Singapore avoids recession as Q4 2012 sees 1.8% growth

Downward revision of growth rates in previous quarters was a key factor

By Aaron Low, The Straits Times, 3 Jan 2013

SINGAPORE has dodged a recession after the economy managed to grow in the final three months of the year.

Fourth-quarter growth came in at 1.8 per cent compared with the three months before, surprising many economists who were expecting a contraction.

This easily trumped the 6.3 per cent contraction in the third quarter, flash data based on October and November from the Trade and Industry Ministry showed.

But the better showing is not directly the result of a stronger economy.

OCBC economist Selena Ling said Singapore managed to avoid a technical recession - defined as two consecutive quarters of declines - largely because the growth numbers were revised down in previous quarters.

As a result, the fourth quarter numbers looked better by comparison, she said.

"The Government also expects slightly better-than-expected manufacturing performance in December, which may have pushed up the estimates," she said.

Singapore is not out of the woods just yet, said economists.

More care centres in primary schools

By Sandra Davie and Stacey Chia, The Straits Times, 3 Jan 2013

FOURTEEN new student-care centres were launched in primary schools yesterday to provide after-school programmes such as enrichment activities and homework supervision.

More centres will open by the year end, bringing the total number to more than 80. This means that close to half of the 187 primary schools will have these centres run by voluntary welfare organisations and commercial firms.

Education Minister Heng Swee Keat, who announced the new centres during a visit to St Hilda's Primary yesterday, said parents are keen on them.

They are conveniently sited in school and there is better coordination between school teachers and centre staff in designing activities to complement what the school offers.

He added that the Ministry of Education (MOE) is working with three schools to fine-tune the after-school care model and see what works best.

Mr Heng said that despite the higher demand, MOE will continue to give priority to children from disadvantaged homes. He noted that school principals report the centres make a difference to children who lack home support.

The average non-subsidised fee is $250 a month, but needy families can pay as little as $20 for their children to spend around six hours a day at the centre.

COE: Time for a tune-up?

Soaring COE prices today are driven by a constricted supply of certificates. But it is also partly because of rich car buyers who trade in five-year-old cars for new ones, crowding out other buyers. How about making people pay more for a second car? It is time to consider this and other ways to improve the quota system.

By Christopher Tan, The Straits Times, 3 Jan 2013

STRATOSPHERIC certificate of entitlement (COE) prices have been a talking point for much of 2012, and are likely to continue to hog many cocktail conversations into the new year.

But even as consumers roll their eyes at the rocketing prices, they are partly to blame.

If every car owner had kept his vehicle for 10 years, premiums are unlikely to be where they are today - $82,000 (for cars up to 1,600cc) and $95,000 (for those above 1,600cc).

According to estimates based on statistics collated by the Land Transport Authority (LTA), about 8,000 cars were between nine and 10 years of age last year.

COEs available to car buyers last year were around 27,000 (including the open category) - clearly sufficient for all those who needed to replace cars approaching 10.

The quota would probably have been sufficient even if we factored in a percentage of owners with cars older than 10 years who might have wanted to buy a new vehicle, as well as fresh demand from first-time buyers.

But it was not to be. Apparently, there are still car owners who feel they have to change their ride by say, the fifth or sixth year. This is supported by evidence from used vehicle traders: that the majority of their stock are cars between five and seven years old.

According to LTA data, there were about 300,000 cars between four and seven years old as of last year. Even if 10 per cent of their owners had decided to switch to a new car, the demand would have outstripped 2012's COE supply.

And clearly, that is what has happened. Now, if these folks had exercised some restraint (and common sense), car COE prices would have been saner.

'Nanny state' furore in Australia

One state bans ladies' nights in bars; schools adopt dress code for parents

By Jonathan Pearlman, The Straits Times, 3 Jan 2013

SYDNEY - The new year in Australia has been marked by claims the country is turning into a "nanny state" with new rules including dress codes for parents picking up children from school and bans on smoking near beaches.

One of the most controversial is in the state of South Australia, which has banned bars from holding "ladies' nights" - cheap or free drinks for women to try to improve the gender balance.

The ban, from Jan 18, was introduced by the state government to try to curb binge drinking.

Bars will also be required to offer free water and at least one non-alcoholic beverage that is cheaper than the cheapest alcoholic drink.

Health experts have welcomed the move but bars signalled they will not end their promotions and will instead target both men and women.

AIM IT deal done to benefit town councils: Teo Ho Pin

Cumbersome for service provider to deal with 14 town councils separately

By Goh Chin Lian, The Straits Times, 3 Jan 2013

THE coordinating chairman of the PAP town councils, Dr Teo Ho Pin, yesterday explained in detail why they had sold the software rights of their computer system to a company.

The reason: it would have been cumbersome for an IT service provider to negotiate separately with each of the 14 town councils (TCs) on the maintenance and upgrading of the system.

He also described how the tender for the sale was called in 2010 and the process by which it was awarded to Action Information Management (AIM), a company owned by the People's Action Party.

His statement came in response to Workers' Party (WP) chairman Sylvia Lim's questioning of the sale of the software rights to Aim, when she asked if it was in the public interest.

The controversy erupted after the WP blamed AIM last month when a government review did not give Aljunied-Hougang Town Council a banding for corporate governance because it did not submit in time an auditor's management report. It attributed the delay to the need to change its computer systems.

Tracing the events leading to the sale, Dr Teo said the PAP town councils worked closely together to derive economies of scale and share best practices for the benefit of their residents.

Why focusing on costs raises health spending

Singapore is to embark on a major review of health-care costs this year. In a new book out next week, David Goldhill analyses what ails America's health financing system, and explains why cost-plus funding leads to higher prices for medical services all round.

Published The Straits Times, 3 Jan 2013

IN 1983, the Ronald Reagan administration enacted one of the most significant cost reforms in Medicare's history. The prospective payment system switched inpatient hospital reimbursement from open-ended fee-for-service to fixed fees, paid per diagnosis.

In theory, this would give hospitals the incentive to treat patients as quickly and economically as possible.

The new rules did drive big changes. Since 1983, the total number of days spent by Medicare patients in hospitals has fallen 40 per cent, even as the number of Medicare enrollees has risen 60 per cent. The average inpatient stay is now just over five days, down from 10.

But even an improvement in efficiency of such magnitude failed to slow the cost train. As the number of hospital days declined, the daily charge to Medicare rose to US$1,800 (S$2,200), from US$300.

The prospective payment system is only one obvious example of a long trend.

Most of the major developments in health care - higher doctor productivity, diagnostic scans, new pharmaceuticals, minimally invasive surgery - could be described as increasing health-care productivity. None of these achievements have lowered prices.

Guide for maid employers

It contains information on days off and training courses for maids

By Amelia Tan, The Straits Times, 2 Jan 2013

TRADER Ang Keen Guan is not sure whether he can ask his new Filipino maid to do some chores before leaving the house on her day off.

He also wonders how many hours of rest is considered acceptable.

Mr Ang, 46, will soon receive answers to these questions in a new guide prepared by the Ministry of Manpower (MOM), which aims to give employers all the information they need now that a policy giving maids one mandatory day off per week has kicked in.

The new rules apply to foreign domestic workers who have work permits issued or renewed from the start of this year.

If they are not given a weekly day off, they must be given a day's wages in lieu. Employers can ask their domestic helpers to perform light tasks on their free days, which should consist of at least eight hours of rest.

The English version of the booklet will be mailed to employers in the next few weeks. Apart from tips on where to turn to for help when maids take their days off, there will also be information on training courses for domestic workers and general dos and don'ts that employers should be aware of. The guide, available in Mandarin, Malay and Tamil from the MOM website, includes a sample agreement for employers to record information such as when the maid can take her day off and how much she will be paid if she works instead.

New sourcing ideas for maids, workers

By Amelia Tan, The Straits Times, 2 Jan 2013

EMPLOYERS and agents are stepping up the recruitment of foreign construction workers and maids from existing source countries, as well as exploring new options, to ease a supply crunch.

The Association of Employment Agencies (Singapore) or AEAS is hoping to start hiring maids from Cambodia, while ramping up recruitment in Sri Lanka and Bangladesh.

Meanwhile, the Building and Construction Authority (BCA) has stepped in to help employers recruit workers from Sri Lanka and the Philippines to cope with the construction boom here.

AEAS said it has submitted a proposal to the Manpower Ministry to approve Cambodia as a new source country for maids. Its president K. Jayaprema said she is also working closely with the Cambodian Labour Ministry on this. "I hope to hear good news soon," she told The Straits Times.

The group is also hoping to recruit more maids from the less frequently tapped approved sources, such as Sri Lanka and Bangladesh.

More health-care facilities planned ahead of need

This way, S'pore will be prepared if population ages faster than expected

By Salma Khalik, The Straits Times, 2 Jan 2013

SINGAPORE is planning to build more health-care facilities than it might currently need, in case projections are wrong and the population ages faster than expected.

Over the last few years, hospitals and nursing homes have been facing a severe bed shortage with strong demand outstripping supply.

This has resulted in the public sector renting wards from private hospitals, putting beds along hospital corridors, and delaying non-critical surgery.

Health Minister Gan Kim Yong told The Straits Times in an exclusive interview: "You can say that given our experience and looking ahead, there is uncertainty; how fast we will age, what disease patterns will emerge, what kind of illnesses we're likely to see.

"We may want to consider over-building a bit, beyond what we have planned for, in case the ageing process is faster than we have planned for."

He explained that it is not so much building a buffer as building to meet the higher end of scenarios projected.

Mr Gan added: "Over time, with the ageing population, we will need it (the extra facilities). It will give us the flexibility to adapt faster. It is a matter of timing."

The population here is ageing rapidly, not just because there are fewer babies born, but also because people are now living longer. In the past two decades, life expectancy here has gone up by seven years.

Older people generally use more health-care services. When in hospital, they also tend to stay longer. By 2020, Singapore will have 600,000 seniors.

Mr Gan said: "We are now planning for the long term. We need to build in flexibility to allow us to adapt as the trend changes."

800,000 HDB households to receive $90 Million of GST Voucher - U-Save in January 2013

Smaller utility bills from January to March 2013

By Toh Yong Chuan, The Straits Times, 1 Jan 2013

SOME 1.2 million households can expect to pay smaller electricity bills for the next three months.

SP Services yesterday announced that electricity tariffs for domestic consumers will be reduced by an average 3.7 per cent from January to March.

About 800,000 Singaporean families living in Housing Board flats will also get $90 million worth of rebates to offset utility bills this month. Those who live in one- and two-room flats will get $130 per household. Those in bigger units will get between $90 and $120.



The largest group of beneficiaries are 307,000 families who live in four-room flats, followed by 240,000 families in five-room and larger units, a Ministry of Finance spokesman told The Straits Times.

The rebates are part of the GST Voucher Utilities-Save (U-Save) scheme announced during the Budget debate last year to help middle- and low-income Singaporeans cope with the cost of living. These rebates will be credited directly into the households' utility accounts. Households do not need to apply for the rebates.

What to expect in 2013

From bus fares, flats for young families to the latest tourist attraction, The Straits Times looks at what is coming up in the year ahead

by Daryl Chin, Rachel Chang, Maria Almenoar, Royston Sim, Irene Tham, Janice Heng and Ng Kai Ling, 1 Jan 2013

HOUSING:

New flats a-plenty

What: Bountiful supply of housing

When: 2013

Why it matters: House-hunters are going to be spoilt for choice, given the bumper supply expected to hit the market.

The Government has promised to roll out at least 20,000 new Housing Board flats this year to meet demand from newly-wed couples, and to cool the red-hot resale market.

It has also earmarked sites that could yield 14,000 private homes in the first six months alone.

This includes 3,100 units of increasingly popular executive condominiums, some of which have hogged headlines recently for their ritzy offerings, including a $2.05 million penthouse in a Tampines project which was sold within two hours after bookings began.

This generous infusion comes on the back of a strong supply last year, when both the number of new HDB flats (27,084) and overall private homes in the pipeline (more than 93,000) reached record highs.

Prime Minister Lee Hsien Loong's 2013 New Year Message

Singapore economy grows 1.2% in 2012: PM Lee
By Imelda Saad, Channel NewsAsia, 31 Dec 2012

Singapore's economy grew 1.2 per cent this year, hurt by weak US, European and Japanese economies, said Prime Minister Lee Hsien Loong in his New Year message on Monday.

Mr Lee said overall, Singapore has made steady progress this year though economic growth was weaker than the 4.9 per cent expansion last year.

The slowdown was attributed to weakness in Western and Japanese economies as well as difficulty some industries have in hiring the workers they need to grow.



Mr Lee did not give figures for the fourth quarter, but analysts said Singapore's economy would likely contract in Q4, thereby pushing the economy into a recession, as it had also contracted - by 5.9 per cent on-quarter - in the third quarter.

The government will release advance estimates for fourth quarter economic growth on Wednesday.