Secretary General of the Reform Party Kenneth Jeyaretnam has called on the country’s Finance Minister Heng Swee Keat to issue a Correction Notice under POFMA to MP for MacPherson SMC, Tin Pei Ling, for the statement she made in Parliament about the Government’s COVID-19 budgetary support.
Penning his reasons in a letter to Mr Heng, published on his blog on 8 June, Mr Jeyaretnam said that Mr Heng has previously been quick in using POFMA against politician from opposition parties as well as to “protect the secret remuneration of Prime Minister’s wife as CEO of Temasek”.
As such, he wants Mr Heng, who is also Singapore’s Deputy Prime Minister”, to be “equally proactive” in issuing a Correction Notice to Ms Tin for her speech in Parliament on 4 June.
Mr Jeyaretnam said that her explanation about the country’s COVID-19 budgetary support is “highly misleading”.
Ms Tin’s said in her speech on 4 June that:
I also shared a rough estimation of the COVID19 budgetary support per capita in Singapore and some of the advanced economies. Based on my back-of-envelope estimation, the budgetary support per capita in Singapore is $23,225, higher than Japan or the US (to standardise for comparisons, I took the entire package value divided by citizen population size). On per capita basis, Singapore tops the chart around the world. Based on the figures, I thought that this demonstrates our government’s determination in helping our people and seeing Singapore through the crisis.
Within a short span of 5 months, our government is pumping $93billion just to combat the pandemic. This amount already exceeds the total full year public expenditure in 2019.
In fact, Mr Heng also said in his Fortitude Budget statement that:
Together with the Unity, Resilience and Solidarity Budgets, we are dedicating close to 100 billion or $92.9 billion to be precise or 19.2% of our GDP, to support our people in this battle.
Based on this numbers, Mr Jeyaretnam, who is also an economist, questioned to where this figure of $100 billion, or $93 billion comes from.
“A comparison of the total expenditure for 2020 including special transfers but excluding transfers to endowments and trust funds (which are not current spending) versus the same figure for 2019 shows that the increase was only some $65 billion,” he explained.
He added, “Also the Special Transfers figure in the Unity Budget of $34 billion presumably includes the extra $13 billion which you (Mr Heng) are allocating to the Contingencies Fund, since you have not provided an updated Analysis of Revenue and Expenditure in your Fortitude Budget Statement.”
As such, the opposition politician said that if the $13 billion is subtracted from the past reserves to the Contingencies Fund (which may not be spent) from the total for Special Transfers (excluding Top-Ups to Endowments and Trust Fund), then the total spending is only about $52 billion more than last year.
“Another way of measuring the Government’s support is to look at the projected budget deficit in the Fortitude Budget Statement of $74.3 billion and subtract both the Top-Ups to Endowments and Trust Funds of 17.3 billion and the allocation of $13 billion to the Contingencies Fund. This gives a figure of $44 billion,” Mr Jeyaretnam noted.
He continued, “You have already allocated $20 billion to the Jobs Support Scheme to help fund up to 75% of the wages of Singapore citizens and PRs. However given that probably more than half of the economy should be classified as being in the public sector and that a large proportion of the Jobs Support Scheme will go to Government-linked companies (GLCs) we should probably deduct half of the $20 billion as just a transfer payment from central Government to other entities in the public sector.”
“We should also deduct $1.9 billion provided from past reserves under the Temporary Bridging Loan Programme and the Enterprise Financing Scheme shown in the Solidarity Budget since the Government is acting as a guarantor only. The final cost will depend on the loss that is left after the banks have exhausted the recovery process. The current cost of these guarantees is zero and they do not constitute actual spending.”
Since the Government did not publish any information about the “true surplus”, Mr Jeyaretnam said he had no choice but to “make assumptions”.
“As a minimum you should publish the General Government surplus, which should include all entities in the public sector including GLCs and take account of changes in the value of all assets including land as well as the true figure for the reserves. Thus I have no idea of how much the real deficit is and am forced to guess,” he noted.
Ms Tin’s comparison of Singapore with other countries is misleading
Mr Jeyaretnam also pointed out that he has an issue with the denominator that Ms Tin used to calculate the benefit per capita.
Comparing the number of Singapore citizens and PRs with other countries’ citizen populations is “misleading”, said the economist.
This is because countries like the US, which is what Ms Tin highlighted as a comparison, has a much smaller proportion of non-citizens in their workforce.
“It would be more appropriate for her to use Singapore’s total population particularly as you (Mr Heng) have provided substantial support to enterprises employing foreign workers as well through waiver of the Foreign Worker Levy, rent relief and the Temporary Bridging Loan Programme,” he said.
“If we do this and divide $44 billion by Singapore’s population in 2019 of 5.7 million, then we get a per capita figure of about $7,700 as opposed to Tin’s claim that it is $23,225. If we subtract the $10 billion which is likely just a transfer between Government entities and also the $1.9 billion which is shown as set aside for losses under the Temporary Bridging Loan Programme and Enterprise Finance Scheme, which may never occur, then we get a figure of $5,682,” he added.
This figure of $5,682, according to Mr Jeyaretnam, is less than half of what Ms Tin claimed to be the figure of US of $12,765 per capita.
“This is presumably based on the roughly $2.7 trillion in stimulus allocated by Congress under the US$2.2 trillion CARES Act and the US$484 billion interim CARES Act which extended the funding for small businesses. Even if we divide $44 billion by just citizens and PRs we get a figure of $10,929, which is less than Ms Tin’s US figure,” he pointed out.
If that’s not all, he also stated that it is unfair to compare Singapore with other countries like the US, UK, Europe, Canada and Japan as they all have “much more comprehensive safety nets such as unemployment insurance and welfare payments” which immediately takes effect when the economy goes into a recession.
Mr Jeyaretnam added that based on the Government’s total direct support for Singaporeans, it is amounted to a “derisory $2 billion up to the Resilience Budget and 620.is probably no more than $2.5 billion now”.
As such, if the figure is divided among 4 million Singaporeans residents, which includes citizens and PRs, then that results to about $620, Mr Jeyaretnam said.
Given that Ms Tin said that the Government offered support totalling to $23,225 on a per capita basis to Singaporeans, this is clearly misleading as the total direct support for the people has only been about $600 on a per capita basis, the politician explained.
“By providing a fake number she is clearly attempting to influence the impending General Election, it is thus clearly in the public interest under Section 4(d) of the Act for you to issue a Correction Notice and to provide a true and accurate comparison with other countries using the various measures I have set above,” he noted.
He continued, “A good start would be to tell Singaporeans what the real General Government surplus (including all income and capital gains from all state-owned companies and assets) has been over the last forty years and to publish a truthful Statement of Assets and Liabilities rather than the incomplete fake one that you provide every year with the Budget.”
Mr Jeyaretnam went on to express that if Mr Heng ignores his letter and do not issue a Correction Notice to Ms Tin, then it just shows to the people of Singapore that POFMA was “never intended to deal with the problem of fake news but on the contrary to allow the PAP Government to present its own false facts secure in its monopoly of information and in the knowledge that this new piece of repressive legislation will even further deter ordinary citizens from challenging them”.