The PAP has schemingly legislated the perpetual accumulation of past reserves which could only be spent on a rainy day. But when the rainy day came years ago, PAP refused to spend a single cent. Something appears not quite right when the it continues to channel more funds into GIC at every opportunity.
To better understand this, one needs to look at the Pioneer Generation Package (PGP) where $8 billion was set aside for future spending. This clearly wasn’t necessary.
If we base on the spend-only-when-it-rains scenario, the PAP would have unanimous support from citizens to dip into our reserves kitty. So why did PAP complicate the issue by channeling additional billions into GIC?
In fact, why even bother to set aside any amount when the returns from reserves would have sufficed, ie only $400 million needed annually for the PGP?
To continuously channel funds into GIC when we are supposed to have hundreds of billions in our reserves suggests our reserves might have been decimated through bad investments.
Total land sales revenue alone since 1980 is estimated to be in excess of $300 billion. Including their returns, and assuming PAP’s figures to be factual, the balance should easily add up to at least $400 billion. For context, $400 million for PGP is only 0.1 %.
In the last 10 years, revenue from land sales (excluding capital receipts) was a staggering $130 billion. Again, there is no reason to set aside $8 billion for PGP.
Land Sales Revenue and Income from Investment/Interest (in $ bil)
|Year||Land Sales Rev||Inv/Int Income|
(If PAP had wanted to eradicate absolute poverty altogether, it could well afford to. Even if it had to spend $3 billion, or only 1% of GDP, our reserves would have continued to accumulate. What’s the point of having hundreds of billions when elderly/vulnerable citizens have to eke out a living exercising with cardboards and die in the most undignified manner? Would Singapore have been able to accumulate such a huge reserves without the pioneer generation?)
In 2007 the Income from Investment/Interest was $10.6 billion.(see table above) By 2016, after the revenue from land sales has increased by a staggering $130 billion, the Income from Investment/Interest has remained almost unchanged at $10.9 billion. How is this possible? I hope the PAP could shed some light on this.
Revenue from land sales aside, the government also confiscates about 3% from CPF invested by GIC via SSGS to supplement the budget. Since 2007, the amount of CPF invested by GIC has increased by about $158 billion from $128 billion to $286 billion.
With a total increase of $288 billion ($130 bil land sales + $158 bil CPF) for investment, why has the Income from Investment/Interest remained almost unchanged since 2007? Can the government be more upfront and transparent on the use of our reserves?
The reluctance to increase social spending is not so much due to the need to save for a rainy day: this is only propaganda. It appears the government does not have sufficient funds in the reserves despite its claims of superior investment returns. A lot of investments have either been wiped out or generating inferior returns.
Image source: undertheangsanatree
The figures don’t add up and when PAP continuously channels even more money into GIC, it is only logical to ask the obvious question: Have our reserves been wiped out?