Last week, the South China Morning Post published an opinion piece, arguing that Singapore’s CPF system is not a pension fund model for Hong Kong to follow (http://www.scmp.com/business/
It said, “When the boss takes investment decisions out of the hands of the citizens, you just get poorer citizens.”
The author showed 2 charts to make his point:
The first chart shows GDPs of SG and HK in USD terms. Singapore’s is clearly the greater than that of HK’s, arguably because of a strong SGD currency.
“Your average Singaporean does not have much money in his pocket”
The second chart shows the personal consumption expenditure per capita, i.e, the disposable income, of SG and HK. Here, HK’s is almost 50% greater than SG’s. So, it works out that HK has 66% of GDP attributed to personal consumption compare to Singapore’s 36%.
“One obvious reason for it is that we put only 10 per cent of anyone’s wage into the Mandatory Provident Fund. The equivalent figure for Singapore’s Central Provident Fund is 37 per cent,” the author reasoned.
“Your average Singaporean does not have much money in his pocket. His government has taken it all out of that pocket,” he added.
But the author did mention that HK Govt is currently studying if Hong Kongers should be allowed to use their MPF to buy a home or even to pay for medical costs.
“Singapore has a boss culture. You do what the boss tells you”
But overall, the author is against HK emulating Singapore’s CPF model of sucking up so much money out from the residents. This is because Hong Kong’s economy is still based on an entrepreneurial culture.
With large money soaked up into CPF, the author feared that personal disposable income would vanish. That would reduce the “essential equity capital for the small businesses that make this place (HK) the success it is”.
In comparison, the author thinks that Singapore has a “boss culture”.
“Things aren’t quite that way in the Lee Kingdom. Singapore has a boss culture. You do what the boss tells you,” he said. “This makes for a clean shiny city with an administrative rather than entrepreneurial culture, which lives mostly by feeding, parasite fashion, on neighbouring economies.”
“The boss has a woeful investment record. Where Singapore with its longstanding, vast current account surplus should be living off foreign investment earnings, it is still paying them out heavily,” he added.
“When the boss takes investment decisions out of the hands of the citizens this way and puts them in his own, you just get poorer citizens. Let’s not do what Singapore does.”Follow us on Social Media
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