Singapore’s fiscal position is “much better” than what was stated by Second Minister for National Development Indranee Rajah, said Progress Singapore Party (PSP) Non-Constituency Member Leong Mun Wai.
In a Facebook post on Tuesday (6 Apr), Mr Leong noted that Ms Indranee’s statement in Parliament about the Government’s fiscal position “was confusing to Singaporeans and inaccurate from a financial point of view”.
Noting that he wanted to point out the said inaccuracies during the Parliament session but could not due to the “rushed” pace of the proceedings, Mr Leong noted that “a cash position is always a more accurate reflection of a company’s financial health than a profit and loss statement, period.”
He said this in reference to Ms Indranee’s statement in Parliament where she said, “… it is not correct to suggest that because we have a certain amount of cash surpluses, that …. our fiscal position is better than we have stated ….”.
Mr Leong said that this conclusion is “untenable” from a financial point of view and that “you cannot have different versions of your case position”.
“Whereas, a profit and loss statement can come in different versions depending on the accounting principles you use,” he explained as a comparison.
“The same applies to our budgeting process – the cash surplus being the most accurate indicator while the budget depends on how the Government accounts for the cash, ie., what cash to include or exclude from the revenues of the budget.”
He then supported Workers’ Party MP Louis Chua’s focus on the government’s cash flow surplus position of S$3.5 billion for the financial year of 2021 instead of the reported budget deficit of S$11 billion.
“Our Government has always under-reported revenue by not including a substantial amount of cash generated every year in the budget,” Mr Leong highlighted.
“For completeness sake, apart from the land sales revenue, 50% of the NIR or Net Investment Return derived from investing the national reserves is also not accounted for in the revenues of the budget.
“Adding the 50 per cent NIR of $19.6 billion to the net cash surplus of $3.5 billion, the net surplus fiscal resources will actually be $23.1 billion for FY2021.
“So contrary to what the Minister had tried to assert, our country’s fiscal position is indeed much better than what is stated,” he said.
Mr Leong also stressed that it is “inaccurate” to compare the land owned by the government to land owned by a family, since the land sales are a constant source of revenue for the government which can resell the same piece of land again after 99 years under the 99-year leasehold system.
“The Government should first acknowledge the excess fiscal resources it commands before we can move on to discuss how much to keep for future generations and how much we can spend for this generation,” urged Mr Leong.
He noted that the debate “cannot be restricted to a particular set of budget figures put up by the government,” adding that the debate should also cover the “assumptions behind the set of budget figures”.
Mr Leong concluded, “This latest episode in Parliament is another GST test balloon sent out by the Government.”
He expressed his hope that a thorough debate would be allowed when the GST Bill is tabled in Parliament so as to allow all economic, financial and moral arguments to be addressed properly.
Mr Leong called for opposition MPs and NCMPs to be given sufficient time to question all the assumptions and present alternative solutions.