Lee Hsien Loong
Singapore
“Yes, of course, every time I sell the land, I put money into the Reserves, but I am not putting the money into the Reserves all today. I am putting it in a stream of payments, 30 years apart.”
“Speaker, Sir, I do not think it was a very difficult question to figure out, that when I spoke to MTI, I spoke to the Minister, because Mr Gan Kim Yong is the Minister for Trade and Industry.”
“" I think that would have been unjust because he has not been charged. If there is a case, the case has not been heard, he has not been found guilty or acquitted or whatever. I cannot prejudge a case based on an incomplete investigation – started recently, or a partial investigation, just entered into the formal phase.”
“Mr Speaker, Sir, first, Mr Leong is quibbling over words. In February, Mr Tan Chuan-Jin told me, "I offer to resign". I said, "Yes, sort out your constituency first". In other words, decision taken. The moment to execute it, I will decide. So, it is quite clear. Legally, he has not resigned.”
“Sorry, Mr Speaker, to respond to Ms Poa on why not no pay leave. It is my judgement to make. The Civil Service works in one way; their basis is if you have been convicted, then you are on zero pay and other consequences will follow.”
“I am very happy to note that Assoc Prof Jamus Lim appreciates the second key and is seeking a third. And I hope that it portends a change in your attitude towards the Elected President and his custodial powers. But I think the Brazil example is a very interesting one.”
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“Yes, of course, every time I sell the land, I put money into the Reserves, but I am not putting the money into the Reserves all today. I am putting it in a stream of payments, 30 years apart. And that means the money which we are paying 30 years from now, today, has to be discounted by whatever interest rate the bank is charging, multiplied by 30 years. It is not worth $1 for $1. Maybe 10 cents for $1. And the next one after that, maybe one cent for $1 and that series converges.”
“There is such a thing called an interest rate, a discount rate. And if we add all those payments together and discount them, we get the price of the land for freehold, at least in principle. So, if we sell the freehold land, it is one price, if we sell the 30-year lease, it is another price, it is shorter, but we are only selling that 30 years and we get in 30 years' time, we have the chance of selling it again and again. And if we add up all those 30-year lease earnings, well, that should get us the freehold value. So, if we sell the land once and we want to spend the money now, we are actually saying I used to own this land. I rent it out, I collect rent every month or year, over the next 30 years, I will collect rent every month and I can spend it every month. But now, I sell the land, I collect 30 years of lease premium upfront, I spend it today. That is cheating. We can spend it over the next 30 years, as Ms Hazel Poa suggests, it is not an unthinkable proposition. We can put it away, invest it, spend the investment returns as we are doing, which is also sensible. But to say that we can take it forward and we can spend it and do not worry because in 30 years' time, we will get it back. Tell a banker, "In 30 years' time I'll pay you back. Same dollar. I borrow $1 from you, in 30 years' time, I'll give you back the hongbao". See what he says to you.”
“How much does that translate into next year's return five years from now, 10 years from now, God only knows. It can be that you have 10 years, 15 years of bad markets. It happened in the 1970s and early 1980s. It can be that you have 10 years of boom. It has happened. The tech bubble and then, more recently, another bubble; maybe, now an AI bubble to come. But it is a random variable and we are trying to estimate what is going to happen and we are trying to make a prudent judgement. So, I am not judging the tail, the most optimistic outcome or the bottom, the most awful outcome, which is not just zero, but minus 10 minus 20, there could be a crash. But where do we think is a reasonable middling scenario? And that is the number which we will plan on and which we will use to draw on the Reserves. And if it turns out that next year markets perform better, well, my Reserves will grow, "heng!", happy! If it turns out that markets perform worse, I have already drawn the money, the Reserves will go down sharper, it cannot be helped, I have already spent the money. These are random outcomes. So, I hope that clarifies and it will help the WP to make your explanations easier for us to understand. Land, yes, we can sell it over and over again. We cannot sell a freehold over and over again. We can sell leasehold over and over again. So, if we sell a 30-year leasehold, I can sell the first 30 years now. I can sell another 30 years. If I sell it now, I will get very little money. I can sell it at the end of the first 30 years. I can sell another 30 years. At the end of that 30 years I can sell, yes another 30 years and so on, forever. So, does that mean that the leasehold is worth 30, $1 plus $1, plus $1, plus $1, plus $1, forever? No.”
“Mr Speaker, Sir, I thank, from the bottom of my heart, the Leader of the Opposition for raising these questions and giving me the opportunity to clarify the matter further. First, on Mr Low Thia Khiang and the GST. Yes, indeed, he did regularly oppose the GST – every time. Introducing it at 3%, pushing it up from 3% to 5%, which I did, going from 5% to 7%, which Tharman Shanmugaratnam did as Finance Minister. And we reminded the WP of this, only to be told by their ex-MP, Mr Leon Perera, that now that it has reached 7%, they do not oppose that, but they oppose it going to 9%. The Hansard is an open book. We can all refer to it readily and soon, we will be able to do a generative AI search on it. And all these facts will come out and I am not hallucinating. Secondly, on volatility of the returns to be reconciled, with Tharman saying that the estimate is conservative. There is nothing to reconcile. It is true. The estimate is conservative, but it is an estimate. It is an estimate of a random variable. A variable which can be high, which can be low, which can be middling, which nobody knows which is going to be, but to the best of our judgement, this is the estimate of probably the middle point, a median or the mean or some measure and therefore, it gives some idea of the range of outcomes which are possible. And furthermore, it is an estimate for 20-year returns, long term. In fact, GIC does it not just do 20 years, but equilibrium returns. Meaning, assuming the world is in order and nobody is recovering from a slump or a crash or a depression or a mania bubble. Everything is in order, well, these are the returns, these are the rates at which we expect equities to pay back, to appreciate, bonds, cash and so on.”
“Put this squarely to the people and let them decide that PAP will join issue with them and convince Singaporeans that our way is the right way for Singapore and I believe Singaporeans do believe us. Because and if I may come back to the IPS survey which we referred to and which you still have in your hands, it was not just a survey of the trust for input on Reserves but trust in the PAP Government in general. If you look at the paragraph under paragraph 3.3, it says, "In the case of the PAP Government, the statement was modified to refer to the level of trust in it to manage the Reserves." In other words, Singaporeans have high confidence in the PAP Government's management of the Reserves. And therefore, we are confident that we will win the argument and we will be able to get Singaporeans to do the right thing. Taking a long-term view of the Reserves, striking the right balance between present and future needs, these are vital responsibilities of any Singapore government. I have spent 40 years of my life stewarding, safeguarding, improving the system and continuing the work of those who had come before me. Now, I am preparing to hand over to my successor in good order, a Singapore which is more prosperous and more secure. I ask everyone to help them maintain the prudent policies that have served us well to keep Singapore on the right track so that we can all continue to benefit from the nation's success for many years to come. [Applause.]”
“It is a great source of comfort and reassurance that if we run into a jam or find ourselves in a tight spot, which is bound to happen every so many years and not so many years, we will have one extra card to play. We will not be destitute. Other countries admire, even envy what we have. But they find it very hard to emulate what we have done. It was only in Singapore, only in those circumstances, only with that history and that generation and that phase of nation-building that we could do it. If it is gone, we will not be able to do it again either. So, therefore, as for ourselves, we too must make a conscious effort to keep our system working. Singaporeans need to have the right instincts. Save when we can, resist the pressure to touch it, use only when we really must. Each of us must see ourselves as stewards and trustees, taking care of the interests of present and future generations. That is the way to keep this discipline, to keep this rule and to keep this system with the two keys working well. Ultimately, in a democracy, like Singapore, on big issues like this, it is the people who will decide and the PAP is convinced that this is the right approach for Singapore. As long as the PAP Government is in power, this is what we will do. If any other political party thinks that this is not the right approach, if they truly believe that we should dip into our Reserves more, then bring it to the ballot box, put it upfront, say you want to touch, you want to spend, you want to shift the rules. Do not pretend that you are being just as prudent, only more kind-hearted. Campaign in the next General Election on this issue. Ask voters for a mandate to form the Government. Change their Constitution. Dismantle the second lock and key.”
“We all want more things to be done, but we also know – and Mr Lee Kuan Yew knew – that that money would always be not enough. And he knew that it would always be politically tough to raise taxes and that is why he and his colleagues designed and implemented the "two key" scheme. Some of Mr Lee Kuan Yew's senior colleagues told him that in locking up the Reserves, he was trying the impossible. You know why? Because their philosophy was, if a generation wants to spend the money, somehow, they will get their hands on it and they will do it. But Mr Lee Kuan Yew disagreed and decided he had to try his best. And it is up to us and for us now to prove that we can protect the nest egg and that Singaporeans are capable of being prudent and responsible, well beyond the founding generation. We are not "Ah Sia Kia". We are responsible. We are also forefathers one day of generations yet to be born. The Government is elected, not just to take care of citizens today but also to secure the future of the country and the PAP Government has always done both. But in taking care of today's citizens, we are very cautious to safeguard the interests of young people not yet voting, future citizens not yet born and the long-term interests of Singapore. In 2001, when we instituted the 50% rule applied to the NII and amended the Constitution, Mr Lee Kuan Yew intervened in the debate because some MPs were proposing good causes to spend the money on, particularly old people. And he reminded everyone in Parliament, he said, at the end of the day, whom do we owe our deepest obligation to as the Government? To the future, not just to the present, certainly, not to the past. We must protect the Past Reserves. It is our precious resource, our strategic advantage.”
“There was a common commitment to safeguard our Past Reserves and a recognition, a shared recognition, that they are a strategic asset only to be used for unprecedented circumstances. Now, I hear the Opposition arguing that we should change the rules and draw more from Reserves and that, of course they have no intention to raid the Reserves far from wanting to bankrupt Singapore. They say we can easily afford what they are proposing. I conclude that their tune has changed. May I remind them that the changes they are proposing are not simply policy changes, but require amending the Constitution to draw and to spend more from the Past Reserves which are protected by the President. Some people say it is harder for this generation to abide by the same tight fiscal rules as before. They say that now growth is slower, the cost of living has gone up, which is true. But our forefathers, who put aside the surpluses which grew into the Reserves, were much less well-off than us – to put it bluntly, much poorer than us. Our standard of living is double or triple what our forefathers lived with and yet, they saved up surpluses for the future, whereas now, we hear arguments that we should draw more from the Reserves on that basis that we need the money more urgently today! There is a Chinese saying, 创业难，守业更难，败家轻而易举, which means hard to start, even harder to keep it going but all too easy to ruin and to lose everything. Mr Lee Kuan Yew and his team had anticipated this outcome, this political pressure. They knew that there would always be many worthy heart-tugging causes demanding Government resources. Every MP has got pet causes which he champions. Even Ministers have pet causes. Even Prime Ministers are allowed to have a few.”
“He said: "What is unusual about our resilience package is that the Government will be using our Past Reserves to fund two main components of the package, the Jobs Credit Scheme and a special risk sharing initiative." I think I misspoke, I said Job Support Scheme; it was the Jobs Credit Scheme. "Past Reserves are a strategic asset meant for use in times of need, especially when the Government faces financial constraints due to unprecedented circumstances which require the Government to respond in the interest of the nation. Hence, I am surprised that the Government has chosen to set a precedent in asking the President for approval for a drawdown of our Past Reserves when it has enough savings from the current term of Government to fund the entire Resilience Package, and the resulting Budget deficit, which the Finance Minister has estimated at..." a certain amount. So, it was a very reasonable question – actually, it was a very polite objection – and it was right that he raised it and we debated it. And our answer was, we are doing this so that we have dry powder, and that there are current Reserves, we may well need it later. We put that aside. If we need to, we will use it. As it turned out, fortunately, we did not need to. Two years later, in 2011, when the Government paid the $4 billion back to the Past Reserves, Mr Low Thia Khiang spoke again. He did the honourable thing and commended the Government and he said, in that Budget debate again, 2011, "In conclusion, Sir, the Budget this year has done one thing right. It has prudently put back into Past Reserves the $4 billion that the Government took in 2009." So, this is how a responsible Opposition conducts itself.”
“We, too, should fulfil our obligation to our children and grandchildren to protect their interest in this nest egg. This nest egg. It is the money of the people of Singapore, yes, but it is not the money only of this generation of the people of Singapore. It belongs to this generation. It belongs to future generations, too, and we have a responsibility to both. And if we fulfil that responsibility, in time, our children and grandchildren, too, can benefit from a steady stream of returns from the Reserves and also have an umbrella to protect them come a rainy day. We must not erode the patrimony, this family treasure, which we have inherited from our forefathers. Nor should we burden future generations with debt, nor mortgage their future. We are beneficiaries of our forefathers' sacrifice and vision, but we are also trustees protecting this inheritance for future generations. It is not just for us, we have a responsibility to our children and grandchildren. This is the ethos and the compact which generations of Singaporeans have forged and it is one that, in fact, has been upheld across the aisle in this House. During the Global Financial Crisis – I spoke about it briefly just now – we brought forward the FY2009 Budget to deal with the crisis and we had a crisis Budget. In the Budget – this is a Budget where we had the Job Support Scheme – and we were going to draw $4.9 billion from the Past Reserves. And in the Budget debate, Mr Low Thia Khiang questioned why the Government wanted to draw down on our Past Reserves instead of using savings from the Government's current Budget.”
“Yes, our spending needs have gone up and we need more programmes to cater for and to look after an ageing population. And yes, the Government does have many programmes to help Singaporeans to cope with the cost of living. All kinds of them. Just now, the Leader of the House counted the ways. I do not have to count them again. But there are many. And in fact, we have covered not just the present generation and the younger generation, but also the older generations, too, because we had a Pioneer Package, we had a Majulah Package. We have not forgotten the people who brought us here. But each generation must spend within our means, and each generation has been able to spend within our means and, even this generation, we can spend within our means. It does mean that, from time to time, we have to revise our taxes, raise some of them, like the GST, which we have just raised to 9%, and we have powerful reasons for doing so, which have been extensively debated. Our spending needs have gone up, especially for healthcare and the ageing population. And we know that we will need the money sooner rather than later. Why do we do this? It is not just for the fun of it. Nobody relishes a tax increase. Not even MOF. Why should a government volunteer unnecessarily to do something which it knows is going to be unpopular? But if it has to be done, we will do it, and that is what it means to take responsibility for governing our country. We got here because of the careful tending of our forefathers. Despite the difficulties and the challenges which they faced, they still put savings aside so that we can enjoy this resource today. And we are fed much better off for it and grateful to them for it.”
“And borrowing, issuing Government securities, because that is not really our money. It is borrowed and one day, it will be claimed. And foreign exchange, that is also really not our money because people bring in money to be deposited in Singapore banks, they can take the money out of Singapore banks any time. So, just because the balance is sitting there does not mean you can take it home. So, 50/50, 2% goes back into the Reserves, the Reserves will grow, all things going well, at 2% per year. And our economy, all things going well, will also grow, I hope, about 2% per year, because my workforce is flat, my productivity, if I work very hard, I get 1.5% productivity growth a year. So, to make 2%, 2.5%, is already working very hard and doing quite well. In other words, on present settings, with our present policy, the Reserves will be growing about 2% per year. The GDP will be growing about 2% per year. The balance is the same every year. It is not getting bigger and bigger, more and more Reserves, while the GDP languishes. And so, the contribution to our Budget, NIRC, will be about the same every year, about 3.5% of GDP. And if you look at the last five years' Budgets, all of the figures are published, you will see that it has been about 3.5% a year. It has not gone 3.5%, 4%, 5%, suggesting that I have got more and more money in the kitty. It is about there. And, so, if I keep on doing this, I will keep on being able to do this and spending 3.5% from the Reserves every year, saving me a doubling of the GST. I think that is a good thing. And that is the way to protect our nest egg. It is the right thing to do. Yes, Singaporeans are facing higher cost of living.”
“Instead, our mindset should be to treat our Past Reserves as a precious resource that generations of Singaporeans have built up, starting with the Pioneer Generation but continuing with the Merdeka Generation and with the later generations till this day. And it is a resource. How much does not matter. Whatever the amount, we put it aside as a nest egg, a rainy day fund. We draw on half the investment returns to supplement our Budget every year. The rest, we touch only in times of exceptional need or during crises, with special permission from the President. If during one term of government, we happen to accumulate a surplus, then we add to the Reserves and, hopefully, we can maintain the nest egg and keep on growing it gradually year after year, not just for this generation but for future ones as well. The spending rule which we have settled on and enshrined in the Constitution is 50/50. Half for now, half for the future. As I explained earlier, this is fair and just and, as I would like to explain now, it also happens to be the right sustainable proportion to keep the Reserves in proportion with the GDP, because let me take you through this back-of-the-envelope. Please get your back of envelopes out so we can do this sum. Let us assume a long-term expected real return of 4%. It is roughly that. You can see it from GIC's numbers. MAS' is slightly lower. Temasek's is slightly higher, but let us, say, 4%. The 50/50 rule means we spend 2%, we save 2%. Okay? It means that the Reserves should grow by about 2% per year because there is no other place for the Reserves to grow. Just now, Mr Sitoh enumerated all the other places and explained to you why there was no money in them, land. Because it is a conversion. The Budget, because it is not in surplus.”
“Would we have been able to pay up to 75% of salaries in the crisis, in the Job Support Scheme to protect workers and to prevent companies from closing? So, we spent $40 billion in the end. Is $40 billion enough? COVID-19 will not be our last pandemic nor our most serious one. And it is far from being the worst thing that can happen to Singapore. If we find ourselves at war, like Ukraine, how much is enough? The war is costing Ukraine US$100 million a day. The country relies heavily on US and European support. The US has committed over US$100 billion in humanitarian, financial, military support, and now another US$60 billion is being debated. The administration wants to do it, the money is desperately needed in Ukraine. Not money, but guns, weapons – everything – ammunition. Congress is making it difficult. Europe has also committed almost US$100 billion so far and just committed an additional €50 billion in grants and loans over four years, with a lot of angst and debate, internal disagreement. Hungary had strong views to the contrary. Without this external funding support, Ukraine's war is over. How long more can the US and Europe sustain this support for Ukraine? Looking ahead for 50 years, can anyone promise that Singapore will enjoy another half century of peace and tranquillity? Or guarantee that someone will come to our rescue if we ever find ourselves in a situation like Ukraine's? So, back to the question, for Singapore, how big a nest egg is enough? Mr Speaker, there is no sensible answer to this question. We can never say for sure how much is enough because we do not know what kind of crises we will face in the future or how our investments will fare. But that does not mean that we should mindlessly save every dollar we earn without regard for present needs.”
“And we said so: that we would put aside $150 billion from the Reserves to back this guarantee. It is not just words. It has got real heft behind it. Thankfully, no banks failed and we did not have to touch the money. But it was critical that we did that and to deliver a credible guarantee to bolster confidence in our banking system; and probably prevented a run and the deposits that would have disappeared from our banking system – gone overseas. The banking system would have crashed, the exchange rate would have crashed. Those people who say, "It did not happen, it cannot happen", I say, "Get real." So, was $4 billion enough? The next crisis, COVID-19, when it hit us, that was on a different scale altogether. We sought the President's approval successively to draw up to $69 billion from our Past Reserves for medical facilities, testing, vaccines, support schemes and Assurance Packages. We saved lives, we saved livelihoods. In the end, we actually drew down about $40 billion. It is not likely that we are going to be able to put $40 billion back into the Reserves anytime soon. Again, in COVID-19, our Reserves were a tremendous advantage. It gave us confidence. It gave others confidence in us. We had the financial muscle to do everything we needed to do without getting heavily into debt, unlike so many other countries. The Ministry of Health could concentrate on their duties, the Ministry of Education could concentrate on their arrangements, the Ministry of National Development and the Ministry of Manpower could look after the dormitories. You do what you need to do, the resources will be forthcoming. It is a tremendous luxury. Without the Reserves, would we have dared to pre-order vaccines even before they were tested, proven and produced?”
“No doubt, the Opposition will swear they are being responsible and give many plausible reasons to draw on the Reserves. Surely, spending a little bit more, just a little bit more would not break the bank. Surely, it is okay to talk about the income or the returns, and we do not touch the principal. Surely, we can treat land differently from other assets – no need to price it fully, sacrifices of the people. Once we take that mindset, we are going down a deep hole. How much is enough? To me, that is the wrong question to ask. It is a misconception. I have said it before, but it is true. It is a misconception, that when it comes to our Reserves, there is such a number, say, X billion dollars, that is enough. Then, you have more than X billion in the Reserves, we have too much. You have less than X billion in the Reserves, we have too little. There is no such number because we have no idea what the future holds, what crisis we will run into and how much we will need. When the Global Financial Crisis came in 2008/2009, we tapped on our Past Reserves for the first time. We made a Resilience Package – $20.5 billion, of which $4.9 billion was earmarked to come from Past Reserves. We implemented a Jobs Credit Scheme to help employers pay CPF and to protect the jobs. We had a special risk-sharing initiative to encourage banks to lend and the Government would share the risk of the lending. In the end, we actually took $4 billion from the Past Reserves. The economy revived much faster than we expected and the Government fully returned this $4 billion by the end of its term. In that crisis, we also used Past Reserves to guarantee deposits in commercial banks. We ringfenced $150 billion for this purpose.”
“5% of GDP, more than what we spend on any single Ministry; more than we spend on defence, more than we spend on education, more than we spend on health. It is 3.5% of GDP every year. As far as MOF is concerned, they just sit there, it arrives. They do not have to raise taxes, they do not have to collect fees. They just have to make sure that Temasek, GIC and MAS are run properly. And every year, we hope and should be able to get 3.5% of GDP. How does that compare with our other revenue sources? Sir, 3.5% of GDP is about equal to corporate income tax revenues. It is 1.4 times that of personal income tax revenues. It is 1.3 times that of GST revenues. Supposing we did not have the NIRC out of the Reserves, then what would we do? We have a choice. We can double corporate income tax. We can more than double personal tax. Or we can roughly double GST. So, instead of 9% GST, maybe 18% or 20% GST. That is what the NIRC has enabled us to do – and that is the burden which the NIRC has taken off Singapore taxpayers. We are here today because our forefathers had the prudence to build up the Reserves and the vision to anticipate the political pressures to spend them and the imagination to design the Two Key scheme to protect the Reserves for succeeding generations. That is what stewardship means. But despite the constitutional protection, the pressure to draw on the Reserves will still be there, especially as spending needs grow. And hence, the repeated questions and demands: how much do we have? Do we have too much? Are we saving too much? Can we not save just a little bit less? If Members look up the Hansard, Members will know that this is far from the first time this subject is being discussed.”
“Yale has quite a big fund, but Yale had a model which was very successful and very respected. We learned how they implemented consistent spending rules, how they smoothened out the draw on funds because from year to year, the fund performance can be volatile. We must understand this. We can project 4% long-term expected returns. Next year, what will we earn? God only knows. It can be plus 10%, it can be minus 10%. Hopefully, after 20 years, it is something like what we projected but, really, it is volatile from year to year. And we have to find some intelligent way to smoothen it out, so that we can spend steadily and not be whiplashed. I met Mr Len Baker, who chaired the Yale investment committee, to understand how Yale did it. He happens to be on the GIC investment advisory panel. So, we studied them, we modelled our rules on these ideas, taking into account our political and constitutional context, which makes it much more complicated for us to implement than, say, a US university. So, in 2008, we amended the Constitution again to specify that the Government would spend out of NIR, instead of NII. But we kept the 50% rule, so the Government could spend 50% of NIR instead of 50% of NII. And we called this amount which a government can draw from the Reserves and add to the annual Budget to spend, the NIRC. And this is how we arrive at today's system of spending half of investment returns and saving the other half – after decades of refining and improving the system, testing it out and making sure that it worked as intended. It is important to put into context just how valuable an asset our Reserves are to Singapore. As Members have heard, the NIRC accounts for one-fifth of Government revenue. It is around 3.”
“And so, in 2001, Parliament passed a constitutional amendment to protect 50% of NII and add that to the Reserves; and the other 50%, the Government of the day could spend. So, 50% for the present, 50% for the future. Over the next decades, as we gain experience operating the safeguards, we progressively refined them. And I have been closely involved in this process: first, working with Prof Jayakumar under Prime Minister Goh Chok Tong, and then, later on, as Prime Minister. Over time, we realised that NII may not be the best measure of what we should be able to spend. Because when we invest, we do not just look at income from dividends and interest. We also expect to make capital gains, which are often more important than dividend payouts. For example, if you had bought Facebook shares – I did not, but if you had – at their initial public offering (IPO) in 2012 at the price of US$38; yesterday, you would have had that value gone up 12 times, because Meta closed at US$455 yesterday. But you would not have received one cent of dividends. Meta is about to pay their first dividends next month in March. So, in that circumstance, can we say, returns from the investment is zero? No, it is wrong. So, we decided we should consider not just the interest and dividends but also include capital gains as well. And of course, we must take into account capital losses as well. And that means spending on the basis of overall investment returns – capital gains and losses, in earnings, plus income, interests and dividends – instead of just investment income. We also studied how other institutions which had built up large endowment funds managed them, particularly the US Ivy League universities, like Yale and Harvard. Harvard has the biggest fund.”
“Land has value and, in Singapore, land is often very valuable. Therefore, we must protect our land and not allow our Government to do anything with it that is a covert form of giveaway; and we discussed some possibilities today. That was how we started. Our first priority was to keep the capital sums in the Reserve safe. We had not thought very deeply about exactly how much of the income to spend. We just took a standard accounting view, that the income from the Reserves would be the interest and dividends that we earned on our investments and we called this the NII. We decided that the government of the day could spend 100% of the NII. But in practice, we did not spend any of the NII because we were still running comfortable Budget surpluses. Later, when Mr Ong Teng Cheong was Elected President, he questioned this rule. He asked why did we allow ourselves to spend 100% of NII? He argued correctly that we should also set aside something for the future. Because as the years pass, as the economy grows, if our Reserve amount remains constant; it gets smaller relative to the economy and we ought to allow the Reserves also to grow. So, the question is, how much to provide for the future while also enabling the present generation to benefit from the Reserves? There is no magic rule to this, but we arrived at a split of 50-50. And there is a certain simplicity and fairness to that – a natural division that we settled on, between the President and the Government. It is simple, it is intuitive, everybody can understand it. We split the difference between now and the future – "jit lang, jit pua" (一人一半). (In English): Half for each person.”
“And to guard against a rogue government raiding the Reserves, Mr Lee mooted the idea of a President elected directly by the people who would have the constitutional power and the moral authority to safeguard the Reserves and be able to say no if the government wanted to spend it for an unwise purpose. And that was the concept of the second key. Four years later, 1988, the PAP Government published the White Paper on the Elected President scheme. Prof Jayakumar oversaw the drafting and I helped him with it. We made the Elected President proposal a central issue in the 1988 General Election. After the election, in January 1991, we amended the Constitution to create the elected presidency. And Mr Wee Kim Wee, who was then already the President took on the new custodial powers and became the first President who wielded the second key. We designed a whole system to protect the Reserves, wherever those Reserves might have been. So, the second key applies to the Government, especially the Ministry of Finance (MOF) but also to what we call the Fifth Schedule entities. Fifth Schedule because it is a Fifth Schedule attached at the back of the Constitution. These Fifth Schedule entities are MAS, Temasek, GIC, CPF, JTC, HDB. Why did we do this? Why did we include these six entities? MAS, because those are OFR. Temasek, because those are our direct investments, the Government-linked corporations. GIC, it does not have very much money of its own, but it is the manager of the Government's money, of MOF's money. The CPF, which is Singaporeans' savings; not really the Government's money, but if we have a rogue government, this too will be at risk. And then, JTC and HDB – why? Because of land; they own and manage land for industrial, for housing and for other uses.”
“Mr Speaker, Sir, I rise in support of the amendments to the Motion as proposed by Mr Liang Eng Hwa. Today, we have had a long debate on this, Past Reserves, how much to use and how much is enough. But let us not forget what a blessing it is to have the privilege of having such a debate, having Past Reserves to argue over. How did we get into such an enviable position? MPs will know that Singapore did not start with much. In 1959, when the PAP Government first took office, Dr Goh Keng Swee was appointed Minister for Finance and he immediately discovered that the Treasury was bare and he had to implement immediate austerity measures, including pay cuts for civil servants and Ministers. It was only by the early 1980s, after two decades of nation-building that we had started to accumulate a nest egg of Reserves. At that time, our forefathers considered what to do, because they anticipated that the political pressure to spend these Reserves would grow and that if these hard-earned savings were not properly protected, it could be easily and unwisely spent. And once gone, it is gone. They felt that they had to do everything they could to guard against this. So, in 1984, at the National Day Rally, Mr Lee Kuan Yew talked about how the Reserves could be frittered away by a profligate government spending money that it had not itself earned within a single term. He proposed a simple principle. If a government wants to spend, it must first raise the money, whether by raising taxes or by making shrewd investments or some other direct open, proper means – but not by drawing down on the Past Reserves that it had inherited.”
“Mr Speaker, Sir, first, Mr Leong is quibbling over words. In February, Mr Tan Chuan-Jin told me, "I offer to resign". I said, "Yes, sort out your constituency first". In other words, decision taken. The moment to execute it, I will decide. So, it is quite clear. Legally, he has not resigned. In terms of the decision made – I have decided, he has decided. Would I have asked him to resign if it was just a matter of the hot mic? The answer is no. It was wrong for him to say that. It was bad that it was picked up. It lowers the tone of the Chamber. No Member should say that in the House. Dare I say no Member should say that even outside of the House. But I hazard to guess that maybe not all of us abstain completely all the time. But we do expect standards of behaviour in this House and especially in the Chair. What he said was wrong, but I would not have considered that alone a basis to ask him to resign.”
“Otherwise, it would not even be here. At some point it may have come out and then we would have a bigger problem. But it did not get worse, and we have started this very serious investigation because our system worked, and we picked up that something was wrong. That is how the system is meant to work and that depends on the leadership, on the Government, on the whole ethos of our society, to frown on corruption, to have no tolerance for somebody who falls short of the standards we expect. And when something needs to be done, painful or not, we do it. No ifs, no buts. If it has to be done, it has to be done. Do you think I was pleased when CPIB told me that one of my Ministers needed to be investigated? I was disappointed. I was saddened. But the Director knew. I knew. I said, "You do your duty; I will back you and I will enable you to do your duty." And I think that is what we, as this Parliament, ought to adopt as our attitude. Rely on them. They will do their job and, in due course, everything will be settled. And I think that is the way we keep Singapore working for a long time to come.”
“Mr Speaker, I think we should have a sense of reality. Information comes up, a Minister is quietly being investigated. CPIB tells me as the Prime Minister. Should I straightaway tell the Minister, "By the way, CPIB is quietly investigating you, please have a care"? It is ridiculous. Supposing I say: "You go on leave of absence". Why? What reason do I give? He is working. He is being investigated. It is my duty to make sure that while he is working and, knowing that there is a cloud, he does not make any steps which are going to dig the hole further or cause a problem. And if something like that threatens to come up, I will have to find some way to head it off. Why does CPIB need time to get ready for a formal investigation? Because they must have all the facts and evidence enough to start interviewing the principal person. Otherwise, if you go in and the principal person turns up and you have announced that you have arrested him and then it turns out that there is nothing in the case, I think you have been derelict in your duty. So, you must make sure, as much as possible, that the case is there before you go to the Minister. And when do you go to the Minister? That depends on CPIB's operational considerations. Who is in town? How do they want to mount this? What else do they want to do at the same time? I defer to them on these operational judgements. They know exactly what they are doing. They have a good track record and a formidable reputation. I rely on them. They asked for permission on 5 July; I gave it on 6 July. I said the timing is entirely up to you. They said they needed a few days. They acted on 11 July. And that is all there is to it. The reason this is here at all is because this Government decided to act – "ownself check ownself".”
“I am very happy to note that Assoc Prof Jamus Lim appreciates the second key and is seeking a third. And I hope that it portends a change in your attitude towards the Elected President and his custodial powers. But I think the Brazil example is a very interesting one. You have safeguards; you have got judges involved; but if you have heard of Lava Jato, "Car Wash", it is one of the, what do they call it, the "mother of all corruption scandals"? So, the solution is not to be found in more and more and more and more layers of checks and balances. The solution is to be found in honest people with integrity, conviction and courage to make the system work with a reasonable degree of redundancy, so I do not have a single point of failure. And that is what we have done.”
“Mr Speaker, as I have said, if I could play it again, I would have acted earlier.”
“Speaker, Sir, I do not think it was a very difficult question to figure out, that when I spoke to MTI, I spoke to the Minister, because Mr Gan Kim Yong is the Minister for Trade and Industry. Mr Iswaran has a role in MTI, he is overseeing various matters to do with trade as well as projects like the Formula One (F1) and I thought it was important that the Minister for MTI knows that there is an investigation going on concerning Mr Iswaran, so that he knows how to deal with the issue until the investigation has reached a point and the matter is public. It is necessary. So, that is quite clear. On the MP's allowance, it has not been interdicted. The MP's allowance is different from the pay, it is not at the discretion of the Prime Minister. If you want to do that, Parliament has to move a Motion to interdict the MP as an MP and Parliament has not done that. And neither in previous cases, has Parliament done that. What has happened is that the MP has been on a leave of absence, and eventually when the case is settled one way or the other, well, then, consequences follow.”
“Sorry, Mr Speaker, to respond to Ms Poa on why not no pay leave. It is my judgement to make. The Civil Service works in one way; their basis is if you have been convicted, then you are on zero pay and other consequences will follow. Here, I have to be fair to the Minister involved as well as do the right thing by the Government and the taxpayer. He is under investigation, it is not a minor matter. He has not been convicted. He has not even been charged. Is it fair for me to say, "Your pay goes to zero"? I think it is not. What is fair? Well, I looked at the Civil Service. The Civil Service says half pay, subject to a minimum and ceiling. Their ceiling is about here too. So, I decided on this number, $8,500, because much less than half pay. So, I think we have to go on principles, rather than whatever we do, anything you can do, I can do stronger. I think that would not be a wise approach to take.”
“But it is a situation where a personal relationship crosses with a public relationship. In this case, it is an extramarital personal relationship and that makes it difficult.”
“That was done when eventually, he did resign, I think, on 17 July. Thirdly, on the Speaker being impartial and whether there was a conflict of interest, I addressed this in my main Ministerial Statement just now and explained why this is a situation where it was improper – a Speaker having an affair with an MP. Therefore, it is not a matter where you can stop having the affair and carry on as if nothing happened. But neither is it a situation where the Speaker is in a position of command or supervisory responsibility over the MP. The Speaker presides, yes, but the Speaker is not the MPs' boss. The Speaker does not decide the MPs' bonus. The Speaker does not decide the MP's postings, does not assign work to the MPs. So, therefore, you are in a situation where it is awkward, but it is not something which must be stopped immediately. That is why I asked you to think, have a thought experiment. Would it have been okay if the Speaker is married to a MP? It can easily happen. We have had a Minister married to a MP, both serving simultaneously in the House. Nothing wrong. The Speaker and an MP serving in the House – is there anything wrong? I do not think so. Everybody will know it. The Speaker will have to be extra careful and make sure that he will bend over backwards not to be seen to be favouring his wife or her husband. But if it is an extramarital affair, I think that is different. It puts everybody else on edge, in an awkward position – MPs as well as staff. In Singapore's context, people look at it and say, this will not pass muster. Therefore, that is a situation we are in. It is not a question of my making a conflict of interest decision where I am making a decision which financially benefits me.”
“Mr Speaker, Sir, after 29 May, when CPIB informed me that they were looking into Mr Iswaran's matter, he continued his duties but I was aware of the issue. I alerted his Ministers, particularly, in MTI, and we had in mind that this matter was in the background, so that if any issues came up which needed to be decided involving Iswaran, we would know that there was this complication which we would have to think about. But I did not have a basis yet to suspend him. What is the difference between an informal, quiet investigation and a formal investigation? In a quiet investigation, the CPIB does not exercise all of its powers. For example, it does not arrest people and formally interview them. It makes inquiries, it asks for information, but it has not formally exercised its powers to arrest a person and to compel him to answer their questions under the Prevention of Corruption Act, because under the Prevention of Corruption Act, if you answer the CPIB and give the CPIB a false answer, that is a crime. It is like being on oath. So, when you go into a formal investigation, a transition point is passed. The reason they needed to go into a formal investigation is because they had reached a point where they had to interview the principal parties who were involved, namely, Mr Iswaran. They also had to interview several other people, including Mr Ong Beng Seng. Therefore, they needed to launch a formal process at that point. As for Mr Tan Chuan-Jin's seat in February, no, it did not become vacant in February. He offered to resign. I accepted. That was my decision. Taken strategically, the actual implementation was to come at a time convenient to me. In the formal process to resign, he would have had to write to the Deputy Speaker and that is legally done.”
“" I think that would have been unjust because he has not been charged. If there is a case, the case has not been heard, he has not been found guilty or acquitted or whatever. I cannot prejudge a case based on an incomplete investigation – started recently, or a partial investigation, just entered into the formal phase. So, what is a fair thing to do? And the Civil Service, their practice is, in such situations, you get interdicted, you are put on half pay, subject to a ceiling and a floor, but you are there until the matter is disposed of. If you are, at the end of it, innocent, and nothing is there, your back pay is reinstated to you and made good. If later on, in fact, you are found guilty, well, at that point, your pay will stop completely and other consequences will follow. I think that is a reasonable model to follow and that is the basis on which I decided that Mr Iswaran will be interdicted and that he will be paid $8,500 per month instead of his normal salary. He was told, acknowledged and that was done. I think that is the proper way to do things.”
“It is unusual for a Prime Minister to have to do this to a Minister, but we are not the first organisation to confront this problem of a person under suspicion being investigated. And what do you do with him while he is being investigated, before he is either cleared or charged and convicted? You have to have some arrangement. Can you leave him at work? Well, that depends. In the case of the Ridout Road bungalows, I had no doubt I could leave the Ministers at work. I did not believe that they were guilty, neither did any evidence come up during the process of investigation that they were. In fact, the investigation cleared them. If the investigation had surfaced something which looked questionable, I would have been told and I would have made the decision on whether they needed to be interdicted and put on leave of absence. In the case of Mr Iswaran, by the time formal investigations began on 11 July, the CPIB had been working on this case since at least May. So, they had some basis to come to some conclusion and I had to decide what to do with a Minister who is being investigated for what could be quite a serious matter, which is a possible corruption offence. That is why CPIB is investigating it. And what do I do? Because I do not have a precedent, I do not have a norm, I look at what the Civil Service does as a guideline. Their situation is different. But here, you have an officer who is under suspicion, who is under investigation, he has not been convicted. A presumption of innocence applies. He is innocent until proven guilty. So, I could technically have said, "Well, presumed innocent and he goes on leave, full pay, until the matter is cleared." I could also have said, "There is a cloud. I straightaway do not want anybody with a cloud. You are out.”
“And he explained how we do it, we have the CPIB, it was zealous, it has a fearsome reputation, you go and "lim kopi", you know what will happen. And his course mate asked him, "Whom does the CPIB report to?" So, he thought this was an organisational question. So, he said, "Well, it is independent, it has got its own chain of command, it reports to the Prime Minister." And his course mate looked at him again and says, "Who does the CPIB report to?" Why did he ask that question? Because the question, at the root of it, is the age-old problem – who is to judge the people who judge the people who judge the judges? Who is in charge? Somebody has to be in charge. And in Singapore, the Prime Minister is in charge and if he is corrupt, you are sunk. But beyond that, we decided to put in an extra safeguard; and that is, if the Prime Minister directs the CPIB "you do not do that", CPIB can go to the President and say that "Prime Minister has refused me consent, do you concur?" And if the President says yes, then the Director of CPIB can proceed. If the President agrees with the Prime Minister that the Director of CPIB does not have a case or has gone rogue, or is doing something ill-founded and says no, well, that is how two keys work. And, therefore, the matter stops there. Is it guaranteed? No, because the Prime Minister may be corrupt, the President may be mistaken. But it is as best, it is possible to contrive a system with human beings, which will work, provided you put honest people in charge. That is how the system is supposed to work in Singapore. As for the interdiction and why it is $8,500 per month, we considered this carefully. We are not the first.”
“At that point, they are comfortable to say that the Minister was arrested and bailed, because the situation is different. So, these are operational judgements which our law enforcement agencies have got to make. All the law enforcement agencies, whether it is Central Narcotics Bureau (CNB), whether it is the Police, whether it is CPIB. And they do this all the time. In this case, CPIB did it. Did they know that three days later, HPL would issue such a statement? I think they expected that HPL would have to issue such a statement because there is a regulatory requirement by the Singapore Exchange (SGX). I do not think they would know what Mr Ong Beng Seng would say and it would depend on what had transpired during the three days before Mr Ong put out that statement. So, I think, we are reading a lot into very little. First of all, nobody knew that Mr Iswaran might or might not have been doing something wrong. CPIB found out. Nobody tipped them off. Nobody blew a whistle. Nobody raised a public scandal, no Parliamentary Questions in Parliament, not even from the WP. But CPIB found out and they told me, and they decided to investigate the matter. They proceeded. It reached the point where they needed to interview the Minister. And then, they came to tell me and say, "Can I have your concurrence?" Because CPIB reports to somebody. It has to report to somebody! It cannot report to God! So, who does it report to? That is a very interesting question. Once upon a time, we had an SAF officer who went overseas on a course. He went to a Commonwealth country. And the course mate asked him: "How do you keep your system clean, in Singapore, of corruption?" This is a country which grapples with this problem.”
“Mr Speaker, Sir, guidelines on disclosures involving Ministers, basically, we have to judge the situation. In this case, CPIB judged and I supported them, that they are going to be interviewing a Minister. They are going to be interviewing other people, word would go around town. It is untenable for us to say we have no comment. And therefore, they put out the statement that they are interviewing a Minister. There have been, and it is not the previous precedent; those of you who are old enough to remember, I do not think there is anybody else in the House except me who was here when Mr Teh Cheang Wan was investigated. None of that was announced. Because you do not know at first, when you interview him, whether or not there is something there. And if you interview him, if you announce that he is being interviewed, Minister for National Development, and then it turns out there is nothing there, and you come out three days later and say, "the Minister for National Development is innocent", I think you are going to cause great consternation and, at the end of that, his reputation will be damaged undeservedly. But if you investigate him first, if it turns out there is something there, at some point, you cross a threshold and it is necessary to make an announcement. In this case, CPIB judged that the threshold to say that they are talking to Mr Iswaran was there right from the beginning, because they were going to call in other people, including Mr Ong Beng Seng, HPL. Therefore, it was not possible for this thing to be kept quiet and it had to be stated upfront. But would they know where the investigation will lead? At that point, no. Three days later, after interviewing different people and establishing various facts, they make a fresh assessment.”
“I do not wish to go beyond that and to delve into the ins and outs of how it happened but suffice to say, eventually it came to a break point and did not stop, and they had to go. I could have done it sooner. I should have done it sooner. I have explained that. Marine Parade was a consideration, but all things considered, I should have moved earlier. But the important thing is we moved. And we brought it out and we are open about it. And when I was asked, I said, yes, I knew sometime after GE 2020 – which is November 2020. I was open about it. If I had not said that, nobody would know that. And therefore, we clear the matter and I think we account to Singaporeans.”
“We could equally well ask, for example, when did the Leader of Opposition know about problems in his party and what did he do about them? But those are matters which the WP will have to decide and will have to account for to Singaporeans, and the PAP, we establish our own standards and we establish our own practices. As for the relationship between Tan Chuan-Jin and Cheng Li Hui and the questions on the House Committee and foreign trips, I think I will leave that to Leader to answer subsequently. On the difference between this case and the case of Michael Palmer and the PA staff, I think there are two differences. One, in Michael Palmer's case, it involved a PA staff who worked in a team which supported Michael Palmer and other GRA advisors in Pasir Ris-Punggol GRC, subsequently Pasir Ris-Punggol GRC and Punggol East Single Member Constituency (SMC). And there is a reporting relationship there. Secondly, I think the specifics of the extramarital affair matter, as I explained just now – we have to look at how the families respond, what the other circumstances are, and that differs in every case. I do not wish to go into specifics of how the extramarital affairs are different, but suffice to say, they were different. As for Raeesah Khan, that raises many issues and those issues have been exhaustively debated in the Committee of Privileges. The matter, further problems were recorded and reported by the Committee of Privileges and the matter has been referred to the Police for investigations. So, I would leave that to the Police to pursue the matter and take it where it may. As for the time, why I took so long, I counselled Tan Chuan-Jin at the beginning. I saw to it that Cheng Li Hui was also counselled at the beginning. They both agreed to stop. It did not happen.”
“Mr Speaker, Sir, let me deal first with the question of transmission of information. The Leader of the Opposition raises three issues, one of which has been extensively debated, in fact, in 2020, during COVID-19; and I do not need to go back there again, which is the TraceTogether and whether we should have announced earlier when we discovered that the Police were using it for their purposes. I think that has been completely explained, closed; that matter is done. As for CPIB statements, the CPIB does not investigate somebody unless there is a very serious reason to do so. And the CPIB does not reveal that investigation generally until it has reason to believe that this investigation has to carry on, that it has to go somewhere. Therefore, in general, CPIB investigations are not, in the first instance, announced at all. If you had listened to Minister Chan Chun Sing, you would have heard that explained very clearly why, in general, the CPIB does not announce any investigations at all. And when I asked the CPIB to investigate, it is my prerogative, I do not have to tell anybody. What is important is that I did conduct an investigation and these investigation results were published. That is what matters. In the case of the 12 July statement, the reason why the CPIB said exactly what they said, if you listen carefully to Minister Chan Chun Sing, that explanation has been given – which was that they had to say what they felt justified in saying at that point for operational reasons and to be fair to the persons involved, and the Ministers, unless we have strong reason to do otherwise, we will go along and we will not go beyond what the CPIB needs and is able to say. So, I think in terms of the transmission of information, we are pursuing a red herring.”
“Mr Speaker, may I have your permission to make two quick factual corrections to what I said just now? Firstly, Mr Tan Kia Gan, by 1966, was a former Minister; no longer a Minister because he had lost in the previous 1963 General Elections. Secondly, Mr Wee Toon Boon was the Minister of State in the Ministry of Environment and not in MINDEF. Thank you, Mr Speaker.”
“The founding generation built up Singapore and entrusted it to our generation in good shape. It is incumbent on us to protect and uphold this system, to keep it incorruptible and clean, and maintain high standards of propriety. With the investigation into Minister Iswaran, and the resignations of the Speaker and an MP, the PAP has taken a hit, but we will show Singaporeans that we will uphold standards and do the right thing, so that trust is maintained, and the Singapore system continues to work well. This is my approach, and I am confident it will be my successor’s approach too, and this is how we will keep Singapore safe, strong and prosperous for many years to come. [Applause.]”
“For example, the extramarital affair between the former Speaker and former MP should not have happened. Then, I had hoped they would end their affair because their families would suffer the most if the affair was exposed. Indeed, my most important consideration throughout was how this would affect their families. If they had ended the affair, they need not have left politics under these embarrassing circumstances and hurt their families. Regrettably, they did not deal with it properly. Looking back, if I could do it again, I would have forced the issue earlier. In any extramarital affair, the families are affected and hurt greatly. Whether it is a case involving the PAP or the WP, I hope everyone would give the families time and privacy to heal. We cannot guarantee that this sort of incident would never happen again. If it does, we will continue to deal with it in accordance with the PAP’s principles. My team and I are very clear about the importance of keeping our politics clean. This is critical to our democratic system. As we have always done, we will continue to exercise self-discipline and uphold the principles of integrity. This is the promise of the PAP Government. (In English): Mr Speaker, Sir, let me assure Singaporeans that we will protect the integrity of our system of Government. For the good of our country, we will carry through what needs to be done in accordance with the law, even if it may be politically embarrassing and painful to the party. I will not flinch or hesitate to do my duty, to keep our system robust and clean. This is how the PAP Government can continue to deserve the trust that Singaporeans have placed in us. I have spoken often about how precious trust is and how crucial it is for our democracy to work well.”
“That is still how the PAP Government deals with such cases. It has not changed under my charge; and it would not under my successor either. Mr Speaker, Sir, with your permission, may I say a few words in Mandarin. (In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, Sir, the People’s Action Party (PAP) has always maintained an honest and clean Government. A clean Government and good governance are critical to our democracy. Therefore, we have strict laws in place to check on corruption. On values and personal integrity, we expect Ministers and Members of Parliament (MPs) to meet social norms. In Singapore, while corruption cases involving political leaders are rare, it has still happened before. This is because even the most comprehensive safeguards can still go wrong. Recent cases show this. But they also reflect our determination to stand for honesty and against corruption. We firmly believe that to maintain an honest political system and for the people to continue to trust the PAP, we must deal with issues transparently. Therefore, when anyone, including Ministers or MPs, are involved in corruption or illegal behaviour, there is zero tolerance, and we will investigate fully. If the investigation finds that there was no wrongdoing or conflict of interest, the matter would be closed and those involved exonerated. If the investigation shows that there is misconduct, they would be dealt with the full force of the law. In terms of personal conduct, the PAP expects the Ministers and MPs to hold themselves to the highest standards and to be self-disciplined. However, when people slip up in their personal lives, circumstances differ and we have to look at the facts case by case, and deal with each of them individually.”
“We took some time to sort it out, probably longer than we should have, but we did what we needed to do and put the situation right. The two CPIB investigations, and the response to the personal misconduct case, show two aspects of how this PAP Government works. One, when there is a suspicion or allegation of wrongdoing in the discharge of official duties, especially possible corruption, there is zero tolerance. Two, when people slip in their personal lives, the PAP will look at the facts of each case carefully and deal with the matter as humanely and sensitively as possible, according to the principles that the party has established. Systems are composed of human beings. In any system, however comprehensive the safeguards, sometimes something will still go wrong. The PAP Government does our utmost to minimise that possibility. We work hard to identify the right people to bring into politics and appoint into responsible positions. We vet them carefully, test and stretch them, before entrusting them with heavier responsibilities. Often, they measure up, but sometimes they fall short. Occasionally, they transgress the norms of conduct, or commit wrongdoing. Singapore has seen corruption cases involving political office holders in the past: Mr Tan Kia Gan in 1966, he was then Minister for National Development; Mr Wee Toon Boon in 1975, he was then a Minister of State, I think in the Ministry of Defence [Please refer to a clarification by the Prime Minister later in the debate.]; Mr Teh Cheang Wan in 1986, he was Minister for National Development; and earlier in 1979, Mr Phey Yew Kok, then President of NTUC and also an MP. All these cases were handled by Mr Lee Kuan Yew who was then Prime Minister – thoroughly, transparently, and applying the full force of the law.”
“On reflection, as I said, I should have forced the issue earlier, certainly before mid-term. Let me add a personal plea at this point – while there is no doubt the two persons behaved improperly, there are also innocent family members involved. Likewise, for the case involving a former Member across the aisle, in the Workers' Party (WP). All their families are suffering. I hope that MPs and the public can empathise and have compassion for the families and give them the privacy and space they need to heal. Mr Speaker, Sir, there has been a great deal of public interest over the recent series of incidents – CPIB arresting and investigating a Minister, MPs resigning and before that, the allegations about the Ridout Road rentals. The way we have handled these incidents shows how seriously the PAP takes our responsibility of governing Singapore and being accountable to Parliament and to Singaporeans. Let me assure Members – when such issues come up, we will deal with them properly and transparently, as we have done. With the Ridout Road rentals, when allegations of preferential treatment surfaced, the two Ministers involved were thoroughly investigated, including by CPIB, and eventually fully exonerated. The investigation reports were tabled in Parliament, and we had a long session answering MPs’ questions in this House. When CPIB discovered, on its own, that it had reason to arrest and interview a Minister, it opened a formal investigation. Nobody tipped them off. There had been no public scandal. CPIB came across something that needed investigating and proceeded to do their job. When the Speaker of Parliament and a Government MP fell short of the standards of propriety and personal conduct expected of them, they were asked to resign.”
“In deciding what more should be done, consider this: would we object to having the Speaker being married to a Member of Parliament (MP)? Would we object to having the Speaker being married to an MP? I think the answer is no – that would be perfectly alright. There is no direct reporting line between the Speaker and an MP. Thus, an open, legitimate relationship between the Speaker and an MP is not in itself objectionable. Hence, this situation of the Speaker having an affair with an MP does not fall into the category where immediate action has to be taken. However, the Speaker has some official capacity vis-à-vis MPs. An extramarital affair between him and an MP is therefore problematic. It puts other MPs and staff in an awkward position, and it is just not proper. After I spoke to Mr Tan in November 2020, he told me that the relationship would end. I took it to be so. I, therefore, felt there was some leeway to take some time to decide what further steps to take. In this context, the possible actions that could have followed were on the basis that the extramarital affair had stopped, I would have asked Mr Tan to step down as Speaker some time before the end of the term, but in a way which would reduce the public embarrassment to him and his family. As to whether one or both should also resign as Members – I had not decided at that time, but quite likely, both would have had to leave at some point. By giving the matter some time, I had hoped to give them a softer exit, and save them and their families the pain and embarrassment that they are suffering now. I placed much weight on protecting their families; perhaps too much. Regrettably, in the end, Mr Tan and Miss Cheng did not stop the affair, and both had to go.”
“In retrospect, and certainly now, knowing how things eventually turned out, I agree. I should have forced the issue sooner. But let me explain my general approach as well as my thinking at that point in time. These sorts of relationships happen from time to time. They have happened in the past and no doubt will happen again in the future. In such cases, what we do depends on many factors: the circumstances, how inappropriate or scandalous the behaviour was, the family situations. We also have to be conscious of the impact on innocent parties, particularly the spouses and children. I had explained this at my press conference on 20 July and so did Deputy Prime Minister Lawrence Wong last week in a BBC interview. This is not a new position; it reflects the PAP's long-standing practice, since the days of Mr Lee Kuan Yew. There is no single template that applies to all extramarital affairs. But there can be at least three situations. The first situation is where the individuals involved will be talked to, and if they stop, the matter ends there. No further action need be taken. The second situation is where immediate action has to be taken. For example, when one party has supervisory power over the other party, and we have in the past taken immediate action, in a few cases. The third situation, where the relationship raises some questions of propriety, beyond it being an extramarital affair per se. The parties will be talked to, but the matter cannot end there. Even if the affair stops, some action has to follow. But what that action is and when it is taken, depends on the nature of the facts and the boundaries that have been transgressed. The present situation falls into the third category. It is wrong. Mr Tan and Miss Cheng had to stop their affair. I told them to stop.”
“I should point out that CPIB investigations are still ongoing. I am unable to provide more details on the case so as not to prejudice the investigations in any way. I ask Members of this House and the public to refrain from speculation and conjecture. We must allow CPIB to do its work, to investigate the matter fully, thoroughly and independently. When the investigation is completed, CPIB will submit its findings to the Attorney-General's Chambers (AGC), which will decide what to do with them. Whichever way the facts come out, the case will be taken to its logical conclusion. That has always been our way. Next, on the resignations of former Speaker Tan Chuan-Jin and former Member of Parliament (MP) Cheng Li Hui. Let me recap some basic facts that are mostly already public: I first learnt of their relationship sometime after the 2020 General Election (GE), in fact, in November 2020. They were both spoken to and counselled, separately. They both said they would stop the affair. But as it turned out, they did not. Most recently in February 2023, I spoke to them again, separately. Mr Tan admitted that what he did was wrong. He offered to resign. I accepted but I told him that before he actually resigned, I had first to make sure residents in Kembangan-Chai Chee, his ward, and Marine Parade, his Group Representation Constituency (GRC) were taken care of. Meanwhile, his relationship with Miss Cheng had to stop. A few weeks ago, I came across information that strongly suggested that the affair had continued. I decided that Mr Tan had to go forthwith. Miss Cheng had to resign too because she had not broken off the affair even after being told to stop. I have been asked – why did I take so long, more than two years, to act? It is a fair question.”
“Mr Speaker, Sir, recently, we witnessed a series of high-profile public cases involving political office holders. Members have asked several questions regarding these cases. Let me give the House an account of how these issues have been dealt with, and why. After that, Minister Chan Chun Sing will address the more detailed questions in his Statement. On the Corrupt Practices Investigation Bureau (CPIB) investigation involving Minister Iswaran, briefly, the facts of the case are these: while investigating a separate matter, the CPIB came across some information concerning Minister Iswaran that merited investigation. CPIB alerted me on 29 May and pursued this lead further on their own volition. On 5 July, the Director of CPIB briefed me on the findings he had at that point. He told me that CPIB would need to interview Minister Iswaran to take the investigation further and he sought my concurrence to open a formal investigation. I gave my concurrence the next day, on 6 July. On 11 July, Minister Iswaran was brought in by CPIB and subsequently, released on bail. I instructed him to take leave of absence until the investigations were completed. Subsequently, I interdicted Minister Iswaran from duty with a reduced pay of $8,500 per month, until further notice. Such incidents involving Ministers are rare and there is no rule or precedent on how to effect an interdiction on a political office holder. Hence, I used the current Civil Service practice as a reference point. The specific details in Minister Iswaran's case follow generally how the Civil Service would deal with a senior officer in a similar situation. But this was my decision as Prime Minister, because the political contexts for a Minister and a civil servant being investigated and interdicted are different.”