Yesterday Tin Pei Ling, the young PAP MP who became notorious for her posts of Kate Spade handbags that surfaced during GE 2011, gave a speech in Parliament in which she claimed that her Government had provided the highest level of support in the world to Singaporeans on a per capita basis. She posted her speech on Facebook and I reproduce below what she said:

I also shared a rough estimation of the COVID19 budgetary support per capita in Singapore and some of the advanced economies. Based on my back-of-envelope estimation, the budgetary support per capita in Singapore is $23,225, higher than Japan or the US (to standardise for comparisons, I took the entire package value divided by citizen population size). On per capita basis, Singapore tops the chart around the world. Based on the figures, I thought that this demonstrates our government’s determination in helping our people and seeing Singapore through the crisis.

I was surprised by her calculations because I did not think the PAP Government had been particularly generous, particularly as far as its own citizens are concerned. So I decided to examine her claims more closely.

Firstly she says:

Within a short span of 5 months, our government is pumping in S$93billion just to combat the pandemic. This amount already exceeds the total full year public expenditure in 2019.

This is also the figure mentioned by Seatwarmer-in-Waiting Heng Swee Keat in his recent Fortitude Budget statement:

Together with the Unity, Resilience and Solidarity Budgets, we are dedicating close to 100 billion or $92.9 billion to be precise or 19.2% of our GDP, to support our people in this battle.

However a comparison of the total expenditure for 2020 including special transfers but excluding transfers to endowments and trust funds (which are are not current spending and may never be spent) versus the same figure for 2019 shows that the increase was only some $65 billion. Also the special transfers figure in the Unity Budget of $34 billion presumably includes the extra $13 billion which Heng is allocating to the Contingencies Fund. These figures can all be found at:

https://www.singaporebudget.gov.sg/budget_2020/budget-speech

The Contingencies Fund is one of the funds shown as liabilities in the Government’s Statement of Assets and Liabilities (SAL). As I showed in my last blog, these do no appear to form part of past reserves and strongly support my case that there are substantial reserves not shown in the SAL, possibly as much as $1 trillion more than shown.

If I subtract the $13 billion allocated from past reserves to the Contingencies Fund (which may never be spent) from the total for Special Transfers (excluding Top-Ups to Endowments and Trust Funds) then total spending is only some $52 billion more than last year.

Another way of measuring the Government’s support is to look at the budget deficit in the Fortitude Budget statement of $74.3 billion and subtract both the Top-Ups to Endowments and Trust Funds of 17.3 billion and the allocation of $13 billion to the Contingencies Fund. This gives a figure of $44 billion. Heng says he has already allocated $20 billion to the Jobs Support Scheme to help fund up to 75% of the wages of Singapore citizens and PRs (Why PRs? Did they do NS?) capped at a $4,600 monthly salary (a figure that is curiously almost the same as the UK Government’s limit on its Furlough Scheme of £2,500 per month). However given that probably more than half of the economy should be classified as being in the public sector and that a large proportion of the Jobs Support Scheme will go to Government-linked companies (GLCs) we should probably deduct half of the $20 billion as just a transfer payment from central Government to other entities in the public sector. Since the Government keeps secret the General Government surplus, which should include all entities in the public sector including GLCs and take account of changes in the value of assets including land) as well as the true figure for the reserves, we have no idea of how much the real deficit is and are forced to guess.

Also I have issues with the denominator Tin uses to calculate the benefit per capita. She says she used the number of Singapore citizens and PRs but really she should use Singapore’s total population. Our GLCs and private sector companies employ large numbers of foreigners, including many whose pay is hundreds of times what a Singaporean on median income earns like Piyush Gupta, the CEO of DBS, as well as low-paid migrant workers. While the Jobs Support Scheme is supposed to benefit SIngaporeans and PRs only, if it helps those companies to survive the pandemic then it also saves the jobs of foreign workers.

If we do this and divide $44 billion by Singapore’s population in 2019 of 5.7 million, then we get a per capita figure of about $7,700 as opposed to Tin’s claim that it is $23,225. If we subtract the $10 billion which is likely just a transfer between Government entities then we get a figure of $5,965. This is less than half than Tin’s claimed figure of $12,765 per capita. This is presumably based on the roughly $2,7 trillion in stimulus allocated by Congress under the US$2.2 trillion CARES Act and the US$484 billion interim CARES Act which extended the funding for small businesses.

However this is an unfair comparison because the US, Canada, the UK and Europe all have much more comprehensive safety nets such as unemployment insurance and welfare payments which automatically kick in when the economy goes into a recession. That is why they are known as automatic stabilisers because the additional spending helps to stop demand falling too much and the economy contracting further. A fairer measure might be the total projected US federal deficit for this year of US$3.7 trillion which would work out to roughly $15.585 on a per capita basis at current exchange rates,. Tin also includes only federal spending and not spending at the state and local level.

With no entitlement to welfare benefits or unemployment insurance Singaporeans have been forced to turn to Heng’s ad hoc stopgaps such as the Temporary Relief Fund (TRF) where the stingy nanny state stands guard to make sure Singaporeans do not become lazy or addicted to welfare (while the PM’s wife seems to be on the world’s most expensive furlough scheme to allow her to post full time on Facebook to support her husband and develop her political career). Even the Self-Employed Income Relief Scheme (SIRS) seems to be operating in an arbitrary fashion and true to past history, Singaporeans face constant issues actually accessing the support promised. It has been outsourced to NTUC, a PAP-controlled organisation, presumably to try to make Singaporeans grateful to the PAP for the peanuts they receive and to swell its profits administering the scheme. Total direct support for Singaporeans from Heng’s Government amounted to a derisory $2 billion up to the Resilience Budget and is probably no more than $2.5 billion now. If that is divided among 4 million Singaporeans residents (citizens and PRs) that is about $620.

Tin Pei Ling’s lazy and mendacious fabrications are fully deserving of a Correction Notice under the Government’s beloved Protection from Online Falsehood and Manipulation Act (POFMA). On Monday I intend to send an open letter to the Minister of FInance, Heng Swee Keat, to ask him to issue one. If he does not I will write to Facebook and ask them to put a warning on her account to the effect that it contains falsehoods. Unlike laid-off Singaporeans Ms Tin’s career appears to be prospering. No doubt she has moved on from the entry-level Kate Spade brand to a brand like Hermes which better suits her elite status.

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