Transcript of Lim Tean’s speech on Budget 2018

Transcript of lawyer and opposition politician, Lim Tean’s speech on Budget 2018. 

My Fellow Singaporeans.

A few moments ago the finance minister Heng Swee Keat finished delivering the government’s budget to Parliament.

Now it was a long budget speech and necessitated a 15 minute break in between.  I will be studying the details of the budget carefully, and I’m sure that I will have more to say in the coming days.  But this evening I want to share with you my initial impressions of this budget.

Now to me there are 2 words indelibly stamped in bold on this budget and those 2 words are “no substance”.  This budget is notable for what it did NOT say rather than what it said.
When you take away all the fluff, when you strip away all the buzz words and the euphemisms; this budget did not give us a roadmap as to where our economy should be brought to in the coming decades.

It was a budget that shirked responsibility.  No Mr Heng spoke extensively about innovation, and why we should make innovation pervasive in our economy.  I agree with him on that.  Innovation and enterprise are the key engines to productivity and growth in our knowledge era. And these are the key engines which will determine our quality of life in the coming decades.

But, the fact of the matter is Mr Heng and this government have no idea how to make Singapore a truly innovative economy and society.
A good indication of how innovative a country is, is the Global Innovation Index which is published every year around September.

It has been published for 10 years running now, and if you examine that index my friends, you will find that Singapore actually is not an innovative country.

We rank number 1 in terms of innovation input, which means how much money the government commits, it spends in making our society and our economy innovative.

But we are only mid-table, we rank 63 out of 127 countries in the innovation efficiency ratio league. We are second last in the whole of ASEAN in that league.  Only Brunei at 124 comes behind us, and we know the reason why; they are an oil dependent country.

But all our notable neighbours, Thailand, Malaysia, Philippines and even Indonesia rank higher than us.

Now, why is that you may ask, and I proffer a reason. It is because this government wants to control innovation like it controls every other thing.

You would have noticed from Mr Heng’s speech today when he touted all the government agencies and all the schemes that are laid out to help Singapore companies innovate; that the basic tenet at the end of the day is that the government still wants to have a hand in the direction of where the country innovates, where our companies innovate. And funds are allocated on that basis.

Now that cannot be how innovation works.  Innovation is about adventure, it is about exploration, it is about failing repeatedly sometimes before you reach success. But this government has not laid the groundwork, it has not laid the social infrastructure for an innovation landscape to emerge in our country.

Is that a surprise? I would say no, because you look at the way this government operates.  Look at our great national enterprises.  They want to put their own people, so-called scholars in charge of these various enterprises and agencies.

Look at NOL as a good example.  Singapore as a great maritime nation deserves a national shipping line. I was a practicing shipping lawyer for much of my lawyering days, and I thought it was disgraceful when NOL was sold to a French company.  Which in the 2000’s I may add, almost went into bankruptcy. Now within a year after buying NOL they turned it around.

I have seen shipping companies operated by other nationals, and I have seen how shipping companies work. I once did work for a Greek shipping company and in those days the owner had 60 vessels, large crew oil tankers.  He operated the company virtually through himself and one charter manager.  I once went into his office and there was a small anti room beside his office and there was a small cot there.  And he used to sleep in that room very often following the shipping markets and concluding fixtures. Today some 15, 16 years after I got to know him, he runs a company that has more than 120 vessels.

Now can we not find capable Singaporeans who can run a successful shipping company?  That cannot be the case. There are many successful shipping companies in Singapore.  So at the end of the day the family silver is sold because the government cannot find capable enough people to polish it and make it shine.  What a great shame.

For Singapore to be a truly innovative country, or to become a truly innovative country we need to get government out of business. The first business of government should be to get out of business.  Open up the space, allow the natural genius of Singaporeans to flower.

We cannot have an economy that is 50-60% controlled by the GLC’s and expect innovation to thrive in Singapore. And my fellow Singaporeans, the fact that Mr Heng declared a 2% rise in GST although he tells us that it will only take effect earliest from 2021, itself tells the story that he and this government is not confident that it can grow the economy sufficiently through innovation and enterprise.

Let me now come to some more substantive things that Mr Heng left out of the budget, but which I think concerned Singaporeans will be interested to know.

Mr Heng did not touch on the parlous situations regarding our senior citizens, about their standard of living, about their means to survive in old age. He did not touch on the disastrous situation facing our PMET’s, and the very bad situation facing our young graduates in terms of the job market.

I intend to address these.

Now Mr Heng used healthcare costs, the projected increase costs in healthcare costs as an excuse of the imposition of the GST.  You may think, well if an economy is doing well and we are growing why can the government not cover that healthcare cost, that cost of building hospitals, polyclinics and all that as he put it from the revenue it takes in?

But let me come to the parlous state of the situation for our elderlies, for our seniors, for the people who have retired.

Now it breaks our heart to see so many of them still working at jobs like clearing tables, cleaning plates, cleaning toilets when we go to the hawker centres and the coffee shops.  Their counterparts in advanced nations are not having to do all these jobs when they are 70 or 80 years old, because they have enough to survive on.

The sad truth in Singapore is that many of our seniors do not have enough to survive on in old age in their so-called retirement years.  They have been short-changed by the policies of this government.  For the last 40 years.

When they started working, they were told that at the end of their working career they would have this pot of savings known as the CPF to see them through comfortably in retirement.  But when they stopped working they realised that they could not touch these savings and these savings were actually inadequate for them to live on.

Many of them today get at most a few hundred monthly dollars in annuities from this fund known as the CPF.  And how do you survive on that in the world’s most costliest city? In the early days the CPF gave returns which were below the inflation rate. From 2000 onwards the CPF has given a fixed return of about 2.5% on the ordinary account and about 3-4% on the retirement account.

So it averages out to about 2.9%. That is not enough to survive on. And worse still, CPF money is given to GIC to invest.  GIC invest all of its money overseas. It does not invest a single cent in Singapore. It claims to earn a return of about 6% per year. If that is so, why are Singaporeans being paid only 2.9% returns on their CPF?

Now when you park money with a fund manager, he will take his management fees which for a return of 6% I cannot imagine can be more than 0.5%, And when we talk about the CPF and it being such a large pool of funds the management funds should really be negligible.  In fact I would say that they should be free as it is the government doing national service for its citizens to ensure that they have a decent standard of living in retirement.

So why is the government taking away 3% off the CPF returns for Singaporeans.  Resulting in that Singapore senior not having enough in old age to live on.

You compare our CPF with other comparable systems in the world and we fare very poorly.  You look at the Malaysian EPF which is an almost identical system.  Malaysians are allowed to withdraw their EPF at the age of 55 in full if they wish to.  Now the EPF returns on average

The EPF returns on average 6.45% per year. You take the Canadian pension plan, over a 5 year period it is able to return annualized returns of 11.8% and over a 10yr period 6.7%. Last year it returned 11.8%.  Take the Australian superannuation funds which are analogous to the CPF, although professionally run by private companies for their account holders.

Now in a good year Australians enjoyed up to 18% returns, and even in a bad year they enjoyed on average 7-8% returns.

So Singaporeans, over a 30-35 year period of their working life have on average 3% taken away from their CPF every year by their government.

Now my friends, compounded over 30-35 years, that is a huge sum of money. A huge sum of money. Is it any wonder why our seniors find themselves in this desperate situation today?

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