Hi everyone

I’m speaking to you today to give you my take on Budget 2022. I’ve written about the fake news event that is the Singapore Government’s Budget for at least ten years now and very little has changed. We still get zero transparency, a smoke-and-mirrors exercise or what I have characterized as a shell game or magic show in which the Finance Minister shuffles money around from one silo to another. If you don’t keep your eye on the money and get distracted, then suddenly it disappears and instead of what should have been more than enough money to give every Singaporean citizen a basic income and a reward for all the austerity and hard work they have put in over the years, it’s become a gaping hole that PM Lee says must be filled by raising taxes. A few years ago PAP MP Vikram Nair characterized Chen Show Mao as being like a Nigerian scam artist for saying in Parliament that the Government should do more to help the less well off because he could not say where the money would come from. But the real scam artists are the PAP Government, starting with PM Lee, because they continually tell you that the Government has no money, that Singapore will not become a European style welfare state and that no one owes you a living, whereas when I do even a little detective work I can see that the Government’s resources extend to trillions of dollars.

I find it richly ironic for the Finance Minister to say that no one owes Singapore a living because the PAP think that you owe them a living in perpetuity, not only for them but for their spouses, children and relatives who too often seem to hog the generous Government scholarships on offer and are fast tracked to multi million dollar salaries with Government agencies or GLCs. The example is set from the top downwards with PM Lee not only paying himself millions of dollars a year and inheriting a colossal but undisclosed inheritance from his parents’ many years of public service and sacrifice but employing his wife until very recently on a total compensation package that he arrogantly refused to disclose but is certain to have been many tens of times his own salary. It’s continued with his son being appointed to head the Technology Agency, in charge of AI surveillance of Singaporeans and before that getting a job at Google, whether it was a secondment from the Civil Service or a job given him at the same time as Google received lots of tax incentives from his Government. The PAP think that Singapore owes them a living and they deserve to take outsized rewards out of state resources while many SIngaporeans endure poverty and hardship and the majority of you find providing for your families a struggle, working the longest hours in the developed world for a wage per hour that would be considered derisory in most of the countries that Singapore comfortably tops if we looked purely at GDP per capita. When LHL talks about the exciting prospects ahead for Singaporeans, he is probably thinking of his own family, whom he called “natural aristocracy”, rather than you.

I want to start my discussion of the Budget by asking you to focus on a number. Just one number so far as I am trying deliberately not to put in too many numbers to my talk today as I don’t want you to be turned off. The number is

$3 trillion.

I will repeat it ….$3 trillion. What is this number? It’s my estimate for the total size of the Government’s financial reserves. This excludes the value of the physical assets the Government owns which includes 90% of the land in Singapore as well as Changi Airport. You might ask how I derive what might appear to be an improbably large number. Well it’s all set out in my blog article i“Heng’s Desperate Attempts to Deceive Singaporeans End Up Revealing Enormous True Size of the Reserves”. You can find my blog at kenjeyaretnam.com and I hope after listening to me here you will go there to follow my argument and also read my analyses of the Budget stretching back to 2012.

I work backwards from the Net Investment Returns Contribution which by law is up to (and thus likely to be substantially less than) 50% of the long term real returns of Temasek, GIC and MAS. In Budget 2022 the NIRC is about $22 billion. If we assume (not unreasonably) that that is about 1% of the total assets then we get a figure of $2.2 trillion. However under Article 142 of the Constitution the Finance Minister must exclude from the calculation the liabilities represented by Government borrowing and also any amounts earmarked in the special purpose funds that he is so fond of setting up but never get spent. If we subtract from the total assets of $1.4 trillion in the latest Statement of Assets and Liabilities, published with the Budget Statement, the amount in the Government Securities Fund of $824 billion then that leaves us with net assets of $576 billion that are not used to calculate the NIRC. So the Government’s net financial assets are at least $2.8 trillion and its total assets are about $3.6 trillion. The Government historically has earned a much higher rate of return on the long term funds that it borrows from Singaporeans through CPF which is hardly surprising given that its weighted average cost is not much more than 2.5%.

This means that the Government’s net assets per Singapore citizen are close to $800,000 and if we only count adults then it’s well over $1 million. Let’s not forget that it also owns 90% of the land in Singapore and the other con trick that the Gov plays on you is that all the value in your HDB will ultimately revert to the Gov once the 99 years lease is up.

Why then does the Gov need to raise taxes? And why does it do it through the regressive form of GST when the top rate of income tax is only 22% (raised to 24% next year) and most wealth apart from property remains untaxed? I covered this exhaustively in my previous talk and I admit I am mystified with regard to the former. The Government’s aversion to taxing the rich has a lot to do with the interests of LHL and his family and the PAP Ministers and MPs, their spouses and relatives whom LHL has co-opted to allow them to grow richer along with him provided they continue to convince Singaporeans that they’re really better off with a Government that spends nothing on them and gives them nothing than people in rich countries who benefit from excessive welfare.

Why do Singaporeans get such an abominable bargain from their Government which gives them very little despite its huge resources? Why do they put up with it year after year when the rewards are so small. Lawrence Wong boasted in the Budget that Singapore delivers high quality services despite expenditure being only 18% of GDP. But that’s just another fake statistic from the Government that refuses to apply POFMA to itself. If we count the whole of the state sector including Government-owned and -linked companies as well as statutory boards, then the Government owns probably in excess of 50% of the economy particularly when the part of GDP represented by MNC tax avoidance is stripped out, which like Ireland, is extremely large.

In contrast HK residents this year are going to receive HKD 10,000 from their Gov, or about Singapore $1,700. Reform Party advocated a stimulus payment of $2,000 per adult Singapore citizen and $1,000 per child. Instead Singaporeans will receive just $700-$1600 in vouchers spread over five years. I don’t do the Maths for you, according to LHL you have the highest quality education in the world, but that’s just $140-$320 a year.

HK’s Government, which is now just a branch of the Chinese Communist Party, has far fewer resources than ours. If we take just 4% of the Government’s assets then we should be spending $120 billion a year not the fake NIRC of $22 billion, of which historically most has been saved not spent. No reason for Singaporeans not to have universal health care, free education through to university, an old age pension and child benefit, even a universal basic income. Singaporeans should get a dividend from the reserves every year. If Lawrence Wong says Singapore is not and never will be a Scandinavian or European style welfare state then he needs to hand back the excess reserves to Singaporeans.

And don’t be fooled by LW’s Fake claims that some in Singapore will get 10 times more in Gov subsidies than the extra amount they pay in GST. If they cut down on their spending to almost nothing then the ratio of the amount they receive in fake ”subsidies” to the extra GST they pay could theoretically be infinite. The annexes to the Budget illustrating the subsidies are the typical fakery we can expect from a PAP Government. Much of the so-called subsidies are in the form of Medisave Top-ups and CDC vouchers (which is corrupt since NTUC Fairprice, the business arm of PAP, will benefit). Utility rebates are meaningless when energy bills have doubled for most households and may double again as oil and gas prices go through the roof as a result of Russia invading the Ukraine.

I’m still mystified why you continue to vote for the PAP election after election. Why are you taken in by LHL and Lawrence Wong’s claims that you benefit from working longer hours than anyone else in the developed world to make ends meet while you receive less from your Government than citizens of many much poorer countries despite the huge reserves ours has? Next election cast off your chains and take your country back from these rogues who lie to you constantly while lining their own pockets and those of their families with state funds. It truly is Animal Farm.

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