In my last blog I satirized the fact that, instead of regular cash dividends from Singapore’s massive and secret pile of financial assets (which I estimated here could theoretically be as much as $2.6 trillion), Singaporeans were instead fobbed off with trinkets like free mouthwash and face masks, courtesy of First Lady Ho Ching’s new role as head of Temasek’s charity arm, The Temasek Foundation.

After decades of austerity the mass of middle and lower-income Singaporeans have little to show for it while fraudulent, illegal and probably unconstitutional accounting tricks practised by Finance Ministers Tharman and Heng Swee Keat ensure any surplus disappears. The supposed Net Investment Returns Contributions from GIC, Temasek and MAS are siphoned off into new long-term funds rather than being spent.

I have been highlighting this state of affairs for years in my blog. I analyzed the help provided in successive Budgets during the pandemic to Singaporeans and found that the actual Budget deficit in 2020 was likely only a fraction of the Government’s stated figure in Budget 2021 of $64 billion (see here). In fact when amounts paid to Government-owned companies under the Jobs Support Scheme were netted off the deficit could even have been a surplus, and that was before taking account of the enormous rise in the value of the Government’s foreign equity holdings in Temasek and GIC. Budget 2021 forecast a deficit of $11 billion bur applying the same reasoning the real fiscal position is likely to be one of substantial surplus and thus deflationary for the economy.

Leaving aside the Jobs Support Scheme, which goes only to companies that employ Singaporeans and PRs, many of which are Government owned anyway and thus should be excluded in a calculation of the deficit. Budget 2021 provided less than $2 billion dollars in direct support for Singaporeans through the Covid-19 Support Grant and the Household Support Package. While there have been some ad-hoc extensions by the Government of the aid schemes, they amount in total to only a few hundred million dollars.

The Government’s stinginess while sitting on over $2.5 trillion of financial assets, which does not include the value of the land it owns and assets like Changi Airport Group, was put into stark contrast with the plight of many Singaporeans by the publication recently by the LKY School of Public Policy (LKYSPP) of a study of the minimum income needed for a basic (very) standard of living in Singapore for a single person household with one child (aged 2-6 years) and a two person household with two children (one aged 7-12 and the other 13-18). It calculated this as $3218 per month for the single person household with one child and $6426 for the two person household with two children.

Comparing this minimum income with the figures for work incomes (including Employer CPF contributions) per family member for employed households (Key Household Trends, 2020) the study found that the incomes of 30% of working Singapore households were below their assessed Minimum Income Standards. However only 87% of households have at least one working member. 8% of households are comprised solely of non-working members aged over 65 while the remaining 5% are also non-working but some at least of the members are under 65.

For those over 65, CPF savings and Government assistance are unlikely to be enough to meet the LKYSPP minimum income for the over-65s of $1,421 month meaning that a significant number of the elderly live in poverty. The elderly are forced to continue working into their 70s and 80s, though unlike Father of the Nation Lee Kuan Yew not many are able to draw combined salaries and pensions from state coffers of $5 million per year (till 2011) and continue “working” into their 90s. Government income supplements like WorkFare only cover a fraction of the shortfall. They also subsidise employers meaning that wages are probably lower than they would be in the absence of WIS (Workfare Income Supplement).

The PAP Government may retort that the household budgets include amounts for holidays and recreation and entertainment to which Singaporeans who cannot manage their personal fortunes well are not entitled. (LHL and his dad have of course been astute in managing their own personal fortunes, ensuring their wives make staggering amounts of money either directly or indirectly from the Government even if they themselves are relative paupers only earning a meagre few million dollars a year,) They may also query the need for a three or four room HDB flat since many Singaporean extended families of as many as nine members crowd into a one or two room rental flat. And they would probably say spending large amounts on tuition is a waste of time as only children of elite families are clever enough to benefit from enhanced educational opportunities. Poor folks should also learn to stay healthy to avoid high medical bills, as the PM has advised with his customary sagacity.

The plight of many lower income Singaporeans was highlighted in a recent Al Jazeera article about the food insecurity suffered by many who lost jobs during the pandemic and for whom Government temporary aid schemes like the Covid-19 Support Grant only provided temporary support for three months. Private charities and food banks had to fill the gap but still the article suggested many parents skipped meals so that their children got enough to eat. In the 1990s my father used to say that a third of children went to school hungry, a claim that was repeated by former UN Ambassador Tommy Koh a few years ago before he was forced to retract it. Despite a staggering increase in the reserves since then, nothing much has changed. To access Government assistance through ComCare and other schemes, applicants will still be forced to prove that they cannot get assistance from family members first.

Research and the experience with pandemic stimulus payments in the US has shown how effective cash payments are at reducing poverty. The Reform Party’s manifesto included commitments to pay a seniors pension of $500 per month to the over 65s and child benefit of $300 per month per child to mothers. This is a bare minimum and should be easily affordable but could be restricted to households with incomes below $6,000 a month to reduce the cost and the amounts increased, though this would lead to disincentive effects. I also proposed a pandemic stimulus payment of $2,000 per adult Singaporean and $1,000 per child.

We also want to see a minimum wage of at least $10 per hour and preferably $12-15 rather than the Government’s Progressive Wage Model, which encourages employers to substitute cheaper foreign labour for Singaporeans and has no control on working hours and the prevalence of unpaid overtime. In these discussions on minimum income no mention is made of the fact that Singaporeans are forced to work much longer hours than workers in Europe and the US in order to achieve those standards. This makes it even more difficult for families with children who are forced to rely on Foreign Domestic Workers made to work well over 12 hours a day six or seven days a week so that both partners can work at least one job each (and often two or even three).

The Government has bleated on disingenuously about the need to rebuild the reserves through higher taxes on middle-and lower-income Singaporeans (the hike in GST from 7% to 9%) but refuses to come clean on what is the real surplus and how much the reserves have increased with the huge rally in global markets (though maybe not in Temasek’s Chinese investments!). Meanwhile Ho Ching clearly feels the offer of free mouthwash will jumpstart her new political career even as her husband refuses to tell us what she has earned over her nearly twenty years as head of Temasek. How much longer will Singaporeans proudly go without basic safety nets that would put a third world country to shame while the Government manipulates figures like GDP per capita to claim that Singaporeans are the richest people in the world? On the basis of these bogus statistics Ministers ensure their spouses and relatives (as well as PAP MPs and ex-civil servants who have proved their sycophancy) monopolise all the top multi-million dollar jobs at GLCs that are not taken by foreigners .

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