Today in a Facebook post Indranee Rajah, Second Minister for Finance (why do we need not one but two Second Ministers? just another example of the Government’s bloated bureaucracy), claimed that the Government had provided $16 billion of support to Singaporeans and Singaporean companies.

This is another example of Fake News from the PAP which goes unchecked. The figure of $16 billion is only true if one looks at the narrowest definition of Government. This is the amount which is given in our Fake Budget under Total Expenditure. The definition of Government should be expanded to General Government which includes all receipts and expenditures by state-owned statutory boards, endowments, trust funds and then should be expanded again to include the entire public sector which includes all of the above as well as state-owned private companies such as MAS, Temasek, GIC, Changi Airport Group, SingHealth etc. etc.

Indranee omits to mention that much of that $16 billion expenditure will flow straight back to the Government since it owns so much of the economy. I have previously estimated that 50% of the economy is directly or indirectly owned by the Government. A recent comment left on my blog in relation to my open letter to the Minister of Finance suggested that the percentage is much higher:

There is empirical evidence to this ‘conjecture’. Back in 2000, my team and I under the guidance and supervision of a certain Mr A Miranda, undertook a research effort to unearth the extent of SG Govt in the private sector, and how much of SG’s GDP is attributed to the Govt’s involvement. I wouldn’t bore you with too much details, but the methodology essentially, was to manually calculate through direct and cross-referenced shareholdings between networks of entities and assigning appropriate weights, share composition belonging to the Govt, in publicly listed companies and major private companies through their mandatory declarations and annual reports. The objective was to determine the percentage of involvement of Temasek and GIC in our local economy. We only used these two vehicles as starting points for simplicity, and firms like ST Engineering by definition, would have been accounted for at the 1st layer of shareholdings held by the Govt.

Our findings indicate a whopping 65% to 70% of direct and indirect involvement (through a myriad of subsidiaries) by the Government in our local economy, with a 95% CL.

Disclaimer: this research was done almost 20 years ago and no effort has been made to keep up with ongoing changes, so composition might have changed. This was purely an academic exercise with no political bias attached to it.

If this has not changed (and there is reason to think that state involvement has got greater not less over the last 20 years) then simplistically about $9 billion out of $13.5 billion in corporate grants and tax breaks is not real expenditure but just a transfer from one Government unit to another. Only some $2 billion has been provided to individuals and households who are the most in need of support.

Despite having what the Government wants the world to believe (while refusing to provide any information) is one of the highest, if not the highest, level of reserves in relation to GDP of any country, the level of support lags well behind that of most of the other countries with similar levels of income per capita, most of which have high levels of public debt. There could be no better illustration of the fact that the PAP policy of depriving its citizens for decades of a decent standard of living for the sake of “saving for a rainy day” (if the Government is indeed saving and not squandering under the inept guardianship of the PM and his wife) is intellectually as well as morally bankrupt.

Indranee probably feels as secure as Josephine Teo in talking cock since due to Heng’s rapid-fire barrage of POFMAs Singaporeans are fearful of challenging their nonsense. Heng needs to self-issue himself and his second-in-command a POFMA and provide analysis to explain what the Government’s real expenditure is, netting out transfers between one arm and another. Until he does I will continue to appoint myself Government Fake News Buster as well as trying to fulfill my other role of Secret Salary Buster!

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