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Budget 2018: Same Old Cliches As Heng Makes Your Money Vanish in the Uniquely Singaporean Version of the Shell Game

Budget time yesterday and my first thought was that I had stepped into a time machine and been transported back to last year’s Budget. In fact the same could be said about any of the Budgets over the last five years. The Government could save a lot of money by eliminating the need for a Finance Minister. Instead they could just replay Heng’s or Tharman’s old speeches just updating the figures every year. That would save at least $2.5 million p.a. Include the Minister of Trade and Industry (Iswaran) and the Ministers of State and savings would be over $10 million p.a.

This year everything sounded even more deja vu than usual. For ease of understanding I have regurgitated Heng’s familiar cliches together with what they really mean in brackets: a “caring … society” (shamelessly stolen from my father’s title for the Workers’ Party manifesto he wrote in the 1970s), “building a smart nation” (investing in comprehensive and all encompassing citizen surveillance following China’s example), “a carefully calibrated foreign worker inflow” (opening the floodgates for a new wave of foreign labour without any minimum wage protection for Singaporeans),  and “a fiscally sustainable and secure future” (we will continue to pretend we are running out of money while raising taxes in the most regressive way imaginable).

The FY2018 fiscal position set out in Annex D was the usual mixture of fake accounting, inappropriate categorisation, deliberate under-forecasting of revenues and missing money that has been the pattern in previous Budgets. I have been writing on the subject since 2012. I am sure many of you are familiar with my posts but for those who are not  I have posted links to some of my articles below.

  • Fake Accounting.and Slush Funds Every year the Finance Minister sets aside substantial sums which he transfers to endowments and trust funds. This year was no exception. Former classmate and second class Cambridge Economics degree holder (but master magician in the Tharman mould) Heng put $2 billion into the GST Voucher Fund and $5 billion into the newly announced Rail Infrastructure Fund. He also announced that the Changi Airport slush fund stood at $4 billion. However according to the Analysis of Revenue and Expenditure (ARE) actual spending from the GST Voucher Fund was only $791 million. last year. Setting aside money for Rail Infrastructure out of current revenue is also strange when funding for the construction of new MRT lines and other infrastructure comes out of current revenue. A few years ago Tharman set aside over $8 billion for the Pioneer Generation Fund, which neatly entirely offset the whole of the Net Investment Returns Contribution. Four years later the Fund still stands at $7.5 billion.
  • Inappropriate Categorisation Funding for long-term infrastructure projects out of current revenue does not make good economic sense when the returns and benefits will largely accrue to future generations. The Finance Minister goes one step further and pre-funds future infrastructure spending today, robbing Peter to pay his son or grandson Paul. In this year’s Budget Heng has also set aside $16 billion in grants and capital injections to organisations. It is even more inequitable when many of these investments are in profit making corporations like Changi Airport Group (CAG). Though it pays dividends these are small compared to the loans and Government support it receives. CAG could undoubtedly raise the finance it needed in the private sector.
  • Deliberate Under-Forecasting The Finance Minister always deliberately under-forecasts the surplus each year. Last year he failed spectacularly. At Budget time he predicted a slight surplus (based on the PAP Government’s dodgy accounting) of just under $2 billion. This year he revealed that due to a surprise windfall gain from MAS of about $5 billion as well as under-spending on infrastructure that $2 billion turned into a $10 billion surplus. This has happened every year that I have analysed the Budget. If this happened in the corporate world such deliberate under-reporting would probably be criminal. We need the equivalent of the  independent Congressional Budget Office or the UK’s Institute for Fiscal Studies.
  • Missing Money Despite being required to do so by law many of the funds that the Government sets up fail to publish accounts or give any explanation of their spending. Many of the funds do not appear in the Statement of Assets and Liabilities that the Government is obliged to publish every year with the Budget. An example which I have drawn attention to many times is the Productivity Fund to which another $1 billion was allocated last year. This is controlled by the Prime Minister’s Office yet to the best of my knowledge no accounts have been published and it does not appear on the Government’s balance sheet. According to the ARE it spent $202 million last year. Is it a secret slush fund? At the same time as WP are being rightly asked to account for $33 million in spending by the Aljunied-Hougang Town Council citizens should be forcing PM Lee to account for the billions that have disappeared into the Productivity Fund.

These are the questions that any Opposition worthy of the name should be pressing the Finance Minister for an answer to:

  1. Why when the state coffers are overflowing is the Finance Minister even contemplating raising taxes at the moment, let alone committing to raising GST by 2% between 2021 and 2025? Is there something he’s not telling us about the Government’s accounts?
  2. Why does the Statement of Assets and Liabilities not include physical assets for a true picture of the Government’s net worth? In fact what does it include? This is a question I have been asking for six years but we will never get an answer as long as PAP remain in power and there is no proper Opposition in Parliament.
  3. On what basis is the Net Investment Returns Contribution calculated? For $14 billion to be 50% of the returns on $1 trillion or more of assets is ludicrous. We should move towards the Norwegian model of spending 4% of the net assets (which will be transparent) every year. Better still divest the assets to Singaporeans as I have argued previously.
  4. What other Funds are there besides those displayed in the Statement and why are there no accounts?
  5. In particular what has happened to the Productivity Fund?

Instead of transparency all Singaporeans got were a few hundred million dollars of handouts including the insulting Singapore Bonus of up to $300 per person over 21. The Finance Minister estimated this would cost $700 million though given his poor ability at Maths it will probably be much less. There was not even any new welfare programme like the misleading Pioneer Generation Package. No doubt Singaporeans will be overjoyed by the prospect of $100 or $200 when the Government is making a surplus of $30-40 billion p.a. and will vote enthusiastically for the PAP at the fast approaching next election.

The Germans also love the fact that their government makes large surpluses year after year rather than cuts taxes. But at least the government still has debt which it is paying down and Germans expect a high level of spending on welfare and public facilities. Singaporeans must be the only people who derive utility from being told that their money is piling up in the bank but they can never spend it. Recently the BBC published a story about an African con man who swindled a Dubai bank out of hundreds of millions in the 1990s by promising to double their money through black magic. Heng and the PAP must be the only con men in history who have persuaded people to hand over their money in return for promising to halve it year after year and made them grateful into the bargain.


How To Make A Surplus Disappear Without Anyone Noticing!

What is the Real Surplus?

Budget 2016: Stuck in a Car in the Fog. Who to Ask for Directions?

Hey Lee Hsien Loong, Where’s Our Money Dude?



  1. The most insulting part of the budget is the 100-300$ cashback.
    Really just roll the limo window down and throw out the money. If he’s going to insult us do it with class.
    The other disturbing part of the budget is one the one hand he only expected to collect about 2 billion but ends up collect 7 which he didn’t expect ;on the other, he’s suddenly got a crystal ball where he magically knows he’ll have a spending shortfall.
    Does he really take us for take us for totally stupid?


  2. Good political players (albeit of no real use to anyone, whether at work or in government) use smaller stories to deflect from the real issues, hide behind the team instead of leading the team, accept no responsibility, never answer questions directly. In reality by creating insecurity they can live with their own insecurities….I’m not saying Singapore leadership is doing this, but if it looks like an orange, smells like and orange and tastes like an orange….the possibility is…it could be an orange?


  3. I would not be surprised if more than half of the $700 mil is distributed tothe people. Even that amount is miserly when the IRAS collected $11.1 bil in GST for FY16/17. Increasing GST from 7% to 9% would mean an extra $3 bil per year in gst revenue if we assume FY16/17 revenue level.


  4. Dear Mr K Jayaratnam,

    I was wondering, why Singapore currency and Brunei currency are of the same value? This has been since 40 years ago!

    I know that Brunei is an oil producing country. I also know that no country can survive without any natural resources. Singapore has claimed to survives on Human Resources. This is plain BULLSHIT! I believe there is a great deception lead by the PAP government. I believe that the British government assisted PAP with the independence of Brunei so that Brunei’s oil reserve, crude oil, to be sent to Singapore for proccess. It’s plausible 40% of these oil revenues goes to the Singapore Government! I don’t have any proof but one thing is for sure where does spc comes from?
    If this is true, all the oil monies has been siphoned and goes to the FAMILEE


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