Budget 2018: Government needs to explain $7 billion ‘windfall’, economy in fact weak

The PAP government owes Singaporeans an explanation as to how it ‘missed’ statutory boards’ contributions estimate by a mile last year.

In Today’s “S’pore posts record S$9.6 billion budget surplus, thanks to ‘one-off’ factors“, the article briefly explained how PAP managed to generate the ‘unexpected’ gargantuan surplus in FY2017:
1. ” …owing mainly to “exceptional statutory board contributions” and higher-than-expected collections from stamp duties.”
2.  “Some S$4.9 billion in statutory board contributions were expected in FY2017, more than 16 times the initial estimate of S$300 million“.**
3. “This was driven mainly by an “exceptional contribution” from the Monetary Authority of Singapore thanks to higher investment returns from recovering global markets, said the MOF”.

Fact: Increased contributions from some stat boards were almost offset by decreased contributions of other stat boards.1budget11

The game changer in fact came from only one figure, ie increased revised 2017 “Investment and Interest Income”.

The difference between what was ‘estimated’ and the revised figure: $7 billion!
(see Budget 2018 ‘Government Revenue’)1budget10

The government needs to explain the huge discrepancy: Where did the additional $6.35 billion dividend come from?

The difference between the estimated surplus and revised figure is $7.7 billion ($9.6 billion – $1.9 billion.  $7 billion came from the revised figure of “investment and interest income”.

By injecting $7 billion into the revised figure, it gives the impression of a much-stronger economy which is of course misleading.

Anecdotal evidence strongly suggests that the economy was weak.  Arbitrary increase by the government, eg fees, charges, etc. had contributed to part of the increased government revenue.

The $700 million ‘hongbao’ is merely a distraction, its objective to buy silence from Singaporeans.

Without disclosing the source of the $6.35 billion dividend windfall or increased investment income, Singaporeans will continue to speculate that something is amiss.

Especially after the transfer of $5 billion to GIC via the Rail Infrastructure Fund.*

The government appears to have a hidden agenda for introducing “one-off factors”, ie $7 billion from “Investment and Interest Income” with $5 billion set aside in another newly-created fund.1budget12Funds set up by PAP are managed by GIC and the $5 billion Rail Infrastructure Fund will add to the increasing 2017 list of funds below:
1budget13Statement of Assets and Liabilities

‘Statutory Boards’ Contributions’ is stated as $253 million and should not be conveniently rounded off to $300 million to give the impression that the estimate overshot by more than 16 times. It should have been more than 19 times.

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4 Responses to Budget 2018: Government needs to explain $7 billion ‘windfall’, economy in fact weak

  1. Anonymous incognit4444 says:

    I bet that the 100-300$ an pao from an exceptional 7,7 billion surplus will finally provoke Singaporeans to ask hard truth questions that put them on the spot.
    It’s an affront that finance minister is literally throwing change out his limo window and the population is supposed to be fawning in gratitude.

    The population needs to be 7nrelenting in asking how much are the surplus and the reserves as well as why the country doesn’t implement current IMF budget standards

    • Phillip Ang says:

      The Net Investment Return Contributions, now the highest revenue contributor, smells fishy. And Singaporeans are expected to believe that spending based on unearned estimated future returns = prudent spending!
      Worse, no figures have been disclosed. Is the projected return 5%, 6% or ??
      The government has continued to generate fake GDP growth by increasing the population and cost of public goods. All evidence of its failure is classified as state secret.

  2. Anonymous incognit4444nce i haven't says:

    Agreed. And very soon the vapour figures will dissipate and we’ll finally see the hard truth. The American tax cuts are sending money back ro the country and the citizen there are benefitting. There’s a confidence haven’t seen since Reagan. This bodes badly for Singapore. The economy os very shallow and not resilient

    • Phillip Ang says:

      Our economy has always been a joke. GDP has grown mostly as a result of increased land cost/rental trickling down to businesses, resulting in higher cost of goods and services. And PAP is the landlord.

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