8 June 2020

The Finance Minister Ministry of Finance 100 High St #06-03 The Treasury Singapore 179434

Dear Mr Heng

You have been admirably quick to make use of your Government’s new Protection from Online Falsehood and Manipulation Act (POFMA) against your political opponents and also to protect the secret remuneration of the Prime Minister’s wife as CEO of Temasek, a Schedule 5 company whose shares are wholly owned by the Ministry of Finance. You have used POFMA even though your junior Minister, Lawrence Wong, has claimed in Parliament that Temasek is a private company and that the remuneration of top management is set by an independent board.

I would now ask that you be equally proactive in issuing a Correction Notice under POFMA to an MP from your own party, Ms Tin Pei Ling. On 4 June she made a speech in Parliament and later shared that speech on Facebook.

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.

She went on to say:

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 you in your 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.

I am curious as to where this figure of $100 billion, or $93 billion, comes from. A comparison of the total expenditure for 2020 including special transfers but excluding transfers to endowments and trust funds (which are not current spending) 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 you are allocating to the Contingencies Fund, since you have not provided an updated Analysis of Revenue and Expenditure in your Fortitude Budget Statement.

If one subtracts 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 projected 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. You have already allocated $20 billion to the Jobs Support Scheme to help fund up to 75% of the wages of Singapore citizens and PRs. 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. We should also deduct $1.9 billion provided from past reserves under the Temporary Bridging Loan Programme and the Enterprise Financing Scheme shown in the Solidarity Budget since the Government is acting as a guarantor only. The final cost will depend on the loss that is left after the banks have exhausted the recovery process. The current cost of these guarantees is zero and they do not constitute actual spending.

Unfortunately your Government’s guiding principle of obfuscation and hiding the true surplus from the people means that I am forced to make assumptions. As a minimum you should publish the General Government surplus, which should include all entities in the public sector including GLCs and take account of changes in the value of all assets including land as well as the true figure for the reserves. Thus I have no idea of how much the real deficit is and am forced to guess.

Also I have issues with the denominator Ms Tin uses to calculate the benefit per capita. She, like you, is trying to have her cake and eat it. She says she used the number of Singapore citizens and PRs and compares this to other countries’ citizen populations. This is misleading as countries like the US that she compares Singapore with have a much smaller proportion of non-citizens in their workforce. It would be more appropriate for her to use Singapore’s total population particularly as you have provided substantial support to enterprises employing foreign workers as well through waiver of the Foreign Worker Levy, rent relief and the Temporary Bridging Loan Programme. 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 and also the $1.9 billion which is shown as set aside for losses under the Temporary Bridging Loan Programme and Enterprise Finance Scheme, which may never occur, then we get a figure of $5,682. This is less than half of Ms Tin’s claimed figure for the US 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. Even if we divide $44 billion by just citizens and PRs we get a figure of $10,929, which is less than Ms Tin’s US figure.

However this is an unfair comparison because the US (and the UK, Europe, Canada and Japan) 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.

According to your figures total direct support for Singaporeans from your 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.

Ms Tin’s claim that the Government has provided support of $23,225 on a per capita basis to Singaporeans is highly misleading when in fact your total direct support for Singaporean citizens and PRs has been about $600 on a per capita basis. By providing a fake number she is clearly attempting to influence the impending General Election. It is thus clearly in the public interest under Section 4(d) of the Act for you to issue a Correction Notice and to provide a true and accurate comparison with other countries using the various measures I have set out above. A good start would be to tell Singaporeans what the real General Government surplus (including all income and capital gains from all state-owned companies and assets) has been over the last forty years and to publish a truthful Statement of Assets and Liabilities rather than the incomplete fake one that you provide every year with the Budget.

If you ignore my letter and refuse to issue a Correction Notice then it will be plain to Singaporeans that POFMA was never intended to deal with the problem of fake news but on the contrary to allow the PAP Government to present its own false facts secure in its monopoly of information and in the knowledge that this new piece of repressive legislation will even further deter ordinary citizens from challenging them.

Yours sincerely

Kenneth Jeyaretnam Secretary General The Reform Party

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