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Sim Ann’s Mendacious Twaddle Cannot Disguise the Toxic Link Between HDB (Over)Pricing and Bailing Out Our Sovereign Wealth Funds

State media dutifully reported on Sim Ann’s Facebook post on Monday in which she supported the Government”s motion “asking Parliament to affirm the importance of keeping public housing affordable and accessible, while protecting the interests of both current and future generations of Singaporeans”.

The PAP, like the colonial British administration who gifted Singapore to LKY and which it so closely resembles, dumbs things down for Singaporeans in paternalist fashion. The story they want Singaporeans to swallow is that despite land prices having risen enormously since independence as a result of economic and population growth (much of which is due to Government policy of importing low skilled labour and subsidising foreign PMETs over Singaporeans), a benevolent Government continues to provide high quality public housing priced affordably. Because land forms part of Past Reserves (that riddle wrapped in a mystery inside an enigma that like the PM’s wife’s salary must remain secret lest Singapore collapse and be swallowed up by the sea), the PAP maintain that it can never be spent as that would be unfair to future generations. So HDB must pay the full market price for the land even though they expropriated it fifty years ago from Singaporean landowners, many of whom were not wealthy, for a tiny fraction of its true market value even then. Never mind that it seems hypocritical for the PAP to claim to be worried about future generations when the support provided to families with children is derisory. As I will continue to say, “market” price is meaningless when the PAP Government has a monopoly of land and can restrict supply to extract the maximum revenue.

This is exactly what the Government does by making HDB pay an excessive price for the land even though if HDB was not a Government statutory board but a private sector company it could use its position as a monopoly buyer, or monopsonist, to lower prices. No one should doubt that prices for land are artificially high since prices collapsed when the Government miscalculated and HDB built too many flats. To offset artificially high prices, the Government then goes through an elaborate charade of keeping housing “affordable” by providing a grant to HDB ($4.4 billion in 2022) from the Budget to cover the manufactured loss that HDB makes. HDB’s accounts do not provide a breakdown of its cost of sales between land and construction costs and this has always been a closely guarded secret but its cost of sales were about $5.5 billion in 2022. The Government also subsidises homeowners with CPF housing grants (though these have to be repaid with interest if the flat is sold) to make it possible for Singaporeans to pay these exorbitant monopoly prices.

As I pointed out in my recent blog, “The Mystery of Why the Government Wants HDB To Make a Loss Solved” it would be far easier for the Government to price the land element at cost or at least at a level that meant that HDB would not make a loss. The PAP insists that not paying the “market price” would be unfair to future generations but it has used its monopoly to manipulate the price much higher than it should be in an open market. HDB resale prices keep going up despite the length of the average lease remaining decreasing which suggests that the Government closely watches the build-up of CPF balances and the maximum Singaporeans can be made to pay for smaller and smaller units as part of a coordinated strategy.

The ever rising prices paid by HDB to the Government for land are met through the allocations to Ministry of National Development in the Budget out of current revenues. These allocations can then be channelled to GIC and Temasek. With no transparency on the returns achieved we cannot be sure that the performance figures given have not been goosed by regular injections of funds to cover losses despite the Government’s assurances that this is not the case. As I have pointed out the Budget is an exercise in diverting money away from current spending and from providing tangible easily affordable help to Singaporeans. Whether it is subsidising HDB into overpaying for land or mysteriously ever rising allocations to MOH, to the point where healthcare expenditures per Singaporean resident appear on a par or even greater than those per UK resident who receive most healthcare free, while concealing revenues collected from Singaporeans and foreign visitors in a private holding company, or Net Investment Return Contributions (NIRC) that disappear into long term funds and endowments, the whole Budget is an elaborate shell game designed to hide money from Singaporeans and make it appear as if the Government needs to raise taxes.

Singaporeans need to wise up to what Sim Ann and other PAP Ministers really mean when they talk about the Government’s commitment to “affordable” housing. It has much less to do with giving you a good deal than it has in pulling the wool over your eyes and making more and more of your money disappear into secret and unaccountable entities where, like a Madoff fund, it will appear to be earning good or even excellent long term returns, as former Finance Minister Tharman memorably said, but no real money will ever come out.


  1. At least now we know, how profits through mortgage payment are channelled, to bail out temasek and other linked organisations.

    Nobody can come close to JBJ style of questioning when comes to such financial matter through public policy loopholes. The closest we have now is your blog, chee soon Juan, leoan pierria, James lim and pritam Singh.

    Hope you will stand in A SMC in macpherson and get into parliament kenneth.


  2. Kenneth
    The lan price issue onevtgst’s bugged me. Why should Singaporeans pay for land they don’t own? Either give them title or just charge the proportion of the apartment’s dimensions (for example 1/20th of the entire land costs.) Then ownership would be far more affordable


    • It’s not so simple unfortunately. A majority of Singaporeans are invested in the current system from which the government profits. If prices are cut their wealth will be affected


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