Government subsidy should not go to luxury seafront homes

Aerial view of Keppel Club which will accommodate about 9,000 apartments after the land lease expires.
Aerial view of Keppel Club which will accommodate about 9,000 apartments after the land lease expires.PHOTO: ST FILE

During Prime Minister Lee Hsien Loong's National Day Rally, he mentioned that among other developments, Housing Board flats will also be built on the land where Keppel Club sits, which is part of the 30km Greater Southern Waterfront.

HDB's mission is to provide basic affordable housing to the population, and in this regard, it has done an excellent job, an achievement second to none anywhere in the world.

Public housing is subsidised by the Government and is a form of social spending, which must necessarily be needs-based and be targeted at the population at large subject to eligibility criterion.

As the allocation of HDB flats is done by balloting, those who are allocated the seafront flats will effectively strike the lottery, and the beneficiaries will only be limited to a small group, obviously not an ideal way of allocating social spending.

Seafront living is a luxury and should not be subsidised by the Government. It is also beyond the mission of the HDB.

It is not difficult to envisage the overwhelming response to the Build-To-Order HDB seafront flats when they are launched. Upon the expiry of the minimum occupation period, these flats will command a premium in the open market, and the lucky flat owners will reap handsome profits.

The Government has also previously cautioned that social spending is rising, and there might be a need in the future to raise taxes, such as the Goods and Services Tax, should social spending continue on the upward trend.

Any increase in taxes affects the population at large, another compelling reason to exercise prudence in social spending.

Soo Weng Keong

A version of this article appeared in the print edition of The Straits Times on August 30, 2019, with the headline 'Govt subsidy should not go to luxury seafront homes'. Print Edition | Subscribe