Choo Zheng Xi / Editor-in-Chief
Where does the buck stop?
Minister of State for National Development Ms Grace Fu stated in Parliament that the original rationale of the Town Council (TC) scheme was to ‘devolve’ responsibilities such as financial accountability to individual MPs.
“Devolution” is a term used to describe giving local government more autonomy. It is often used to describe the degree of self-government the United Kingdom permits Scotland, Northern Island and Wales.
In a country as small as Singapore’s, has “devolution” become a euphemism for passing the buck of safeguarding $1bn worth of Singaporean money to TC managers?
A government that brands the country “Singapore Inc” can afford to take a page from corporate best practice. Sadly, the reality is that the level of TC probity is appalling.
In a company, the finance committee of the board of directors will seek out professional advice before making an investment. Unless authority is granted to make the investment, it has to report back to the full board for approval. The company’s shareholders are also allowed to grill the board on the state of these investments in an annual general meeting (AGM).
Dr Teo Ho Pin, coordinating chairman for the PAP TCs, told Today newspaper that the TCs cannot reveal their investment strategy. We cannot imagine the chairman of a board of directors saying that at an AGM
The yardstick of transparency for TC funds is higher, especially because public funds are involved. Unfortunately, when it comes to municipal funds, the PAP has decided to take a laissez-faire approach to financial management.
In a global financial crisis whose roots can be found in a gluttonous appetite for financial market deregulation, why is the PAP taking its hands off the TC steering wheel?
Where is our money?
While Singaporeans know that TCs are allowed to invest up to 35% of the $1bn in sinking funds they hold, we have absolutely no idea how this money is being used.
If not for a Parliamentary question by Nominated Member of Parliament Ms Eunice Olsen, Singaporeans would still be in the dark about their TC’s exposure to structured products.
A pressing question remains unanswered: where is the rest of our money invested, and how is it doing?
Published TC audits reveal next to nothing about where these substantial amounts are being invested. These documents are general audits running into an uninformative 3-5 pages. The 2004-2005 Sembawang TC, which managed $237 million sinking fund as of 2006, has a published audit that is 5 pages long, with no details as to where that money is being invested.
Why the hoarding?
The common refrain in this Parliamentary sitting was that hindsight is 20/20: no one could have foreseen the scale of the economic crisis.
However, this doesn’t answer a very important question: why do TCs need to sit on so much money in the first place?
While budget surpluses are returned to Singaporeans in the form of tax rebates or Singapore shares, and listed companies pay out dividends, it is not unreasonable that surplus money from our TC’s operational costs should go back to residents.
There are many ways to return the value of surplus TC funds. It could be in the form of a Town Council public assistance grant, to help the neediest in the constituencies who might not qualify for government public assistance. It could come in the form of Service and Conservancy rebates.
However, exactly the opposite is being done. In an article by Mr Leong Sze Hian last year, TOC asked why TCs need to sit on almost $1bn in sinking funds. While a freeze on S & C charges was announced for 2008, what the government did not highlight was how these charges have been increasing every year prior to this even as their funds have ballooned.
Full and frank disclosure
For now, public anger is at a high watermark. The best way to bring an end to this sorry episode quickly is full and frank disclosure. The TCs need to release full details of their investments: information should no longer be extracted by Members of Parliament like a dentist extracting teeth.
There is no rational basis for Dr Teo’s refusal to tell Singaporeans where their money is going. We have a right to know.
And to the elected and nominated Members of Parliament, particularly Ms Eunice Olsen, who have helped to pierce the veil of secrecy, the people of Singapore owe you a debt of gratitude in bringing these unsavory truths to light.