Can Malaysia's household debt at 87.9% in 2014 be reduced to 54% ?

BEING a teenager, my granddaughter started to pick up interest on how the economy works, what are the real assets and liabilities in one’s financial planning. As the topic itself can be slightly “dry”, I made an attempt to discuss it in a way that was easier for her to digest.

“Our national household debt to GDP ratio edged up to 87.9% last year. Is the number alarming?” she asked one day.

“It depends. We have good debts and bad debts in life. For example, 10 years later, our new cars may have depreciated more than 80% and our new clothes would have been worn out. Those are liabilities. On the other hand, houses are assets as they will appreciate in the long run. Debts which are backed by appreciating assets are considered good debts,” I said.

As she nodded in agreement with my simple explanation of good debts and bad debts, her question has piqued my curiosity to look into the details of our household debt.

Overall, is our nation having more good debts or bad debts?

Bank Negara report shows that our household debt was at RM940.4bil or 87.9% of GDP as at end of 2014. Residential housing loans accounted for 45.7% (RM429.7bil) of total debts, hire purchase at 16.6%, personal financing stood at 15.7%, non-residential loans were 7.7%, securities at 6.5%, followed by credit cards and other items at 3.9% respectively.

At first glance, our residential housing loans were the highest among all types of household debts. However, a recent McKinsey Global Institute Report highlighted that in advanced countries, mortgages or housing loans comprise 74% of total household debt on average. As a country that aspires to be a developed nation by 2020, our housing loans that stand at 45.7% is considered low. In other words, we are spending too much on other depreciating items instead of appreciating assets like houses.

If advanced economies, which are usually consumer nations, have only 26% debts on non-housing loans, we shouldn’t have as high as 54% loans on items such as hire-purchase (which are mostly cars), personal loans, credit cards and others.

If we were to follow the household debt ratio of advanced economies, our housing loans of RM429.7bil should be at 74% of total household debts, and other loans should be reduced from 54% to 26%, i.e. from RM510.7bil to RM150.9bil. With such reduction, total household debt would be slashed significantly from RM940.4bil to RM580.6bil (existing housing loans plus reduced non-housing loans), the amount would be at 54.2% of GDP instead of 87.9%.

I am wondering why we can’t have a household debt to GDP ratio of 54.2% as illustrated above. Are we spending too much on depreciating items?

Non-housing loans comprise mainly borrowings for cars, personal loans and credit cards. Car value depreciates about 10% to 20% per year based on insurance calculation and accounting practice. Borrowings for personal loans and credit card are also likely to depreciate over time which can be dubbed as “bad debt”.

Perhaps it is time for the Government to introduce massive cooling off measures for non-housing loans in order to curb bad debt in our household debt.

According to our Deputy Urban Wellbeing, Housing and Local Government Minister, our homeownership rate currently stands at 50% and the Government strives to increase the number with more affordable homes. As a comparison, almost 85% of Singaporeans are homeowners.

We can expedite the above vision if more stringent measures are imposed on non-housing loans, it will free up more resources for household financial planning. The rakyat should be encouraged to secure a roof over their heads with effective execution of affordable housing policy by the Government.

It is time to re-look our debt categories and reallocate our resources appropriately. If we are willing to cut back on cars, clothes, shoes and other depreciating items, reducing a household debt to GDP ratio of 54.2% is not only an aspiration, but an achievable reality.

By ALAN TONG Food for Thought

And the more beneficial effect is, more rakyat will have the financial resources to own a house, which is both a shelter and an appreciating asset.

■ FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

 
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Singapore is Asia's best place to be mum, peoples back to being courteous & gracious

 

A class for mothers carrying babies here. Singapore was ranked ahead of the next-best Asian countries South Korea and Japan in the latest Mothers' Index. This rates countries based on five indicators relating to maternal health, children's well-being, education, income levels and the political status of women. -- ST PHOTO: KUA CHEE SIONG

Singapore is the best country in Asia to be a mother.

The Republic came out tops in the region in an annual index released by international aid agency Save the Children and was also ranked 14th worldwide, well ahead of the next-best Asian countries South Korea and Japan in 30th and 32nd spots.

Singapore moved up from 15th spot worldwide last year but short of its 2002 best of 13th.

Norway topped the international chart, beating last year's winner Finland, while the United States was 33rd.

The 16th annual Mothers' Index, released on Monday, rates 179 countries based on five indicators relating to maternal health, children's well-being, education, income levels and the political status of women.

Singaporean women have a one in 13,900 risk of dying in childbirth while the infant mortality rate here is 2.8 deaths per 1,000 live births.

Gross national income per capita is US$54,040 (S$72,000). For these three measures, Singapore was placed among the top 10 countries globally.

But its ranking was pulled down by weaker performance in the educational and political arenas.

Children are expected to complete about 15.4 years of formal schooling here and a quarter of seats in the government are held by women.

In comparison, Norway recorded a national income of US$102,610. Political participation of its women is close to 40 per cent and children are expected to finish 17.5 years of school.

The US' poor showing is partly due to its high risk for maternal death - one in 1,800, the worst level in any developed country.

Ms Sylvia Choo, director of the National Trades Union Congress (NTUC) Women's Development Secretariat, said Singapore has done well because of its strong investment in education and in ensuring that medical care remains accessible.

Since 2000, Singapore has cut its risk of maternal death by over 75 per cent, from one in 3,500 to one in 13,900.

Other experts say the findings, while commendable, should not be a reason for complacency.

They pointed out that the index tracks only parameters such as wealth, education and healthcare and does not take into account other pertinent issues specific to developed economies.

"It does not address the parent-friendliness of workplace policies, culture and practice," said Ms Jolene Tan from the Association of Women for Action and Research (Aware). "Some countries ranked lower on the index such as the United Kingdom and Ireland have much more generous parental leave than Singapore.

"It also doesn't consider security of employment. A mother who returns from maternity leave to find her position terminated has little recourse in Singapore, but she can invoke legal protection such as unfair dismissal claims in jurisdictions such as Canada, the UK and Ireland - all ranked less highly in this report."

Save the Children's chief executive Carolyn Miles said the data confirmed that a country's economic wealth is not the sole factor leading to maternal happiness, but also that policies must be put in place to support mothers.

In the case of Norway, "they do have wealth, but they also invest that wealth in things like mothers and children as a very high priority", said Ms Miles.

Ms Yeo Miu Ean, president of Women Empowered for Work and Mothering, said the fertility rate here remains low because some women want to avoid the dilemma of having to choose between work and children.

"They do not want to give their children the time or energy that is left over from work," she said.

National University of Singapore sociologist Tan Ern Ser agreed.

"Compared with the Nordic countries, we still need to catch up on gender inequality in terms of shared childcare responsibilities and work-life balance."

By Janice Tai The Straits Times/Asia News Network, jantai@sph.com.sg

Singaporeans back to being courteous, survey shows

AFTER two years in which it seemed Singapore was becoming a less gracious country, one social barometer suggests it is back on its best behaviour.

The Singapore Kindness Move­ment (SKM), which has been releasing the annual Graciousness Index since 2008, revealed yesterday that the country scored 61 out of 100 this year, matching the highs it hit in 2010 and 2012.

It is a big jump from last year’s score of 55 and the record low of 53 in 2013.

The index measures “behaviour consistent with social standards and expectations based on the time, place and people around” and polled 1,850 people, including foreigners, between last December and February.

SKM general secretary Dr William Wan said: “If we as a nation continue this positive trend, kindness and graciousness can become part of our norms and national identity.”

He added that more stories of kindness were being reported on social media, while mainstream media had been highlighting disaster relief efforts.

Scores for people’s experience and perception of graciousness told different stories in the index.

They were asked if they had received, done or witnessed “a random act of kindness” in the six months before they were polled.

Scores in this component fell but were offset by improvements in the perception ratings, with respondents rating themselves and others higher when it came to being considerate, courteous and showing appreciation.

About 44% polled felt Singapore had become more gracious, up from 28% last year.

Asked who was responsible for making Singapore a gracious place to live in, more than seven in 10 respondents pointed to the Government, while six in 10 said themselves.

Dr Wan said the Education Ministry had an important role in fostering character development.

“I’d like to see 80% or 90% of people saying ‘kindness can start with me’,” he said. “We must take ownership.”



The SKM also studied attitudes towards neighbourliness and parenting.

Over 40% wanted more neighbourliness in their communities but among this group, fear and awkwardness were cited as stumbling blocks.

Nearly six in 10 respondents, including non-parents, felt parents did not lead by example when it came to being gracious.

Senior marketing manager Joyce Teng, 53, agreed that it was important for parents to be good role models.

Her daughter Emily founded Blessings in a Bag, which sends donated clothes and school supplies to the needy in Asia.

Teng said: “Instilling the qualities of kindness and giving is our responsibility as parents. I’m proud to see that Emily is now leading by example.” — The Straits Times / Asia News Network

How can Singapore improve its graciousness? Chief of Singapore Kindness Movement has some tips
By Priscilla Goy, The Straits Times, 6 May 2015

Singapore scored 61 out of 100 in the latest Graciousness Index released on Tuesday. The Straits Times asked Dr William Wan, general secretary of the Singapore Kindness Movement what areas Singaporeans can improve in.

Public debate - It appears to me that we have not learned to engage each other in real constructive debate. In choosing our sides of an argument, we neglect to listen and seem unable to consider viewpoints that run contrary to our own, and the next inevitability follows: name-calling, abusive statements, or worse. And to say the least, that is most ungracious! This behaviour is also not unique to the online space, but can also spill over into everyday life.

Road users - Other than giving up seats on public transport which has improved every year, every other behaviour related to transport or road usage falls below 6. Our partners like the Land Transport Authority and the public transport organisations have now taken the lead in continuing to encourage more improvement in public transport behaviour, and we have gladly taken a supportive back seat.

Our plans going forward include seeking out partnerships with bodies or associations dealing with private road users such as motorists, cyclists, pedestrians.

Cleanliness/environment - We should treat our shared public spaces (our nation!) in the same way we treat our own homes. It's not just about litter, it can even be as basic as the unhygienic scraps we tend to leave behind at hawker centre tables. We wouldn't do that in our own homes, would we? Even if we had a domestic helper, we would ensure that the mess is cleaned up immediately.

And when asked what is one area that could help Singapore make a big improvement in its graciousness index score?

Neighbourliness - While our findings are quite positive about the current state, we also see the desire for more neighbourliness, but some uncertainty, fear or awkwardness on how to get started. If we live in comfortable and positive neighbourhood environments, it will be just so much more pleasant for us. And we will take that positivity and pleasantness to other people in other shared public spaces.

The Graciousness Index has continued to move up, from 53 in 2013 to 55 in 2014, and to 61 in 2015. This year’s rise is led by a growing sense of positive perceptions about kindness and graciousness in Singapore, with respondents rating both themselves and others higher when it comes to being considerate, courteous and showing appreciation. Read more: http://kindness.sg/blog/2015/05/05/graciousness-index-shows-further-improvement/

Hiking with children is good for the whole family

Hiking as a family has built strong bonds, made beautiful memories and improved health. And everyone has learnt to be more creative in tackling obstacles as they are no longer couch potatoes!

THE day I traded my high heels for hiking shoes, the malls for hills and the stale city air for fresh jungle air, my life was never the same again.

It all began when my dear hubby Adrian Yeong took up hiking. He had been hiking close to six months to improve his health and fitness when I saw the changes in him: he had shed 13 kilos and was much fitter and healthier than before. Finally one day, I agreed to join him.

Wasting no time, he got me my first pair of hiking shoes. I had my first taste of hiking at the Challenger trail in Gasing Hill, Petaling Jaya, on August 1, 2010. Since then, Gasing Hill has become our regular training ground.

Friends who heard of our hiking activities thought we were crazy to hike three times a week and when they learnt that we also brought our younger four children along with us, in their dictionary, we were well...insane. Why bother doing such tiring activities?

Many would not consider hiking with kids, supposedly because: “They will complain!”, “They will cry!”, “They will not want to walk!”

Our children being city kids were no angels either. They were always trying to find excuses to escape from hiking so that they could spend time at home instead, watching television and playing computer games. But as parents, we had the last say and so our hiking journey began...

The writer carrying her youngest son, Joseph, on her back, while climbing Gunung Datuk.

By training our children, who were then one-plus, three, seven and ten years old to hike, all of us eventually got fitter and stronger. Our speed and endurance improved. In a short span of five months, Adrian and I did 50 hikes while our kids went on 30 hikes with us.

We had explored almost all the hills and a few waterfalls in the Klang Valley. After a while, it felt a bit boring hiking the same hills. I dreamt of exploring further but often doubted if we were up to the challenge of hiking more than an hour plus with our young kids.

Little did I know that one day I would get to know a Facebook friend, Michael Mui, and that our feet would soon hit real mountains. Mui got to know of our family hiking activities and invited us to join him to hike Gunung Angsi and Gunung Datuk (both in Negri Sembilan).

In his own words, he described these mountains as “a stroll in the park!” That was our first event with the Freewill Hikers Club, a dynamic hiking group based in Johor led by Captain Richard Yeoh. My husband, being an adventurous guy, took up the idea immediately and the rest is history.

On August 11, 2012, Adrian and I, together with our young hikers, hiked our first two mountains Gunung Angsi and Gunung Datuk, on consecutive days. My two kids Audrey (then aged 12) and Dylan (nine) hiked on their own accompanied by our new friends while I carried Joshua (five) on and off as he happened to be a bit moody in the beginning.

The writer with her husband, Adrian Yeong, and their kids on the peak of Broga Hill, Selangor.

My capable hubby backpacked Lil Joseph (three years old and 12kg in weight) up to the peak of Gunung Angsi and back. Hiking more than an hour with heavier loads than other hikers made it tough.

To make matters worse, wearing the new hiking boots I got him as a surprise, he twisted his ankle during the hike. Despite having applied some ointment over the night, he still had not recovered from the injury and so I volunteered to backpack Lil Joseph up Gunung Datuk the next day.

I remembered assuring my dear hubby that I would hand the little boy over to him should the going get too tough. My hubby agreed to my suggestion. That was my first hike carrying my son up a mountain.

It was my first experience and I found Gunung Datuk to be a steep mountain, with endless roots along the way. Carrying my little boy up weighed me down though I found it quite easy to go on all fours, pulling myself up by tree roots.

Our new friends from Freewill Hikers were very helpful and took care of our two older kids, Audrey and Dylan. While Audrey was slow and steady, Dylan flew up with them and managed to reach the peak in 1 hour 40 minutes; whereas, with my load, we took about 30 minutes more.

It was tiring and our friends kept bluffing us — “You are almost there”, “15 minutes more to the peak”, “Just another 15 minutes more” — in the name of encouragement.

To reach the actual peak of Gunung Datuk, the writer’s family had to clamber up these ladders.

Nevertheless, we made it. At the false peak, I told my husband: “Darling, you take over. I am too tired!”

I handed my little boy over to my hubby to tackle the metal ladder that leads to the actual peak of Gunung Datuk as I was just too exhausted. We had all made it up to Gunung Datuk!

Those were our first two mountains — tough but rewarding. The next few months that followed saw us at Gunung Lambak, Gunung Belumut and Gunung Panti (all three in southern Johor, near Kluang).

Our toughest hike with Lil Jo was Gunung Belumut. Our little boy now weighed 15 kilos and he had not been trained as he was small. He also often pretended to be a 4WD stuck in the mud whilst hiking with his siblings, an idea he got from the multiple off-road trips we had gone for.

I uttered a prayer in the morning, “Dear God, I don’t know how we are going to make it hiking up Belumut but I ask for your help and enablement, in Jesus’ name.”

I came up with a plan. Conserve our energies, get the boy who normally walked only for half an hour to hike as far and as fast as he could. Motivating him, I said, “Jo, you need to look for 10 ant trails and you will get an ice-cream.”

The writer (centre) with her children, husband (right) and Lee Keam Keong of Freewill Hikers at the peak of Gunung Belumut (1,010m) in Kluang, Johor.

So I promised him and we went hunting all the way. He played with twigs, pretending they were rifles and he was soon blasting and shooting away, chasing his brother Joshua and another a new friend, a boy about six, named Rain, who was the grandson of Captain Richard Yeoh of the Freewill Hikers Club.

He played all the way and when he was tired, I gave him some drinks to boost his energy. I also talked, joked and laughed with him in order to distract him from the distance we had to cover. Lo and behold, my four-year-old boy successfully hiked up to the peak in four hours without being carried. It was a miracle indeed. My prayers were answered.

On the way down, Lil Joseph was now tired and had to be carried by his strong daddy. Adrian later shared that it was easier to carry a 15kg bagpack rather than our little boy as he kept swaying to and fro in the baby carrier as he tackled the tough steep terrain, squeezing through tight spots and at times jumping over gullies and large tree roots. After descending for over two hours, his neck and shoulders were stiff.

Nothing worthwhile comes easy, and we’ve had to build up our strength as well as our endurance in hiking. Being positive has made us conquerors. With sufficient training and preparations, we’ve tackled various mountains.

Our conclusion on hiking with kids: it’s not easy and did not happen overnight. But it’s not mission impossible either as kids have new engines and are fast learners.

By clocking the hours and allowing them to master hiking skills, we’ve built up their fitness and confidence. After time, they have become capable hikers.

Hiking together as a family has been rewarding as we’ve built strong bonds and made beautiful memories. We’ve inculcated healthier lifestyles and our children have learnt to tackle obstacles, to never give up and be optimistic.

It has taught them outdoor skills and built their appreciation of nature. It has made them strong, courageous and creative. This is a win-win situation and I strongly encourage families to take up hiking as a regular family activity. Just make a change in your life and that of your family. Bring them out hiking. All you need is a good pair of hiking shoes, determination and motivation.

Go for it folks, don’t be a coach potato!

Backpacks, trekking poles, head lamps, a dry bag, a sleeping bag and a poncho are among the prizes being offered for those who write in about their Star2 Adventure Challenge.

By JESSY PHUAH The Star/Asian News Network

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