On Facebook today (9 October), retired banker Chris Kuan shared a Straits Times article about President Halimah being briefed by GIC, MAS and Temasek on projected investment returns, a process which she described as “an important one within our annual Budget cycle”.
These estimations would be used to decide the amount of fund from the country’s past reserves that the Government will be able to tap for the upcoming Budget. Under the Net Investment Return framework, the Government is able to take up to 50% of the expected long-term real returns on net assets invested by Temasek, GIC and MAS into the Budget. However, this can only be done after deducting liabilities like government bonds.
MOF explained on its website that by doing so, it makes sure that any tapping of the reserves will be done in a sustainable way, so the future governments will be given a steady stream of returns to support the Budget.
Prior to the beginning of each financial year, GIC, MAS and Temasek will propose the expected long-term real rates of return after looking through the detailed study and assessments brought up by investment professionals within the three agencies. Additionally, external expert views are also obtained.
Following that, the MOF will review the methodologies used to propose the rates, and suggests the expected long-term real rates of return to be applied to the net assets invested by the three agencies.
It is only after that the President will be consulted, along with the CPA, before she decides if she agrees with the Government’s proposal or not.
On his Facebook page, Mr Kuan emphasised that the proposal is based on expected long-term real returns which he notes is problematic in a few ways.
First, Mr Kuan asked, “ How is the President able to challenge the assumptions made by the 3 agencies?”
He explained that President Halimah would not be able to challenge those assumptions given that she is not an investment expert herself and noted that the members of the Council of Presidential Advisers (CPA), “who might through majority vote advise her to accept the proposal”.
“So the idea that the President is the guardian of the reserve seems far more a formality rather than an actual check on the government,” said Mr Kuan.
The second point he made was that there is a better way to carry out this particular part of the process, which Mr Kuan asserted is “too damned opaque for a strategic issue”. He suggested that the expected long term real returns and any changes to it be tabled by Parliament for approval.
“The President’s own stamp is as much a formality as it already is,” he added.
He continued, “Better still, also have any changes in the investment mandate such as increasing the equity portion of the reserves or the private equity portions tabled to Parliament for approval.”
By doing so, Mr Kuan said, elected representatives and citizens will have some idea on the deliberations involved in using the earnings from the reserves to fund state expenditures.
“This is what the Norwegians do when it comes to the mandates for managing the reserves and using the earnings to fund expenditures,” explained Mr Kuan.
He went on to explain that these methods could engender confidence and broad public support when it comes to government finances, and even lessen the use of the Protection from Online Falsehoods and Manipulation Act (POFMA) on the issue.
On 25 November, political activist Brad Bowyer was issued a correction order under POFMA as directed by Deputy Prime Minister and Minister of Finance Heng Swee Keat to correct statements he made on a Facebook post about government returns and investments. This is the first correction order to be issued under POFMA since it was gazetted on 25 June 2019.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
You May Also Like

Markets extend rally as Fed holds fire

By Margaret Yang, CMC Markets Nasdaq breaks record new high Markets rallied…

PM Lee refuses to reply to Leong Sze Hian’s defence in countersuit and instead applies to strike it out

In the latest development of Prime Minister Lee Hsien Loong versus Leong…

The ONLY chart you need to make a decision on the new 4G plans

With the entry of the new kids on the block, consumers have…

“要经济发展,需引进移民和外劳”

在上一篇报导,我们分享李显龙总理在2015年1月的一次访谈上,对比新加坡、香港和台湾,认为虽然过去三地都曾是“亚洲四小龙”,最近十几年已分道扬镳。 他提及过去十几年来台湾经济确实面对一些问题,“经济发展较慢,年轻人毕业虽不是问题,但是他们当中做不满意的工作也很多,例如驾驶德士,或者做些小生意,甚至到我国拿工作著准证。” 他也认为台湾经济失去明确方向,“要向中国走(企业走进中国),又害怕靠拢中国;要离开中国,又走不出去;要让外劳进来又怕影响社会,但没有外劳经济又停滞不前。” 对于本地就业,总理认我国的经济发展“是有代价的”,要经济发展就要引进外劳、引进移民,所以就出现另外一些挑战。 尽管近几年来民间对于移民人口都表示忧虑,甚而外来人才也对本地毕业生就业机会构成竞争,不过在另一段访谈视频,李显龙仍指出,引进移民、引进外劳是需要的。 记者在访谈中选民担忧外来人口对本地社会的冲击,这种忧虑也体现在2011年的选举。而新加坡年轻一代独立后在这里成长,有更强烈的认同感,也希望保留本土社会的本质。 不过,当记者提及总理曾透露2030年要达到690万人口,总理马上纠正,并没有这个目标而这其实是制定基础设施的指标,即国内建造铁路、房屋等,以能够应付690万人口为依据。 对于记者有关民间对人口白皮书的争论、生育率未达满意程度和政府会否调整人口等问题,总理在视频中表示,新加坡固然需要保持新加坡社会的风气和特质。但引进移民、引进外劳是需要的,“我们也希望能从这些移民和外劳中吸取正确的价值观、经验等,但我们不希望新加坡社会完全变成其他国家社会风气。” 他说,如果新加坡失去新加坡社会的本质,新加坡生存会有问题。 李总理指我国移民、新公民的人数是每年两万左右;永久居民人数约每年三万;而外劳人数也有监管。 总理对我国生育率不满意 但他重申,人口不能没有增长、或者没有移民,因为他对我国生育率“完全不满意”。“平均一个妇女生1.2、1.3个孩子,是绝对不足够的。”…