Leong Mun Wai
Singapore
“Okay, yes, Mr Chairman. So, first question, can I confirm that MOM still does not track the change in work pass holders that turned to PRs in the resident PME statistics?”
“Yes. Third question, the increase in part-time workers and contract work are also examples of underemployment. Can the Minister explain why we do not need to be concerned that the proportion of part-time workers out of all employed residents has increased from 8.4% in 2009 to 10.1% in 2023, and can the Minister quote the corresponding inc…”
“Thank you very much, Mr Chairman. I have four clarifications for the Minister. First of all, I would like to thank the Minister for his energetic response to my arguments. I have always respected him for that. However, because I think our views are still very different, I have —”
“For those who do not have a university degree, the prospects are even dimmer and younger workers also face the prospects of skills-related underemployment later in their career. Mr Chairman, let me conclude.”
“And I have three more. To many Singaporeans, including myself, the new policy does not make sense in certain areas. I agree with the Government that NRIC numbers, full or masked, should not be used as authentication, and that must be impressed on Singaporeans. Next question, why is there a need to do away with the masked NRIC policy?”
“In paragraph 40 of the report, it was stated that this July 2024 CM was also emailed to senior Public Service Leaders, including those with key responsibilities in IT and data matters within their agencies. Can I ask the Senior Minister whether any of these senior leaders have voiced concerns over the CM?”
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“It is not uncommon, however, that multiple schemes are applied to solve one particular socio-economic problem for one recipient, which often, and very understandably so, makes it very confusing to the recipient. For example, during Budget 2022, the Minister for Manpower presented an example of a low-income 65-year-old landscape worker who enjoyed a total income of $27,570 a year. While this figure works out to be about the same as the Minimum Living Wage that PSP has proposed, the total income was not paid from one source, but consisted of a base income of $17,400, presumably paid by the employer, and $10,170 paid by the government through seven different schemes, namely the Special Employment Credit, the Annual Progressive Wage Model Bonus, the Workfare Income Supplement, the Workfare Special Payment, Community Health Assist Scheme (CHAS) subsidies, the Care and Support Package and the U-Save and GST Vouchers. Hence, seven schemes were applied to achieve the one socio-economic objective of ensuring that the worker had more to cope with the cost of living. Furthermore, such a system may contribute to lower self-esteem among lower-income workers because their basic pay is still very low and there are little incentives in the schemes to motivate them to improve themselves. The handout approach also comes with a high administrative cost because needy Singaporeans usually need external help to navigate through the maze of eligibility rules to qualify for a particular support. For example, to deliver welfare benefits to a Singaporean, very often the Social Service Office (SSO), the People’s Association, the Silver Generation Office and many other private charity groups are involved at the same time. Slightly more than half of the 60 schemes also require applications.”
“PSP has long advocated for a Minimum Living Wage of $2,200 per month for all Singaporean workers, which translates into a take-home pay of $1,800 per month. While we support the increase in the LQS, we are mindful of its negative impact on SMEs which need Singaporean headcount in order to employ foreign workers. We hope the Government will introduce complementary measures to minimise the impact of the LQS increase on the business viability of our SMEs, which are operating in a rising high-cost environment. Thirdly, a new SkillsFuture Level-Up Programme will be introduced to support mid-career workers with a $4,000 credit. My colleague, Ms Hazel Poa has already affirmed our support for it. It is good that the Government has now tied SkillsFuture training programmes to better employability outcomes. PSP has long argued that the SkillsFuture programme, which costs about a billion dollars of taxpayers’ money a year, has contributed little to the employability of Singaporean workers. Much more still needs to be done to ensure Singaporeans have a larger share of good well-paying jobs. To that end, we would also suggest a level-up for the Skills Development Fund so as to co-opt employers into the process, thereby ensuring that the training undertaken by workers are relevant to raising productivity in their current jobs. Mr Speaker, Sir, Budget 2024 has continued with the traditional "handout approach" by the Government. The handout approach is characterised by the existence of around 60 support schemes and services, each offering short-term handouts for a targeted segment of Singaporeans.”
“Can the Government tell us how much interest it is paying these SAs currently and how much will it save in interest payments? On the other hand, we are pleased to note that Budget 2024 has addressed some of the issues that have been regularly raised by PSP in this House. Firstly, the Government will now provide a Parenthood Provisional Housing Scheme (PPHS) (Open Market) Voucher for one year, to support eligible families in renting HDB flats on the open market while waiting for their BTO flats. This will be a great help to young Singaporeans looking to form their own families and PSP strongly supports it. Since Budget 2021, we have pointed out that the long waiting times to get a BTO flat is among one of the major factors pulling down our total fertility rate. As it is not possible to ramp up the BTO supply fast enough, PSP has always urged the Government to increase the number of rental flats and improve the quality of rental flats to enable young Singaporean couples to get a place to stay while waiting for their BTO flats. While we support the PPHS (Open Market) Voucher, we are concerned that this scheme may negatively impact other groups of Singaporean tenants who are not eligible for PPHS. We urge the Government to go further to establish rental flats as a viable housing option going forward. During the COS debates, I will explain why the PSP’s Millennial Apartments Scheme is a superior and more all-rounded policy compared to providing vouchers under PPHS. Secondly, the Local Qualifying Salary (LQS) for full-time workers will be raised from $1,400 to $1,600 from this year. We recognise this increase in LQS as a step closer to the Minimum Living Wage concept that PSP has proposed.”
“Mr Speaker, Sir, Budget 2024 is a big Budget because the Government had a bumper year in 2023. Operating revenue in 2023 was larger than the original estimate by $8 billion because of the tax increases announced in 2022, high inflation and high property prices. This $8 billion excess revenue, together with the $23.5 billion Net Investment Returns Contribution (NIRC) for 2024, contributed to surplus Budget resources of more than $30 billion to be allocated in this Budget. As a result, the Government was able to make a record capital transfer of more than $30 billion to top up existing endowment and trust funds and create some new ones. Because of this, Budget 2024 will give some benefits to almost every Singaporean. However, the monies in the endowment and trust funds will fund social spending over many years into the future and only a small amount will be spent this year. PSP has explained the workings of the endowment and trust funds during the Public Finance Motion three weeks ago and why capital transfers to these funds should not be considered as current-year spending. Hence, Budget 2024 falls short on immediate spending in the current year. While we welcome the $1.9 billion Assurance Package and the effective reduction of the owner-occupier residential property tax increase announced in 2022 by the revision of the annual value bands of the properties, these supports are hardly enough for cash-strapped Singaporeans to cope with the current cost of living crisis. The Government has also decided to close the SA for CPF members above 55 years old. This will impact the retirement plans of many Singaporeans who can no longer enjoy a higher CPF interest rate and withdrawal flexibility of their CPF funds at the same time.”
“One, are the considerations and conclusions made by Senior Minister Teo in June 2004 still valid? Two, if yes, why has the Bill we are debating today not included an amendment to reduce the statutory length of full-time NS liability from two-and-a-half to two years, even though this has been the practice for 20 years, which is practically one generation? Three, by retaining this provision in the Enlistment Act, does this mean the Government expects that the duration of full-time NS may be reverted to two-and-a-half years at some point in the future? PSP calls on the Government to continue reviewing the duration of full-time NS based on operational needs, demographic changes and technological advancements. Where possible, without compromising on operational readiness, training standards and the ability of our uniformed services to achieve their mission, we would support further reductions in our dependence on large numbers of NSFs and further reductions in the duration of full-time National Service. Sir, notwithstanding my clarifications, I support the Bill. For country, for people.”
“Mr Speaker, Sir, the Progress Singapore Party (PSP) welcomes the move by the Government to update the Enlistment Act. While we have no quarrel with the updates proposed in the Bill, we note that the Bill does not make any amendments to the statutory length of liability to render full-time NS, as provided in section 12 of the Enlistment Act 1970. Since Independence, our SAF, SPF and SCDF have become world-class institutions, and this success has come on the backs of generations of full-time NSmen (NSFs) who have given two or two-and-a-half years of their lives to serve the nation. This sacrifice in youth comes at significant cost to the individual. Therefore, the duration of full-time NS must be carefully calibrated and reviewed from time to time, based on our nation's defence needs. Even after amendments made in section 4 of the Bill, the statutory full-time NS liability remains at up to two-and-a-half years for anyone promoted above the rank of Lance Corporal in the SAF or SCDF, or Special Constable 2 in the SPF, which, in practice, covers every enlistee. The duration of full-time NS was last reduced from two-and-a-half years to two years in June 2004. At the time, Senior Minister Teo Chee Hean, who was then Minister for Defence, explained in a Ministerial Statement that this was possible because of the SAF's technological transformation to the Third Generation SAF and a 15% and 20% increase in the annual intake of NSFs over 10 years starting in 2006. Senior Minister Teo also told the House that MINDEF had concluded that the two years of NS duration will be able to be sustained over the long term even after this 10-year surge. Thus, I would like to ask the Minister several questions.”
“Mr Speaker, I have one question for the Minister. Do Permanent Residents (PRs) and foreigners participate in our grassroot activities and are any of them in leadership positions?”
“Mr Speaker, Sir, can I confirm that we can object to the Motion once —”
“Also, they would not need to sell their HDB flat in old age and would have sufficient CPF savings for retirement. Without the lingering worry of repaying housing loans for years, the next generation of Singaporeans can boldly seize the opportunities brought about by globalisation, creating a better economic future for our country. PSP believes that a responsible Government and party should not solely pursue the maximisation of Reserves but should aim to maximise the happiness of the people. PSP will do everything in its power to persuade the Government and assist it in achieving this goal. (In English): Mr Speaker, I beg to move. For country, for people. 9.01 pm”
“Furthermore, from these assets, we earn nearly $50 billion in net investment returns each year. Therefore, the Government's earlier portrayal of itself as a poor Ah Gong and the comparison of our vast reserves to "coffin money" is misleading. PSP urges the Government to be a responsible leader and disclose the total amount of our Reserves, allowing every citizen to use this information to assess our nation's fiscal and tax policies. With the investment returns from the Reserves each year, we will have sufficient financial resources to cope with the increased medical expenses resulting from our ageing population in the future. Therefore, PSP strongly opposes the two consecutive increases in GST and property tax in 2023 and 2024. These two tax increases and the increase in the Government's fiscal surplus allow the Government to accumulate more Reserves, but they also seriously exacerbate inflationary pressures and increase the people's burden. Therefore, the current predicament faced by the people is not solely due to external factors, such as the Ukraine war; the Government also bears some responsibility. In addition, since 1985, the Government has been charging land costs to HDB. These costs have increased with the rise in property prices, leading to a significant increase in BTO prices. However, high BTO prices only absorb a portion of the land costs. The remaining portion is subsidised by HDB, resulting in a deficit for HDB, which is ultimately borne by all taxpayers. PSP strongly urges the Government to waive the land costs for owner-occupied HDB flats. This policy would allow every generation of young Singaporeans to realise their dream of owning a home at an affordable price around the age of 30.”
“We especially want to give the financial freedom to our younger Singaporeans to establish themselves quickly so that they can strive towards their ambition early in their lives. When this House supports this Motion, it will reaffirm that our Budget and Reserve accumulation policies should aim at laying the financial foundations for every Singaporean of every generation to achieve a life of fulfilment and contentment. Mr Speaker, in Mandarin, please. (In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, Sir, the PSP tabled this Motion today to request two things from the Government on behalf of the people. First, disclose the total amount of our Reserves, allowing the people to have an accurate understanding of our finances and related policies. Second, actively utilise our country's substantial financial resources to help reduce the financial burden on the people and improve their quality of life. The total amount of our financial Reserves should not be a secret, because it is the hard-earned money of the people. The Reserves have five main sources, including land sales revenue and investment returns of CPF deposits, all of which come from the people, especially considering that much of the land was acquired by the Government from our forefathers at low prices. The total amount of our national Reserves also does not need to be a secret, as the Government has already disclosed a significant amount of financial information to comply with regulations from international organisations, such as the IMF. With this information, anyone, including foreign exchange speculators, can estimate the size of our Reserves. According to PSP's estimation, excluding land reserves, our total Reserves has reached $1.2 trillion.”
“After receiving the temporary relief, they continue to be burdened by the rising cost of living and the prospect of having to downgrade from their current HDB flats in order to retire. Without policy changes to address these structural economic issues, lower-income and even middle-class Singaporeans will become more and more dependent on Government handouts to survive. This is not the kind of future we want for Singapore and Singaporeans. We must find other ways to improve the conditions of the Singaporeans. PSP wants all Singaporeans to benefit from our economic prosperity, not just the rich and famous. This is the future that PSP wants for Singapore and Singaporeans. Mr Speaker, our Past Reserves is the pride of our nation, a monumental task achieved by the trust between the people and the Government. To maintain that trust, the Government must now ensure that the Past Reserves are put to work for present-day Singaporeans to ensure that they can be competitive and lead a happy life in a globalised world. The well-being of the current generation affects the ability of the future generations to thrive. A family that is constantly stressed by financial worries is not a good environment for children to grow up in. More than leaving behind national reserves to our future generation, it is more important to ensure that they are being brought up in a conducive family and social environment which allows them to develop the necessary skills to do well in the globalised world. PSP's policy proposals like the Affordable Homes Scheme and Millennial Apartments Scheme, are aimed at making our Past Reserves work harder for both the present-day generation and future generations.”
“This means that after deducting the employer and employee CPF contributions, the bottom 20% of households, or more than 200,000 households are essentially, in deficit and must rely on Government handouts, charity or loans from legal or illegal moneylenders to survive. For the second quintile, it is $3,752 in expenses versus $5,981 in income, again, including employer CPF. After accounting for CPF contributions, this group of Singaporeans have very little left to save each month. The survey suggests that the bottom 40% of Singapore households are really struggling to survive while the Government has accumulated lots of savings or reserves. It will be the right policy for the Government to start to relax its fiscal grip, which may reduce reserve accumulation slightly, but to offer more financial support to this group of Singaporeans. We should also be worried about the many social ills we are grappling with today, which can be traced back, at least partly, to financial difficulties. The most important ones today are the low TFR and increasing mental health issues. A pre-conference poll shared by the IPS at the Singapore Perspective Conference last week found that high costs and stress were the top reasons for not wanting to have children across all age groups. If the current generation of Singaporeans are struggling to maintain their standard of living, what incentive do they have to have children? We acknowledge that the share of welfare spending in the Budget has increased significantly since 2011. But these spendings do not address the root causes of the harsh economic realities faced by Singaporeans. Ad hoc handouts do not change the structural economic realities that are faced by present-day Singaporeans.”
“The 4G PAP leadership has presented a new social compact, Forward Singapore, which contains many invaluable insights from 200,000 Singaporeans on what kind of future Singapore they want. We share Singaporean's aspirations to pursue fulfilment and contentment, instead of simply focusing on material needs. What is needed next are concrete policy prescription to realise their future. PSP thinks that financial freedom is the key to enabling Singaporeans to realise the aspirations they have articulated in Forward Singapore. When relieved of their financial burden, Singaporeans will be free to exercise their creativity, make their plans to realise their own potential and lead a happy life. As the most important way to enhance financial freedom for Singaporeans is to lower housing cost, PSP has tirelessly pushed for the Affordable Homes Scheme and Millennial Apartments Scheme to be implemented. I would like to reiterate again that implementing these schemes will not need to draw down our Reserves, but just accumulate a little bit less. The raiding of Reserves allegation by the Government is just a distraction. PSP will continue to share with Singaporeans policies to facilitate a happy life and to ensure Singapore remains a secure place to live in, with rising incomes and good jobs for everyone, not just the rich and famous. Today, many Singaporeans are struggling with their finances, even as Singapore becomes a paradise for the rich and famous, and sometimes the unscrupulous, like those in our recent money laundering case. The household expenditures survey in 2020 shows that the bottom 20% of Singapore households by income, in 2018, spent $2,235 in expenses and got $2,570 in income, including employer CPF.”
“That is why we are confident that some of our policies, long-term policies, even implemented, will not lead to a big increase in the Budget because there are so many of these ad hoc schemes that we can actually integrate into some long-term scheme. PSP strongly supports fiscal prudence. But we believe we have set aside too many resources currently and inadequate spending and investment and heavy overall taxes have weakened the present-day Singaporeans. I am sure Singaporeans will much prefer to be taxed less than receiving ad hoc handouts from the Government. I hope this House today will appreciate that the PSP is not even asking for more NIR or land sales revenue for the Budget, at least for today we are not asking although we support all these policies. What we are saying today, is that even the NIRC has not been totally deployed for the full benefit of Singaporeans. And there is also this artificial deficit created by the current policy of charging land cost on HDB flats. None of the policies that PSP recommended will weaken fiscal prudence and compromise our future ability to spend on any crisis that may come up in the future. In fact, what our policies are aiming at is to increase our social cohesion, improve the conditions and the quality of life of Singaporeans, so that we have a stronger, present-day Singaporean Core and we can take crisis in our stride. Mr Speaker, we want Singaporeans to be confident in Singapore's future by giving them the true and complete picture of a strong financial position. A strong financial foundation is a good start. With the resources we have accumulated as a nation, we are confident that we can realise a new social compact together.”
“That is the message that Opposition has been presenting in this House. We are not being fiscally irresponsible. We are just saying policies can be better. There is no tension between providing for present-day Singaporeans and continuing to provide for future generations – although hon Member Vikram Nair has cast doubts on that. But I have asked him that question on whether he knows how much Reserves we are accumulating each year and how much are our policies are going to spend, even at the very worst. The numbers are as follows. We are accumulating Reserves by the tens of billions. According to my checking of the Government financial statements and all that, probably about $50 billion a year, $50 billion to $100 billion, depending on which year it is. Over the last two years, we are lucky. When there was a huge influx of capital into our country, the Government was able to accumulate an additional $250 billion additional Reserves over the last two years. So, with that, we are accumulating Reserves by tens of billions and we are proposing policies that spend at the very worst, very worst a few billion dollars. Is that not a win-win situation? Because not that we want to spend the money but present-day Singaporeans, many need the money especially the second half of Singaporeans in terms of income. But this is not happening because the PAP Government was overly conservative fiscally and it has continued to raise taxes and fees which will maintain the current rate of reserve accumulation and, in exchange, giving out ad hoc handouts to appease Singaporeans.”
“The cost can come in the form of higher taxes, higher property prices, higher cost of living or lower interest for CPF balances, depending on which of the five sources of growth the new Reserves come from. Hence, the cost of accumulating Reserves has a direct impact on some of the top concerns of Singaporeans, such as the affordability of HDB flats, the rising cost of living, retirement adequacy, prospect for the younger Singaporeans and a host of other social ills. PSP also would like to continue to grow our Reserves at the current rate, if not for the fact that the heavy costs to Singaporeans are becoming more and more apparent, especially with the Government's tax increases over the last two years. We have asked about the Reserves, we have asked about the land sales, NIR. And the Government has said all cannot be used. So, today in my debate, I then said how about NIRC? The NIRC also does not seem to be totally used for the benefit of Singaporeans. I mean, it is a matter of interpretation, but I pointed out that some of the NIRC has been locked up. Some of the NIRC has been applied to very long-term infrastructure projects, including coastal and flood protection, all that. Coastal and flood protection – these are our existential problem. Is this not an example that we should use our Reserves or some parts of the Reserves and not rely all this on the NIRC, which from the PSP's point of view, is supposed to enhance the welfare of Singaporeans so as to avoid the necessity to increase taxes. Of course, we take that away, then we have to increase taxes. The third takeaway is, fortunately, we actually do not need to draw down our Reserves, but just slow down the rate of Reserve accumulation marginally to produce much better economic outcomes for Singaporeans.”
“And of course, all the rumours about the performances of GIC and Temasek, which I think are sometimes very unfair for the fund managers in those two organisations. So, I would like Singaporeans to have three takeaways from today's debate. First, our financial reserves amount to more than $1.2 trillion at least. Ms Hazel Poa has explained two methods to calculate this based on the figures published by the Government in the Government financial statements. This $1.2 trillion, as I mentioned, will also continue to grow although the Prime Minister, the Minister and many Members have said that the rate of return on the financial reserves are not certain, not for sure. Yes, granted. But there are other sources of growth and, by the way, the 4% the Prime Minister mentioned about long-term investment growth, that is a standard assumption made by investment management entities. And, of course, you can say that okay, in a few years' time the whole world will change but that 3% to 4% is based on a long-term forecast of the investment returns generated by these investment firms' forecast. I mean, the actual track record of investment based on a universe of asset classes and this is a standard measure used by the investment firms worldwide. It is not something very special. So, we can use 4% or maybe a bit more conservative 3%, but that is a reasonable number because as long as this world, this Earth is still intact, human beings will have economic activities and their economic activities will generate a return. The second takeaway is that the continued accumulation of Reserves comes at a cost to Singaporeans.”
“Even though the Budget and the Reserves are very technical topics that may not appeal to many Singaporeans, I have chosen to make many speeches in this House on these issues because they fundamentally impact our cost of living, quality of life, economic competitiveness, income equality and social cohesion. It is especially important in the past two years because the Government has made a number of tax increases that PSP thinks are not necessary. Given the fact that Singaporeans are facing unprecedented problems in terms of cost of living and runaway property prices and, anyway, in our opinion at least our Budget and Reserves, we still have the leeway. I also hope that by having more discussion on these issues, we can dispel the misconceptions and fake news relating to our Reserves. Today, I do not think the majority of Singaporeans are really fully confident that we have over $1 trillion dollars of Reserves. Why? Because when we listen to some of the talk on the ground, they say, "If we have so much Reserves, why is the Government keeping our CPF savings?" I have to explain to them that, actually, these are two different issues. CPF savings are for your retirement, it has nothing to do with the fact that we do not have Reserves. But this is a misconception, nevertheless, and we have to address that. Some fake news in the social media say Singapore has external debt that equals to 200% of our GDP. Does everyone know how we get that? From the Government financial statements because we have total liabilities of about $1 trillion. But those are not real liabilities actually. We must explain to Singaporeans that we have all these assets. If not, the fake news will continue to be there.”
“But they fail to point out that all these are what we call fixed exchange rate systems. And of course, the speculators will attack the fixed exchange rate system when there is a mispricing. But our Singapore dollar is essentially a float. It is a floating exchange rate system. As long as MAS runs its monetary policy properly, and we have full confidence in MAS, and makes sure our Singapore dollar value is in line with our economic fundamentals, that is the most important line of defence. And of course, there are short-term speculators who may still come in to test and try their luck. Then, our MAS today, I would say, have sufficient OFR to defend ourselves. MAS has OFR equivalent to 80% of our GDP. How many countries in the world today have that? That is a very strong defence already. In fact, there are other reasons why MAS have very good control over the forex market and control over the value of our Singapore dollar, but I would not go too much into that. So, we have all the tools and the position and advantages to defend the Singapore dollar. But to reveal the figure of our Reserve to the Singaporean is important for the Singaporeans to have full confidence without any other misconceptions. Full confidence and full knowledge of what our country has in the Reserves. I hope Singaporeans do not need to wait for another 56 man years before they get an answer about our financial Reserves at least. I like to emphasise here again. That Singaporeans are the owners of the Reserves and they are entitled to the precise information of at least the financial reserves. Mr Speaker, Sir, I hope that today's debate has helped Singaporeans gain more insight into our public finances and has put more Singaporeans on the same page on Singapore's financial position.”
“The PAP policies are not that bad, but we think we can do better together. This is because what we are proposing is only going to slow down the Reserve accumulation and in exchange for that, to postpone the taxes increases so as to help Singaporeans cope with inflation and rising property prices. By the way, inflation, rising property prices, we can also say that part of it is attributed to the policies of the Government. So, we are talking about better policies here. I hope in this Chamber, we can discuss and debate things, so that we can bring these better policies out and not keep saying that whatever the Opposition says, this is going to bring us down. That is not necessarily true. If you look at the details of the things, the policies, the opinions that PSP, and although I cannot speak every time for WP, those things that we are proposing. We aim to be a responsible Opposition. After today's debate, I am sure that many Singaporeans will continue to be disappointed, that this Government probably would still not want to disclose the figure of our financial Reserves. Despite all the reasons I have given that it will not compromise the stability of our Singapore dollar and our economy. Let me elaborate a bit more on that. Relying on the experience I have in the financial industry and also, based on my exchanges with Member Mr Liang Eng Hwa and the feedback from Members Mr Saktiandi Supaat and Mr Sitoh Yih Pin. First, I think the issue of defending our Singapore dollar against speculators and the issue of disclosing our Reserves are actually two different issues. Because to defend our Singapore dollar against the speculators, first of all, the PAP Members had mentioned about the Hong Kong dollar peg, George Soros' attack on the Pound and all that.”
“Mr Speaker, Sir, I thank the Prime Minister, Minister and the Members for participating in this debate. Indeed, it is an honour for Hazel and myself. There has been a lot of discussion and debate on various topics. We understand all the good things that the Past Reserves will bring to us and bring to our country, but what I want to emphasise today, is that all the good things that the Prime Minister, the Minister and other PAP Members have said will not go away even if we reveal our Reserves. And it is right to reveal the Reserves to Singaporeans who are the rightful owners of the Reserves. People in the know, like myself, can make an estimate. Just like any speculators, they can make an estimate from the data, from the statistics released by the Government. But Singaporeans need to know. We need to put Singaporeans, all of them, on the same page because we are all in this together. So, all the good things that the Prime Minister, the Minister and the PAP Members have said, they are not going to go away after we reveal our Reserves. And the reasons, I will say afterwards again. And it will not go away. If some of the policies that PSP and WP have proposed are implemented – we have already said again and again. Of course, the Prime Minister said, a little here a little there, we are going down the hole, be careful. And with the wealth of knowledge and experience that the Prime Minister has, of course, we will take his advice very seriously. But at the same time, we still think that for Singaporeans of today, there is a sense that they want to do better, but the environment is as such that they seem to be facing a lot of limitations. So, we are here, talking about better policies, than what the PAP is offering today.”
“But then this 20% is not quite the impression that the Government has tried to convey. Meaning this 20% is spent on Singaporeans, is not necessarily spent on Singaporeans. So, on these two points, the capital is locked away and some of the capital is actually not for welfare spending, even for all these very long-term infrastructure spending – which should be dealt with in a different way, like what the Minister has said, there is a SINGA Fund, there are other things that we can use to finance all this.”
“Okay. Then, when the funds are being transferred to all these endowment funds and trust funds, some of these funds, like the endowment funds, as I have said in my speech, the capital is locked up in the fund. So, is there a need to lock up this capital? Because by legislation, the capital is going to be locked up. We definitely will be able to put that fund to better use. So, if indeed some of these funds are locked up through the endowment and trust fund structure, then all the things that the Minister has said about, "Oh, give us the leeway. Let us take the money from you first. We will invest in the Reserves and we will give you back the NIRC." But here, we are finding the situation not so straightforward. Even the NIRC, some of the money is being locked away. The Minister may say that this is not NIRC, but whether it is NIRC or just a surplus budget resource, money is fungible. So, let us not argue about that. But there is excess money that is locked away. And there are some funds that may not actually directly benefit Singaporeans straightaway. Because we would think that the NIRC will be a bit more towards welfare spending, but we also know that the NIRC or the endowment fund and trust funds, a lot of the trust funds are for infrastructure development, like the Changi Airport Fund and for economic development, like the National Productivity Fund and even the Coastal and Flood Protection Fund. These are all going to use up a lot of the so-called 20% that the NIRC has contributed to the Budget. We have no issue that the Minister keeps quiet. But if the Minister insists that every dollar spent in the Budget, 20% is from the NIRC, then, I would say yes, there is no factual error or factual inaccuracy to what the Minister says.”
“Yes, Mr Speaker. I have another question for Minister Indranee on the NIRC. For the NIRC, I think, probably, at some point there will be some agreement to disagree. But I want to clarify a few things with the Minister. First of all, as the Minister has said, the Budget has about $100 billion of revenue and on top of that, there is about $24 billion of NIRC. This becomes a pool of money that is available for spending. There is no question about that. But the Minister will not dispute the fact that out of this $124 billion, in fiscal year 2023, about $17 billion is moved to the endowment funds and the trust fund. So, we may disagree whether this is a spending or not, but that is a fact. Correct? So, this is the first question. So, there is, in fact, a sum of money that is moved to the endowment funds and the trust fund.”
“Mr Speaker, I just want to confirm that all these land acquisitions by the Government, which Singaporeans have given up, represent a sacrifice on the part of those Singaporeans. If the Minister and the Government have got no problem with that, I will let the matter rest. I am raising the question because I thought I heard the Minister saying, some of this land belong to the Government anyway, something like that.”
“Mr Speaker, can I ask the Minister, how about an example like this. There are residents who came to see me and said that their grandfather's land was acquired in the early 1980s. They were paid $60,000. The piece of land, of course, over the years, was enhanced by the Government. So, now, we have got roads going through the land, and the land, to be fair, has increased in value. But the grandfather was paid $60,000 in the early 1980s and only today, the land was auctioned. Does the Minister consider that as a sacrifice by those Singaporeans? This family who has given up the land or was it forcefully being taken from them?”
“Another question I would like to ask the Minister is, the Minister said just now, state land is not the sacrifices of the Singaporeans. She said that this is under the Government, so it is not really — that is the impression I got, if I am not wrong. And the land that we have acquired from Singaporeans, the Minister says all has been used. So, as a result, all these have been used for public purposes and all that. Can the Minister confirm that all the land acquired by the Government in the process of all these Land Acquisition Act acquisitions since the 1970s till now, that all the land has been promptly used for public purposes, within a certain number of years after acquisition? Or is there any land that until today actually has not been fully developed but which we have acquired from Singaporeans already?”
“Thank you, Mr Speaker. I think I want to take on the Minister's last point. Does she not think that it is more accurate to say that what the Opposition has proposed is that the Government should not take everything from us, until we are very weakened now. We cannot even defend ourselves. That is one point. Okay, maybe the Minister can respond to that first. Nothing to respond? Okay. Okay, because I have some other things to ask.”
“Mr Speaker, thank you. I understand that there is some general principles and certain things are true, the more you save, the better for the future. But, in the course of the debate, we had mentioned that there is a cost to accumulating the Reserves. So, as a result, we cannot just base our opinion on a general statement. He must know the facts. How much is being accumulated every year and how much would the policies the WP and PSP are recommending cost? I think that should be fair to say.”
“Okay. Mr Speaker, so the fact is he does not know how much Reserves we are accumulating every year and he does not know how much the policies proposed by PSP would cost the Reserves. So, how does he come to the conclusion that there is a tension between the present generation and future generation, if we implement those policies?”
“Okay. The second question I like to ask him: does he have any idea what will be the cost to the Reserves if we implement the policies that PSP has proposed?”
“Mr Speaker, I like to ask the hon Member Mr Vikram Nair one question. He mentioned about the tension between present-day Singaporean, or the present generation, and the future generation in terms of the use of the Reserves. Can I ask him a question how much Reserves are we accumulating every year? That means what is the rate of increase of our Reserves every year? Does he have an idea on that?”
“Mr Speaker, Sir, I do not deny the effect of more spending, that it may have some effect on inflation. But my question is, if that is the reason the hon Member has put up for not revealing the Reserves, I would like to ask our office holders from the Government whether that is the Government's position or not. That is, I do not want to reveal the Reserves because I do not want to spend more.”
“Mr Speaker, I just want to make one clarification with the hon Member Mr Neil Parekh. In his speech, he seems to have introduced a new reason for not disclosing the Reserves. I just want to confirm with him that he said, if the Reserves are revealed and they are larger than what is expected and the Government spends more, it will lead to inflation. Is he putting this up as an additional reason for not disclosing the Reserves?”
“Mr Speaker, can I ask, through you, another question for Mr Liang. The current amount of OFR that MAS has is already 100% of our GDP. Does he know how many countries in the world have OFRs equivalent to 100% of their GDP to fight the speculators? But, anyway, the Asian currency crisis, I had already proven that, actually, we have enough credibility because MAS has managed the Singapore dollar very well in line with our economic fundamentals. So, even if the speculators, as part of attacking the other Asian currencies, come and attack us, we are fully prepared because our currency is in line with our economic fundamentals. Next, we have enough OFRs to defend our currencies. So, as a result, as I said just now, is there still a need to keep the secret of our total Reserves? Because there is also some kind of contradictory argument here, on the part of Mr Liang Eng Hwa. For the speculators, the more they see what our Reserves are, the more they are unlikely to attack us. Does Mr Liang agree that keeping the total Reserves secret and defending the Singapore dollar, actually, they can be two different issues?”
“Mr Speaker, I have another question for Mr Liang. Does he agree that the defence of the Singapore dollar and keeping the Reserves secret are two separate matters? Because the MAS is already tasked with a lot of resources to defend the Singapore dollar and, I think, Mr Liang has quoted that during the Asian Financial Crisis, the Singapore dollar recovered very fast. I do not know, but since he was in the forex market, he may know more. How much has the Singapore MAS spent in defending Singapore at that time? Probably, $10 billion? It is not a very big sum of money, in contrast to what MAS has its arsenal to fight the speculators. So, does he agree that we do not need to keep the Reserves secret and yet we still can defend the Singapore dollar?”
“Mr Speaker, I have one clarification for Mr Liang Eng Hwa. Can I ask Member Mr Liang Eng Hwa, during the Asian Financial Crisis or Asian Currency Crisis, which I was also deeply involved in at that time, whether the speculative attack, actually it is not just on the Singapore dollar; it was a widespread attack on all the currencies. So, there was also a sell-off on Singapore dollar, but the Singapore dollar as Mr Liang has shared, recovered very fast. So, can I ask him whether he thinks that the recovery of the Singapore dollar, at that time, was due to the fact that we have kept our financial reserves a secret?”
“2 trillion. I have also explained that there are five main sources of growth for our Reserves, which will enable it to continue growing, by tens of or even, sometimes, hundreds of billions of dollars a year. This provides us, with the fiscal space to relax the pace of our Reserve accumulation marginally by, perhaps, a few billion dollars a year to waive the land cost for BTO flat pricing and, deploy the surplus budget and NIRC resources more proactively, to delay and reduce the necessity to raise taxes. These are the kind of policies that will greatly reduce the financial burden and improve the quality of life of present-day Singaporeans, while continuing to save for future generations of Singaporeans. Sir, I beg to move. For country, for people. [(proc text) Question proposed. (proc text)]”
“When an integrated view of all the fiscal resources are available, Parliament will be in a better position to support tax increases of the Government, if required. PSP's second proposal is to waive the land cost for public housing owned by Singaporeans for the purpose of occupancy under the affordable home scheme, proposed by PSP. Under the scheme, a Singaporean still pays land cost plus accrued interest, when he sells his HDB flat. Assuming the very unlikely scenario, that all Singaporeans do not sell their HDB flat, waiving land cost for public housing, may slow down the accumulation of financial reserves by up to $5 billion a year. Even so, this is a small price to pay to ensure that every generation of Singaporeans can afford a HDB flat and, also retire in the same flat with enough retirement income. In addition, the affordable home scheme will eliminate the HDB deficit, releasing substantial resources back into the budget and reducing the tax burden of all Singaporeans, especially the middle-class Singaporeans. The two PSP proposals do not reduce our past Reserves. Although, it may marginally slow down the future rate of Reserve accumulation. On the other hand, they are expected to produce very substantial benefits for Singaporeans. We urge the Government to study our proposals and report the results to this House. Mr Speaker, Sir, in conclusion, there is no need to keep the size of our past Reserves a secret, when the size of the financial reserves can be derived from publicly available information. The Government should accept this and release an official figure of the full size of the financial reserves, so that Singaporeans can properly discuss our Budget, taxation and Reserve accumulation policies. PSP has estimated that our financial reserves is about $1.”
“Through today's debate, PSP hopes to convince this House that our resources in the Budget and Reserves should be deployed more fairly for present-day Singaporeans, while we continue saving for future generations. In this regard, PSP proposes two changes, pertaining to the deployment of the NIRC and the charging of the land cost to public housing. PSP's first proposal is that no further endowment and trust funds should be created and no further top-ups should be made to existing endowment and trust funds. We propose to consolidate surplus budget or NIRC resources, in an omnibus budget surplus fund for future spending for Singaporeans, instead of breaking these resources into many endowment and trust funds. Long-term expenditure needs should, then, be funded each year directly out of this budget surplus fund. The investment returns on the assets in the fund, should also be retained in the fund. This approach has several advantages. First, it will ensure that surplus budget or NIRC resources, will always be used promptly for the immediate spending needs of Singaporeans. No capital will be left idle and the capital that is not used, remains in the budget surplus fund and not transferred back to the Reserves. Secondly, Parliament can have better oversight over one omnibus fund, as compared to more than 20 different funds managed by different Ministries, Statutory Boards and other agencies. Parliament can be informed of the expenditures of the fund at the beginning of each fiscal year, just like any expenditures in the Budget. Parliament can be given long-term spending projections of the fund from MOF and better ensure that future expenditure for all social causes, are fully-costed and provided for upfront.”
“No land cost is paid for, for land use by the state, schools, hospitals and other public infrastructure. But when land is sold for public housing and commercial use, the user will pay a market cost of the land, which goes directly to the financial reserves. Our main point of contention, relates to the Government charging land cost for public housing since 1985. Since 1985, the Housing and Development Board (HDB) has been required to pay the land cost of the land into the financial reserves, when it gets land from the Government to build HDB flats. In fiscal year 2022, the HDB paid about $5.39 billion of land cost to the financial reserves. The total cost of HDB flats, comprise the land cost and construction cost. When the land cost is high and increasing all the time, HDB cannot charge the full cost to the buyer in order to maintain affordability. As a result, HDB is saddled with large deficits, which amounted to $5.38 billion in fiscal year 2022. Incidentally, the HDB's deficit is almost equal to the land cost paid in fiscal year 2022. The HDB deficit created, by paying land cost into the Reserve, is not only paid by the HDB flat buyers, but also all of us taxpayers whenever we pay any tax. It is a heavy and unnecessary financial burden on Singaporeans, which can be avoided if the land cost is waived for public housing. Hence, while the Reserves increase over time, this comes at the price of more taxes and smaller Build-To-Order (BTO) flats for Singaporeans. We must ask ourselves: is this what we really want for ourselves and for our children and grandchildren? Mr Speaker, the Government has tied up a lot of financial resources from the Budget and in the Reserves, to the detriment of the financial well-being of Singaporeans today.”
“Even though, the capital has been expensed off the budget in the year of transfer. Between 2018 and 2022, the actual net annual spending for the 11 funds, accounted for less than 10% of the total assets of the funds. The Government has argued, that the creation of endowment and trust funds is a more prudent measure to ensure that future expenditures are fully-costed and paid-for upfront. However, there is no need to do so in the case of the GST voucher fund, because future GST voucher payments can be offset by GST revenues in the same year. As expenditures and costs are matched, what is the rationale to lock up $9 billion in the GST voucher fund now? The regular top-ups of the funds also show that not all future expenditures can be accurately forecasted from the start. Hence, these endowment and trust funds, especially the five endowment funds where the capital is locked up, can also be seen as a second set of reserves that are being set aside for specific purposes. When money is being transferred from the current year's budget into these endowment and trust funds, we are essentially transferring money back into the Reserves. If we are too conservative and allocate too much money for future expenditures, in the current year budget, these could potentially mean a shortage of resources for other expenditures and lead to tax increases that are larger and earlier than required. PSP will suggest a more efficient way of deploying the surplus budget resources, arising from the NIRC later. Next, we examine how the payment of land cost for public housing, has led to a heavier tax burden for Singaporeans. We have said that the financial reserves are valued at about $1.2 trillion, as of end-March 2023. The land reserve, on the other hand, are valued only when it is sold.”
“However, a deficit is normally reported in the overall budget because the Government transfers a large part of the surplus budget resources arising from the NIRC, each year, to many endowment and trust funds there are intended to fund long-term spending. In 2019, MOF reported to the Estimates Committee that there will 23 such funds. There are probably more now. It is not easy to keep track of the balances and expenditures of these funds because only 11 funds set up by legislation are reported in the Government financial statements. The other funds are reported in the financial statements of Statutory Boards. Capital transfers to these funds are accounted for as current expenditures in the budget, although most of these transfers are not spent in the current year. Based on the budget figures from fiscal year 2012 to 2020, the total capital transfer to the endowment and trust funds is equivalent to 64% of the total NIRC allocated to the budget in that period. In fiscal year 2023, the transfer equalled 72% of the NIRC. As a result, about $51 billion has been accumulated in the 11 funds listed in the Government financial statements by the end of fiscal year 2023. These funds are classified by MOF as: endowment funds; and non-endowment or trust funds. For endowment funds, it is stipulated by law, that the capital transferred is locked up and cannot be spent. Only the investment income can be disbursed. There are five such funds reported in the Government financial statements and the total capital locked up, is about $23 billion. For the non-endowment or trust funds, the capital together with the investment income, might be drawn down to meet expenditure needs over multiple years, long into the future.”
“WP has suggested to increase the share of the NIR, from 50% to 60% for the NIRC. The Government has rejected all these proposals and continues that adhere to its stance that the allocation of 50% of NIR as NIRC to the budget is fair, for both the present and future generations. This brings us to the very pertinent question, which is, whether present-day Singaporeans are really enjoying the full benefit of the NIRC. Upon deeper examination of our budgetary policies, we can see that not every dollar spent in the budget has been used on spending in the current year for the benefit of Singaporeans. Part of the budget goes towards the endowment and trust funds for future spending, and another part goes towards making up the Housing and Development Board's (HDB's) deficit from land cost which goes to the Reserves. This is equivalent to not enjoying the full benefits of the NIRC during the current year. Let me, first, explain in more detail the contributions to the endowment and trust funds. The Government has said that the budget is in deficit and will continue to be so, because of the increasing expenditure for the ageing population. However, is the budget really in structural deficit? Our budget has about $100 billion in operating revenues, which does not include the NIRC. Total expenditures, which include both operating and development expenditures slightly exceeds the operating revenues by about $3 billion to $5 billion. So, the budget should be in a big surplus after taking in the NIRC, which is $23.5 billion in fiscal year 2023.”
“PSP's response to that is we are of the view that we may have reached the point of enough if we are raising taxes when Singaporeans are facing a cost of living crisis for the sake of maintaining the current rate of Reserve accumulation. PSP disagrees that we continue the accumulate Reserves at the same rate when it hurts the welfare of present-day Singaporeans. The accumulation of Reserves comes with costs and benefits. For too long, the Government has over-emphasised the benefits but downplayed the cost. Mr Speaker, after ascertaining the size of our financial reserves, we are now in a better position to discuss how the Budget and Reserve accumulation policies can be tweaked to produce better economy outcomes for Singaporeans. In the past few years, PSP and WP had suggested various ways by which the Government can deploy more Reserves to ease the burden of Singaporeans today, without compromising the welfare of future generations. First, there is a general consensus that we should not touch the principal of the past Reserves. For example, if the financial reserves amount to $1.2 trillion, well, we should leave that alone. Secondly, both PSP and WP have made different but reasonable suggestions on ways to continue growing the Reserves, but at a slower rate. For example, we have suggested that part or all of the land sales proceeds should be allocated to the yearly budget for spending. Given the land is only sold at leasehold, land sales are a recurring source of income which can be used for current spending. Both PSP and WP have also asked for a larger share of the NIR of the financial reserves to be allocated to the yearly budget, instead of raising taxes. Currently, 50% of the NIR is allocated to the budget as a NIR contribution (NIRC).”
“There was so much OFR accumulated in recent years that the Government had to set up a new mechanism, the Reserve Management Government Securities in January 2022, for MAS to transfer excess OFR to GIC. Two, CPF balances. Ms Hazel Poa will explain, in detail, how the growth and investment of our CPF balances contribute to the growth of the Reserves. Three, Net Investment Returns (NIR). Currently, the financial reserves generate NIR of about $50 billion dollars a year. Of which, half is kept in the financial reserves and half allocated to the budget for spending in the current year, which is known as the Net Investment Returns Contribution (NIRC). As our financial reserves increase and make positive returns over time, our NIR and NIRC are also expected to increase in tandem. Four, land sales revenues. The revenue from all land sales goes directly into the Reserves. I will be discussing this further, later in my speech. And, finally, five, Government budget surpluses. All and any surpluses of the Government go directly to the Reserves. In summary, although not necessarily known and accepted by most Singaporeans, it is transparent to the financial markets that Singapore has approximately $1.2 trillion dollars of financial reserves, which is still growing every year and generating higher and higher investment returns each year amounting to $47 billion in fiscal year 2023. It is because of this strong financial position that PSP has opposed the Goods and Services Tax (GST) and property tax hikes in 2023 and 2024. When Prime Minister Lee was interviewed by the CNA documentary in August last year, he said that the biggest misconception which people have is that there is such a thing as enough and that he does not know how much Reserves is enough.”
“Secondly, the most effective defence against currency speculation lies not in the confidentiality of the size of our financial reserves, but in the Monetary Authority of Singapore (MAS) ensuring that the value of the Singapore dollar is in line with our economic fundamentals. Third, there is no national security threat arising from disclosing the size of the financial reserves because it can already be estimated using publicly available information, such as the Government financial statements, even though the Ministry of Finance (MOF) has claimed that the Government's total financial assets, as reflected in the Government financial statements, do not represent the size of our national Reserves. My colleague Ms Hazel Poa will show the House later that we can estimate our financial reserves to be about $1.2 trillion, simply by deducting the relevant liabilities from the financial assets. While the size of the financial reserves can be estimated, an official statement is still important to put all Singaporeans on the same page. The $1.2 trillion figure for financial reserves is not a static number. It will continue to increase over time, from five sources of growth. One, official foreign reserves (OFR). OFR will continue to grow as long as there is more money flowing into than flowing out of Singapore. For example, from the end of 2019 to the end of 2022, even during the COVID-19 pandemic, MAS had accumulated new OFR from large access foreign inflows amounting to about $250 billion. This is more than six times the amount the Government has drawn down to fight the pandemic or more than two and a half times the total Government expenditure in a normal year.”
“It will be befitting for me to emphasise, again, at this point, that PSP is making proposals with neither the intention to nor the effect of raiding our Reserves. That has never been our approach and mindset towards this issue and neither do our proposals have that effect. In this light, I hope that this debate will focus on the substance of our proposals. Let us start with the size of our Reserves. Mr Speaker, during this debate, we will be referring to the financial assets in the past Reserves as the financial reserves and the fiscal assets in the past reserves as land reserves. During the Budget Debate in 2021, Deputy Prime Minister Heng Swee Keat said that no responsible leader will reveal the size of the Reserves. PSP disagrees. We believe a responsible leader should reveal the size of the Reserves for the following reasons. First, as the collective owners of the Reserves, Singaporeans deserve to have access to the precise information about our Reserves, the returns and how it is being invested and managed. A clear statement by the Government on the size and performance of our financial reserves every year will go a long way to facilitate proper discussion on taxation and spending policies and to quash fake news about the insolvency of our CPF, the size of our external debt and the performances of GIC and Temasek. There may be no real necessity for the public to know the full extent of our military capabilities. But Singaporeans would need a clear idea of the size and performance of our financial reserves as a reference point to have a constructive public debate on the Government's taxation and spending policies.”
“However, as our economic fundamentals change, there comes a point when the welfare of present-day Singaporeans will be hurt if we continue accumulating Reserves at the same rate as we are doing now. We are of the view that the Singapore of today has gone past that point. The cost of living crisis that we are facing now, in addition to growing social inequality, increasing mental health issues and declining total fertility rate (TFR) are examples of social ills that have resulted from our economic policies. Today, it is not unreasonable for Singaporeans to expect the Government to focus less on accumulating Reserves and do more with our financial resources to address these social ills. However, over the years, when it comes to Reserves, the PAP Government's approach has been to tell Singaporeans that: one, there is no such thing as too much Reserves; two, that the Reserves can only be used in absolute emergencies; and three, that Singaporeans cannot be told how much Reserves we have accumulated because of national security reasons. The Progress Singapore Party (PSP) believes that this approach does not do justice to the fact that the Reserves are accumulated from the blood and sweat of Singaporeans. There is a cost to accumulating Reserves. Singaporeans deserve to have a greater say over how much we are accumulating in the Reserves, how we are using the Reserves today and how much we are living behind for future generations of Singaporeans. In today's debate, we will first discuss the size of our past Reserves and why it need not be a secret. Then, we will examine how we can moderate the rate of Reserve accumulation marginally to care for and motivate present-day Singaporeans, while continuing to accumulate more Reserves for future generations of Singaporeans.”