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The Mystery of Why the Government Wants HDB To Make a Loss Solved

Recently the PAP have made use yet again, in a typically arbitrary high-handed and arrogant manner of their authoritarian POFMA law. LHL and his Government find this a brilliant tool to intimidate Singaporeans and stop them from questioning obvious discrepancies or piercing the veil of secrecy that shrouds the reserves and the Budget. Despite my relentless questioning of Government fabrications and accounting tricks to hide money and the true state of the finances, I have never been POFMA’ed which would suggest that I am getting close to the truth and that answering me might open a can of worms since they would be obliged to provide more information. Instead they ignore me because they know I will not be intimidated and nothing will induce me to shut up. I will keep on asking questions until I get answers.

This time the POFMAs were issued because the individuals (including the ex-chief economist at GIC) had asked why HDB BTO flats are not priced using the original acquisition cost of the land plus the construction costs. Since the majority of this land was “acquired”, a euphemism if there was ever one, by the Government for a tiny fraction of its true value back in the 1960s and 1970s, the true cost of new BTO flats (most of which constitutes land cost) is much lower than the supposedly “market” price the HDB sells the flats for. Some of the individuals from whom the land was expropriated were extremely wealthy but many were not, including small holders who lost their farms and were forced to live in relative poverty. Many in the Opposition have asked going back at least a couple of decades why the Government does not simply price the cost of BTO flats at the original book value of the land plus the cost of construction.

The Government’s standard retort, most recently by Sim Ann and in the form of the message that those POFMA’ed were forced to carry as well as on the Government website (Un), is that for the Government to charge anything less than market price for the land would be deplete the reserves and thus shortchange future generations. I have always found this argument to be disingenuous since if the Government was concerned about future generations of Singaporeans it would do a lot more to provide support to families and make education free up to tertiary level so that younger generations had the best possible start in life. Rather than help disadvantaged Singaporeans the PAP have always preferred to offer scholarships to talented foreigners who are then invited to work here and become citizens without having to do NS, and to welcome FTs with mediocre degrees who similarly enjoy low taxes and no NS obligations.

But in any case talking about a “market” price is nonsense when the Government owns nearly 90% of the land and a similar proportion of Singaporeans live in public housing. With a nearly complete monopoly the “market” price is wherever the Government chooses to set it.

So why does the Government not set the price of land lower or at least set it at a level that would mean that HDB would not make a loss every year? HDB’s loss is This necessitates the Government, or to be precise the Ministry of National Development (MND,) providing a grant every year ($4,4 billion in 2022) to HDB. Why artificially make a loss by requiring HDB to pay the “market” price for land which it purchases from the Government and which the Government paid next to nothing for in the first place.

The answer came to me after I spent some time pondering this question. As usual the PAP put up a smoke and mirrors misdirection to confuse and bamboozle Singaporeans. Having HDB overpay for the land. using a market price that is meaningless when the Government controls the supply, and then having the MND reimburse HDB for its loss through the Budget, provides a conduit by which revenues from taxes like GST and income tax is “spent” buying the land for a second time after it was originally bought when the land was acquired, or rather expropriated, from its original owners. The money thus spent represents part of the Past Reserves and can then be channelled to Temasek and GIC, which are controlled by the PM and, at least until recently, his wife, and which are not accountable to Parliament for their performance.

This sleight of hand just represents one among the many fake accounting tricks and potentially outright fraud that the Government to keep resources out of the hands of what it regards as undeserving Singaporeans and to argue constantly for the need for taxes to rise. I have highlighted several of them in the past including the Net Investment Reserves Contribution which in many years has gone straight into long term funds of which only a small fraction is spent every year, contributions from long term funds and endowments that mysteriously appear again under current expenditures to be set against current revenues and mysteriously exponentially rising healthcare (and also education) expenditures which also are set against current revenues in the Budget while at the same time fees collected from Singaporeans by the privatised MOH Holdings are not shown and may also be channelled directly to Temasek and GIC. This, along with overpayment for land, may be one way the Government disguises losses by our sovereign wealth funds and keeps up the facade that they are making if not great at least acceptable returns.

I admit it always puzzled me when Tharman and then my old Cambridge colleague, Heng Swee Keat (of the East Coast Plan), waxed lyrical about the generous subsidies given to Singaporeans for housing, healthcare and education and contrasting this with democratic countries with proper social safety nets. There are no real subsidies, just the Government making you overpay or pay twice for what you already own and diverting the money into unaccountable private companies managed by people, including the PM’s wife, PAP connected persons and relatives as well as a whole army of foreign sycophants and brown nosers, whose salaries you as a lower class peasant are not entitled to know, while making it look as though there are no resources available to help you with the problems you face. Singaporeans are perpetually putting money into the but no money ever seems to come out. If that is not the perfect Ponzi scheme, I do not know what is. If I do not get POFMA’ed for this blog then you will know I am right.


  1. Thank you for another interesting an erudite piece. If I may, I think a graphic to illustrate exactly how these transfers are channelled between the various gahmen entities would go a long way in helping explain what is happening.

    I might add that why you have yet to be hauled up before the powers that be for some of the things that have been published is an enduring mystery to me. Notwithstanding the factual accuracy (or otherwise) of some of your posts, the language in which they are couched might in itself have led to you being taken to task for them. One cannot help but wonder whether there is some sort of Faustian pact somewhere!


  2. I am curious to hear the govt’s side to this piece. As a matter of fact, I don’t recall hearing their output to your input provided in this forum, in the past [correct me if I am wrong]. Keep it up, Kenneth. Good work.


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