At the NUSS dialogue on Tuesday I tried to grill the PAP representative on why there were so many discrepancies in the Government’s accounts. More specifically, I honed in on the National Productivity Fund (NPF). I asked Ms Sim why there were no accounts for the National Productivity Fund and apparently no audit by the Auditor-General either.

In true Hari Kumar fashion, she dodged my question and said I was welcome to write in and ask the DPM. I pointed out that I had written to Tharman and the President innumerable times since 2012 but had yet to receive any response or even an acknowledgement.

I would like to draw your attention to a major discrepancy in Statement of Assets and Liabilities of Singapore (“the Statement”) which is published every year with the Budget. See the snapshot below:

Total assets are given as $834 billion.

Firstly we can take off $219 billion for the shareholder equity in Temasek. Temasek’s total assets are $256 billion but non-controlling interests (who owns this interest and why are Singaporeans not told? does it represent the value of shares owned by management including Ho Ching?) amount to $38 billion.

This leaves $615 billion.

Next we can take off accumulated revenue from land sales. This amounts to $170 billion since 2006 alone. Let us say conservatively that the value of revenues from land sales amounts to $300 billion since 1980 including reinvestment income.

That would leave $315 billion.

Then we can subtract $75 billion for operating surpluses since 1989. That is assuming no reinvestment income from the surplus. Let us say $100 billion including interest.

Taking that away from total assets leaves us with $215 billion.

So if the Statement is correct then GIC and all the other Government assets including Changi Airport Group which I have calculated could be worth around $30 billion if it was listed on the stock market. Certainly a lot of taxpayers money has gone into building the infrastructure.

The problem is that according to the Statement the Government Securities Fund (which represents both Government market debt and the debt owing to CPF holders) is $401 billion.

Taking that away from $215 billion leaves a negative balance of $186 billion

If the Statement is correct GIC has lost about half the value of the CPF monies invested in it via the Government since it was set up in 1980.This flies in the face of its claims to have achieved a near 5% 20 year annualised real rate of return which would be considerably in excess of what it has had to pay to CPF holders.

So there can only be three possible conclusions:

1. There are substantial hidden assets that the Government is not telling us about. This is the most likely scenario. But this would be a Constitutional breach because Article 147(4)(b) and (5)(e) of the Constitution requires the Finance Minister to present to Parliament and the President, as far as is practicable, a statement of the assets and liabilities of Singapore. Surely it is not difficult to include Temasek, Changi Airport Group and an estimated value of the Government’s other assets including its land holdings within that.
2. There has been mismanagement on a massive scale by GIC and the money has been lost. The Government and the management of GIC have lied to Parliament and the public over the returns achieved by GIC. Lee Hsien Loong is Chairman of GIC.
3. There has been fraud and monies have been diverted into another account or accounts. While it may seem to be the least likely of the three scenarios it remains a theoretical possibility. Nobody thought there was anything wrong with Bernie Madoff and his fraud went on for years undetected.

In order to clear this up the Government could open the books to show that there is nothing amiss. In fact when I gave an interview to Bertha Henson at The Middle Ground aptly entitled “Show Me the Money” one of her team said, “What if the Government were to open up the books tomorrow and give you complete transparency? What if it was all easily explainable? Wouldn’t that undercut your case?” My response was that that would make really happy. Then CPF holders and indeed all Singaporeans could sleep easier at night knowing there was nothing to worry about

But the PAP have not opened up the books and I doubt if left to themselves they ever will. CPF holders might be wise to sleep a little uneasier at night.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam