20160416 Budget 2016: the deception continues

PAP’s misallocation of financial resources in Budget 2016 does impact our lives. We could demand transparency from PAP to put a stop to the deception or continue to allow ourselves and our children to be screwed. We have a choice.

I will use MP Goh Chok Tong’s analogy of the state as the parent and mere mortals like us its children to put across the deception more clearly.

Singapore government revenue = a breadwinner’s (let’s name him Lao Peh) income. Let’s just assume government revenue comprises only taxes, investment/interest income and land sales. Lao Peh, a commission-based employee, earns a fixed salary, bonus and commission.

2014 Government 2014 Lao Peh
Taxes $54 billion Salary $30000
Inv. and Int. Income $9 billion Commission $20000
Land Sales $14.8 billion Bonus $10000
Total $77.8 billion Total $60000

PAP has intentionally excluded land sales from the budget every year to impress the public that our wealthy country is actually not so wealthy when it comes to taking care of our well being. This allows more than $10 billion to be channeled into GIC for investment, many say speculation.

(From the above table) Excluding land sales revenue from total revenue is akin to Lao Peh excluding his bonus of $10000 from his salary and telling his son he earns only $50000. Wouldn’t any child view his parent with suspicion?

Worse, the PAP then discloses land sales revenue to the IMF which is akin to Lao Peh disclosing his bonus to all his neighbours except family members. Anyone with half a brain would not trust such a ‘fatherly’ figure.

The final figure for 2014 land sales (pg 3) – a whopping $14.8 billion and it was $17.3 billion (pg 3) the previous year. If we were to take land sales into account, the government has been running a budget surplus as far as the eye can see. Questions:

– How much has the government collected in total land sales, $300 billion, $400 billion or more?
– What is the total investment income from land sales revenue to date?
In 8 out of 20 years when GIC’s returns fall below CPF rates, did the government use revenue from land sales, which was converted into reserves, to pay CPF members’ interest?

If the government has not done anything wrong, why fear transparency?

Where our budget is concerned, Singaporeans have been taken for a very long ride: the government has all the while been understating revenues and overstating expenditures. Don’t take my word for it but read Chris Kuan’s TOC article. Or if you are seriously interested to know more about our reserves, read Kenneth J’s post.

Whenever the PAP expresses its concerns about increasing expenditure, one has to be mindful of its definition, ie “expenditure” sometimes means “savings”. For example, when the government topped up $6 billion in the endowment and trust funds, this was considered and expenditure despite not spending a single cent.

The impression given – citizens have received $6 billion worth of benefits! No wonder citizens take to Hong Lim Park and KPKB at coffee shops and online. Singaporeans should bear in mind that when PAP sets aside vast sums of money, there is an opportunity cost, ie less is spent on healthcare, public assistance, etc.

Back to MP Goh’s Lao Peh example:

Lao Peh to son: “This year, our expenses have increased by $50,000. I am setting aside this $50,000 for your university education in 10 years’ time.” Although son was only 10 years old, he was flabbergasted by Lao Peh’s attempt to hoodwink him. Says son: “Daddy, I may be only 10 but please don’t try to redefine “expenses” can or not?”

We live in a ‘demoncratic’ country where MPs represent their parties’ interests in Parliament. A dominant PAP in Parliament with all its useless MPs who are not bothered with issues on transparency can only guarantee one thing: ordinary Singaporeans will be perpetually screwed.

It does not help when its co driver, the WP, has been silent for 5 years on real issues concerning transparency.

In order to put our financial house in order, it’s about time Singaporeans vote for more credible voices in Parliament. Kenneth J and Chee Soon Juan comes to mind.

The PAP government should be honest with the people and disclose the more than $10 billion in land sales revenue during the budget and include this as government revenue. Singaporeans would have readily agreed that a portion of the amount needs to be set aside to benefit future generations. But please don’t tell us the cock-and-bull story about our doomsday resulting from spending a small percentage of land sales revenue.

Budget 2016 is no different from previous budgets: the people are still being deceived.

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