As Budget 2023 approaches the PAP Government is beginning to soften the ground for tax increases to close an invented “funding gap”. Today an article on LHL’s personal propaganda channel, Channel News Asia, which until recently was actually under his wife’s direct control, said that Government spending as a percentage of GDP would rise to about 19 per cent to 20 per cent of gross domestic product (GDP) between the financial years of 2026 to 2030, and possibly exceed 20 per cent by the end of the decade.

The article highlighted that “Healthcare will be a key driver of this anticipated increase in national spending, which currently stands at 18 per cent of GDP”. This reiterates Lawrence Wong’s astonishing assertion in last year’s Budget that healthcare expenditures would rise from about $20 billion in 2022 to as much as $60 billion p.a. by 2030 a three-fold increase. Healthcare expenditures have grown ten-fold since 2006 yet Singaporeans have not seen a commensurate change in the quality of healthcare received.

It is astonishing because even at current levels the Government appears to be spending more per capita (if one divides total healthcare expenditure by the number of Singaporean residents and exclude Employment Pass holders and foreign workers, all of whom should have healthcare paid for by their employers) than the UK spends on the NHS (see my article here as well as my questions to Lawrence Wong which he refuses to answer). If expenditures rise to $60 billion, Singapore would then be spending some $15,000 per Singaporean resident or nearly $17,000 if citizens alone are the relevant criterion (since arguably PRs should be required to pay for health insurance). This is a staggering amount particularly as all treatment under the NHS is free at the point of delivery and prescriptions are heavily subsidised (and free for those over 60 or suffering from chronic conditions. The NHS is far from perfect and long waits for beds and ambulances show that it is severely underfunded but similar or worse delays seem to have become the norm in Singapore.

As usual the PAP tell only half truths or outright lies. We see the expenditure side, which appears to be inflated, perhaps grossly, but not the revenue that the Government collects from Singaporeans for all medical treatment. It claims treatment is subsidised but charges can still be substantial and despite Medisave balances having reached a whopping $110 billion and still rapidly growing as well as the Medishield insurance scheme being in substantial surplus, Singaporeans are still required to pay out of pocket (which for most is only 80% or less of what they earn after deduction of CPF) for medical treatment.

The Government hides the revenues collected from Singaporeans in shadowy private companies, grouped under MOH Holdings, whose accounts are hidden behind a paywall. Why are the accounts not easily accessible to Singaporeans? The revenues collected should be shown in the Budget since more than half of MOH’s expenditure goes to these entities in the form of grants and subventions. Yet year after year the Budget is passed and our current crop of Opposition MPs are silent on this apparent fraud.

Then there is the fakery of the Net Investment Returns Contributions (NIRC). These are shown growing steadily year after year, to reach $22 billion in 2022. The PAP highlight this growth to demonstrate to Singaporeans that they are supposedly receiving a growing dividend from the reserves and that this shows a wise and prudent government harvesting a surplus from you but investing it to benefit you. Strangely the growth in NIRC almost seems to mirror the increase in healthcare expenditures, from which Singaporeans have seen little benefit. I have highlighted for many years that the NIRC is a fake smoke-and-mirrors exercise since it has been matched almost entirely by contributions to endowments and trust funds. In some years the amount set aside for endowments and trust funds has been more than the NIRC contribution, though in the last two Budgets this has decreased, probably because I have drawn attention to it so often. The Finance Minister has been creative at inventing new funds to squirrel away money in such as the $5 billion allocated in recent years to the Coastal and Flood Protection Fund and to the construction of Changi Airport Terminal 5. These are all long term projects where money will be spent over several years often far into the future if at all. For example Tharman allocated $8 billion to the Pioneer Generation Fund back in 2014 but only about $200-300 million has been spent per year and the Fund still stands at some $7 billion or so. This is not current spending and for the Government to classify it as such is false to the point of being fraudulent. I have also raised concerns that the Government might be making Singaporeans pay twice for the same expenditure by putting expenditures from these funds through the Budget again as current spending.

Finally (for now at least though doubtless there are other frauds and subterfuges being used to artificially inflate spending and hide resources from what the Government views as greedy and unworthy Singaporeans) we there is the HDB subsidy scam which I have recently highlighted.By overpricing the land sold to HDB (easy to do when you own all the land) and then giving a fake generous subsidy to Singaporeans paid for by a grant from MND to HDB the Government channels money to Temasek and GIC through the Budget while at the same time loudly telling Singaporeans how generous it is and how grateful they should be. The grant given to HDB to cover its loss on the cost of the land was $5 billion in 2022 (though this covers future losses on sale as well so it is clear that the usual PAP accounting sleight of hand is going on and HDB’s true loss may be much less).

When all these scams are added up, the fake “funding gap”, used as a justification for raising taxes, disappears and in fact the Budget should be in substantial surplus, even without considering the wider Government surplus which should include earnings from land sales as well as from Temasek, GIC and MAS. I have calculated that the total financial reserves should be at least $2-3 trillion, possibly more. This of course does not include the value of the land. Instead of the bogus NIRC, which seems to be largely a transfer from one pocket to another, whether matched by transfers to endowments and trust funds or through bogus rising healthcare expenditures that do include revenues. Singaporeans should not be fooled by Budget 2023, which will be another fake exercise in hiding resources from Singaporeans while proclaiming that taxes need to go up to cover bogus “funding gaps”. They should demand a change of Government whose first task will be to assemble a team of forensic accountants to go over the books with a fine tooth comb (taking rather more than the 100 man years the late President Ong Teng Cheong was told it would take) and finally solve the mystery of why for 50 years the Government has adeptly extracted a massive surplus from Singaporeans but given nothing back.

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