The Government should spend part of Singapore’s net investment return of over S$30 billion a year to “transform the economy and society faster” instead of on “flashy mega-projects”, said Non-Constituency Member of Parliament (NCMP) Leong Mun Wai.
Citing the latest Government Financial statements in his Parliamentary speech last week, Mr Leong, who is from the Progress Singapore Party (PSP), noted that Singapore owns a total of S$1.35 trillion in financial assets as at end of March this year.
He claimed in a Facebook post on Saturday (17 October) that these financial assets generated a net investment return every year.
Mr Leong said that the country’s financial assets are still earning a potential return of S$37.2 billion this year, although S$52 billion from the financial assets were drawn by the Government for the COVID-19 support measures.
“When I say that the $52B drawdown represented only 3.9% of our total financial assets or the $14.8B net decrease (after minusing the $37.2B from $52B) only 1.1% of our total financial assets, I am in no way downplaying the tremendous hard work put in by our Government, but rather commending their ability to have been able to shore up our economy so admirably in this grim times,” he wrote.
He then cited former MP Lee Bee Wah’s “Ah Gong and Ah Seng” analogy during Budget 2019 debate in Parliament last year, saying that Singaporeans should now realise “how inaccurately” the analogy was.
“I am not recommending that because we have the reserves we should pillage our savings now,” he said.
Mr Leong believes that similarly, Singaporeans, being aware of Singapore’s lack of “natural endowment of resources or a hinterland to tap on”, will not agree with the analogy.
“The way forward is to invest more in grooming resilient Singaporeans. That is where we should be using a small part of our national wealth and not flashy mega-projects,” he remarked.
Despite the country’s lack of natural resources, however, Mr Leong highlighted that Singapore’s strategic and trade-friendly geographical location has contributed to the accumulation of its financial assets.
He compared the city-state with Norway, which located geographically next to the North sea oil, saying that both countries are presently “sitting smugly on trillion-dollar financial wealth”.
“Both the oil reserves and advantages of our geographical position can be depleted over the long term, so we have the responsibility to save up for our future generations,” he said.
Citing Norway’s commitment to using up to 4 per cent of the national wealth every year for the benefit of its current generation, Mr Leong said there is “a grave danger” that Singapore’s current generation may not do well enough for the next generation.
“Put in that perspective, using 3.9% (S$52B) of our financial assets to rescue us from a huge calamity like the COVID-19 is not that exceptional.
“In fact, we should continue to look at how to use part of the net investment return of over $30B a year to transform our economy and society faster,” he added.
Mr Leong went on to indicate the country’s reliance on migrants as “a misguided strategy”, particularly via the purportedly rapid induction of foreigners into taking up Singapore citizenship.
“Conditioned by our own geography and history, it is close to impossible for Singaporeans to become xenophobic. We are aware that we need to stay open and attract foreign talent to help us be more competitive.
“We are not against foreigners but do not want to be swamped by them because after all, as masters of our own land, we need to be in control,” he added.
Govt is “giving with one hand and taking with the other”
Last Friday, Mr Leong told Parliament that the Government is “giving with one hand and taking with the other” by hastily increasing taxes and fees while pledging COVID-19 support measures.
“The man on the street must be baffled by the seemingly contradictory actions of the Government. On the one hand, it is purported that the Government is putting up $100B to help with the COVID support measures, yet on the other hand, the implementation of the tax and fee hikes,” he said.
Citing the impending MediShield Premium hike to 35.4 per cent next year, he noted that those who used to pay S$1,000 annual premium will now have to pay S$1,354 a year.
“The increase in coverage which accompanies this premium hike is scant comfort to Singaporeans who are still struggling with the financial woes of COVID-19,” said Mr Leong.
“In any case, there is also no information on how much this increased coverage would have cost the MediShield Life scheme if it had been implemented in earlier years,” he added.
He also cited the 9.3 per cent electricity tariff hike for the last quarter of 2020 that was announced by Singapore Power (SP Group) on 30 September.
“Here is a power-grid monopolist which does not generate electricity, but made billions of dollars since the liberalization of the electricity market in 2012, sparing no time in raising prices at the first available opportunity, even as Singaporeans struggle under the COVID-19 crisis,” said the NCMP.
Mr Leong noted that SP Group could have “easily absorb” the increase from its past profits instead of passing the increased cost on to consumers.
Moreover, the Land Transport Authority (LTA) announced on 9 October that the ERP at six gantries along the CTE will be increased by S$1 beginning from 12 October to ease congestion during peak periods.
“While ERP charges at some gantries along the CTE have been reintroduced in July and August following the end of the circuit breaker, it is hard to imagine that congestion has already built up to the pre-COVID level,” he asserted.
Mr Leong pointed out that these announcements were made consecutively in the span of two weeks.
The rate hikes, he added, are saddling Singaporeans with “hundreds of dollars more” of household expenditures during this crisis when “every cent counts to the average Singaporean”.
“Can these hikes not be shelved till later? Can SP Group not absorb the tariff increases with their past profits? Can’t ERP increases wait? Can’t premium increases be deferred for a period of one to two years, as the current insurance claims are still way below the collected premiums after all?” he asked.
These policies only act as a catalyst to heighten the already increasing public anxiety surrounding tax and fee hikes coming their way, said Mr Leong.
“This leads to the three key questions often asked by Singaporeans regarding the $100B of support measures. How is the $100B spent? How is the $100B paid for? How much reserves are left after paying the $100B?” He questioned.
While he noted that the Government refused to disclose the size of the national reserves for security reasons, Mr Leong said it has published detailed annual financial information on the city-state’s assets and liabilities.
“The conclusion from all this is that we have depleted only 1.1% of our total financial assets to fight the COVID-19 in 2020. We have to commend the Government for its shrewd financial management skills,” he said.
“It appears that there is no need for the tax and fee hikes to take place so soon. We should let Singaporean households recover from the aftershocks of the pandemic and find their footing before we send them reeling with more financial burdens,” said Mr Leong.