Quora Answer: Did Budget 2022 Adequately Address Restructuring Anxieties in Singapore Felt by Workers & Firms?

The following is my answer to a Quora question: “Did Budget 2022 adequately address restructuring anxieties in Singapore felt by workers and firms?” 

It is a bit early to say since we have not seen the effects of it yet.  However, it looks like a step in the right direction.  There are three major areas of interest in the entire budget that Singaporeans should pay attention, since they have major ramifications over the next few years. 

One of central tenets if the expansion of the progressive wage model, which aims to uplift workers in the industries such as security and cleaning.  This applies to those earning at the 20^th percentile or below.  This is essentially a minimum wage, which is necessary to bridge the wage gap and prevent the growth of a disenfranchised underclass.  Due to the pandemic, the timeline of implementation was accelerated and expanded to other industries such as waste management and retail. 

The second was the increase in GST, which is staggered over the next three years.  The increase to 9% is actually lower than the expected 11%.  As a consumption tax, it is among the lowest in the developed world, but it was inevitable.  The key driver for the increase in GST is the cost of an ageing demographic.  The population of Singapore is ageing.  There is a cost to maintaining the standard of living with a lower tax base, and that money has to come from somewhere.  A consumption tax is one of the more equitable solutions. 

The third is the shifting of the tax burden to the wealthier section of the populace.  This can be seen in the increase in property tax, and discretionary luxury spending, and in the increase in income tax for the highest bracket.  Singapore has also implemented a 15% minimum corporate tax, in line with the rest of the world. 

Overall, it is a progressive budget, an expansionary one.  We are drawing $6 billion from the Reserves, which has to be paid back eventually.  This budget touches a bit on climate change and carbon credits.  The focus was on restructuring the economy, and close the income gap.  The next budget would be expected to build on this and address further infrastructural challenges of climate change.

Quora Answer: How Do I Stop Panicking & Improve My Public Speaking?

The following is my answer to a Quora question: “I have tried to improve my public speaking for years - many courses, voice training, improv - and nothing seems to improve it.  I just panic and cannot think straight.  What would you do in my position?” 

You cannot simply attend courses and training for public speaking, without actually engaging in it on a regular basis.  That would be like attending all sorts of lectures and events about swimming, but never actually trying to swim in the pool.  You will panic, flail around, and maybe even drown. 

Public speaking is the exercise of the art of rhetoric.  There are many elements to it.  You need to learn it as you do.  One of the greatest fears of people is public speaking, which explains the panic and the loss of coherent thought.  Your brain is going into the flight or fight mode.  If you were back ten thousand years, hunting mammoths, that would work.  There is fear, so the breathing becomes shallow and rapid to fill the lungs with oxygen.  The blood floods the extremities and the heart pumps faster in anticipation of that fight or that flight.  Your vision narrows so you can focus on the prey or the predator.  The mind blanks because you revert to instinct.  None of that is useful when you are on stage, about to speak. 

Aside from the usual exercise and practices, even experienced speakers go through this.  It could be that they are unprepared, or that the occasion overwhelms them.  The difference is that experienced speakers understand the physiological effects occurring.  Sometimes, through force of will, they snap out of it.  Other times, they revert to the last sentence, or even the last speech from another occasion. 

The first thing you do, when you start to panic, is to clear your mind.  Your are going through the consequences of failure, and you think the world is judging you or laughing at you.  Even if that may be true – and most times, it is not – it is irrelevant.  Take a deep breath.  And then another, and another.  This resets your mind, and snaps your body out of the flight or fight mode.  You have gained a semblance of control. 

The next thing you do is look at the audience.  If you look down, you lose credibility because people interpret that sort of body language as belonging to someone who is lying or afraid.  If you look up, they will know you do not know or are searching for the next thing to say.  You will know they know because there may be some restlessness in the audience, and the panic will come back.  Look for a friendly face in the audience.  It could be a friend, or even someone you greeted when you came early.  If that is not possible, look at anyone, but fixate on a point between their eyebrows.  That way, the audience thinks you are making eye contact.  Then, start your speech, or if you were in the middle of it before you panicked, start at the last point you said, at the beginning of the sentence or the point.  Say it slowly.  This allows the brain to catch up with the tongue.  From the audience’s point of view, however, it looks as it you are reiterating an important point in your speech. 

Every time you forget, pause.  Look at the audience meaningfully.  Breathe slowly again.  Own the uncomfortable pause between points of our speech, and the start from where you left of.  When you slow your speech down, you are less likely to panic, because you are able to remember the points in your head.  When you speak too fast, your tongue moves faster than your brain, and when you lose that train of thought, you panic.  That is where pause fillers or word fillers creep into your speech, and your contentions lose credibility with the audience.  A good speech does not need to be long.  It simply needs to be meaningful.  Long speeches tend to meander and belabor the points.  If it can be said in five words, do not use ten.  If it can be said in three words, do not use five.  Keep your sentences short, and do away with conjunctions as much as possible.  Long sentences, when interrupted, lead to loss of train of thought.  That is what causes you to panic. 

Finally, if you are prone to panic, then always prepare your speeches.  Do not write it down and memorise it.  If you lose your train of thought, you will find it difficult to continue from where you left off, and you will panic.  Instead, summarise three points, an built your argument around them.  Do not give twenty reasons for something.  Give three.  The audience will not remember the rest, and neither will you.  Have an opening statement and a closing statement, the call to action.  Have a habit of coming early to the venue, and introduce yourself to people.  Make small talk, and get to know them.  In that way, you are not addressing an audience of total strangers.  There are people among them you have connected with.  As you stand on the stage, look for those friendly faces, and you will be more at ease.  If you want to master public speaking, join a Toastmasters club, or get a coach.  Seminars and workshops by themselves are worthless.

Quora Answer: Can You Still Make Financial Plans When You Have No Money?

The following is my answer to a Quora question: “Can you still make financial plans, even when you do not have money?” 

Financial planning about managing revenue and expenditure, planning for future expenditure and planning for future acquisition of funds and assets.  Even when you do not have money, you can still plan financially.  In this case, you plan how to acquire that money, and then grow it, so that you do not fall back into a situation where you do not have money. 

If you have no money, not planning makes it less likely you will get money.  You need to take stock of where you are, and make a plan to move from that situation.  In the unlikely event that you have a windfall, without a plan, you will lose that money just as easily, and may end up in a worse situation – no money, but with more debts.

Quora Answer: What is the Range of Capital Expected from an Angel Investor versus Venture Capital?

The following is my answer to a Quora question: “What is the range of capital you can expect from an angel investor versus venture capital?” 

There is no clearly defined range.  An angel investor is a wealthy private investor who finances small ventures, through their own net worth, in exchange for equity.  A venture capital firm does the exact same thing, on a larger scale, because they have access to an investment fund created for that exact purpose. 

Angel investors normally start in the low tens of thousands range, and may be part of different levels of seed funding in a promising enterprise, to maintain the size of their equity stake.  There are exceptionally wealthy individuals who are able to put in tens of millions but that is rare.  Even when an angel investor has that level of wealth, they prefer to diversify and out money into early stages of startups.  They make most their money in the exits. 

Venture capital, on the other hand, may start as low as angel investors, but the largest ones are more than capable of putting in hundreds of millions into the right unicorns.  Generally, venture capital comes in where angel investors leave off.  There may be a light overlap in the early stages of seed funding, in series A or B.  Most angel investors exit or partial exit to venture capital.

Quora Answer: Is Keyman Insurance Tax Deductible?

The following is my answer to a Quora question: “Is keyman insurance tax deductible?” 

In Singapore, there are some considerations to be addressed before it can be.  The premiums incurred on a keyman insurance policy is deductible, but only if all the following conditions are met.  Firstly, the purpose of the policy is to insure the business against loss of profits arising from the death or disability of the keyman.  Secondly, the capital sum insured is directly related to the extent of the annual profits directly attributable to the services of the keyman.  This means that the payout is tied to the impact of the keyman’s verifiable contribution on revenue.  Thirdly, the insurance policy remains the property of the business, and there be no assignment of the benefits under the policy to the insured or his family.  Should the business intent to pay out to the family of the keyman or the keyman, it must be a distinct transaction from the insurance payout itself, and cannot be through some form of assignment of proceeds.  Aside from all this, the insurance policy does not provide for a cash surrender or investment value.  This precludes whole life and investment-linked plans.  It has to be a term policy.  Also, the loss of the keyman should not affect the entire profit making structure of the business. 

Singapore’s Income Tax Act 1947, Section 14, allows deduction for expenses that are wholly and exclusively incurred in the production of income only.  Section 15, of the same act, further provides, among other things, that capital expenditure is not deductible.  Generally, businesses can claim deductions on premiums incurred on any insurance policy where an employee or a nominee of the employee is the beneficiary of the policy.  This is considered a provision of employment benefits, which constitutes part of staff costs.  Conversely, if the beneficiary of the policy is the business itself, premiums incurred are not deductible because the expense is not incurred in the production of income, but to acquire a capital asset, which in this case, is the insurance policy. 

There is an exception to the principle stated above, though.  Premiums incurred on a keyman insurance policy is deductible for income tax purposes although the beneficiary of the policy is the business if the purpose of the policy is to insure the business against loss of profits arising from the death or disability of a keyman.  The principle is that the keyman has the prime responsibility for the profitability of the business.  Hence, premiums paid, in providing protection against loss of profits from the death or disability of the keyman are wholly and exclusively incurred in producing the income of the business or trade. 

Also, the capital sum insured is directly related to the extent of the annual profits directly attributable to the services of the keyman.  For this to be accepted by IRAS, the responsibilities of the keyman in the operations of the business must be prime, shared, or contributory.  Generally, sum assured is limited by the amount of profits directly attributable to the keyman in his capacity of having the prime responsibility for the profitability of the business.  In cases where the capital sum assured exceeds the annual profits of the business, the premiums will not be deductible as they are considered as not wholly and exclusively incurred in the production of income.  This makes sense since it precludes using excessive coverage as a means to reduce tax exposure. 

The insurance policy remains the property of the business, and there must not be an assignment of the benefits under the policy to the insured or his family.  The tax deductions on premiums may be denied if benefits of the policy accrues to the keyman in his personal capacity.  This is because the premiums paid are not wholly and exclusively incurred in the production of income.  Examples that would preclude this would be in a case where the business is a proprietorship.  Sole proprietorships and partnerships are not distinct legal entities.  The assets and liabilities of the business are the assets and liabilities of the proprietor, and that applies to any insurance policy.  Another example would be in the case where the business is a distinct legal entity by the substantially owned by the keyman or his family, which constitutes an unacceptable conflict of interest from a tax perspective.  On the latter case, however, it is possible to appeal to IRAS and have it accepted.  Whether the benefits of the insurance policy has accrued to the keyman in a personal capacity is determined based on the facts of each case. 

As mentioned above, the insurance policy must not provide a cash surrender or investment value.  Any policy providing a cash surrender value or an investment value, the premiums would not be considered as incurred wholly and exclusively to protect against the loss of profits.  This is because the investment payout under the policy, whether a withdrawal of proceeds, or a coupon of any sort, will be made to the business even if there is no claim on the policy.  Therefore, the premiums of such policies do not qualify for tax deduction.  In addition to whole life, and investment-linked plans, this also includes endowment plans, retirement policies and group personal insurance. 

Deduction of premiums on keyman policies do not apply to any case where the loss of the keyman affects the entire profit-making structure of the business, to the extent that the business can no longer carry on as a going concern.  This is because in such a scenario, premiums are clearly in respect of the capital structure of the business, not just for the loss of profits.  An example of this would be a case where a sole-proprietor is denied tax deductions if the keyman insurance is taken up on his own life.  The sole-proprietorship business is not a distinct legal entity, and the death or disability of the key man will affect the entire profit making structure of the business.  However, it is possible to secure tax deductions if the keyman insurance is taken up on an employee provided that all other conditions are met. 

In the event of a payout of any such policy where the premiums are tax deductible, that payout constitutes a trading receipt and is taxable.

Quora Answer: What are the Challenges of Being a Leader?

The following is my answer to a Quora question: “What are the challenges of being a leader?” 

The greatest challenge of leadership is finding that balance between being accepted by the people, and doing the necessary unpopular actions for the good of the greater whole.  Leadership is never a popularity contest.  Successful and popular leaders are only popular after the fact, sometimes after they are long gone or after their deaths.  Great leaders are respected, even feared; they are not necessarily popular.  Any leader who is a populist should be treated with suspicion, and have his credibility questioned.  If they resort to populism, either there is a wider strategic plan and they have managed to sell it to the masses, or they are weak and are willing to sell a future advantage for immediate acceptance.  This would apply to most politicians.  They are populist, earning approval, but they sell the future of the nation for immediate electoral gains. 

Another challenge of leadership is the ability to evolve with the needs of the changing environment.  It is the ability to read the room, so to speak, and understand the limits of the people we lead.  A good example of this would be the fate of Winston Leonard Spencer Churchill, who served as Prime Minister of the United Kingdom from 1940 to 1945, during the Second World War, and again from 1951 to 1955.  He won the war, but he proposed Operation Unthinkable, war with the Soviet Union with freed German POWs.  The British public were not ready to keep a war economy going, and he was kicked out of power.  Leaders must be able to see the probable landscape just over the horizon, and act accordingly.  They must never be lost in the success or failures of the moment.

Quora Answer: Will Singapore Love It if Malaysia Ends the Ketuanan Melayu Policy?

The following is my answer to a Quora question: “Will Singapore love it if Malaysia ends its Ketuanan Melayu policy?” 

Ending Ketuanan Melayu would benefit Malaysia.  This could spur Malaysia’s development, and that would benefit Singapore.  However, this development is not a given since the consequences of Ketuanan Melayu, such as endemic corruption, this warlord culture in politics, and nepotism will not be automatically dismantled.  It is a start, but it is not enough. 

In the meantime, however, Ketuanan Melayu has actually benefited Singapore.  Ketuanan Melayu is a stupid policy.  It needlessly disenfranchise a large segment of the population.  This has lead to a brain drain of non-Malays, and Singapore has directly benefited from that over the last 60 years.  Many of our foreign talent came from Malaysia, Indians, Chinese, Eurasians and others.  This has lead to a stagnation of national development, and the more ambitious among the Malays have also come to Singapore. 

In summary, whether Ketuanan Melayu continues or ends, Singapore will find a way to benefit from it.  Malaysia can be a partner in ASEAN where we can work towards common goals, or it can choose to remain a sick man, and picked over for the choicest parts.

Quora Answer: Is Singapore becoming a Sin City?

The following is my answer to a Quora question: “Is Singapore becoming a sin city?” 

There is no universal measure of what constitutes a “sin city”.  It is a matter of perception.  When people apply this label, it is applied to any urban centre that tolerate, legally or illegally, vice activities such as prostitution, gambling, drugs and the related organised crime.  Singapore has casinos, and prostitution is legal and legislated.  Organised crime is almost non-existent, and there is a stringent anti-narcotic policy.  It is hyperbolic to claim that Singapore is anything close to a sin city. 

The only people that have made this ludicrous claim belong to puritanical Christian churches or the Salafist-influenced community among the Muslims.  We are a secular state, and we should never be defined by narrow interpretations of scripture by fringe religious groups.

Quora Answer: Why has Singapore Prime Minister Lee Hsien Loong Criticised India & Israel?

The following is my answer to a Quora question: “Why has Singapore Prime Minister Lee Hsien Loong criticised genuine democracies like India and Israel?” 

This is what Lee Hsien Loong, Prime Minister of Singapore, said, “The leaders, who fought for and won independence, are often exceptional individuals of great courage, immense culture, and outstanding ability.  They came through the crucible of fire and emerged as leaders of men and nations.  They are the David ben Gurions, the Jawaharlal Nehrus, and we have our own too. 

Many political systems today would be quite unrecognisable to their founding leaders.  Ben-Gurion’s Israel has morphed into one which can barely form a government, despite four general elections in two years.  Meanwhile, a stream of senior politicians and officials in Israel face a litany of criminal charges, some have gone to jail. 

While Nehru’s India has become one where, according to media reports, almost half the MPs in the Lok Sabha have criminal charges pending against them, including charges of rape and murder.  Though it is also said that many of these allegations are politically motivated. 

What is to prevent Singapore from going down the same road?  Nothing.  We are not intrinsically smarter or more virtuous than other countries.  Modern Singapore does not come born with a fail-safe mechanism.” 

This was his speech on Tuesday, 22^nd February, in Parliament.  The context was a debate about the behaviour of the Workers Party leadership, and particularly the Leader of the Opposition, Pritam Singh.  The contention was that misleading Parliament for political gain, and casting aspersions over the civil service that are patently untrue, is not a road we want to go down it impinges on the integrity of our lawmakers, and sullies the reputation of the country as a whole. 

He cited Israel, which has devolved into a corrupt kleptocracy of sorts, where the electorate themselves do not trust any party enough to vote in a decisive majority.  The main parties have been marred by substantiated incidences of corruption, criminal conspiracy, and a politics of divisiveness.  Israel has moved away from a secular democracy to accommodate the Jewish Right and a conservative Orthodox supremacy.  This is not a united nation, and this is especially concerning when the country itself is in a dangerous neighbourhood, surrounded by failed and failing states. 

He cited India, and it is a fact that India is one of the most corrupt nations in the world.  It is a fact that just over 60% of Indian lawmakers have pending court cases, or have been convicted.  But they are still serving in their parliament, and crafting legislation that benefits them.  The current Modi administration is demonising the Muslim and Christian minorities for votes, and inflaming Hindu extremists. 

Both nations are a far cry from the vision of the generation that fought for their independence, and it would be conceivable that the leaders of their independence movement, were they still alive, would be ashamed of the state of these countries.  Prime Minister Lee is drawing a parallel that the road to corruption and disunity is littered by small compromises in our integrity as leaders for immediate gain at the ballot.  Singaporeans are not so special that we are inherently above this.  As such, we must draw lessons from the success and failures of other states, and learn not to make the same mistakes. 

This speech was in Singapore’s Parliament, addressed to a Singapore audience, on a Singapore issue.  There is nothing inherently wrong about those remarks.  No nation is above criticism, including our own.  All that was mentioned are facts, and no aspersion was intended.  These are lessons to be earned.  The claim that these countries are genuine democracies is also subjective.  Singapore is also a genuine democracy.