We have come a long way since 50 years ago in providing homes for Singaporeans. We are proud of our public housing legacy which our MND pioneers have laid the foundation for. We will continue to build on it, guided by the values which have been passed down from the early days of nation building.

Despite difficulties in recent years where demand outstripped supply, we have managed to help 25,000 families, most of them newlyweds, to secure their flats in the past few months. We will continue to help another 25000 families this year.

Besides the newlyweds, we are now able to spread our resources and look at housing needs of other groups, such as the 2nd timers, rental applicants, retirees, families wanting to live together or nearly, and victims of misfortune. While we are aggressively ramping up housing supply for Singaporeans, we also adopt a compassionate, inclusive and kind approach. The less privileged are also not left out, and we will continue to exercise flexibility for the less fortunate families.

Going forward, MND’s focus is beyond providing a physical roof – it is to facilitate the building of strong communities, preparing for an aged society and maintaining our competitive edge as a world class city. Our guiding ethos will be one of “compassion”, “inclusiveness” and “kindness”.

On the Shoulders of Giants

1. Last month, we mourned the passing of the late Dr Toh Chin Chye. He was my first boss in the Health Ministry. I had the privilege to observe at close range how he lived the values of his generation who built modern Singapore: frugality, hard work, personal sacrifice, devotion to family and compassion for the vulnerable.
2. During his long years in public service, Dr Toh was briefly in MND in 1960, the year when HDB was formed, with the late Mr Lim Kim San as its first Chairman. Mr Lim was tasked to solve an acute housing problem. Under his watch, public housing and home ownership became firmly established and eventually, HDB living has become the Singaporean way of life.
3. Mr Lim Kim San roped in Mr Howe Yoon Chong as the chief executive of HDB. In his straight-talking and no-nonsense way, the late Mr Howe led HDB to build 21,000 flats in 3 years. It was an unprecedented feat at that time. The construction industry nicknamed him the ‘bulldozer’, who rammed through obstacles to get things done. This included the politically arduous task of building the first HDB town in Toa Payoh, against fierce opposition from the squatters there.
4. Last June, when I stepped into MND, I was mindful that I was stepping into the shoes of these giants. MND benefited from these and other giants. For instance, I remember Mr Dhanabalan who brought HDB living to new heights with more varieties in design through involving the private architects. To enhance the HDB experience, Mr Dhanabalan started the park connector project in 1991. The network now spans over 200km and has set the foundation for our City in a Garden vision.
5. Mr Dhanabalan had an outstanding CEO in Mr Liu Thai Ker - an unusual talent with deep knowledge of Chinese culture. Mr Liu and his team picked an excellent piece of calligraphy by the late Mr Pan Shou to display in the HDB lobby to remind HDB staff of their mission. This was the one in which Pan Shou captured on paper, the moving poem of Du Fu, a Tang Dynasty poet:

   安得广厦千万间
   大庇天下寒士俱欢颜
   风雨不动安如山

6. My translation is this: “How I wish there would suddenly appear tens of millions of houses to house everyone, especially the poor, so that they can live in comfort and rejoice, and protected against any thunderstorms”. I first read this poem when I was still in high school and immediately committed it to memory, especially the last two lines:

   何时眼前突兀见此屋
   吾庐独破受冻死亦足!

7. “If the price for realising this wish is that I alone, my own heart is destroyed in the storm, and I freeze to death, so be it.” What a great vow! Du Fu’s compassion and deep sense of self-sacrifice left a deep imprint in me, and I am sure in many Chinese scholars. He died a pauper but this, and many of his other heartfelt poems immortalised him. I am glad that despite many changes in HDB leadership over the years, Pan Shou’s calligraphy still hangs in HDB lobby, as it should. I recall this part of MND’s history, not out of nostalgia, but because I want to draw on the wisdom of these pioneers. Their ideas and the values underpinning their thinking process, remain equally relevant today and for the future. Let me distill them into 3 learning points: (a) focus on the longer term greater good of many; (b) put community interest above self interest; (c) dare to try. It was with this spirit that they turned rural Toa Payoh into a thriving modern township of today and Singapore a world-renowned Garden City. We owe them a lot.

Of Pigs, Mice and Men

8. I stepped into MND facing a hot housing problem. A severe mismatch in supply and demand, coupled with global liquidity and low interest rates, caused a sharp spike in housing prices. The situation reminded me of a speech that the late Dr Goh Keng Swee made in 1980 on the plight of pig farmers. I was then a very young civil servant and I remembered that particular speech. He spoke on what the economists refer to as the pig cycle. I think the economists in this house will know the cobweb theorem. When the price of pork is high, pig farmers rear more pigs in the hope that they will make more money. However, when the piglets grow up and reach the market, there is a glut and prices drop. Farmers then cut the number of piglets they are going to raise for the next time, thereby ensuring that when these piglets mature, there will be a shortage and prices go up again.
9. The pig cycle applies to many economic activities: rice, vegetables, even container shipping, all follow such a cycle. Dr Goh used the pig cycle to explain the difficulty of matching the supply of hotel rooms to actual tourist arrivals, resulting in a critical shortage of hotel rooms at that time. With more sophisticated projection, Dr Goh hoped that planners and hoteliers might perform better than pig farmers. But wisely, he added a caveat, that in real life, events seldom move in accordance with projections. Adding a poetic touch to his speech, Dr Goh referred to Scottish poet Robert Burns’ poem “To a mouse”. Let me recite the key stanza:

   “But little Mouse, you are not alone,
   In proving foresight may be vain:
   The best laid schemes of mice and men
   Go often askew,
   And leave us nothing but grief and pain,
   For promised joy!”

10. Such is the occupational hazard of planners. The best laid scheme can often go askew. This is particularly so for Singapore where the larger global environment, over which we have little control, can easily derail our projections. That was how MND’s housing projection and recent rebuilding programmes went askew, when our population shot past projections, mortgage interest rates plunged, and our economy made a surprisingly quick and strong rebound in 2010. And bear in mind how difficult it is for the construction industry to ramp up and slow down. There is a long lead time.

Seeing Some Light

11. Many months of corrective action, policy modifications and hard work have brought some stability to the housing market. We are not yet out of the tunnel, but we are seeing some light at the end of it. Er Lee Bee Wah shared a similar observation.
12. In the last quarter, private residential property prices rose by 0.2%, the lowest increase in over 2 years. HDB resale prices went up by 1.7%, lower than the preceding two quarters. This year, housing prices should moderate further. In some areas, they may even soften, and in some areas, they have already softened. How exactly property prices move in the coming months will depend on global economic developments: the sovereign debt crisis in Europe, the performance of the US and Chinese economies, oil prices and interest rates. We monitor these changes closely and will refine our policies in step with the economy.
13. Mr Zainal Sapari suggested that we take further measures and tighten homeownership rules. Mr Gan Thiam Poh raised the idea of shorter leases for some BTO flats. Mr Zaqy Mohamad asked for a larger housing grant in return for a longer Minimum Occupation Period. I have heard you and noted your suggestions but I do not propose any new measure, given the current price trend. I think let’s give the existing measures time to fully mature.
14. Overall, we have made real progress. I thank HDB officers who have been working very hard to accelerate the building programme, as well as many other agencies, our consultants, contractors and construction workers who partner us in this effort. I must also thank Singaporeans who have been patient and understanding as we tackle the issue.
15. By now, almost all newlywed first-timers earning below $10,000 a month can select a BTO flat if they apply for one. This year, we are launching another 25,000 BTO flats. As the number of marriages eligible for BTO flats is about 15,000 a year, I can now start to address the housing needs of other buyers. Not all, but some.

(a) Second-timers

16. First, the HDB second-timers. These comprise up-graders, down-graders and divorcees with children. Each recent BTO launch attracted about 4,600 such applicants. With priority given to first-timers, they compete for only 5% of each launch, resulting in high application rates.
17. Starting with the next BTO launch this month, we will triple the second-timer allocation of new flats in non-mature estates from 5% to 15%. This should cut the second-timer application rate from above 25 to a single digit, while keeping first-timer application rate below 2.
18. We will keep the status quo for BTOs in mature estates and Sale of Balance Flats. This way, first-timers can continue to enjoy top priority in allocation. We will study the March BTO results, before we make the next tweak to the balloting rules for subsequent launches.
19. As for ECs, we will adjust the 95/5 split between first-timer/second-timer applicants to 70/30 immediately, to match the prevailing profile of the applicants.

(b) Rental Applicants

20. Second, the plight of the HDB rental applicants, as highlighted by some members, including Dr Faishal Ibrahim. We made some progress last year but I know that more still needs to be done. The rental flat building programme is in progress. As completed units come on stream, more families will benefit.
21. Last year, we successfully placed 3,300 families in HDB rental flats. The waiting time for HDB rental flats has come down to 5 months. We will continue to work on this problem. But we must remember the larger social factors which cause this problem, as Mdm Foo Mee Har reminded us, including for example, teenage marriages, divorces, and problem gambling. While MND addresses the downstream problems, our society at large collectively needs to tackle the upstream causes and focus on prevention. Simply building more and more rental units is not a sustainable strategy. We have to help prevent the problem.
22. SPS Dr Maliki is piloting a scheme in his constituency in which he mobilised local resources, and that include the CDC and FSC, to help vulnerable families improve their lot: better education for their kids, higher skills and better jobs for themselves, or simply undergoing marriage counseling. It is hard work and uphill but immensely satisfying when families get rescued and are put onto a recovery path.
23. Mdm Foo highlighted one upstream problem – families selling their flats to pay their debts or short-term expenses, and some under the duress of loan sharks. These illegal moneylenders take the debtor’s cash proceeds and leave the seller homeless. They end up in HDB office asking for a rental unit. Last month, Straits Times and Berita Harian highlighted this problem. It is both sad and disturbing. As a society, how can we prevent such a tragedy?
24. On HDB’s part, we will implement Mdm Foo’s suggestion, tighten financial counseling and step up the checks on prospective sellers to make sure that the families understood and have viable housing alternatives before selling their flats. Where we suspect that the sale would do more harm for the family, we will try to actively discourage the sale. We will work with the local FSC as suggested by Mdm Foo. I hope Singaporeans will accept this paternalistic approach for the good of the families involved. Separately, CEA will also watch out for unscrupulous estate agents who partner loan sharks. We will flush them out. We welcome whistle-blowers and honest feedback. I do not know if these measures are enough to minimise the problem. But if need be, we should be prepared to consider tougher measures. For example, we must try to find a way to prevent the loan sharks from getting the cash proceeds. I welcome suggestions from Members.
25. Ultimately, our objective is to get families into home ownership. Public rental should only be an interim, not a permanent arrangement. Last year, we were happy to help 340 households transit from public rental into home ownership. Mr Azhari was one example. He was allocated a rental flat in 2006. Subsequently, he found a steady job and his income increased to $1,400. He applied successfully for a 3-room BTO flat in Punggol, with the help of an additional housing grant of $40,000. He has just collected the keys to his new home. He is able to service his HDB loan using just his CPF funds, without paying cash out-of-pocket. We are happy for him and his family.
26. Yesterday, DPM Tharman mentioned that even a low income family with $1,000 per month salary can afford an HDB flat. This piece of comment caused a stir, precisely because it sounded so incredible. DPM was referring to a 2R HDB flat, which we started building in 2006. The subsidised BTO price for such a unit in a recent launch is about $100,000. If he is a HDB first-timer, he will be entitled to a total housing subsidy of $60,000 from the Additional CPF Housing Grant and the Special CPF Housing Grant, which we introduced not too long ago. The net selling price to him is therefore about $40,000. The monthly mortgage payment on such a HDB loan can be fully covered from his CPF contribution, without out-of-pocket. In practice, most 2-room BTO applicants earn above $1,000. The median income of these 2-room applicants in recent BTO launches is about $1,400.
27. NCMP Gerald Giam asked about those who are not eligible for rental units because their salaries exceed $1,500. Currently, the income ceiling is $1,500. Where the income exceeds $1,500, we have been looking at individual cases and on a case by case basis, we have been exercising flexibility and allowing, when there are good reasons to be compassionate. So, there are families earning above $1,500 living in HDB rental flats today. As we discussed with Mr Giam in this House last time, the rental these households pay are rightly higher than those earning below $1,500, which Mr Giam agreed. Even so, the rental they pay would still be significantly below market price.

(c) Retirees

28. Third, the retirees. Many have provided for their retirement and are comfortable, physically, socially and financially. But some are finding cost of living a challenge. If they are living in a larger HDB flat with their mortgages largely paid up, they will have options. Renting out a room brings some income, besides useful company. For some, right-sizing to a smaller unit makes a lot of sense. That is why we build studio apartments. They are popular. HDB will launch 2,000 studio apartments this year. Many will be in the mature estates.
29. To further facilitate right-sizing, we are introducing the Silver Housing Bonus and enhancing the Lease Buyback Scheme. Many Members have commented on these two initiatives and offered useful suggestions, both during the last few days as well as today. We will study them. In particular, we will review the CPF Retirement Account top-up criterion with MOF. We hope to complete the review and announce the details in a few months’ time.
30. To support the elderly who prefer to remain in their neighbourhood, we will introduce a new Ageing-in-Place Priority Scheme. This is the idea that Er Lee Bee Wah talked about earlier, and it was also an idea that SPS Sim Ann gave to me a few weeks ago, which is to give elderly applicants of a studio apartment higher ballot chances if the studio apartment is in the same town or estate or within 2km of their existing property. We will implement this idea from the next BTO launch this month.
31. Mr Gan Thiam Poh and Ms Sylvia Lim asked that we reduce or relook the resale levy for elderly and genuine cases seeking to downgrade. There is no resale levy if they buy a studio apartment, or a resale flat. For those who want to buy a new flat, the levy as Ms Sylvia Lim earlier reminded us, is to ensure that those who have never benefited from any housing subsidy get more subsidy than those who have already benefited once before. But I know, on the ground, in many cases it can cause difficulties. I have been looking at them, and on a case-by-case basis, we will try to assist where we can, and we have been trying. For the case that Ms Sylvia Lim mentioned, I think if you can send directly to me. I will take a look.

(d) Families living together or nearby

32. Fourth, many Singaporean families want to live together, or at least near to one another. This forges strong families, besides making a lot of practical sense. Grandparents help to look after their grandchildren; grandparents remain active and healthy and engaged; and children set good examples of filial piety. These are strong values which we must inculcate. Er Lee Bee Wah made a strong call for this and I totally agree.
33. We are building more HDB flats in mature estates, wherever feasible. This year, there will be BTO launches in Bedok, Kallang, Whampoa and Geylang. Indeed, 30% of BTO flats to be launched this year will be in mature estates. This will allow many more young families to benefit from the Married Child Priority Scheme. To provide further support for these families, we will increase the ballot chances for those applying to stay with their married children or parents, starting from the next BTO this month.
34. Mr Gan Thiam Poh suggested that we build more integrated flats to encourage family bonding. I support this. We will introduce the Multi-Generation Priority Scheme (MGPS) to give more options for families to stay together. In SkyTerrace@Dawson BTO, HDB experimented with pairing a larger flat with an adjoining studio apartment. So these units allow extended families to live next to each other. MGPS will build on this and enhance it, by allowing joint selection of a BTO unit by the married child with either a studio apartment or a 2-room flat by the parents. So they then both apply together. We plan to launch 250 pairs of MGPS units in various estates this year, starting with the Bedok BTO project this month. We will offer more MGPS pairs, if they prove to be popular.
35. Er Lee Bee Wah urged that we encourage children, whether single or married, to take care of their parents in their old age. I agree. For singles, we provide a higher-tier CPF Housing Grant of $20,000 for them to buy a resale flat to stay with their parents. We have also raised the income ceiling for the grant from $8,000 to $10,000 to enable more singles to qualify for the grant. Dr Faishal Ibrahim and Mr Lim Biow Chuan asked that we allow singles to buy BTO flats directly. Actually if they are above 21, they can already do so, and they can form a family nucleus with their parents to buy a new flat together, because the motivation, as Er Lee puts it, is so that he or she can look after their parents. But if they just want to stay by themselves, I am still mulling over how to help them, as well as other groups faced with special circumstances – foreign spouses, mentioned by Desmond Lee earlier. I have not forgotten these groups – they are very much on my mind. Last year, my priority was first timers, and this year, various others. I think once I have addressed their needs in a substantial way, I will try to come up with some solutions for some of these singles as well as these other groups. In doing so however, we must not unwittingly compromise on the promotion of marriage and mutual family support that we have long held.

(e) Victims of misfortune

36. The final group I pay particular attention to are Singaporeans who are in distress due to circumstances beyond their control: sudden death of a breadwinner, major illness of a family member, severe disabilities. These are victims of misfortune and sometimes our policies and rules do leave them cold on the wrong side.
37. Let me give one example. Last December, local media reported on a freak accident off Pasir Panjang Terminal, in which a Singaporean lorry driver was killed. The deceased had earlier successfully selected a 4-room BTO flat in Choa Chu Kang. He will never get to enjoy his new house. He left behind a widow and 4 children. Media reports highlighted his widow’s plight as she was at risk of losing this BTO flat and becoming homeless, because she is a foreigner. And the rules are clear. The HDB flat is for Singaporeans.
38. We design policies to cater to the vast majority of the population, with clear rules laid out to promote self-reliance and prevent abuse or gaming. But when we come across deserving cases, we must exercise compassion and treat them as special cases. For victims of misfortune, I have always impressed on my MND colleagues that our default position is to try to say “yes”, to help give such victims a leg-up at a time of need. For the Pasir Panjang accident case, HDB is helping the family to keep their 4-room flat in Choa Chu Kang, which I think will be completed next year. Fortunately, while the widow is a foreigner, her children are Singaporeans. So that gives me a reason to allow the family to retain this flat.
39. Er Lee Bee Wah, Mr Faisal Manap, and Mr Lim Biow Chuan spoke about the plight of divorcees. We are sympathetic to divorcees, especially when they have young children to support, face financial hardship and have no family support. We will always try to help them. And as we increase the allocation for second timers, many of them should be able to benefit. In 2011, we allocated 670 public rental flats to divorcees with children. This is more than 20% of the rental flats allocated last year. Nevertheless, we must be mindful that divorcees do not form a homogenous group. In the West, many sympathetic rules designed to help divorcees get abused, with couples claiming such benefits even though their marriages are intact. We have to be discerning when claiming a case to be special. It must really be special. And that is why we have to deal with this, case by case. I pay some attention to the comments written by the MPs when they write in. So I’m counting on you to do some due diligence. Don’t just take the words for it. We will do some probing.
40. Er Lee Bee Wah called for compassionate housing policies. We do. We strive to govern with compassion. The Pasir Panjang accident case is an example. There are many such examples in our files. Governance with compassion requires a good heart. But it also requires a strong head too. Much of the problem in the western welfare model is that there are too many good hearts and too few strong heads. Solutions become unsustainable. Greece is now a classic case. Let us always be aware of this hazard.

Basic Values

Deputy Chairman

41. In MOH and now MND, I have stuck to basic values when formulating public policies, in 8 simple words:

    老者安之
    少者怀之

42. “Try to help the seniors so that they can age with peace of mind. And shower the junior with love and care.” This ancient Confucian ethos underpins strong families, the marriage institution and filial piety. This is how a strong society is built. With growing individualism, like Er Lee Bee Wah, I worry that these values are getting diluted. There are worrying signs: rising divorce rates, abandonment of parents. These are larger social issues, beyond MND, but they impact MND’s work.
43. At the very least, MND policies must not unwittingly facilitate such negative trends. And where possible, MND policies must actively try to support positive trends. Our latest initiatives, such as the Silver Housing Bonus, the enhanced Lease Buyback Scheme, the Multi-Generation Priority Scheme and the Ageing-in-Place Priority Scheme are all designed to support this ethos.

Conclusion

Mr Chairman,

44. MND goes beyond public housing and HDB. Through AVA, BCA, CEA, NParks and URA, our work affects Singaporeans’ larger quality of life, current and in the future. Through the good work of our pioneers, we can now enjoy today’s high standard of living. Our duty is to ensure that our children and grandchildren will be similarly blessed. While attending to immediate needs are important, we must never forget to plan and build for the future.
45. As this is my first MND COS, let me briefly highlight 3 key challenges that will shape our work plan over the next few years.

(a) From building homes to building communities

46. First, how do we go beyond building homes to building communities? We used to live in kampongs where everyone knows everyone. There is a general consensus on how we can live together. We take care of one another – gotong royong – as well as our little kampong.
47. As we moved into city living, many things improved. But yet we become more isolated from one another even when we live more closely together. And that is the irony of it. Much of the kampong spirit is lost. Many do not even know their neighbours. We lost some of the basic courtesy we used to have for one another. We care less about our neighbours and the community spaces that we share.
48. There are many reasons for the loss of the kampong spirit. But we need to find ways to encourage residents to own their community and to care for one another again. To be sure, there are areas in Singapore where the kampong spirit remains strong. We need to find out how such spirit can be replicated in many more places.

(b) Preparing for an aged society

49. Second, how do we prepare for the silver tsunami? In 20 years’ time, one in five Singaporeans will be over 65, one in 20 over 80. Many will be living alone because many Singaporeans have chosen not to get married. The whole texture of society will change. The built environment will need to evolve to accommodate the needs and aspirations of the older Singaporeans.
50. Certainly, we will need more nursing homes and day rehabilitation centres, better wheel chair access, etc. But there is much more that is needed. There is no one size that will fit all. We do not know exactly what will work. We will need to try many models to see which works.

(c) Maintaining our competitive edge as a world class city

51. Third, how do we keep our city world class? There are many islands along and around the Malacca Straits and South China Sea. That Singapore is a prosperous First World city, while other islands remain undeveloped is perhaps due to our good fortune in history but also to the foresight and diligence of our pioneers.
52. But nothing stays forever. Just look at history. Many of the older cities in the United States have shrunk. The economy that drove the growth of these cities, withered. Businesses and jobs went away. Similar history played out in UK and many European cities.
53. Singapore must stay at top of the competition of cities, because this is our only city. It is not just about the economy. Our children are now well educated. Many are much sought after by other countries and cities for their talent. To keep them here, Singapore must remain the best place for them to live, work and play. Beyond a vibrant physical landscape, we must aspire to cultivate a graciousness of life in Singapore, founded on an ethos of inclusiveness, compassion and kindness, including kindness for all living things, and kindness for our environment.
54. In short, MND’s strategic challenge is to prepare for a very different world, physically and socially. Like everything else, where we were and where we are now will not matter much 20 years from now. Singapore can only be a great city for us to live, work and play tomorrow, if we make the right choices and do the right things now.