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Smoke and mirrors at “An Honest Conversation”

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By Kenneth Jeyaretnam

TOC readers will be aware of the farce surrounding registering for and attending this event. However, having admitted Abdul Malik, who is not registered as a Bishan-Toa Payoh voter, Hri Kumar had little choice but to admit me. I was told by Ariffin Sha  (17), who arrived much earlier, that it took about ten minutes of heated discussion among the organisers before they finally decided they would lose more by barring us than by admitting us.

I‘ve never been to one of these before so I thought you might enjoy a first hand account. After all the fuss I discovered that the hall was still half-empty when I entered so Hri Kumar need not have worried that our attendance would deprive his constituents of places. In fact the start of the forum was delayed by half an hour in an effort to fill the hall. There were plenty of empty seats.

A very friendly lady came over to me and literally dragged me over to where she and her friends were sitting. They were all retired nurses. They all wanted to shake my hand and I was giving out my card and there may even have been a selfie or two. It was all getting quite jolly until the organisers made us return to our seats and behave ourselves.

We started with a slide show. In an effort to control us and pre-empt any independent thought there were various “Ground Rules” for the discussion. The first rule was that there were to be no ”motherhood statements”. The second rule was that there was to be no presentation of alternative proposals unless the downsides were clearly explained. The third rule was that it would be impossible to make one group better off without making another worse off.

Of course by agreeing to play by Mr Kumar’s (and the PAP’s) ground rules you would essentially be admitting that there was no alternative to the current CPF policy.  You would be playing the PAP’s game that they have a monopoly on technocracy and efficiency. Any departure from their model, which has run for fifty years, could only be justified on the grounds of equity or compassion and would result in economic costs.

In case we were of low intellect Hri Kumar reinforced the slide show with some commentary that the forum had nothing to do with politics but was about finding the best solution in the interests of all Singaporeans. As I said in my article, “Eight Dishonest Things About Hri Kumar’s Honest Conversation”, it is ridiculous to pretend that politics does not enter into every decision that affects our lives.

Mr Kumar said the discussion would focus on three questions:

  1. Should a person be allowed to withdraw her CPF at 55 if she then squandered it all in a few years?  Should society then pick up the tab of looking after that person?
  2. If there is to be a Minimum Sum, what should it be?
  3. Ideas for improvement to the CPF system

At this point Mr Kumar handed the microphone over to an investment adviser who ran through the mechanics of the CPF, including the various investment schemes available.

When she asked for questions, an old woman, a retired teacher, stood up and after declaring her love for Lee Kuan Yew and the PAP she began to recount, with great bitterness, the injustices inflicted on her by the CPF and the IRAS.

She bitterly denounced the IRAS, which had allegedly taken the property tax due on her property from her POSB account without getting her permission. She then asked the reasonable question of why she was not able to withdraw the balance in her CPF despite her advanced age. It was clear that many in the audience supported her particularly when she asked why no representative from CPF was there to answer questions on the CPF at a forum about the CPF.

However as she continued to demand answers a PAP grassroots adviser, a middle-aged woman, was seen signalling to the organisers to move her off the microphone. At this point one of the organisers, a bald man with a goatee, actually laid hands on her to try and move her away. Most of the audience were pretty shocked by this and the organisers were forced to give up their attempt to move her.  I suppose you have all seen the video by now.

After she had sat down, Hri Kumar, like a magician entertaining children at a party, produced another slide show. This was of the Budget presentation used by the Finance Minister to support his argument defending  the Minimum Sum and CPF Life scheme.

Hri Kumar argued that the slides showed that the government was running a balanced Budget or a slight deficit and that there were no additional resources available to help Singaporeans who did not have CPF savings. The government was already spending as much as it raised in taxes plus the Net Investment Returns Contribution (NIRC) from the reserves. If there was to be any more social spending then taxes would have to rise.

Now I happen to disagree with the Budget as it is presented by the PAP.

It does not balance, there are discrepancies and some black holes where figures should be.

So, I stood up and challenged Hri Kumar on this point.

I pointed out that the NIRC were not being used to fund actual spending but that there was an unexplained shuffling of funds between accounts.

The NIRC were matched by the figure for Special Transfers, which were placed in special funds set up by the Finance Minister.

I told Hri Kumar that I had written extensively on this in “Smoke and Mirrors”.

For instance the $8 billion Pioneer Generation Package was wholly provided for in 2014’s Budget even though the actual amount of spending was only budgeted at $240 million in 2014.

In other words, though they gave you the headline figure of $8 billion, only $240 million was planned to be spent.

I also pointed out that the NIRC did not even represent 50% of the returns from the reserves, as they were only some $8 billion, whereas the true surplus was some $30 billion in 2012.

Perhaps Hri Kumar was not familiar with the Budget or the arcane intricacies of Government accounting, being only a Senior Counsel with Drew and Napier, but Hri Kumar’s attitude was patronizing.

After listening to me speak, with a condescending smile and some jeers from the grassroots in the front row, he did not answer my point (that the government had substantial resources available to help Singaporeans without needing to raise taxes).

Instead he said I was welcome to publish my own figures. Well, of course. I have done so many times.

When I said that the government would not give us the figures we needed he said I could use the ones he had put up on the slide. Conscious of the need to behave well as a guest at the forum, I did not press the point but decided to sit down.

Mr Kumar then said, “We’re dealing with reality here”.

I found this deeply ironic since Tharman’s Budget presentation is largely a work of fantasy whereas my figures are drawn from the PAP government’s own statistics.

I also thought if he says he is dealing in reality, he is suggesting that I am dealing in fantasy. In other words he is calling me a liar.  Maybe I should get all PAP on him and sue for defamation?

We were then split up into discussion groups. I was put into a discussion group in a separate meeting room with non-residents. These included Ariffin and the aforementioned Malik.

I thought it was a kind of quarantine zone putting us all where we couldn’t infect his residents with our ideas.

When I sat down in that room I looked at the enormous glass coffee table and thought, “Finally some transparency from the PAP.

I was asked what changes I thought needed to be made to the CPF system. I gave the views set out in the Reform Party’s White Paper on CPF, which I won’t reiterate here.

Most of the members of the discussion group wanted to be given the option to withdraw their CPF at 55 and manage their own finances even if that meant that the state would not pick up the tab if they became destitute.

Hri Kumar and his support group repeated the argument made in the open forum: that taxes would have to rise substantially if we were to move away from a fully-funded pension system to a more generous welfare system.

However this was robustly rebutted by the participants who said that they already paid enough tax, in the form of ERP, GST and COE.

They agreed with me that it was ridiculous of Hri Kumar to cite HDB as an asset that had vastly outperformed other investments since HDB is only 99-year leasehold. The discussion group felt that as an HDB apartment was going to be worth zero at expiry, it would be a rapidly depreciating asset that would not provide any security for their children. This is why I always advocate giving HDB owners freeholds.

I said that actually it was not true to suggest that median income earners in countries with more generous social welfare systems paid more tax. In fact they were net gainers from the tax and benefit system once things like child benefit, free health care, free education and other income support measures were taken into account.

However I found myself being shouted down by two of the participants who claimed that they paid far more tax in the UK and Europe.

One was a young man who was hardly representative of the median UK wage earner as he had no children and worked in the financial sector where his income, it can be safely assumed, would have been several times the UK median wage. As he was young he was unlikely to have been a big user of the free health service provided by the NHS.

The other was an older man who just shouted about how he had had to pay high taxes in Spain but failed to produce any evidence for this. Instead he just showed an ability to stop an opponent from putting forward any evidence that contradicted his view.

It was disappointing to hear one participant, a retiree, say that if the government solved the CPF problem and returned his money to him at 55 he would definitely be on the side of the government.   It seems that generation is not going to be shaken in their loyalty to the PAP, yet.  They want a nicer PAP, a PAP that listens and a PAP that gives them their money back but they still want the PAP. I felt sad that many Singaporeans do not seem yet to have realised there is no need for gratitude as the PAP’s power and control of  the money stems from the people.

We returned to the hall for a final wrap-up of the morning’s discussions. It was clear from Mr Kumar’s wrap-up that the feedback from the participants was not going to affect government policy. Instead the PAP would continue to justify the retention of the CPF with a faulty logic and smoke and mirrors calculations.

Hri Kumar painted a scenario where Singaporeans are too stupid or childish to make their own savings and investment decisions. That returning their CPF at 55 will lead them to squander their savings and that then taxes will have to rise sharply to look after these naughty citizens.  I suppose it was just a presentation intended to impress some senior citizens who had been bussed in. But actually everyone there seemed genuinely worried about their retirement and future and I do not think they were any less worried when they left.

I was pleased to see how full of holes and deliberately deceptive the PAP logic was. I do not think they are going to be able to defend these changes to the CPF at all well. If they stick to the Minimum Sum increase as planned it may very well have disastrous repercussions for them. But perhaps fear of freedom and the Emperor Complex will win out again at the crucial last moment?