Tharman says he has experience on ground but told everyone household incomes of S$1,000 can buy flat

by Adam

Presidential candidate Tharman Shanmugaratnam told supporters on Tuesday (Aug 22) that he looks forward to a “fair, dignified and honourable contest” that focuses on Singaporeans.

In a speech to supporters on Nomination Day, Mr Tharman said, “It will be a more difficult and challenging future that we face, which is the reason why I have entered this contest to offer all my experience and capabilities on the ground for a few decades nationally and internationally.”

“I have a track record on the ground – nationally and internationally – which I believe allows the elected presidency to play a full role in the future for Singapore,” he added.

The other two candidates contesting the election are former GIC chief investment officer Ng Kok Song and former NTUC Income chief executive Tan Kin Lian.

Mr Tharman also said that he looks forward to a campaign that “unites Singaporeans and not divides us” but added that he has no plans for a physical rally.

Household incomes of just $1,000 can buy HDB flat

However, about a decade ago, a comment made by Mr Tharman in Parliament sparked an outrage among Singaporeans. He was then the Finance Minister of the People’s Action Party (PAP) government.

Responding to concerns by then non-constituency member of parliament (NCMP) Gerald Giam about Singaporeans being unable to afford a flat from the Housing and Development Board (HDB), Mr Tharman said that families with household incomes of just $1,000 could already purchase one.

“I would like to assure Mr Gerald Giam, who might not have caught up with all the developments, that our enhanced housing grants for lower income families are such that a family with a monthly income of as low as $1,000 can now purchase a small flat,” said Tharman, who added that a family that earns “a bit more, say $1,500,” can afford a medium-sized flat.

“The housing grants that we have been giving are more aggressive than what any other government would give,” he continued.

At the time, many Singaporeans remained unconvinced and took to social media to ridicule him. One reader wrote, “Hmm, any idea why my friend who earns $1k a month couldn’t even get a loan for his BTO flat?”

Another said, “Yes, it might be possible. If you don’t plan on eating, going anywhere or paying your bills, that is.”

One added, “It’s statements like these that make me wonder if the common citizens actually live in the same dimension as the PAP MPs.”

Even popular blogger mrbrown joined in and created an online meme with the caption, “MAKE $1K A MONTH / CAN BUY A FLAT”, to ridicule Mr Tharman.

With the barrage of criticism coming from Singaporeans, then National Development Minister Khaw Boon Wan had to step in to give support to Mr Tharman.

Mr Khaw said Mr Tharman was referring to a two-room Built-To-Order (BTO) flat. That’s because such a flat would cost a first-time applicant – who earns $1,000 – about $40,000, after subsidies.

The mortgage payment, said Mr Khaw, can be fully paid through the applicant’s CPF, without incurring any additional out of pocket money. But he added that the median household income for the group of two-room flat buyers was about $1,400.

Then-Minister of State for Manpower and National Development Tan Chuan-Jin, who resigned recently over an extramarital affair, also chimed in via a Facebook post, giving an example of how households with a joint monthly income of $1,000 can afford a two-room HDB flat.

Using the example of a two-room Build-to-Order (BTO) flat in Fernvale Lea, Sengkang, which was listed in January of this year at a price range of $83,000 to $112,000, Mr Tan cited its midpoint price of $100,000.

He highlighted that first-time buyers with a cumulative monthly income of $1,000 are eligible for both the Additional CPF Housing Grant, which can provide up to $40,000, and the Special CPF Housing Grant, which can offer up to $20,000. These grants can collectively be utilized towards the flat’s down payment, effectively reducing the selling price by $60,000.

For the residual $40,000, Tan illustrated the potential HDB loan repayment plans:

  • Over 30 years: $161 per month
  • Over 25 years: $182 per month
  • Over 20 years: $214 per month.

In any case, even if a household with S$1,000 monthly income could buy a two-room HDB flat with their CPF and without incurring any additional out of pocket money, how is the family going to survive living in Singapore with S$1,000 a month?

Clearly, based on the online uproar at the time, many thought Mr Tharman was not living in the “same dimension” as the rest of Singaporeans.

Nevertheless, Singaporeans will go to the polls on 1 September, which has been declared a public holiday. It remains to be seen if Singaporeans would support PAP’s selected candidate, Mr Tharman to become the next President.

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