News: Brilliant Analysis by DPM

[Darryn]

Wah, u very rich hor?.. Strike toto huh?.. Want to buy ec and condo leh...

 

Not buying EC - Not worth it, instead pump the money into condo...

 

Not lich leh....just lucky enough to finally have enough for a reasonable deposit...

 

[Evillusion]

He is not wrong de! His definition of average differs from ours!

[Royho1979]

Transport cost and property price affect everyone, not only car buyer or condo upgrader.

 

If you care to look deeper into the issues. transport cost and rental take up about 30% or more of the business cost, and any upward adjustment would put pressure on the price of every others items and services you can think off (a chain effect). In layman term, when cost of truck / van goes up (by 100% like now), logistics company will have to charge more for delivering say a lorry load of vegetable to whole seller, who in turn will pass the cost to say economy rice stall owner, and we consumer will get hit sooner or later.

 

The same goes for property price and rental. as stall owner have to pay higher rental after coffee shop, hawker centre stall changing hand with ultra high price tag, and where do you think these extra cost will goes to? We consumer... Have you not noticed that a bowl of noodles or a plate of chicken rice cost at least S$3.00 - S$3.50 now even at non-air-conditioned hawker centre (where that kind of pricing is what air-conditioned food court used to charge just 2 years ago)?

 

No point replying. The poster did not read what was posted before and it is unlikely he/she will read what you have taken pains to write.

[Kangadrool]

Just defending for the sake of defending.

 

We will be indeed very surprised IF they admit the high property and transportation prices is causing the runaway inflation we never seen before. This inflation rate could have been much much worse if SGD is weak.

 

 

[Carbon82]

What our government has been doing (to lower cost of operation and impact of inflation) are:

 

1) Strengthening S$, which helps in short terms, as import cost will be kept low, BUT will hurt the economy in long term, as we will become less competitive with higher cost of goods exported from our shore (just look at what happen to Japan with the strong Japanese Yen)

 

2) Allowing more foreigner to work in Singapore. so as to lower overhead cost (and in hope to offset upward pressure from transport and property / rental cost). But that in turn hurt the lower and middle income groups, as they will find that their wages will remain stagnant, if not lower (relative to inflation), since foreigner is willing to take the job for less

 

 

Disclaimer: I am NOT in anyway trying to blame the government, but merely stating facts from a economy point of view. Alternate views are welcome...

Edited April 30, 2012 by Carbon82

[Scb11980]

I have to disagree with Tharman view point, for 3 obvious reasons, which I am still wondering why a Finance Minister cannot visualize... ...

 

1) Higher COE premium and property price lead to higher business operation cost, how can that not affect our daily necessities and essential services in longer run?

 

2) Going at this rate (salary increment is not "aligned" with inflation), how can our next generation afford a roof comfortably??

 

3) Statistics shows that Singaporean do not have enough saving, but at this kind of inflation rate, the more we save, the more we "lose", and are these not affecting us???

 

you are completely right

we are going down the american route

going to be a consumer economy

[Porker]

Take what you read with a pinch of salt. Especially coming from someone who needs to evaluate whether buying Sculptura @ Ardmore is a worthwhile thing. As far as I know, the people in that sort of bracket do not consider such things when they throw $20-30mil on a condo

[Gukubird]

What else will you expect from a DPM?

A QQ SE will always say his hatchback is the best hatchback

[Vulcann]

And of course his single most unforgettable line: GST is to help the poor.

 

[rolleyes]

[SimonTan]

Aiyo....just sharing news only.

Where got I blame anyone?

 

 

trying to blame government again?

 

[Carbon82]

if my livelihood depends on a vehicle, and the damn coe increased so much.

will i pass my costs down?

 

chances are, i will..and many will.

 

those who depend on the services will also get affected.

 

this guy..just like $1000 own a hdb story..

 

The HDB story is a fairy tale to me... Yes, theoretically the sums are balanced (after considering the hefty subsidies from HDB for lower income group). But it is the same when someone earning a monthly salary of $2000 is trying to buy a car. Again, they can afford it, but what about the running / maintenance cost, and what if they loss their job the next month? And how can anyone assure that these low income earner will get better paid (read: increment must be > inflation cost), since statistics revealed that lower income group increment is almost -ve (after taking into consideration of inflation) for the past decade?

[Celicar]

The HDB story is a fairy tale to me... Yes, theoretically the sums are balanced (after considering the hefty subsidies from HDB for lower income group). But it is the same when someone earning a monthly salary of $2000 is trying to buy a car. Again, they can afford it, but what about the running / maintenance cost, and what if they loss their job the next month? And how can anyone assure that these low income earner will get better paid (read: increment must be > inflation cost), since statistics revealed that lower income group increment is almost -ve (after taking into consideration of inflation) for the past decade?

Going by what they say about flats being affordable, since some cars are cheaper than flats, that means cars are also affordable.

[Kangadrool]

Going by what they say about flats being affordable, since some cars are cheaper than flats, that means cars are also affordable.

 

Boats (not luxury yacht) should be more affordable than cars then.

[Carbon82]

Affordable is not about ability to buy something, but to own and maintain it.

 

As in the HDB flat case, CPF can cover monthly install, if not just top-up a few $$ in cash. But what about the conservancy charges, utility bills, up keeping of the flat conditions, future upgrading, etc.

 

And looking at a bigger picture, with a stagnant salary (after considering inflation), can the family still cope with increasing expenditure after a few years?

[Expertz]

i've already pointed out more than a year ago that raising home prices will lead to higher rents which will translate to higher consumer prices

now that coe is increasing, transportation prices will follow suit and will eventually once again translate to higher produce costs

 

once again, don't look at the ever increasing paper value of your HDB flat and feel richer than your peers because its only 1 single sided point of view

[SimonTan]

The vicious cycle of Catch-22 is unstoppable.

Every businesses will justify its cost increase from higher fuel, COE, rentals(for workers), etc. Contribution the the inflation numbers.

The trickle down effect will be felt by the non-average Singaporeans.

Then these non-average Singaporeans will be asking for salary increment, and the vicious cycle completes one-round.

 

[Unidentified]

very brillant indeed.and they are paid few millions each year to come up with such analyst.

[CKP]

http://business.asiaone.com/Business/News/...429-342813.html

 

DPM Tharman: Average S'porean won't feel the sharp effects of inflation

 

The average Singapore will not feel the effects of a sharp inflation, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said today in a speech at this year's May Day dinner.

 

He acknowledged that the 5.2 per cent increase in the Consumer Price Index (CPI) for March 2012 compared to a year ago, was a "high figure".

 

But more than half of this inflation rate of 5.2 per cent comes from higher COE premiums on cars and the effect of higher market rents on homes, the Manpower Minister said.

 

So those who already own their homes and are not buying a new car will be unaffected.

 

In fact for most Singaporeans, inflation in actual household expenses is lower than 5 per cent.

 

Mr Tharman explained that the increase in prices of daily necessities and essential services, such as food, clothing and footwear, and education, has actually been much more moderate, at 3.0 per cent or lower.

 

Nevertheless the Government is closely monitoring the situation, including prices of everyday goods and services, Mr Tharman said.

 

Inflation remains an important challenge and it is also one that union leaders are most concerned about, he said.

 

The Monetary Authority of Singapore has been gradually strengthening the value of the Singapore dollar to reduce the impact of imported inflation.

 

Actions have also been taken to cool the property market as an overheated property market with inflated property prices, while by themselves not part of the CPI, can drive up other prices.

 

 

I agree with Tharman that: "Average people do not feel the effects of high 5% inflation."

 

He said "high" inflation, not just general inflation; in fact, tharman went on to say the average people experienced

3% inflation ex-transport(cars) and ex-housing. That means the so called "passing down" effects of high transport and rents

have already been factored in the "moderate" 3% inflation.

 

I think some people are misreading Tharman's account as "average people did not experience ANY inflation if they did not buy car/house".

 

 

 

I disagree with Tharman's contention that: "inflation at 3% is moderate".

 

Anything about 2% is high. Of course, this involves my own value judgement against Tharman's.

 

 

 

I also disagree with Tharman that: "those not buying cars and houses are not affected by high 5% inflation".

 

On the contrary, future buyers of house/car with either be hold off their purchase (cannot afford etc),

or have suffered an increase cost of living in future when they proceed to purchase the items.

Remember, price increases of 5% today do not "go away" in the future unless deflation sets in.

 

Thus, people still "suffer" in the future even if their purchases were not made this year.