The replies given by Lim Hwee Hua, Minister in the Prime Minister’s Office and Second Minister for Finance and Transport on Sunday during a walkabout in Bishan appears to imply that it might be impossible to track how our funds are being used, just like how it is difficult to prove how the Jobs Credit Scheme does save jobs, apart from saying that it does and it has.

Mrs Lim said retrenchments may not indicate abuse of the system. She added that abuse was also hard to define, as the subsidies go into the company’s cash flow. And it is up to the company to decide how it wants to use the government wage subsidy. Speaking to reporters later, Mrs Lim added that it is “technically difficult” to define what counts as abuse, as the scheme is a “blunt instrument” where the firm can decide how it wants to use the government wage subsidy. She explained: “Because it is basically cash to companies, it is technically difficult to define what is abuse, because it goes into cash flow. You also cannot judge that once a company has retrenched workers, it must be abusing the system, because some of them might just need to be restructured. “So I think it would be difficult to judge it quite quickly. But I think there is enough peer pressure out there for companies to feel like, if they had retrenched at the word go, they would feel quite bad about it. But if it is because of business circumstances, regardless of how hard they have tried, they still needed to retrench, then I think we would have to let market forces work its way.”

http://www.channelnewsasia.com/stories/singaporelocalnews/view/1010703/1/.html#

So even though the money belongs to the people, and also because it is given to companies -technically- as a “cashflow”, it is not possible to tell the companies how to use the money. It comes to the beginning where handing out the money was a moral hazard since there was no way proper resources could have been assigned to make sure the money was used responsibly instead. Would there then be instances like how the money given by the Obama administration to bail out the banks was in turn used to pay out obscene bonuses to bankers and insurance agents? We would not know because the Jobs Credit Scheme is essentially turned into a ‘cashflow’ for the companies and it is ‘technically difficult to define what is abuse’, because it goes into… cash flow.

So what can be done about this to protect proper and responsible use of the people’s money? Apparently, in the end we will need to rely solely on peer pressure on the companies and believe that they will act on good faith and not retrench employees after receiving money from the Jobs Credit Scheme, because they might feel bad about it. Even though it is basically what the ‘credits’ are supposed to be used for – to help save jobs by not having the companies retrench their workers.

The government has dug a hole for itself by copying the bailouts enacted by the Obama administration. The Jobs Credit Scheme should never have been created because it can be abused in more ways than one. Due to technicalities, they cannot seem to ensure its integrity either. And now if companies do see the need to retrench, the government is happy to let market forces work its way, even though it would have been the right thing to do that from the start – it might have been more painful in the short term to have businesses fail and people losing their jobs, but in the long term it would have created more efficient and productive environments. Instead, we have a fall back for the companies to exploit if they do not wish to do anything to save their own bottomlines. But the budget shortfall used to fund the scheme would surely then have to made up by putting a bill on the people like you and me. The Jobs Credit Scheme should be stopped instead of being extended.

One girl surveyed stated that dining at cafes and fast food outlets was the norm and then spending $6 – $8 on a meal was reasonable, especially since they would rather eat fast food than at cheap coffee shops because the food at the latter “is not so nice”.

Another said that allowances are only saved for the sole purpose of making purchases of luxury items such as the latest gaming consoles or clothes. A teenager commented that spending $15 to $20 each time at cafes for meals was the norm and acceptable.

Once again, the blame is laid on the feet of parents who do not spend enough time with children and teaching them the right values of saving, while creating a false environment of endless comfort using the commodity of money. But judging by the values and attitudes of the Singapore youth and younger generation in particular, it is also the result of a weak educational and value system that has seeped into and festered in the local culture.

Learning from, and building on, the current generation of Singaporeans who think they are always right and above most people from all over the world, our youth have now been brought up on a steady diet of propaganda of being the best and that nothing they do will be, or can go, wrong. Singapore has been touted as the best country for everything. Most of us are wrapped in a bubble of comfort. The recent recession has hit us hard, and will continue to do so. If the global economy does not turn around quickly and with more losing their jobs, the loss of livelihoods will seep down to the youth.

Brought up in a life of comfort, not many will be able to understand or accept the situation. But the worrying effect could be a large percentage of youths deciding to give up on their futures as they struggle to cope. There are already signs that Japan’s lost generation phenomenon has reared its ugly head in Singapore society, with kids turning to virtual reality and video games to soothe their savage souls while neglected by families in the latter’s quest for financial wealth and comfort. And to make things worse, Singaporeans’ “holier-than-thou” attitude will result in denials.

Personal debt in the future is the least of our worries for the new generation growing up. It is the shrinking future workforce available to the country and their lack of proper financial values that could cause greater problems for Singapore.

In earlier Singapore financial news, GIC has stated that their investment structure provides “appropriate downside protection” which will see long term expected lower returns despite the risk. Interestingly it raises GIC’s holding in Citigroup to 4 per cent, and GIC has stated that it does not have plans for a board seat at Citi. This no doubt comes after criticism leveled at other American financial institutions’ moves to seek investment funds from Asian and Middle Eastern sources.

This could simply be a move by GIC to strengthen its investment portfolio and provide a broader management of investing Singapore’s reserves. With the threat of 20,000 Citi jobs at risk, it might or might not have vested interest in ensuring that this does not have greater downstream impact to Singapore’s economy, which is enjoying satisfactory growth against the gloomy global economic outlook, as reported frequently in Singapore financial news. GIC has also sunk US$300 million with US property hedge Rosen Real Estate Securities to take advantage of falling values in the US property market and real estate.