A short one I promise

No more long rambly posts. Just short ones to keep me occupied while I wait for time to pass. So chop chop; point form.

1) Earlier my boss sent me Orwell's take on English language to show us how we can write better with less. I'm shocked at myself for not having read it before. I suppose any English major would have read it at some point in time. I am definitely guilty of writing that should be tossed out into the garbage bin. But better late than never.

2) My colleague, one of the more interesting people in the office, resigned yesterday. Not entirely unexpected but certainly sobering.

3) Civilisation 4! For people who know why there is an exclamation mark, jolly well. For those who don't, skip this point altogether.

4) Sour coffee sucks. I had sour coffee the whole day because the damn canteen uncle wouldn't change the large canister of kopi.

Budget 2007

The big one is here. Yesterday for a mind numbing 2 hours or so, 2nd Finance Minister Tharman Shanmugaratnamn delievered a speech meant really for technocrats. Chockful of minor details and a bland emotionless description of the vision the government has for SIngapore, he delivered one of the most impactful Budgets for a while.

Check the speech out here (its forty-plus freaking pages long, I warn you all first): Singapore Budge 2007

First, the three major thrusts of the budget, in my humble amateur opinion.

1) Raising GST/Lowering corporate taxes -> Move towards indirect taxes
2) Raising CPF contributions, but stifling the increase for low wage workers, so that they become more competitive
3) Workfare - psuedo-welfarism


Man there's just so much to talk about. But let me give me initial asssesment.

It's a big move to do what the govt has done. It is essentially pushing the economy and tax system to face the new Singapore. A singapore powered by foreigners, businessmen, tourists and high-rolling gamblers.

It will be a Singapore populated by more PRs than citizens, where most if not all of the jobs that will be available will be to service these high-networth foreigners.

It will also become a place where hopefully the majority of the Singaporean working population occupies the middle to the higher level type of jobs, where more than half of the population will have degrees.

Is this a grand vision of us tapping the world or a vision which shows that we are totally at the mercy of the world?

I reserve judgement.

But what I am interested in is that although sweeping, the changes mean little to the heartlander. In an example Tharman gave, a worker earning $800 can look forward to taking back $57 after the changes. Woopee. And after you minus the GST increase, he will get about mmm $30 more a month. But wait there is the GST credits to help him right? Well, as most of the people I speak to, who are poorer, most of this money that is given will automatically go to paying off debts.

The one big flaw the govt has in these big policies changes is that it assumes people are rational. Of course, that is the assumption one starts with if and whenever you use economic analysis. But damnit, most people are not. If you give someone $200, do you think he will put it aside and distribute it over the nxt 2 years to offset GST? Heck no. That guy will probably use it to buy a handphone or give angpows to his relatives. Or buy him a small comfort in life.

Is the govt right in saying that GST credits of $1,000 will help offset a poor family's GST impact over 19 years? Yes and no. On paper, yes. In reality no. It has wised up though, and decided to distribute the money over 4 years so the relief can be felt over a longer period.

Sweet things last a short while, while bitterness stays in the mouth for a long long time.

Xando vs Aili

Xando, and before that we had Expressions and Jean Yip. Now the Americans have Aili.

Kinda ironic because Aili sounds like a Chinese name (I actually have a friend named Aili) while we tried to be exotic/Western sounding.

My beef with weight loss products as always is that you can lose weight by natural means, so why choose artificially induced means? I mean you can exercise, which is much better - build muscles, improve overall health and lose weight. That was how the cavemen did it. They dragged their women around and speared prehistoric chickens that had claws and sharp teeth.

Secondly, these products mess with your body. They trick your body into doing something its not supposed to do. And everyone knows if you mess with something, it will mess back with you. Side effects like oily stools and diarrhoea (hey i managed to spell that)? No way man. That's probably like the common side-effects. What about the less common side effects? Cancer? Liver failure? Safe, my ass.

Of course the counter-argument is that some obese people just can't seem to turn back the fats and need extra help. If so, let such cases be reviewed by a doctor. Let the doctor decide whether say surgery might work, or even drugs. For in those cases, they face a bleak future of having high possibiities of heart attack and high blood pressure etc. So they might as well take weight control pills.

But making such drugs over-the-counter is just tempting abuse. Girls who are already skinny wanting to get skinnier. Dude, these drugs typify why some people are fat - laziness.

Get out run, gym, swim, play footy, beat up a capitalist selling weight loss drugs - whatever. Do something.

Politics and sports - Draw the line please

With the ball at his feet, Singapore striker supersub Khairul Amri drove towards the Thailand goal in the 81st minute. The Thai defenders hesitated, perhaps because their tired legs refused to shake off the lead that seemed to grow on their muscles; perhaps because they thought Amri could do no harm, or that he would not have the guts nor gumption nor the skill to do anything so audacious as to shoot.

But with a quick shuffle of his feet, a shoulder drop and a slight pull-back of his right leg, he slammed the ball into the net with the outside of his foot from 18 yards out, past 3 defenders and a stunned goalkeeper. The scoreboard read: 1-1. Aggregate 2-3 to Singapore.

He ran, unbelieving, howling with joy to his teammates in the silence that had suddenly descended upon the 30,000 strong crowd at Thailand's Rajamangala Stadium.

It was the highlight of the match which was dominated by the Thais for most part of the match. Their skill and speed was clearly streets ahead of the Singapore team but the Singaporean team wearing blue, instead of their normal red, was the better organised side.

Indeed, with this win, Singapore not only retained the Asean championship, previously known as the Tiger cup, but can also finally claim to be the genuine challenger to Thailand, long regarded as the kings of Asean football.

The win was glorious and unexpected given the controversy that had marred the first leg of the final. Singapore won that first leg 2-1 after the Malaysian referee Malaysian referee C Ravichandran awarded Singapore a dubious penalty in the last ten minutes of the game, prompting a walkout by the Thai team. They eventually returned after 15 minutes but it had set up an intriguing finale and set off a string of conspiracy theories put forth by the Thai media.

The controversy was further fanned by the straining of diplomatic ties between Singapore and Thailand after former premier Thaksin Shinawatra met with Singapore deputy Prime Minister S. Jayakumar on a social visit.

That prompted Thailand to cancel a planned visit by Singapore Foreign Minister George Yeo to Bangkok. A few days after that, the Thai army said that it suspected Singapore of tapping the phones of its generals through Shin Corp, previously owned by Thaksin and which was bought over by the Singapore government investment company Temasek Holdings last year. That sale started a chain of events that ended Thaksin's political career.

Some quarters are saying that for better neighbourly relations, it would have nicer if Singapore had lost. After all, Thailand is a bigger country than Singapore. And 'face' means a lot in the Asian culture.

But for most Thais, despite the media frenzy spouting all sorts of theories, they draw the line between sports and politics. Emotions certainly run high in football games. Read some of the chants that the English fans use when their team meets their rival team.

Yet, emotions almost always stay within the stadium when the game is played. Once the game is over, players shake hands, fans walk out, with the memories of the spectacle trickling away with each step towards home.

I enjoyed myself. I cursed the Thais when they scored, I screamed at the referee when he made a bad call.

But I did so in the spirit of the game, not because their leaders are taking potshots at my country.

I drew the line. I hope everyone else will too

Singapore's aghast at GST increase, Should they be?

Singapore has been slowly moving from a direct tax system to a more indirect tax system since 1994, when GST was first introduced. Then throughout the 1990s, income tax and corporate taxes were progressively cut.

In 2003, GST went up to 4% and in 2004 5%. And now next year it will be likely to be 7%.

Although no clear indications have been given, PM Lee has hinted corporate tax is likely also to fall. Income tax, already at 20%, may fall if other countries are dropping their rates too.

All these points to an acceleration of the moving from the direct to the indirect tax system. It will not be a surprise if by 2010, GST is up to 10% or higher. Crazy? Not really.

As I said in the previous post, there are several pros to having an indirect tax system. The one big worry is that indirect taxes are highly regressive and they impact the poor more than the rich.

Many Singaporeans have rightly taken up their cudgels against what they percieve to be a government placing a heavier and heavier burden on the poor, even as they claim to be helping them.

I disagree. I think the fundemental philosophy underlying the movement from direct to indirect taxes is still there. But it is not the kind of argument one would accept in the face of the prospect of having one's pocket burnt. I think the PM tried to sell the policy by stating how the Government can help the poor with the increase in revenue from GST.

The economic argument also holds a lot less water given that Singapore seems to have taken a classical economic approach to managing their economy and yet Singaporeans are still struggling.

Jobs are up but people are still unemployed. Jobs in the bottom fifth are also paying less, and incomes have dropped for them while the top fifth have seen their incomes soar.

Economics, alas, like any theory works in theory because it assumes many many things. In the case of Singapore, there were several many variables that upset the balance of Singapore's economy.

1) Competition from India and China. The flood of 1 billion workers into the world economy is like a heavy metal ball slamming into a

In any case, the movement towards

GST 5- 7 percent - what's really at stake

VERY LONG POST> WARNING

Please turn back if you can't stand long economic, theoretical essays. Ciaos



On Monday, the Singapore PM dropped what many people saw as a bombshell. The goods and services tax, a consumption tax in Singapore, is moving up from 5% to 7%.

His reasoning: Globalisation has caused the income gap to grow. And with the expected increase spending as the population ages, there will be a need to find more money. He says the government wants to help these people, especially those at the bottom of the wage gap. For example, he wants to put, as a more regular feature, the Workfare bonus, a financial incentive to get people to work, by giving money to those who can hold unto a job.

But there needs to be additional sources of revenue, if the government is to avoid dipping into its reserves. So raise the GST from 5 to 7% so more money can be collected. Also, change the definition of the Net Investment Income, so that the government can take out more from the money earned from investing its reserves. (This is managed by the Singapore government's investment companies, Temasek and Government Investment Corporation)

Naturally, this created a huge uproar. His argument seems to be: We want to help the poor. Raise taxes so we can get more money. Redistribute this money so that the poor gets more help. Sorta like Robinhood.

Of course, this is entirely counter-intuitive. Shouldn't you lower taxes to help the poor?

First, consumption tax is regressive as compared to income tax, which is, in most cases, progressive.

A progressive tax system is one in which the richer pay a proportionally higher rate of taxes than the poorer. For example, in Singapore, the rich pay xx% of their wages, which is higher than xx% of someone who earns xx dollars.

In the case of regressive taxes, or in this case, the consumption tax, the poor guy pays a higher proportion of his salary to taxes than compared to the rich guy.

This is different from paying a larger absolute amount of tax, which the rich does in the case of the consumption tax.

For example, everyone needs to eat. The richer may eat a more expensive meal than the poor, but all will have to eat. In the case of Singapore, most Singaporean families buy rice for food to eat at home. So let's assume that there is only one type of rice in Singapore, and it costs $10.

If GST increases by 2% to 7%, then all families will have to pay that extra 20 cents more. For a poor family, if the household income is say $1,000, 20 cents is a higher proportion in the poorer familiy, than it would be in a household which earns $10,000.

But of course, we know that the rich people buy more expensive rice. There is of course the fragrant rice version, the organic version or the cheapest gunny sack version. The prices differ and depending on the income level, families would spend differently. But since rice is such a basic necessity for most families, we can assume, not without being too extreme, that there is not that much of a difference in price of rice. So even if the price of the most expensive rice is say, double that of the cheapest, the rich would still be paying a significantly less proportion of their salaries in buying rice.

In other words, the poor will almost always spend more of their money on consumption than the rich do because their salaries are just much smaller than the rich, even though the rich will probably end up paying more taxes by virtue of them spending more.

If this is the case, how can a rise in GST help the poor, many people complain. Will this not make the poor poorer and the rich poorer too?

On this question, there is significant debate at the intellectual level. But economic theory posits that indirect taxes (GST) is a better system than direct taxes (income tax).

Why? It is more efficient as it leaves the individual in charge of his own spending patterns.

A person would usually base his spending, saving and investing patterns on just how much he has in the bank, economic theory says.

So in the case of a direct tax, like income tax, the person will have a certain percentage of his money taxed and he can only decide what to do with the money after taxes has been deducted.

But if the system moves from a direct tax system to a more indirect tax system, there is more money for the person to play around with. So it gives him control of his own finances.

At the same time, a consumption tax would mean that it is more expensive to buy things. As such, the incentive to save and invest grows.

But that does not mean that consumption will go down, because a person's decision to cosume varies from person to person. It does mean that there will probably be more people attracted to saving and investment. In fact, you can avoid taxes by just deciding not to consume that much in the first place.

Another effect of lowering income taxes is that in a globalised world, people are mobile. So one major consideration for top talent and CEOs is how much of the money they earn actually goes into their pocket.

And in this knowledge economy, talent is the greatest contributor to value. So the country which can attract the most talent will most likely thrive. Those which cannot, will probably fall by the wayside.

Similarly, for companies, a major consideration for them when they consider where to invest in is how much a country taxes their profits. So they would invest in a certain country which has lower taxes than one which taxes them more.

Like individuals, companies which are taxed less on their profits has an option to invest the increased amounts of returns into capital or research and development.

Of course, this does not solve the problem of the regressive nature of consumption tax. But it does mean that the economy becomes more competitive.

This is then where it gets tricky, no pun intended.

If the economy gets bigger, as the saying goes, the pie grows larger as well, which means that everyone has more to eat.

If more investments and talent flood into a country, the economy booms and more jobs are created. Incomes at the top will increase exponentially.

This will create the trickle-down effect, so that the poorer people also get better paid jobs. This is what economists claim the market economy will do for the entire economy. Let the market decide and everyone will be better off than they were if the market was mangled with.

Well, I try to put this into persepective in my next post on Singapore's experience.

The Matrix

The Matrix rocks. Fullstop. Plus another fullstop. That's how good it is. No can say anything else about the movie except that it rocks. Or rOxoRs! Or Rox. Whatever; it is the best show of the last decade, maybe even in the last millenium.

Maybe I exaggerate but certainly it is undoubtedly a movie which appeals on so many levels and discusses so many things. It also helps that the heroes are cool dudes.

I totally am infatuated by Morpheus's sunnies. Freaking gravity defying shades. Awesome.


I am coolness personifed. My shades are coolio. Even the sofa is cool.

But the reaons for loving the movie goes way beyond the beautiful poetry in motion set up on the movie screen, what with the flowing fight sequences with the use of CGI. No it is the themes that the Wachowski brudders have delved into.

Lemme just rattle off a few themes of great signficance - existentialism, religion, humanism utilitarianism, relativism vs objectivism and metaphysics. Mind boggling isn't it? And this is just the first movie. (granted the other two never rose to the same dizzyingly powerful heights of the first installment)

But the one thing that has been bugging me ever since I read Mark Rowland's Everything I Know I Learned From TV, which is really a pop philp book, I keep going back to that one scene which has Cypher played by Joe Pantoliano eating steak with Agent Smith. The Judas-like character remarks as he chomps down the steak.

"You know, I know that this steak doesn't exist. I know when I put it in my mouth, the Matrix is telling my brain that it is juicy and delicious. After nine years, do you know what I've realised?"

"Ignorance is bliss."

Interesting isn't it? Would you be happier ignorant and just to feel happy or to actually be doing something even if it may not bring happiness?

Rowland pointed out in his book that for many of us moderns, happiness is a feeling. When for example, we buy the latest iPod, we are happy. We touch the metallic surface, gaze upon the shiny gleaming screen surface, listen to the pure quality of sound and we are happy.

Or we are happy if let's say we win the lottery. A million bloody bucks. We can use the money to buy stuff that we like or want. Fulfilling these cravings, we become happy. At least for a fleeting moment, until the next bad streak of luck hits us. Or we lose that iPod we just bought. Then feelings of anger, frustration and irritation build up and we lose our happiness.

Like Cypher, most of us want to feel happy. Ignorance, as he aptly puts it, is bliss. As long as we feel happy, we are happy. It matters little that it is all in the mind. In fact, that is the beauty of the whole Matrix project. The humans in there can feel happy. They can feel sad too but for Cypher's case, he will deal with the devil (Agent Smith) if he gets to be happy i.e a movie star. He hates the real existence of life. Dressed in crummy ugly clothes, he has to put up with Morpheus the captain of the ship, who he constantly wants to undermine. He is also unable to touch his heart's desire, Trinity, thereby adding to his frustration and feelings of unhapiness.

Of course the movie is slanted to persuade the audience to sympathise with Neo and his gang of freedom fighters. But ask yourself, would you rather be in a state of happiness all your life? What if there is a machine that can put your mind in a state of constant happiness? Or at least make it such that you always think everything goes the right way for you?

Or would you rather live the life of a normal man or woman who keeps having to face disappointments and suffering. Sure some people would say that it is the disappointments that make the moments of happiness much more sweeter. But come on, we all know that disappointments and happinesss somehow provoke much stronger feelings than happiness. And feelings of frustration linger much longer than joyous feeling.

Given the premise that happiness is a feeling, I think it would be difficult to argue against wanting to hook up to such a machine. After all, we all want happiness right?

Very few people would reject the machine and that is evident from the movie too. Most people are still enslaved by the machine and many reject the real world because they are happy slaves.

But yet we find a colony of humans who reject the notion of the happiness machine. They embrace the drudgery of real living. That I will attempt to answer in the next post.