The Singapore Democratic Party’s (SDP) chairman Paul Tambyah said that the party can fund the pledges in its “Four Yes, One No” general election (GE) campaign without dipping into the country’s reserves.
He said this in reference to the three components of its GE campaign, which are to suspend GST till 2021, pay retrenchment benefits as well as to provide retirees over 65 with a monthly income of S$500.
“You do not touch the reserves. The reserves are the principle,” Dr Tambyah said on Thursday (2 July) while speaking to residents at an HDB block in Bangkit Road.
Although the exact amount in the country’s reserves remain as a secret, the chairman estimated it to be around S$1 trillion.
By using an analogy of getting interest from a fixed deposit account, Dr Tambyah explained that SDP is proposing to use the Net Investment Return Contribution (NIRC) for its programmes.
Dr Tambyah made this comment after People’s Action Party (PAP) candidate Vivian Balakrishnan asked the party’s chief Dr Chee Soon Juan at a live debate telecasted on national television on how the alternative party plans to fund its pledges.
Dr Balakrishnan said, “I think my voters want to know that the total size of the bill is, and who bears it. Some of your proposals have got very big holes, in term of fiscal deficits, so please enlighten us.”
If that’s not all, the PAP candidate for Holland-Bukit Timah GRC also stated that SDP’s proposal of suspending GST will result to creating an S$11 billion fiscal gap yearly, and this is something that has to be accounted for.
To this, Dr Tambyah said that the party’s proposals for retrenchment benefits and monthly income for retirees would add up to a total of S$5 billion. He also noted the GST shortfall cited by Dr Balakrishnan.
The infectious diseases expert suggested raising the rate for the NIRC in order to finance the party’s programmes.
According to the Ministry of Finance’s website, there are two components to the NIRC—up to 50 percent of the Net Investment Returns (NIR) on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek Holdings; and up to 50 percent of the Net Investment Income (NII) come from past reserves from the remaining assets.
“If we increase that to 75 per cent, that increases another $15 billion, which can come just purely from the interest without touching the capital. So that is the primary source where we are going to get funding for these two (SDP) programmes,” said Dr Tambyah, who was using his estimate for the reserves in his calculations.
He also guaranteed voters that the pledges in SDP’s “Four Yes, One No” campaign are not a “sinkhole”.
The SDP candidate for Bukit Panjang SMC added that the money given to those in the retrenchment benefits as well as retirees will be recirculated back into the local economy.
“So say you have a retiree, you give him $500, what is he going to do? He’s going to spend the money in the hawker centre, he is going to spend the money in the shops, he is going to spend the money in Bukit Panjang. He’s not going to put the money in the Cayman Islands or some Swiss bank account where it goes out of the country,” Dr Tambyah said.