Tuesday, February 24, 2015

Singapore Budget 2015: Higher tax for top earners, Benefits to lower income groups and CPF enhancements

If you have not seen any of these news about Singapore budget, then you must be living under a rock. Just kidding.. I was told not many are concerned as there will not be massive changes in the budget without prior hints.. So lets look at the budget and the key points captured my eyes were,

  1. CPF Enhancements: Increased the limit from current 5000/m to 6000/month. Which means I am expecting the limit to go 17 months including OW + AW ceiling. So instead of SGD 31,450 per annum, its going to be SGD 37,740. Or additional 6,290. Here 2,890 comes from Employer while the rest is from you. So you got a pay hike of ~250 from next year. 
  2. Income tax: I hate this part to increase the rate and create complexity. Especially when the top bracket is paying 20%. If it goes higher then what exactly is the point of getting top talent here. Anyway to not to offend the 'mass sentiment' and to show robinhood policies I would go with it. If you are making 250,000 the MoF estimated that the difference is 400 (Source: Todayonline). Not sure how they ended up with 50,000 taken for deductions. The CPF is max 20,400, Earned Income - 1,000, Spouse Relief - 2,000 (if your spouse is not working), Kids - 8000 (2x 4000) and this makes it max 32,000. I don't think an average person can claim relief of 50,000 but more in to 30,000 unless max out on SRS, Insurance, Education, etc.. So if I take 30,000 then the difference is 950. Anyway I will wait to see the excel calculators from IRAS as I am not very good with manual calculators. Or I need to use excel to measure
  3. Maid Levy: not a fan as this is not applicable
  4. Others: No comments

Overall, this is a mixed one for me and I tend to feel that this is more towards negative side rather than exited one. 

Thursday, February 19, 2015

Stereo type - Is it true that many things happen based on 'profile' or race?

This is one of the most sensitive topic but I am deeply saddened by an interaction with one my  close friend (who holds masters and Dr from world class schools). We are having a conversation and there are few words came out of his mouth that gave me his views about the social class system in even developed economies.

Believe it or not, or blame it on conspiracy theorists or matrix, the conclusion I ended up is we humans need to evolve lot more. Whatever assumptions we make, and whatever masks we wear, end of the day the real feelings (heart truths ??) can be quite different.

For example, one of the basic assumption in Singapore society I encountered is alcohol and Indians. Similarly laziness and malays, money and chinese. All these are quite funny topics over a meal or bear. But it is not when we see it on a serious note.

Indians are not alchoholics and probably one of the lowest consumers of alcohol in the world barring muslim countries. Per capita consumption of alcohol is quite low and based on the WHO report , the lifetime abstainers are ~82% and including stoppers are ~ 92%. So the 8% are the one who are consuming lot more and probably creating the misconception. Similarly, I have seen dozens of my malay friends who are much more hard working than any other race or nationality. In fact the productivity of the friends is much higher given the balancing act of family and community they do.

Nevertheless, I am not trying to defensive or show some examples and jump to conclusion (or stereo type ;)) but recently I had enough of these things and the horror to me is its happening in Singapore. Not with friends but even at work.. One of the most sickening conversation I ever had is with an executive in an MNC (HQ in USA and Fortune 100 firm). The view shared was it's good to keep a Chinese person to handle local customers. I am flabbergasted by that view, and hearing from a company which talks about equality, and global view. So all the materials and so called CSR topics are just for publishing and the decisions are made based on specific views.

I really wish that we can move on and put these behind.

Tuesday, February 10, 2015

Wish there is a mental shift: Entitlement to Pragmatic, and realstic

What makes people from some other countries like Singapore or Korea to Indians. Very simple, I saw majority of these people questioning their government for their rights, and going with the real world. In India, we tend to demand others for our 'stuff'. We pay taxes through our nose, but we do not question the bad quality in public schools, but send our kids to private schools. Then strike for pay hike; same with health care. Thanks to political parties who just treat public money as their own money, the vicious cycle is going on forever.

I saw this news from sakshi, where a school teacher is complaining that the current CM is not doing his job, and not increasing the pay. The expenditure is

  • Rent: 4,500
  • Daily necessities : 4,000
  • Milk: 1,500
  • Rice: 2,000
  • Education: 10,000
  • Medical: 2,000
  • Clothes: 2,000
  • Gas: 400
  • Utilities: 450
  • Travel: 1,000
  • Entertainment: 600
  • Cable: 150
  • Mobile: 500
  • Vegetables: 1,500
  • Others: 3,000
  • Total: 33,600
First of all this is a totally made up story IMHO. Anyway, still one question on why on earth a school teacher who is getting paid by the tax payers want to send his/her kids to private schools and spend 10,000 every month? 

If the justification is that the quality is bad, then why can't we close down all these schools and remove the teachers? That would save pretty good amount for the tax payers. 

The expenditure is equal to $550 per month which makes it on par with many other asian nations monthly expenditure. 

Average Malaysia school teacher makes $ 1,124 month. Are we trying to say that our cost of living, or living standards are higher than Malaysia which warrant such salaries ?

Friday, February 6, 2015

Fuel prices dropped by 40+ percent , but Airlines are not cutting down prices.

I am a bit annoyed thought it seems kind of accepted industry practice when any savings due to price reductions are not transferred to customers.

We can see how the price dropped from IATA. Based on a WSJ article Airlines spend 29% on fuel. So if I take a very simple example of $100 cost per person (while airline charging me $120 assuming $20 as margin) the fuel cost itself used to be $29 and its now $24. So the cost to the Airline is now $95 and the ticket should be reduced accordingly (20% margin gives me $114). However I still see the same old rates and not even a single cent reduced. In fact the opposite is correct. i.e. the ticket prices are going up recently.

The explanation given by Airlines doesnt impress me either. From our own ST article here, it appears some are reducing (which I can't see) but our own SQ is not going along the same route.

I don't understand the logic of investing in lounges, upgrading flights or returning to share holders taking priority over business. May be the last one makes sense to me but the savings due to external factors can't be used to fund the capital expenditure activities which are part of day to day business. Unless there is a huge demand for upgrading flights or investing in lounges for airlines regular passengers (which I found quite weird as any flight I take can see less than 10% frequent flyers) so is it the airlines saying the 10% spending more money compared to rest of the 90%?

Tuesday, February 3, 2015

Taxi Confusion in Singapore - Varying flag down fares, distance charges and models

Probably the most complaining part about taxi is the 'non-availability' when one really needed. For example, during peak hour or when its raining. However I have another issue with taxi which I encountered during my trip from Changi couple of days back. 

The challenge is the different models and the fare difference. I remember Straitimes did a great job trying to put things together in single file (I've uploaded here) and appreciate the effort.

What I did is to do a quick comparison with Excel assuming three different routes. I have taken plenty of assumptions and please don't ask me that how come your fare is much higher :) Reason is I've excluded any ERP charges, late night charges, location based charges, Peak hour charges, booking charges, waiting charges and all other stuff. A very basic and simple calculation for the distance.

As you can see the price difference between the most common taxi (I guess Sonata) vs the most common Merc is huge. It's almost 38% difference.  That's excluding Crowns and the notorious Chryslers. 

The worst thing is the price difference between Sonata and Premier Kia. That's a 5% difference but in my experience taking this last week was a difference of 30%. Normally I pay 21-23 for a trip using Sonata and this time I ended up paying 26 which is quite huge difference. The traffic was smooth and the route is the same. No idea why and that motivated to write this in the first place. 

Even if we take the difference between Sonata - i40 from Comfort (largest operator) that's a difference of 50C but 5-8% higher depending on how long the commute is. No idea why and how the operators decide to charge, rise the fares. I recall LTA controls the fares just like the PTC for public transport but it seems these days the taxi operators have a free hand :|

I wish there is some commonality. Just remove the so many versions and keep two or three versions. 

  1. For regular usage - Sonata, i40, Prius and all can go here
  2. For Exec or Sedan - Merc or likes of it
  3. MPV's - Larger groups .
That would simplify the fare confusion up to some extent. Ofcourse this doesnt answer the "peak hour surcharge, mid night surcharge, and location surcharges.. 

Monday, February 2, 2015

Singapore budget airliner Scoot gets its first 787.

Source: CNA

This is good and I must admit, I love the Scoot Biz class any day compared to the cattle class which I am used to travel on official duties. Thanks to 'cost cutting' of enterprises, and 'profit' of airline industry, we end up with comparing 18" vs 18.5" seat width, or 2" difference in pitch. I can see the discussion in lounges, about how Asiana 21" width is great, or SQ 32" pitch.

Scoot is a bit generous and gives 38" pitch and 22" width which is quite comfortable and at the same prices of what other economy fares are at. So for a trip to Perth or Sydney this makes more sense.

With dream liners (I enjoyed my journeys to Japan on ANA few times except their horrible seats) I have to say the overall experience going to be much better.

They are flying to Perth from this thursday and wish to see more 787 in other routes too.. 

FDI Inflows to India increased by 26% in 2014..

But wait, the final position is not even in the top ten nations but far beyond. Here goes the top ten nations which are darlings..
Source: UNCTAD

Interestingly small nations like Singapore & Hongkong received 81 & 111 Billion respectively while India received 36 Billion. 

Tough job ahead Mr.Modi and all other regional leaders. Got to triple the numbers very very soon. If not the situation would be worse when the 'hype' goes off.