By Sharon Ng
SingFirst urged the Singapore government not to keep growing the reserves but, instead, to give Singaporeans back the returns on the investments made by their hard-earned CPF money.
During a public forum held at Hotel Royal on 15 August, three speakers, Chris Kuan, Leong Sze Hian and Roy Ngerng, took turns to speak on the hot button issue of CPF returns, with Tan Jee Say as the moderator.
Approximately 25 SingFirst members were seen in attendance, donning the official blue polo shirt. At its peak, the forum was attended by more than 130 people, with the small room partitioned from a larger ballroom filled to the brim.
When asked when SingFirst will introduce its candidates to be fielded at Jurong and Tanjong Pagar GRCs, Sec-Gen Tan Jee Say remained tight-lipped. He said the party has about 20 potential candidates, but he will wait for the PAP to reveal their candidates first, and will only reveal their 10 candidates on Nomination Day. Tan also questioned if PAP candidate Chee Hong Tat will continue to be fielded, given the recent controversy on his perceived flip-flopping on the issue of the learning of dialects.
Chris Kuan took to the stage first to present several estimates on the size of our reserves and the estimated long-term rate of return of our reserves. A retired banker, he took pains to crunch the numbers and explain the assumptions. He presented the results in ratios, and real and nominal terms.
He estimated that the government’s debt is about S$400bn, out of which about S$260bn is derived from Special Singapore Government Securities – an IOU from the CPF. He went on to estimate the size of the Singapore Reserves to be around S$561bn, with the breakdown as follows:
The long term average return from the Singapore Reserves, after taking inflation rates into account, is estimated to be around 5.5%, while the CPF returns an average of 3.7% to account holders. His message is that the returns from the reserves can be comfortably distributed to CPF holders without affecting the real value of the reserves. Currently, there is no limit to growing the reserves. However, Singaporeans are currently experiencing many problems due to this unfettered growth of reserves. These include low CPF interest rates that do not compensate sufficiently against inflation, resulting in insufficient funds for retirement. The individual account holder’s CPF is also drained by expensive and long-term housing loans due to the high prices of HDB flats; this burden is exacerbated by high medical costs and educational expenses.
As for how to maintain the reserves while giving CPF holders higher returns, Kuan reminded the audience that most of the land in Singapore is sold in the form of 99-year leases. This allows for an auto-replenishment of its assets, which will in turn be used to generate returns to be ploughed back to the reserves.
The next speaker was financial analyst Leong Sze Hian. In his usual casual and humorous manner, he went further to say that the gains from the returns from CPF funds are the people’s loss.
Although the forum planned to feature Kenneth Jeyaratnam, economist and Secretary General of the Reform Party, Roy Ngerng attended in his absence. Jeyaratnam had called in the morning to inform the organisers he will be absent as he was conducting Reform Party walkarounds that day.
Ngerng received a rousing reception when he took to the stage. He presented archived information captured from government websites related to the GIC and Temasek Holdings and also included some of the charts and information found on his blog, thehearttruths.com.
Delivering an emotional speech, Roy recalled cases he encountered as a social worker, and questioned why it is so difficult to qualify for healthcare subsidies in Singapore. While he spoke passionately about the low government spending and asked provocative questions, he steered clear of making accusations due to the recent suit filed against him by PM Lee. His speech drew cheers from the crowd, who seemed eager to show their support.
Overall, the forum, the third in its series, was well-organised and well-attended. However, almost 80% of the attendees seem to be above 50 years old. One would think that a hot button issue like the CPF would be pertinent to younger Singaporeans too.
As one of the newer parties to contest in GE2015, it remains to be seen if SingFirst can run their campaign effectively and attract the attention and support of voters in Jurong and Tanjong Pagar GRC.