Paying for State land not a case of “left pocket, right pocket”, says NMP Raj Thomas, cautions against misunderstanding


Healthy debates can accelerate progress, but they must show accountability. 

Underlining the importance of democratic accountability, Nominated Member of Parliament (NMP) Raj Thomas shared an anecdote about conversations he had with friends about public housing and land costs over the Chinese New Year period. 

“I was disappointed when some of my friends and relatives said that, well, paying for State land is simply a matter of left pocket, right pocket. That (PSP NCMP) Mr Leong’s original proposal of excluding land costs makes sense.”

“I took pains to explain to them that this is not a matter of left pocket, right pocket – but that the State Land bank as part of Reserves and government account is in fact two different pairs of trousers worn by two different people,” said NMP Raj today (7 February 2023) in Parliament.

Perhaps this highlights why a misunderstood idea—like a seductive but inherently incorrect take on land cost—is so dangerous.

Because when something incorrect is repeated often enough, it becomes perceived as the truth.

Concluding his speech, NMP Raj lamented that despite a clear but technical explanation made by Minister for National Development Desmond Lee last month, the reality is that the public has opted for an incorrect but simplistic and delicious proposition. 

“The nod to a populist position will have more traction and agreement. But it will create confusion and misunderstanding of government policies.”

Is this how we want our politics to evolve, and is this the level of democratic accountability we expect? NMP Raj asked. 

We’re afraid not. 

PSP’s housing proposal fails on several fronts

In his impassioned speech, NMP Raj also expressed why he disagrees with the housing policy proposals made by Progress Singapore Party NCMPs Mr Leong Mun Wai and Ms Hazel Poa. 

Mr Leong seems to fixate on land cost and the payment made by the government to the state as consideration for state land, said NMP Raj. 

In his initial housing proposal, Mr Leong suggested that land be sold at historical cost, which is problematic since it would amount to a raid on the reserves. 

However, the updated proposal that exempts buyers from paying the purported land cost until they sell their flat fails on several fronts, cautioned NMP Raj. 

Firstly, the Government will become a de facto creditor to all persons living in HDB flats. According to NMP Raj, the Government should not be lending money to citizens this way.

But ethical questions aside, the proposal made by the PSP is fundamentally flawed because when a person sells their flat, they may end up with nothing or even a deficit, said NMP Raj. 

That is because interest continues to run as long as the owner occupies the flat. 

Moreover, what happens to the flat when the owner dies since it is unlikely for anyone to use up the entire 99-year lease? 

“Is the cost of the land to be borne by the purchaser, the inheritor, or will the land cost merely disappear?”

As we can see, while the housing proposals made by the PSP might appeal to potential flat buyers because of their low pricing, it simply does not stand up to scrutiny. 

Images via: Wikipedia, Andrew Haha Lee on Unsplash