PAP has been reluctant to help needy Singaporeans. And when it does, the first step is to channel billions into GIC, eg delaying CPF withdrawal through CPF Life, increase in MediShield Life premiums, Pioneer Generation Package, etc and setting up ComCare Fund.
Despite funds being needed today for ComCare, PAP’s assistance model demands a huge capital of 24 times the amount needed to be set aside, ie $1.7 billion goes into GIC in order for ComCare Fund to disburse about $70 million annually.
If, say, ComCare assistance requires an additional $10 million with no budget funding from MSF, this would mean ComCare Fund will receive $240 million (24 X $10 million) from the government. GIC is again the beneficiary.
There was no need to set up the ComCare Fund because the peanuts amount could have been funded through MSF budget. It’s not that PAP lack funding but its prioritising investment above citizens’ well being.
From $250 million in 2005, the ComCare Fund has been increased to currently $1.7 billion. Under PAP’s flawed self sufficiency model, $1.7 billion will remain in GIC until god knows when.
Last year, interest income from the Fund contributed $68.4 million to ComCare assistance. This is about 4% of the Fund’s $1.7 billion balance. For the past 2 years, ComCare Fund earned interest income of about 4%.
But shouldn’t ComCare Fund be earning 6% interest since it is managed by GIC?
So who else is managing state reserves earning only 4% returns? Could PAP enlighten the public?