CORRECTION NOTICE: 

This article (dated 21 August 2023) contains false statements of fact. For the correct facts, click here: https://www.gov.sg/article/factually300823-a.

Another year another National Day Rally completed by our veteran PM. Every year the same clichés, the same old hogwash about safeguarding Singapore for the “ages” and looking after future generations. What Singaporeans need to know is what the PAP is going to do to alleviate the squeeze on incomes now as growing numbers find it harder and harder to make ends meet and more and more lose their jobs and find it difficult to find new ones. Yet as usual LHL’s speech is remarkably fact-free, allowing the PAP Government to accuse anyone trying to fill in the gaps, big enough to accomodate the Rajahs of Ridout’s palaces, of spreading falsehoods and POFMA them.

I will break down his speech into the main elements and refute all of them:

Majulah Package

Firstly the “Majulah Package”. I note that BG Lee says this will be $7 billion, details to follow in Budget 2024. But of course this is another of his conjuring tricks. The money is not real spending of course but another of these bogus transfers from one pocket to the other. There will be yet another long term fund set up and annual spending will be a small fraction of the $7 billion.

As I pointed out in 2014, the Pioneer Generation Package of $9 billion, announced with great fanfare by Tharman in that year’s Budget, only translated into extra annual spending of $200-400 million annually. The same sleight of hand was performed with the Merdeka Generation Package of $8 billion announced in 2018. Today the Pioneer Generation Fund is still nearly $6 billion, ten years later, while the Merdeka Generation Fund is over $6 billion. Only a small fraction has been spent each year while the money in the funds has accumulated interest.

The same will be true with the Majulah Fund which is ostensibly to help senior citizens. The actual spending each year will only be a small fraction of the total amount, undoubtedly only a few hundred million dollars a year.

I have frequently pointed out in articles in my blog going back to 2019 that the Government has to have at least $3 trillion in financial reserves. This is merely the result of working backwards from the Net Investment Returns Contribution (NIRC) of $23 billion a year, and assuming that this represents up to 50% of a conservative long term expected rate of return above inflation of 2%. To this total should be added the monies in long term funds and endowments of about $600 billion.Since PM Lee said in his remarkably unrevealing talk on “Singapore’s Reserves Revealed” that CPF balances are considered part of the reserves you should also add on another $525 billion for CPF holdings of Singapore Government securities. This would bring total financial reserves to close to $3.5 trillion.

Instead of the fake NIRC and an additional $4-5 billion of spending from endowments and trust funds the Government should be spending at least 3% of its total financial assets. It should also be spending a nominal yield on the land reserves of, say, 1-3%. This would also have the benefit of forcing SLA and its ultimate boss, Shanmugam, to work our land assets more efficiently. The Government could do this without diminishing the reserves. In fact far from diminishing they would still continue to grow, albeit at a slightly slower rate. So we could easily afford total real additional spending of at least $90 billion a year rather than $23 billion of fake spending and an additional $4-5 billion from endowments. This would surely enough to pay, when combined with Medisave and the enormous MOH Budget of $20 billion a year, for universal free health care for our citizens rather than families having to make life and death decisions because they can’t afford the drugs. Also it could pay for free education up to university level, free kindergarten, a modest old age pension and child benefits for starters

Financial Support for Unemployed Workers

The PM/BG said there would be no details till 2024 but again you shouldn’t be taken in. I have already explained above what the Government can and should be spending over and above current levels. Whatever modest level of support you’re given will be to convince you to go on courses of dubious value run by state-linked entities. The aim is not to find you jobs but to keep you from counting as unemployed so the PAP can claim that the unemployment rate is still low. People in full time education as well as NS men count as employed. That is why I have always said that we need to look at the Labour Force Participation Rate for Singapore citizens and not at that for the total labour force I have inferred from the total data that the rate for Singaporeans is shockingly low, perhaps below 60%. Since the Government hasn’t POFMA’ed me it’s a good bet I’m right.

New HDB Categories

BG Lee announced three new categories of BTO flats-Standard, Plus and Prime-instead of the old mature and non-mature. Again no facts until 2024. He said there will be more subsidies for the Plus and Prime categories plus a requirement to pay these subsidies back upon sale.As I’ve pointed out repeatedly HDB subsidies are a scam taking money away from the Budget and current spending and channeling it into the reserves. It allows the Government to increase land prices because you’re being “subsidised” to buy it. The Government insists HDB pay the full “market” price for the land (whatever that is when the Government owns almost 90% of the land in Singapore) which translates into higher prices for HDB buyers. As HDB apartment sizes get smaller and the plot ratio gets higher and higher (smaller and smaller apartments in taller and larger blocks) Singaporeans are being squeezed and the sliver of land they are leasing (with the right to occupy for only 99 years) becomes ever more miniscule. The converse of squeezing ordinary citizens into ever denser estates is that much of the land the Government owns is left vacant. As we’ve seen with the Rajahs of Ridout, the Government can simultaneously argue that Singaporeans must pay the full market value of the land, which is completely artificial since there is no real market, while DPM Teo can stand up in Parliament and say that the huge parcel of land Shanmugam was allowed to annex to his rental property was virtually valueless.

More Support Needed to Cushion GST Increase

The PM said that the Government was looking into providing more support to cushion the GST increase. It shouldn’t be necessary to remind Singaporeans that the Assurance Package is meant to be spread over five years. The headline figure was originally $6.6 billion which Lawrence Wong enhanced to $9.9 billion in this year’s Budget. It’s fully pre-funded but not current spending. According to the Statement of Assets and Liabilities dated 31 March 2022 the GST Voucher Fund stood at $9.1 billion. Like the Merdeka and Pioneer Generation Funds I’m sure that that the bulk of this fund will still be unused in five years time. Again it’s another example of the way in which the Budget is fake and the amount actual spending is much less than the figures announced by the Finance Minister. If the Government needs to spend more to cushion the impact of the GST increase it doesn’t need to allocate more since there’s more than enough money there already. So any announced enhancement will be both an attempt to buy more votes with fake spending and a means of diverting resources from current spending into long term funds and thus increasing the reserves at Singaporeans’ expense.

No Delay in Timetable for Succession Plans

Again this is another meaning-free phrase since no timetable has been announced anyway and BG/PM Lee shows no sign of wanting to step down. Since there’s no end date it’s like saying that there’ll be a change of leadership sometime before the next century or when the earth is swallowed by the sun, whichever comes first. Presumably LHL and his wife still want to secure the succession for their son Hongyi.

 Founding values of integrity and incorruptibility fundamental to Singapore

If PM Lee is doing “his utmost to keep the system clean” then I’m afraid he’s not doing very well.

Singaporeans have seen how the Rajahs of Ridout managed to secure from the very agency one of them controlled palatial mansions at rents a fraction of what much smaller private properties, properly managed, fetch on the open market. At the same time they struggle to make ends meet and have to bear skyrocketing housing costs. Citizens can thus judge for themselves how far the values of our pledge to build a democratic society based on justice and equality are upheld in BG Lee’s Singapore.

Singaporeans have also seen how the desire at all costs to attract questionable businesses like F1 has ensnared another Minister who has not yet been cleared of allegations of corruption. And that’s before the trillions of dollars of dirty money, of which the recent arrests and property and asset seizures are likely the tip of the iceberg, that the PM and his Ministers have allowed to enter Singapore, bidding up asset prices and worsening inequality on a massive scale. The unpalatable truth is that despite the fawning of Western agencies and governments, ever susceptible to the PAP’s sophisticated gaming of global indices of corruption and transparency, Singapore’s apparent success is built on only two things. One is squeezing residents to create a massive government and current account surplus to feed the reserves, whose purpose and size is unclear. The second is huge inflows of dirty money attracted by low taxes and a blind eye turned to money laundering and foreign tax evasion.

The resultant inflation of asset price has only benefited owners of land and fixed assets including of course all the PAP Ministers and their families and relatives. At the same time these hypocrites preach to you about the need to tighten your belts. They also claim it would be unfair to allow you to own your HDB in perpetuity rather than lease it from them for a mere 99 years because the land must be preserved for future generations. If you can’t see you’ve been played then you can’t be helped.

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