The Reform Party

Build Back Better, Fairer

SG50: It’s Time for Reform

Published: 22nd June 2015

As part of the SG50 celebrations the PAP Government has been announcing a number of handouts and one-off bonuses. First there was the special commemorative medal for all Singaporean babies born in 2015. A few days ago, the Government announced that they would be giving out a special SG50 $500 bonus to 82,000 or so civil servants. Government-linked companies have also been following suit.

Vote-Buying by the PAP?

 While the ostensible reason is the SG50 celebration, the real reason for these handouts is undoubtedly the fast approaching General Election which has to be held by early 2017 at the latest but is likely to be held late this year or early next. The PAP Government wants you to believe that life is good under PAP rule . Above all you should be grateful for these small one-off payments given around election time. Your gratitude should be great enough to give the PAP another five years of authoritarian rule during which they can do pretty much as they please.

Handouts Miniscule Compared to What the  Government Makes by Subjecting You to Unnecessary Austerity

However the amount of money handed out is derisory. The payments to civil servants will cost the Government about $41 million while the payments made to employees of GLCs like SMRT and DBS will partially be recouped in higher fares and bank charges. Part of the costs will be recouped through higher tax revenues and profits from the increased spending.

To put these payments in context , the PAP Government makes a recurring surplus of more than $25 billion, and possibly $35 billion p.a, when the Budget is presented properly using the IMF format. The Government fails to properly account for these surpluses or indeed for the size of its assets.

Does it really think that Singaporeans are like children who can be so easily bought for a few hundred dollars in handouts? Perhaps the Government is not far wrong since at every election a majority of Singaporeans vote for the PAP. They accept what the PAP always repeats: we must continue to put aside money for a “rainy day” while most Singaporeans live in conditions of austerity with minimal or no safety nets. Such conditions have seen governments in other advanced countries voted out.

Reform Promises New Compact between Government and the Citizens for SG50

 Reform’s manifesto promises a new relationship between the Government and the people. We want to see a fundamental change in the way the country is governed and to make sure that the Government is transparent and accountable to the people of Singapore.

In particular we want a full accounting of the Government’s assets and liabilities as well as the returns it is earning on those assets and to ensure that they are used for the benefit of Singaporeans and to promote the dignity of every member of society.

Democracy and economic reform are intertwined as we cannot have economic reform without democracy and democracy will not be possible unless the Government’s ownership and control of the economy and land is reduced.

What is the True Value of the Nation’s Assets?

In our previous press release just before Budget 2015 (Reform Party’s Wish List for Budget 2015) we calculated that using the IMF format Singapore has accumulated at least $258 billion in surpluses over the period 1999-2012 (see graph below). Bringing this up-to-date for the last few years would mean total accumulated surpluses are well over $300 billion. This is probably a considerable underestimate since land sales alone since 2006 have brought in revenues of around $170 billion.


Screenshot 2015-06-22 13.43.06


The misleading, out-of-date and incomplete Statement of Assets and Liabilities, which the Finance Minister is required to publish every year, tells a similar story.

Information is available only up to 31st March 2013, despite the Finance Minister being constitutionally required to provide information for the last completed financial year (see An Open Letter to the Finance Minister Concerning the National Productivity Fund) , which would be 31st March 2014. It is undoubtedly a serious underestimate since the assets figure looks  far too low if it includes Temasek and Changi Airport Group as well as all the revenues from land sales. The Statement also makes no attempt to value the Government’s land holdings.

Assuming that Temasek is included in the Statement, which it should be because it is a Government-owned holding company, the net assets less liabilities of the nation are at least $360 billion. If it is not, then net assets amount to at least $582 billion.

How Much Can Be Spent Each Year?

 Assuming the Government is able to earn at least a 4% return on the nation’s assets (which is around the average interest rate paid on CPF) then we can safely add between $14 billion and $23 billion p.a. to the total Budget each year without diminishing the real value of the nation’s assets.

We calculate this as follows:

4% x $360 billion = $14.4 billion

4% x $582 billion = $23.3 billion

But even this is very likely a serious underestimate of the total which could be spent each year without affecting the real value of our assets We have left out any allowance for the extra amount the Government is able to earn on its borrowings from CPF over and above what it pays CPF holders. This could conservatively be up to 2%. Adding in 2% on another $400 billion or so of assets would give us another $8 billion or so of additional spending.

At the moment the Government is constitutionally required to calculate a Net Investment Returns Contribution (NIRC) which is required to be no more than 50% of the expected long term returns of GIC, Temasek and MAS. Over the last five years the PAP have kept it almost unchanged at $8.5 billion p.a. despite large gains in global stock and bond markets.

However like everything else the PAP does, this supposed contribution is just another cheap trick. The Finance Minister includes the NIRC in the Budget but then performs a sleight of hand.  He simultaneously transfers the money to one of the new funds he is always setting up, which do not appear to be properly audited and are certainly not accountable to Parliament. They also do not constitute current spending. For instance in 2014 the Finance Minister transferred $8 billion to the Pioneer Generation Fund but the estimated annual expenditure is only some $400 million.

It gets worse. These funds are not included in the pool of assets on which future NIRCs are calculated. Over time as more and more money builds up in these funds the pool of assets on which the NIRC is calculated will become smaller and smaller as a proportion of the nation’s total assets and more and more of the assets will neither contribute to current spending nor come under Parliamentary oversight.

Reform’s SG50 Proposals

We will demand a proper accounting of the nation’s assets and of any conflicts of interest that have arisen in their management.

Rather than condescending and derisory giveaways amounting to a few million dollars to the citizens, Reform wants to see new social programmes and safety nets instituted that will enhance the dignity of all Singaporeans and bring us in line with other advanced nations and eliminate the fake and unnecessary austerity. We will do this while reducing the government’s ownership of the economy, in line with our belief in free markets and democracy. We will also do it without raising taxes or cutting defence spending (though we want to reduce the NS burden on Singaporeans).

These are a few of  our proposals:


  1. A Basic Old Age Pension

In our press release entitled “CPF Needs Radical Reform Not Cosmetic Changes”, we proposed that the Government fund a basic old age pension for our senior citizens of $500 per month. We costed this at less than $3 billion per annum even if this was extended to everyone currently over the age of 65. If it were only given to those on low incomes the cost would be considerably lower. Our preference would be to pay it to every Singapore citizen over the age of 65 thus ensuring that everyone buys into the programme.


  1. Family Credit

In order to help low-income families with children and as a step towards reversing our current below replacement birth rate Reform Party proposes to institute a system of payments to families with children. We propose initially a payment of $300 per month for each child below the age of 18Based on estimated numbers of around 800,000 children of Singapore citizens the total cost would be around $3 billion though this could be lowered considerably by restricting it to families on median incomes or less.


  1. Eliminate Medishield Life Premiums for over 65s and under 16s

We estimate the cost of this to be only around $275 million for 2015 rising to $332 million by 2019.

The total cost of these proposals would only be around $6 billion p.a. of which a significant amount would be recouped in higher tax receipts due to the increased level of spending and activity in the economy.

We would also look to raise the age for compulsory education to 18 in line with other advanced countries and to make education up to 18, including pre-school, entirely free. We also want to provide free university or polytechnic education to all those who have served NS. We do not expect the cost of this to be substantially more than $1 billion per annum.

Longer-Term Plans

Longer term Reform wants to give all Singaporean citizens a stake in the nation’s assets by listing Temasek, GIC and Changi Airport Group and handing out shares, with more shares going to the lower income groups. This will fulfil one of our aims which is to promote a more equal distribution of the nation’s wealth without having to resort to redistributive measures like higher tax rates. It will also be in line with our belief in a free market economy rather than government control. Over time this should result in greater efficiency and innovation as well as helping to prevent a future government from using state resources to intimidate voters and stifle democracy as the PAP have done so thoroughly over the years.

Given the PAP Government’s desire to keep Singaporeans in the dark over the true level of the nation’s assets we cannot be certain what the real value and how much may have been squandered through poor management. However conservatively such assets should amount to at least $100,000 per Singapore citizen.

An Easy Decision

The choice is clear: Singaporeans can either stick with the PAP and their insulting and derisory handouts only given in election years or opt for Reform’s far-reaching proposals for reform and transformation.

On the one hand you have an existing government that believes in hiding the national wealth from the people, keeping them grateful for insulting handouts and intimidating anyone who has the temerity to ask questions about the true value of the nation’s assets, all the time reserving the top jobs for a narrow elite centred around the Lee family

On the other hand, if you choose Reform you will get a new type of government that believes in empowering our people not enslaving and intimidating them. We want to give Singaporeans the means to achieve true equality of opportunity rather than a fake meritocracy in which who gets the prizes has already been decided by which family you are born into.  We believe all our people deserve a stake in the nation’s wealth that has been created through conditions of forced and unnecessary austerity.