Man-in-the-street Paying Back Temasek Losses?
Shortly thereafter, I learnt about the Medisave Minimum Sum increase which registers the largest jump of $11,000 from the previous year as compared to a relatively modest $4,500 to $6,500 year-on-year increase in each of the preceding 5 years. Was inflation really THAT exceptionally bad in 2008/2009 as compared to 2007/2008?
Consequently, if you sell your flat for anything less than this value, you can't even dream of seeing anything in cash - everything goes into the CPF account. Apparently, when you sell below the valuation (valuers are HDB appointed and IRAS licensed, by the way), you are obligated to top-up the difference between sale price and valuation back into your CPF account as well. This was reportedly 'enforced loosely' - until now.
When sale prices are naturally heading southward and people in difficulty are finding themselves forced to sell their flats cheaply to save themselves, it is a mystery to me why the authorities would put such folks in a catch-22 situation - if they keep the flat, they wouldn't be able to service the loans; and they can't sell their flat either because they would be obligated to come up with cash to make up the difference (which they obviously don't have).
Any which way I look at this, it seems as though only the CPF/HDB coffers will benefit - if the top-up is made, the actual financial loss of the sale is borne by the house owner (who forks it all out in cash), and if there is a default in the housing loan repayment, HDB can simply repossess the flat and resell it for a (handsome) profit.
So, that brings me to ask the question, "who stands to benefit the most" and the answer seems to be an obvious CPF/HDB/Civil Service which invariably leads back to the same coffers (more or less) - Ministry of Finance, which in turn finances Temasek Holdings.
In any case, it sure doesn't look as though the man in the street is in anyway a better position to deal with the current difficult financial situation - in fact, it just got worse.