Economy's growing, but retailers aren't seeing benefits
Monday • January 29, 2007
TODAY Newspaper
WHEN you have an economy charging ahead — it grew by 7.7 per cent last year — you would expect cash registers to be ringing non-stop as more people hit the shops.
But the reality has left economists and retailers scratching their heads.
Domestic private consumption was estimated to have grown by just 2.8 per cent last year — a meagre increase over 2005's 2.5 per cent, when the economy grew by 6.4 per cent, and a dip from the 5.9 per cent in 2004, when economic growth hit 8.7 per cent.
"Private consumption has been the weak link in this current economic expansion," said Dr Chua Hak Bin, Citigroup Economist.
Figures released earlier this month showed that retail sales, excluding vehicles, grew by 4.4 per cent year-on-year in November — a figure which is not fantastic, say economists. Consumer lending, too, was lacklustre, expanding by just 2 per cent year-on-year, according to the central bank.
It seems the CEOs and bankers, who are snapping up luxury homes and Lamborghinis, are not splurging enough to make up for the average Joes' lack of spending.
"The big boom has benefited companies more than workers. The economic benefits are going to those who are well-to-do and who own capital — not the average person," said Dr Chua.
And the impending Goods and Services Tax (GST) hike from 5 to 7 per cent at one go — as signalled by Prime Minister Lee Hsien Loong — is likely to dampen mass spending even further.
One bit of hope: With this increase in revenue, some analysts are hoping the Government will lower the personal income tax rate, especially with a corporate tax cut already on the cards for next month's Budget Day. The trend in other countries has been to lower both rates, and Mr Lee hinted last week that Singapore could not buck global trends if it wanted to compete for investments.
However, private consumption has always lagged behind growth in gross domestic product, and this is a structural issue worth looking into, said Mr Manu Bhaskaran, Head of Economics Research, Centennial Group.
"Has globalisation led to a more skewed income distribution?" he asked.
According to Urban Redevelopment Authority figures for 2006, prices of high-end private property in prime districts have surged by 17 per cent. Yet prices of mass market condos and Housing and Development Board flats have grown by only 4.2 and 1.97 per cent, respectively.
Despite having the smallest population in the region, Singapore topped the charts in the sales of luxury cars of the Ferrari, Porsche, Lamborghini, Rolls-Royce and Bentley variety.
Yet retailers and restaurateurs say that sales have not been up to mark. One local owner of a restaurant chain told Today: "Surprisingly, sales in December were not as strong as they were in the peak season in previous years. We're waiting to see if things will improve over the Chinese New Year period. It's very puzzling because there's all the hype in the news about a growing economy — yet we're not seeing it."
Mr Song Seng Wun, a regional economist with CIMB-GK Research, noted that the arrival of budget airlines means that people can easily go overseas to shop.
Overseas expenditure of Singapore residents tripled between 1998 and 2005, according to Monetary Authority of Singapore statistics. One in two persons aged 15 and above, or a total of 1.4 million people, made at least one overseas trip in 2005.
More are spending in neighbouring countries such as Thailand and Malaysia, where a dollar can go much further. Rival shopping cities, such as Hong Kong, Kuala Lumpur and Dubai — all of which do not impose a GST — are giving Singapore a run for its money.
Said Citigroup's Dr Chua: "Retail sales in Hong Kong, which recently decided not to adopt the GST, are running at almost double the pace of Singapore's. For a small open economy, where residents are travelling abroad, a high GST may have wider negative consequences."
Even so, he is optimistic of this year's outlook, expecting domestic spending to accelerate to 4.5 per cent. "The job market is tightening and wages are creeping up. Together with the picking up of the mass residential market, these factors can, hopefully, offset the impact of the GST hike," he said.
Mr Song agreed: "We must remember that last year's consumption growth rate is coming off the high base of 2004. Things will get better."
Chee's trial: The Prosecution at it again
ReplyDelete29 Jan 07
The trial of Dr Chee Soon Juan, charged with attempting to leave Singapore without a permit, resumed with another clanger from the Prosecution.
Prosecutor Ms Kamala, from the Official Assignee's office, stood up to re-examine her witness, Ms Kala who holds the position of Manager in the OA's office. (Yes, they are, in fact, colleagues in the same office. More about this later.)
During re-examination, Ms Kamala had asked Ms Kala about an email which the Prosecutor wanted to introduce as part of the evidence.
On seeing this Mr Alfred Dodwell, Dr Chee's lawyer, immediately objected on two grounds:
One, it was inappropriate for the Prosecution to introduce evidence under re-examination. (Under court rules the prosecution first leads the witness in evidence, followed by cross-examination by the defence counsel. The prosecution is then allowed to re-examine the witness but only to clarify the witness' testimony, not to adduce fresh evidence.)
Judge Aedit Abdullah admitted that it was "not proper" for Ms Kamala to do so.
Two, and a much more serious matter, while under oath, witness Kala had obviously been communicating with Prosecutor Kamala. This is a grave breach of legal practice.
The Judge had warned the witness when the trial was adjourned, that she was still on oath and that she was not to discuss trial matters with anyone else.
Mr Dodwell pointed out that it was clear that Ms Kala had been communicating with Ms Kamala when the proceedings was stood down. Ms Kamala admitted that Ms Kala had brought to her attention (when the court was not is session) an email which she wanted to introduce as part of the evidence.
Mr Dodwell said that this was highly improper and raised the question of whether there was any more communication between the two. He then told the Judge that, as a result, the entire evidence of Ms Kala was tainted and had to be ruled out.
Mr Dodwell then indicated that he was making an application to that effect. Judge Aedit stood down the hearing and allowed Mr Dodwell time to prepare submissions for the application.
Under the strange setup, Ms Kamala is not only the legal officer prosecuting the case but also holds the position of Assistant Official Assignee and Public Trustee/Official Receiver.
In other words, she works in the same office of the Insolvency and Public Trustee's Office (IPTO) and under the same boss, the Official Assignee, as Ms Kala.
Worse, emails exchanged between the OA officers handling Dr Chee's case before the trial began, or for that matter, before the decision was made to charge the SDP secretary-general, were copied to Ms Kamala.
Such proximity between prosecutor and witnesses raises questions about propriety. The Judge himself had earlier noticed this and raised his concern.
When parties subsequently appeared before the Judge in chambers, Ms Kamala offered to retract the latest evidence which she and Ms Kala wanted to introduce during re-examination.
But the cat was already out of the bag. The two had been found to have been communicating with each other.
In an earlier case involving Dr Chee, Mr Gandhi Ambalam, and Mr Yap Keng Ho, the Prosecution was also caught with an egregious breach of the rules of court. In that case, Deputy Public Prosecutor Ms Lee Lit Cheng had asked one of her witnesses to be in the courtroom while other witnesses were testifying. This particular witness was also seen to have been communicating with other witnesses who had not yet take the stand.
These instances bring up two questions: One, were the state prosecutors so confident of securing a conviction that they became complacent about adhering to court rules?
Or was it a case of arrogance leading them to conclude that they could get away with such breaches of procedure?
Or maybe it was a combination of the two.
Either way, it does not reflect well on the Government, First World or otherwise.
The hearing continues tomorrow at 10 am in Subordinate Court 15.
simply hilarious...
ReplyDeletei mean the SAF is a real fucked up organisation, didn't know the justice system is equally bad if not worse haha!
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ReplyDelete