils website:


So the concept of the town council was tested out in Ang Mo Kio – and almost immediately, it ran into problems.

One of the town councils ended the year with – yes, you’ve guessed it – a deficit.



In 1987, the Ang Mo Kio East Town Council “ran a deficit of $15,000”, according to a Straits Times’ report in 1988 (above), because of the costs of maintaining a public garden.

[*We are not sure if this town council was Ang Mo Kio East Town Council (as reported by the paper) or Ang Mo Kio West Town Council (as indicated by the National Archives).]

The town council was so upset by the lack of funds needed to maintain the garden that it was “thinking of washing their hands of this responsibility.”

But Ang Mo Kio East Town Council wasn’t the only one which ran into financial trouble.

The other pilot council – the Ang Mo Kio South Town Council – also had problems maintaining another garden – this time at Avenue 6 of the estate apparently.

The situation was so bad that the estate manager projected the council would go into a deficit of $20,000.



Fast forward to the 1990s and another two town councils, including a PAP one, ended the year in the red, according to a New Paper report titled, “Lost money”.

First there was the PAP’s Hong Kah GRC in 1995, with an “operating shortfall of $1 million”, along with Potong Pasir SMC with an “operating deficit of $584,000.”

Here is the report in full:



Strangely, the report seemed to have ignored the earlier Straits Times report of the two town councils in Ang Mo Kio which also went into deficits by referring to Potong Pasir and Hong Kah as the first town councils to go into deficits.

In 1996, the three Singapore Democratic Party’s town councils – Nee Soon Central, Bukit Gombak, and Potong Pasir – were also in the red.

In 1997, several PAP town councils were also in danger of joining the red queue. These were:

1. Pasir Ris Town Council which “estimates an operating deficit of $3,824 million” [sic]
2. Aljunied Town Council which “projects a shortfall of $988,000”; and
3. Bukit Timah Town Council which expected to be in deficit by $964,000.

We could not get confirmation of whether Aljunied Town Council and Bukit Timah Town Council had eventually crossed into the red.

However, Pasir Ris Town Council seemed to have indeed incurred a deficit.

This seems to be confirmed by a report in the Straits Times 3 days later, on 26 July 1997, some three days after the one in The New Paper which warned that it might go into deficit.

The Straits Times’ report said it had received a “note” from a “resident” who “spring” to the defence of the town council.

The “resident” was “commenting on an ST article earlier this week showing that Pasir Ris Town Council had incurred a huge deficit.”

We have been unable to determine how big was this “huge deficit” reported by the paper. In any case, it didn’t seem to matter to a resident.

The Straits Times said the note writer, Mr Chia Wenn Teck, had “gushed” when he wrote:


Mr Chia’s confidence in his MPs are a stark contrast to that of former Minister in the Prime Minister’s Office, Lim Boon Heng, who recently said of the AHPETC deficit:


One must wonder if Mr Lim, who entered politics in 1980, had said or felt the same about the PAP MPs whose town councils had similarly gone into the red over the years.

Some of these MPs were or have even become ministers leading the country today.

So, a town council going into deficit is nothing new.

Apparently, at least four PAP town councils (Ang Mo Kio East, Ang Mo Kio South, Pasir Ris and Hong Kah), and three opposition town councils (Potong Pasir, Nee Soon Central and Bukit Gombak) have experienced such low points through the years.

There were also several other PAP town councils which came close and were in danger of falling into deficit – saved at times only by raising the service and conservancy fees residents had to pay.

One can only wonder then why the PAP is making such a big fuss over AHPETC’s situation, especially when all town councils, even today, run deficits which only turn into surpluses after receiving government grants. (See here: “Desmond Lee, all town councils run deficits“.)

This is especially so when one of the PAP’s former MPs was rather nonchalant about the prospect of his town council falling into deficit.

“This is not a big problem,” said Lew Syn Pau in a Straits Times report in October 1996, titled, “In danger of running into the red”, which highlighted that Mr Lew’s town council “may run into the red in the year 2002.”


And, by the way, Pasir Ris Town Council which “incurred a huge deficit” is still functioning today under the PAP and the GRC is in fact led by Deputy Prime Minister Teo Chee Hean, who had entered politics in 1992 and became an MP in Pasir Ris after the January 1997 general election.

Mr Teo is of course, one of those “in charge of the country” today, as Mr Lim put it.

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End of Article​

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deficit?

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8 out of 14 PAP Town Councils have exposure to Lehman Brothers
Topic(s): Singapore Ramblings
Updated 18 Nov 2008: Added returns figures from the newspaper

I've written a post last year with regards to Holland-Bukit Panjang Town Council investing our money in the stock market, in particular in Creative. Now it seems that they did not learn from that lesson and went up 1 step further. They started investing in structured products!

Holland-Bukit Panjang and Pasir Ris-Punggol town councils have invested a total of S$12 million in DBS High Notes, Lehman Brothers' Minibond Notes and Merrill Lynch's Jubilee Series 3. Other town councils such as Aljunied, Ang Mo Kio-Yio Chu Kang, Hong Kah, Marine Parade, Tampines and Tanjong Pagar also have exposure to Lehman Brothers.

It was stated that it's a small percentage of the total funds available. However other than the question on why on earth a town council will invest their sinking funds into structured products instead of thinking of ways to rejuvenate the estate or to subsidize the conservancy charges, my main question is why did the town councils have so much money? And if they have so much money, why did they use the excuse of inflation to increase our conservancy charges??

The whole idea of a town council is that its not meant for-profit. It's suppose to be a non-profit organisation since the money comes from the general public. Therefore, if there's surplus, the benefits should flow back to the general public. With so much funds available, just by putting it in a simple highest rated bonds and fixed deposits would yield a decent return.

Worst still, based on what was reported in the newspapers, the returns averaged over 3 percent a year over the last 6 years, excluding the Lehman fiasco. 3%! Investing in equities! Considering the risk premium, why on earth would you take so much risk to get a return of 3% in equities when you can get the almost equivalent using bonds and fixed deposits?? Come on... I think even Singapore millionaires can get more than 3% on their deposit accounts.

According to the newspapers, they say that they need to build up their sinking funds to replace the lifts every 28 years. Hello... I compound $150million a year with interest of 3%, I get a total of $343million at the end of 28 years. Even compounding $75million a year, I get a total of $172million at the end of 28 years! Each lift cost only at most $250,000. How many lifts do you have in a HDB block?

There should be a cap on the amount of sinking funds the town council should have. What's the use of having so large an amount if the benefits do not flow back to the general public? The famous Holland-Bukit Panjang Town Council seems to have $120million in the sinking fund, based on reported 6.7% invested in the structured products ($8 million).

Having surplus is one thing, but this is getting ridiculous. Is it so hard to use the money the general public has given to rejuvenate the estate, or to reduce our conservancy charges that we must pay?

Why on earth did they have so much in their sinking funds?? Scrooge McDuck??!?!?!

http://chantc.blogspot.sg/2008/11/8-out-of-14-pap-town-councils-have.html

Interview of Bukit Panjang residents on Town Councils' loss of sinking funds

[video=youtube;cHwXMPWLhe8]https://www.youtube.com/watch?v=cHwXMPWLhe8[/video]