Public Finances

Please go ahead. [A copy of the handout was distributed to hon Members.]

Yes, Sir. The Leader of the Opposition, in his speech said, "The IPS working paper referred to earlier in my speech revealed relatively low levels of trust in journalists and the media on the topic of reserves policy. For this House's information, Opposition politicians scored higher in this regard." Nothing wrong with that statement, perfectly correct.

But the Leader of the Opposition did not highlight the other statement which was just on top of the statement that he referred to which is that, "The highest trust level was accorded to the PAP Government." There is a chart which shows the PAP Government at about seven. Then, it was scholars, then families and friends, then fellow citizens, then followed by Members of the Opposition.

The IPS survey is fully transparent. But just because it is fully transparent does not mean that everything will necessarily be highlighted or a conversation taken on a particular trajectory.

I have no quarrel with the Leader of the Opposition for highlighting his particular statement but I just want to say that full transparency does not actually always mean the full picture, depending on what is done with the information.

Next, I move on to PSP's contention that because our Total Fertility Rate (TFR) is declining, we will need less resources in the future.

Do not forget that while we may have fewer babies born, we have a population that is living longer and, yet will have fewer children to support them. A smaller workforce will have to support a larger, ageing population. We will need the additional resources to provide Singaporeans with greater healthcare and ageing support in their silver years.

On CPF, Ms Hazel Poa suggested that the Government is paying out less interest than it should for CPF. Mr Louis Chua has also suggested to directly pass through GIC's returns to CPF members.

In 2014, then Deputy Prime Minister Tharman Shanmugaratnam explained in Parliament at great length how we set our CPF interest rates and manage CPF proceeds. Our CPF rates are fair. They are pegged to returns on investments of comparable risks and duration in the market. The rates are risk-free for members.

Regardless of the interest rate environment or the returns that the Government actually earns in a particular year, we continue to pay the CPF rates that we have committed.

Over the past 20 years of low interest rates, the Government has continued to provide members with 2.5% minimum interest on OA monies, and since 2008, a 4% minimum interest on Special, MediSave and Retirement Account (SMRA) monies, extra 1% interest on the first $60,000 of combined CPF balances for all members and an additional 1% interest on the first $30,000 of combined CPF balances for members aged 55 and above.

While the Government expects to earn returns over the long term that will be able to cover CPF interest rates, there is no assurance that GIC's returns will exceed CPF interest rates in the shorter term, let alone every year. There have been years where GIC's returns fall below CPF interest rates but we do not cut CPF interest rates.

The Government is able to maintain CPF interest rates regardless of the interest rate environment or the financial performance of our investment entities only because we have a buffer of net assets. In effect, where GIC has earned returns higher than that of CPF interest rates, it is used to cover for the many years of low interest rates and when GIC earns returns below CPF rates. This ensures that Singaporeans do not experience fluctuating CPF rates and will continue to receive stable rates to grow CPF balances for retirement adequacy.

On the question of the rate of growth of the reserves, Mr Leong Mun Wai has suggested that the Government is growing our reserves faster than necessary. If we were truly over-accumulating our reserves, the NIRC would be growing at a much faster rate than GDP. But do remember that our economy is growing and our population has higher needs. In fact, NIRC has kept pace with our economy. Over the past five years, NIRC has remained stable at about 3.5% of GDP and we expect this trend to continue.

As Deputy Prime Minister Lawrence Wong has explained previously, at the current pace of accumulation, reserves' growth will not greatly outpace economic growth. So, in truth, we are not at all over-accumulating our reserves. If we slow down the pace of saving, the value of our reserves will diminish over time. The fact of the matter is that our spending needs are growing and these need to be funded. We do not have a lot of fiscal space, contrary to what PSP suggests.

The WP has acknowledged that there is a medium-term funding gap and that taxes need to be raised. They opposed all the previous GST increases, but recently changed their position and said they accept the GST at 7%.

We are able to enjoy today's sound and stable fiscal position because the Government introduced the GST in 1994 and revised the rate prudently in good time. This GST increase is needed, too, in light of the spending trends I have shared. We have to spend more in several key areas and we will need the revenues very soon.

The WP has suggested a slew of tax measures in lieu of the latest GST increase, including to introduce a tax on net wealth above $10 million and further raise property taxes. Effectively, they seek to impose more taxes on the wealthy, rather than raise the GST as a broad-based consumption tax. Their ostensible objection to the GST increase was that it would negatively impact the lower-income groups.

The fact is that the higher-income groups are already paying more in taxes, and that is how we have designed our overall fiscal system – to be fair and progressive. Remember, the GST increase was done together with enhancements to the permanent GST vouchers. This ensures that the well-to-do pay more GST and the lower-income are impacted the least. In other words, the wealthy, who consume more, will also contribute their fair share of taxes.

The Opposition's other suggestion is to spend more from the reserves – for example, tweak the NIRC formula or fund land purchases from the reserves rather than the current Budget. But is this really the best course of action for Singapore? Given significant uncertainties in the current geopolitical situation, this would not be wise.

As such, we must use our reserves wisely. Today, we preserve our principal and strike a balance between our current and future needs by spending 50% of the investment returns, while putting the remaining 50% back into the reserves to grow it for the future. We believe this to be fair to current and future generations of Singaporeans. We should not be too quick to change this.

I think WP alluded to the fact that they are not saying to touch the principal. That is fair enough. And they had suggested 60:40. Deputy Prime Minister Wong has addressed this before. He had said "never say never", but not for now. Not for now because we need to make sure that we have enough ballast to keep us going.

We have faced four major crises between 1997 and 2020 – the Asian Financial Crisis, the SARS outbreak, Global Financial Crisis and the COVID-19 pandemic. In a more uncertain and volatile world, we cannot expect less.

In a crisis, we can draw on our reserves, but having such solid reserves in itself also means that we have a rock on which to anchor ourselves in turbulent times. Our reserves give us confidence and give others confidence in us. In times of crisis, we become the harbour in the storm for many investors.

We must and will continue to do right by Singaporeans, for Singaporeans. Doing right by Singaporeans is not just about meeting the needs of Singaporeans today; it is about looking after our children, grandchildren and generations of tomorrow.

That is the approach our pioneers took with regard to the reserves, the result of which is that we all benefit today. As stewards of our reserves, we have the obligation to manage it judiciously, make refinements where needed, so that it will continue to serve its purpose for Singaporeans today and in years to come. Mr Speaker, I support the amended Motion. [Applause.]

Mr Pritam Singh.

Mr Speaker, I thank the Leader of the House for her reply speech on Mr Leong Mun Wai's Motion. I will make two points in response to what the Leader of the House has raised in terms of my interventions in this Motion.

The first pertains to the two pages of the IPS working paper which was shared with all Members. I am glad she has no quarrel with my characterisation of what I referred to in my speech. The Leader of the House said that full disclosure of information does not mean the correct stuff will be highlighted because I did not say what, in her mind was important, which was that the PAP Government ranked the highest vis-a-vis the mean rating of trust for every group. But the irony here is that full transparency and identifying the source of the information and the report itself have allowed the Leader of the House to ensure that what she deems is the correct stuff will be highlighted. So, that is my response to an argument about transparency.

The other point I would like to follow up with the Leader of the House is that she also did not make a copy of the point which I had raised specifically in the report about a Select Committee, which was what the report recommended. So, I suppose the argument can work both ways.

I refer to page 64 of the report which states quite clearly "another alternative is for the Parliament of Singapore to set up an ongoing committee that convenes an annual review" and it goes on, and this is under the header "There is potential for future public engagements". With regard to the proposal for a Select Committee and better engagement, it says, "This process needs to be carefully calibrated so that knowledgeable and activist segments of the population do not feel that it is an attempt to breed the siege mentality or reinforce what has been termed as the veil of vulnerability. It will be unfortunate if this is mired in a debate about whether such a mechanism structure or programme is an attempt to shore up the power of the political incumbents and scare the public into supporting the latest status quo of policy orthodoxies".

It is for this reason that I will segue into my second point, which was what the Leader of the House had shared vis-a-vis what I said about land use. I understand what the Leader of the House is saying about land just being converted from cash into a physical — that essentially, there is no real difference between the cash you receive from a land sale and the fact that the land was actually part of the reserves before.

But the point I am making is actually the fact that the land can be conceivably be resold. The same piece of land can be resold. For example, in the case of the 30-year industrial property, Company A buys it for $1 billion. After 30 years, it has to return it to the state.

And the state, depending on what the prevailing land use rules are, can resell that piece of land. And this is the point that I sought to put into my speech, which brings the ultimate conclusion, that para – and I will repeat it – it is the knowledge of this intuitive fact that the same piece of land can be resold and the state receives land sale receipts, why there is significant interest in conversations about a more equitable use of the NIRC for current and future generations of Singaporeans.

I hope Leader can address that point, that the fact that the land can be resold.

I thank the Leader of the Opposition for his clarification. On the point of the 99-year lease, the simple answer is that you would have lost the use of the land for the 99 years or the 30 years. You can set the limit where you want to. If it is below 10 years, we do not do that. Anything above that, because you have lost the use of that land. I had actually explained that in actually quite great detail in that Parliamentary answer that I mentioned and I would encourage the Leader of the Opposition to read that.

Then, on the second point, the reference to the IPS study, the main point I really wanted to highlight was that if you want to have a full conversation, you should be fair and objective and set up all the material facts. So, just because it is out there does not mean that that is guaranteed.

Mr Singh.

Thank you, Mr Speaker. To the Leader, I understand the point that you have lost the use of the land that you sold to Company A for 30 years. I understand that point. But then, when it returns to the state, you sell that same piece of land again. And that is the point that I was trying to suggest that the public intuitively see. Hence, they also feel that your reserves grow because you have this opportunity to sell the land every 30 years, the same piece of land. That was the essential point I was making.

I understand the point, which in Minister Tan See Leng's words, is more of a comment than a clarification, but it does not really detract from what I said, which is that you lose the use of the land for the 99 years, when you could have used it for other purposes. And here what you are really doing is, when the land has a value, you put it in, you invest it, that is surely unobjectionable.

At the end of the day, if you think about it, there is not much difference in our positions as I explained, because we do use the land sale proceeds. The difference is, what the PSP and WP, in different forms are asking us to do is use it now, use it directly. What we do is we take it, we invest it and we use it, but we use it in a sustainable manner by streaming it out through the NIRC.

So, we are not so far apart. And philosophically we have a different approach, but you can have a debate, and we are having a debate on which is the better approach, but we think ours is better because it is a fair, sustainable and prudent approach.

Mr Singh.

Thank you, Mr Speaker. I do not intend to prolong this. Let us just say there is a difference. I want to put that on record, that there is a difference between what the Leader has characterised in her latest reply and what I was referring to.

Ms Poa. Ms Hazel Poa.

Mr Giam.

Mr Leong.

Mr Leong, could I suggest, maybe you have other clarifications? Why not you put them out at one go?

Mr Leong.

Mr Speaker, can I ask the Minister? How about an example like that? There are residents who came to see me and said that their grandfather's land was acquired in the early 1980s. They were paid $60,000, the piece of land, of course, over the years was enhanced by the Government. So, now, you have got roads going through the land, and the land, to be fair, has increased in value. But the grandfather was paid $60,000 in the early 1980s and only today the land was auctioned.

Do you consider that as a sacrifice by the Singaporeans? This family who has given up the land or was it forcefully being taken from them.

Mr Leong.

Mr Louis Chua.

Ms Hazel Poa.

Mr Vikram Nair.

I just wanted to pick up on a point that the Leader of the Opposition made both to me and to the Leader. He suggested that the IPS report had a reference or recommended a Select Committee. It is 90-page report. I did a quick scan, I could not find this reference. I would be grateful if he can tell us where it is.

To the Member, at page 64, "Another alternative is for Parliament to set up an ongoing committee." I read that as a select committee. I am not sure what other ongoing committees there can be.

Mr Leong, you have another clarification?

Yes, Mr Speaker. I have another question for the for Minister Indranee on the NIRC. For the NRC, I think, probably, at some point there will be some agreement to disagree.

But I want to clarify a few things with the Minister. First of all, I think as you have said, the budget has about $100 billion of revenue and on top of that there is about $24 billion of NIRC. This becomes a pool of money that is available for spending. There is no question about that. But the Minister will not dispute the fact that out of this $124 billion, in fiscal year 2023, about $17 billion is moved to the endowment funds and the trust fund. So, we may disagree whether this is a spending or not, but that is a fact. Correct? So, this is the first question. So, there is, in fact, a sum of money that is moved to the endowment funds and the trust fund.

Mr Leong, are you seeking a clarification? At the end, you will have the chance to make your closing speech. So, if you have other clarifications, I would appreciate if you maybe just put it all, at one go.

Okay. Then, when the funds are being transferred to all these endowment funds and trust funds, some of these funds, like the endowment funds, as I have said in my speech, the capital is locked up in the fund. So, is there a need to lock up this capital? Because by legislation, the capital is going to be locked up. We definitely will be able to put that fund to the better use.

So, if indeed some of these funds are locked up through the endowment and trust fund structure, then all the things that the Minister has said about, "Oh, give us the leeway. Let us take the money from you first. We will invest in the reserves and you will give you back NIRC." So, but here, we are finding the situation not so straightforward. Even the NIRC, some of the money is being locked away. You may say this is not NIRC, but whether it is NIRC or just a surplus budget resources, money is fungible. So, let us not argue about that. But there is access money that is locked away.

And there are some funds that may not actually directly benefit Singaporeans straightaway. Because we would think that the NIRC will be a bit more towards welfare spending, but we also know that the NIRC or the endowment fund and trust funds, a lot of the trust funds are for infrastructure development, like the Changi Airport Fund and for economic development, like the National Productivity Fund, and even the Coastal and Flood Protection Fund.

These are all going to use up a lot of the so-called 20% that the NIRC has contributed to the budget. We have no issue that you keep quiet. But if you insist that every dollar spent in the budget, 20% is from the NIRC, then, I would say yes, there is no factual error or factual inaccuracy to what you say. But then this 20% is not quite the impression that the Government has tried to convey. Meaning this 20% is spent on Singaporeans, not necessarily spent on Singaporeans.

So, on these two points, the capital is locked away and some of the capital is actually not for welfare spending, even for all these very long-term infrastructure spending – which should be dealt with in a different way, like what you have said, there is a SINGA Fund, there are other things that we can use to finance all this.

I thank Mr Leong for his clarification. It is actually a very straightforward principle: 20% of our revenue comes from NIRC. So, that is your full revenue. We allocate this for education, for the Ministries; and some part of that goes into funds. So, the entire revenue is fungible, as Mr Leong said. So, that is all mixed up.

I did not say – and I am not sure why Mr Leong thinks so – that we take just that 20% slice of NIRC and park that in a fund. It does not work like that. It all comes into the big pool of revenue and then we slice up the pie differently. Then, when it goes into the fund, it is spent on Singaporeans. Some of it may be spent now because, like he mentioned a whole lot of infrastructure funds, but he omitted mentioning the other funds which I talked about in my reply earlier – like for example, Pioneer Generation Fund, the Merdeka Generation Fund and the GST Voucher Fund which you draw down. And you draw down now for today's generation and some of it may be later. But the point is, the most important point is, that this is for Singaporeans.

And for the infrastructure ones, because the spending is lumpy, you do not want to wait until one day when you have to pay a very large amount and suddenly, you do not have the money. So, you set the money aside and you are able to stream it out, and you ensure that you have infrastructure available for Singaporeans.

Prime Minister.

Mr Speaker, Sir, I rise in support of the amendments to the Motion as proposed by Mr Liang Eng Hwa.

Today, we have had a long debate on this, past reserves, how much to use and how much is enough. But let us not forget what a blessing it is to have the privilege of having such a debate, having Past Reserves to argue over. How did we get into such an enviable position?

MPs will know that Singapore did not start with much. In 1959 when the PAP Government first took office, Dr Goh Keng Swee was appointed Minister for Finance and he immediately discovered that the Treasury was bare and he had to implement immediate austerity measures, including pay cuts for civil servants and Ministers.

It was only by the early 1980s, after two decades of nation-building that we had started to accumulate a nest egg of reserves. And at that time, our forefathers considered what to do, because they anticipated that the political pressure to spend these reserves would grow and that if these hard-earned savings were not properly protected, it could be easily and unwisely spent. And once gone, is gone. They felt that they had to do everything they could to guard against this.

So, in 1984, at the National Day Rally, Mr Lee Kuan Yew talked about how the reserves could be frittered away by a profligate government spending money that it had not itself earned within a single term. He proposed a simple principle. If a government wants to spend, it must first raise the money, whether by raising taxes or by making shrewd investments or some other direct open, proper means – but not by drawing down on the Past Reserves that it had inherited.

And to guard against a rogue government raiding the reserves, Mr Lee mooted the idea of a President elected directly by the people who would have the constitutional power and the moral authority to safeguard the reserves and be able to say no if the government wanted to spend it for an unwise purpose. And that was the concept of the second key.

Four years later, 1988, the PAP Government published the White Paper on the Elected President scheme. Prof Jayakumar oversaw the drafting and I helped him with it. We made the Elected President proposal a central issue in the 1988 General Election.

After the election, in January 1991, we amended the Constitution to create the Elected Presidency. And Mr Wee Kim Wee, who was then already the President took on the new custodial powers and became the first President who wielded the second key.

We designed a whole system to protect the reserves, wherever those reserves might have been.

So, the second key applies to the Government, especially the Ministry of Finance (MOF) but also to what we call the Fifth Schedule entities. Fifth Schedule because it is a Fifth Schedule attached at the back of the Constitution. These Fifth Schedule entities are MAS, Temasek, GIC, CPF, JTC, HDB. Why did we do this? Why did we include these six entities?

MAS, because those are official foreign reserves. Temasek, because those are our direct investments, the Government-linked corporations. GIC, it does not have very much money of its own, but it is the manager of the Government's money, of MOF's money.

The CPF, which is Singaporeans' savings; not really the Government's money but if we have a rogue government, this too will be at risk. And then, JTC and HDB – why? Because of land; they own and manage land for industrial, for housing and for other uses. Land has value and, in Singapore, land is often very valuable. Therefore, we must protect our land and not allow our government to do anything with it that is a covert form of giveaway; and we discussed some possibilities today.

That was how we started.

Our first priority was to keep the capital sums in the reserve safe. We had not thought very deeply, about exactly how much of the income to spend. We just took a Standard Accounting view – that the income from the reserves would be the interest and dividends that we earned on our investments. And we called this Net Investment Income (NII). We decided that the government of the day could spend 100% of the NII. But in practice, we did not spend any of the NII because we were still running comfortable budget surpluses.

Later, when Mr Ong Teng Cheong was elected President, he questioned this rule. He asked why do we allow ourselves to spend 100% of NII? He argued correctly; that we should also set aside something for the future. Because as the years pass, as the economy grows, if your reserve amount remains constant; it gets smaller relative to the economy and you ought to allow the reserves also to grow.

So, the question is, how much to provide for the future while also enabling the present generation to benefit from the reserves?

There is no magic rule to this, but we arrived at a split of 50-50. And there is a certain simplicity and fairness to that – a natural division that we settled on, between the President and the Government. It is simple, it is intuitive, everybody can understand it. We split the difference between now and the future – "jit lang, jit pua" (一人一半).

And so, in 2001, Parliament passed a constitutional amendment to protect 50% of NII and add that to the reserves; and the other 50%, the government of the day could spend. So, 50% for the present, 50% for the future.

Over the next decades, as we gain experience operating the safeguards, we progressively refined them. And I have been closely involved in this process; first working with Prof Jayakumar under Prime Minister Goh Chok Tong, and then later on, as Prime Minister.

Over time, we realised that NII may not be the best measure of what you should be able to spend. Because when we invest, we do not just look at income from dividends and interest. We also expect to make capital gains, which are often more important than dividend payouts.

For example, if you had bought Facebook shares – I did not, but if you had – at their IPO in 2012 at the price of US$38; yesterday, you would have had that value gone up 12 times, because Meta closed at US$455 yesterday. But you would not have received one cent of dividends. Meta is about to pay their first dividends next month in March.

So, in that circumstance, can we say, returns from the investment is zero? No, it is wrong. So, we decided we should consider not just the interest and dividends, but also include capital gains as well. And, of course, you must take into account capital losses as well. And that means spending on the basis of overall investment returns – capital gains and losses, in earnings, plus income, interests and dividends – instead of just investment income.

We also studied how other institutions which had built up large endowment funds managed them, particularly US Ivy League universities like Yale and Harvard. Harvard has the biggest fund, Yale has quite a big fund, but Yale had a model which was very successful and very respected. We learned how they implemented consistent spending rules, how they smoothened out the draw on funds because from year to year, the fund performance can be volatile.

We must understand this. We can project 4% long-term expected returns. Next year, what will you earn? God only knows. It can be plus 10%, it can be minus 10%. Hopefully, after 20 years, it is something like what you projected but, really, it is volatile from year to year. And you have to find some intelligent way to smoothen it out, so that you can spend steadily and not be whiplashed.

And I met Mr Len Baker, who chaired the Yale investment committee, to understand how Yale did it. He happens to be on the GIC investment advisory panel. So, we studied them, we modelled our rules on these ideas, taking into account our political and constitutional context, which makes it much more complicated for us to implement than, say, a US university.

So, in 2008, we amended the Constitution again to specify that the Government would spend out of Net Investment Returns (NIR), instead of NII. But we kept the 50% rule, so the Government could spend 50% of NIR instead of 50% of NII. And we called this amount which a government can draw from the reserves and add to the annual budget to spend, the NIRC.

And this is how we arrive at today's system of spending half of investment returns and saving the other half – after decades of refining and improving the system, testing it out, making sure that it worked as intended.

It is important to put into context just how valuable an asset our reserves are to Singapore. As you have heard, the NIRC accounts for one-fifth of Government revenue. It is around 3.5% of GDP, more than what we spend on any single Ministry; more than we spend on defence, more than we spend on education, more than we spend on health – 3.5% of GDP every year.

As far as MOF is concerned, they just sit there, it arrives. They do not have to raise taxes, they do not have to collect fees. They just have to make sure that Temasek, GIC and MAS are run properly. And every year, you hope and you should be able to get 3.5% of GDP.

How does that compare with our other revenue sources? Sir, 3.5% of GDP is about equal to corporate income tax revenues. It is 1.4 times personal income tax revenues. It is 1.3 times GST revenues.

Supposing we did not have the NIRC out of the reserves, then what would we do? You have a choice. You can double corporate income tax. You can more than double personal tax. Or you can roughly double GST. So, instead of 9% GST, or maybe 18% or 20% GST. That is what the NIRC has enabled us to do – and that is the burden which the NIRC has taken off Singapore taxpayers.

We are here today because our forefathers had the prudence to build up the reserves and the vision to anticipate the political pressures to spend them and the imagination to design the Two Key scheme to protect the reserves for succeeding generations. That is what stewardship means.

But despite the constitutional protection, the pressure to draw on the reserves will still be there, especially as spending needs grow. And hence, the repeated questions and demands: how much do we have? Do we have too much? Are we saving too much? Can we not save just a little bit less?

If you look up the Hansard, you will know this is far from the first time this subject is being discussed.

No doubt, the Opposition will swear they are being responsible and give many plausible reasons to draw on the reserves. Surely, spending a little bit more, just a little bit more would not break the bank. Surely, it is okay to talk about the income or the returns, and we do not touch the principal. Surely, we can treat land differently from other assets – no need to price it fully, sacrifices of the people.

Once we take that mindset, we are going down a deep hole. How much is enough? To me, that is the wrong question to ask. It is a misconception. I have said it before, but it is true. It is a misconception, that when it comes to our reserves, there is such a number, say, X billion dollars, that is enough. Then, you have more than X billion in the reserves, we have too much. You have less than X billion in the reserves, we have too little.

There is no such number because we can have no idea what the future holds, what crisis we will run into, how much we will need.

When the Global Financial Crisis came in 2008/2009, we tapped on our Past Reserves for the first time. We made a Resilience Package – $20.5 billion, of which $4.9 billion was earmarked to come from Past Reserves. We implemented a Jobs Credit Scheme to help employers pay CPF and to protect the jobs. We had a special risk sharing initiative to encourage banks to lend and the Government would share the risk of the lending. In the end, we actually took $4 billion from the Past Reserves. The economy revived much faster than we expected and the Government returned fully this $4 billion by the end of its term.

In that crisis, we also use Past Reserve to guarantee deposits in commercial banks. We ringfenced $150 billion for this purpose. And we said so; that we would put aside $150 billion from the reserves to back this guarantee. It is not just words. It has got real heft behind it.

Thankfully, no banks failed and we did not have to touch the money. But it was critical that we did that and to deliver a credible guarantee to bolster confidence in our banking system, and probably prevented a run and the deposits would have disappeared from our banking system, gone overseas. The banking system would have crashed, the exchange rate would have crashed. Those people who say, "It did not happen, it cannot happen", I say, "Get real."

So, was $4 billion enough?

The next crisis, COVID-19, when it hit us, that was on a different scale altogether. We sought the President's approval successively to draw up to $69 billion from Past Reserves for medical facilities, testing, vaccines, support schemes and Assurance Packages. We saved lives, we saved livelihoods. In the end, we actually drew down about $40 billion. It is not likely that we are going to be able to put $40 billion back into the reserves anytime soon.

Again, in COVID-19, our reserves were a tremendous advantage. It gave us confidence. It gave others confidence in us. We had the financial muscle to do everything we needed to do without getting heavily into debt, unlike so many other countries. The Ministry of Health could concentrate on their duties, the Ministry of Education could concentrate on their arrangements, the Ministry of National Development and MOM could look after the dormitories. You do what you need to do, the resources will be forthcoming. It is a tremendous luxury.

Without the reserves, would we have dared to pre-order vaccines even before they were tested and proven and produced? Would we have been able to pay up to 75% of salaries in the crisis, in the Job Support Scheme to protect workers and to prevent companies from closing?

So, we spent $40 billion in the end. Is $40 billion enough?

COVID-19 will not be our last pandemic nor our most serious one. And it is far from being the worst thing that can happen to Singapore. If we find ourselves at war like Ukraine, how much is enough? The war is costing Ukraine US$100 million a day. The country relies heavily on US and European support. The US has committed over US$100 billion in humanitarian, financial, military support, and now another US$60 billion is being debated. The administration wants to do it, the money is desperately needed in Ukraine. Not money, but guns, weapons, everything, ammunition. Congress is making it difficult.

Europe has also committed almost US$100 billion so far and just committed an additional €50 billion in grants and loans over four years, with a lot of angst and debate, internal disagreement. Hungary had strong views to the contrary.

Without this external funding support, Ukraine's war is over. How long more can the US and Europe sustain this support for Ukraine?

Looking ahead for 50 years, can anyone promise that Singapore will enjoy another half century of peace and tranquillity? Or guarantee that someone will come to our rescue if we ever find ourselves in a situation like Ukraine's?

So, back to the question, for Singapore, how big a nest egg is enough? Mr Speaker, there is no sensible answer to this question. We can never say for sure how much is enough because we do not know what kind of crisis we will face in the future or how our investments will fare. But that does not mean that we should mindlessly save every dollar we earn without regard for present needs. Instead, our mindset should be to treat Past Reserves as a precious resource that generations of Singaporeans have built up, starting with the Pioneer Generation but continuing with the Merdeka Generation and with the later generations till this day.

And it is a resource. How much does not matter. Whatever the amount, we put it aside as a nest egg, a rainy day fund. We draw on half the investment returns to supplement our Budget every year. The rest, we touch only in times of exceptional need or during crises, with special permission from the President. If during one term of government, we happen to accumulate a surplus, then we add to the reserves and, hopefully, we can maintain the nest egg and keep on growing it gradually year after year, not just for this generation but for future ones as well.

The spending rule which we have settled on and enshrined in the Constitution is 50/50. Half for now, half for the future. As I explained earlier, this is fair and just and, as I would like to explain now, it also happens to be the right sustainable proportion to keep the reserves in proportion with the GDP, because let me take you through this back-of-the-envelope. Please get your back of envelopes out so we can do this sum.

Let us assume a long-term expected real return of 4%. It is roughly that. You can see it from GIC's numbers. MAS' is slightly lower. Temasek's is slightly higher, but let us, say, 4%. The 50/50 rule means we spend 2%, we save 2%. Okay? It means that the reserves should grow by about 2% per year because there is no other place for the reserves to grow.

Just now, Mr Sitoh enumerated all the other places and explained to you why there was no money in them. Land, because it is a conversion. The Budget, because it is not in surplus. And borrowing, issuing Government securities, because that is not really our money. It is borrowed and, one day, it will be claimed. And foreign exchange, that is also really not our money because people bring in money to be deposited in Singapore banks, they can take the money out of Singapore banks any time. So, just because the balance is sitting there does not mean you can take it home.

So, 50/50, 2% goes back into the reserves, the reserves will grow, all things going well, 2% per year. And our economy, all things growing well, will also grow, I hope, about 2% per year, because my work force is flat, my productivity, if I work very hard, I get 1.5% productivity growth a year. So, to make 2%, 2.5%, is already working very hard and doing quite well.

In other words, on present settings, with our present policy, the reserves will be growing about 2% per year. The GDP will be growing about 2% per year. The balance is the same every year. It is not getting bigger and bigger, more and more reserves, while the GDP languishes. And so, the contribution to our Budget, NIRC, will be about the same every year, about 3.5% of GDP.

And if you look at the last five years' Budgets, all of the figures are published, you will see that it has been about 3.5% a year. It has not gone 3.5%, 4%, 5%, suggesting that I have got more and more money in the kitty. It is about there. And, so, if I keep on doing this, I will keep on being able to do this and spending 3.5% from the reserves every year, saving me a doubling of the GST. I think that is a good thing.

And that is the way to protect our nest egg. It is the right thing to do. Yes, Singaporeans are facing higher cost of living. Yes, our spending needs have gone up and we need more programmes to cater and to look after an ageing population. And yes, the Government does have many programmes to help Singaporeans to cope with the cost of living. All kinds of them. Just now, the Leader of the House counted the ways. I do not have to count them again. But there are many.

And, in fact, we have covered not just the present generation and the younger generation, but also the older generations, too, because we had a Pioneer package, we had a Majulah package. We have not forgotten the people who brought us here. But each generation must spend within our means and each generation has been able to spend within our means and, even this generation, we can spend within our means.

It does mean that, from time to time, we have to revise our taxes, raise some of them, like the GST which we have just raised to 9%, and we have powerful reasons for doing so, which have been extensively debated. Our spending needs have gone up, especially for healthcare and the ageing population. And we know that we will need the money sooner rather than later.

Why do we do this? It is not just for the fun of it. Nobody relishes a tax increase. Not even the Ministry of Finance. Why should a Government volunteer unnecessarily to do something which it knows is going to be unpopular? But if it has to be done, we will do it, and that is what it means to take responsibility for governing our country.

We got here because of the careful tending of our forefathers. Despite the difficulties and the challenges which they faced, they still put savings aside so that we can enjoy this resource today. And we are fed much better off for it and grateful to them for it.

Now we, too, should fulfil our obligation to our children and grandchildren to protect their interest in this nest egg. This nest egg. It is the money of the people of Singapore, yes, but it is not the money only of this generation of the people of Singapore. It belongs to this generation. It belongs to future generations, too, and we have a responsibility to both. And if we fulfil that responsibility, in time, our children and grandchildren, too, can benefit from a steady stream of returns from the reserves and also have an umbrella to protect them come a rainy day.

We must not erode the patrimony, this family treasure, which we have inherited from our forefathers. Nor should we burden future generations with debt, nor mortgage their future. We are beneficiaries of our forefathers' sacrifice and vision, but we are also trustees protecting this inheritance for future generations. It is not just for us and we have a responsibility to our children and grandchildren. This is the ethos and the compact which generations of Singaporeans have forged and it is one that, in fact, has been upheld across the aisle in this House.

During the Global Financial Crisis – I spoke about it briefly just now – we brought forward the FY2009 Budget to deal with the crisis and we had a crisis Budget. In the Budget – this is a Budget where we had the Job Support Scheme – and we were going to draw $4.9 billion from the Past Reserves. And in the Budget debate, Mr Low Thia Khiang questioned why the Government wanted to draw down on Past Reserves instead of using savings from the Government's current Budget. He said: "What is unusual about our resilience package is that the Government will be using our Past Reserves to fund two main components of the package, the Jobs Credit Scheme and a special risk sharing initiative." I think I misspoke, I said Job Support Scheme; it was the Jobs Credit Scheme.

"Past Reserves are a strategic asset meant for use in times of need, especially when the Government faces financial constraints due to unprecedented circumstances which require the Government to respond in the interest of the nation. Hence, I am surprised that the Government has chosen to set a precedent in asking the President for approval for a drawdown of our Past Reserves when it has enough savings from the current term of Government to fund the entire Resilience Package, and the resulting Budget deficit, which the Finance Minister has estimated at..." a certain amount.

So, it was a very reasonable question – actually it was a very polite objection – and it was right that he raised it and we debated it. And our answer was, we are doing this so that we have dry powder, and that there are current Reserves, we may well need it later. We put that aside. If we need to, we will use it. As it turned out, fortunately, we did not need to.

Two years later, in 2011, when the Government paid the $4 billion back to the Past Reserves, Mr Low Thia Khiang spoke again. He did the honourable thing and commended the Government and he said, in that Budget debate again, 2011, "In conclusion, Sir, the Budget this year has done one thing right. It has prudently put back into Past Reserves the $4 billion that the Government took in 2009."

So, this is how a responsible Opposition conducts itself. There was a common commitment to safeguard our Past Reserves and a recognition, a shared recognition, that they are a strategic asset only to be used for unprecedented circumstances.

Now, I hear the Opposition arguing that we should change the rules and draw more from reserves and that, of course they have no intention to raid the reserves far from wanting to bankrupt Singapore. They say we can easily afford what they are proposing. I conclude their tune has changed.

May I remind them that the changes they are proposing are not simply policy changes, but require amending the Constitution to draw and to spend more from Past Reserves which are protected by the President.

Some people say it is harder for this generation to abide by the same tight fiscal rules as before. They say that now growth is slower, the cost of living has gone up, which is true. But our forefathers, who put aside the surpluses which grew into the reserves, were much less well-off than us – to put it bluntly, much poorer than us.

Our standard of living is double or triple what our forefathers lived with and yet, they saved up surpluses for the future, whereas now, we hear arguments that we should draw more from the reserves on that basis that we need the money more urgently today! There is a Chinese saying, 创业难，守业更难，败家轻而易举. Hard to start, even harder to keep it going but all too easy to ruin and to lose everything.

Mr Lee Kuan Yew and his team had anticipated this outcome, this political pressure. They knew that there would always be many worthy heart-tugging causes demanding Government resources. Every MP has got pet causes which he champions. Even Ministers have pet causes. Even Prime Ministers are allowed to have a few. We all want more things to be done, but we also know – and Mr Lee Kuan Yew knew – that that money would always be not enough. And he knew that it would always be politically tough to raise taxes and that is why he and his colleagues designed and implemented the Two Key scheme.

Some of Mr Lee Kuan Yew's senior colleagues told him that in locking up the reserves, he was trying the impossible. You know why? Because their philosophy was if a generation wants to spend the money, somehow, they will get their hands on it and they will do it. But Mr Lee Kuan Yew disagreed and decided he had to try his best. And it is up to us and for us now to prove that we can protect the nest egg and that Singaporeans are capable of being prudent and responsible, well beyond the founding generation. We are not "Ah Sia Kia". We are responsible. We are also forefathers one day of generations yet to be born.

The Government is elected, not just to take care of citizens today but also to secure the future of the country and the PAP Government has always done both. But in taking care of today's citizens, we are very cautious to safeguard the interests of young people not yet voting, future citizens not yet born and the long-term interests of Singapore.

In 2001, when we instituted the 50% rule applied to NII and amended the Constitution, Mr Lee Kuan Yew intervened in the debate because some MPs were proposing good causes to spend the money on, particularly old people. And he reminded everyone in Parliament, he said, at the end of the day, whom do we owe our deepest obligation to as the Government? To the future, not just to the present, certainly, not to the past.

We must protect the past reserves. It is our precious resource, our strategic advantage. It is a great source of comfort and reassurance that if we run into a jam or find ourselves in a tight spot, which is bound to happen every so many years and not so many years, we will have one extra card to play. We will not be destitute.

Other countries admire, even envy what we have. But they find it very hard to emulate what we have done. It was only in Singapore, only in those circumstances, only with that history and that generation and that phase of nation-building that we could do it. If it is gone, we will not be able to do it again either.

So, therefore, as for ourselves, we too must make a conscious effort to keep our system working. Singaporeans need to have the right instincts. Save when we can, resist the pressure to touch it, use only when we really must. Each of us must see ourselves as stewards and trustees, taking care of the interests of present and future generations. That is the way to keep this discipline, to keep this rule and to keep this system with two keys working well.

Ultimately, in a democracy like Singapore, on big issues like this, it is the people who will decide and the PAP is convinced that this is the right approach for Singapore. As long as the PAP Government is in power, this is what we will do.

If any other political party thinks that this is not the right approach, if they truly believe that we should dip into our reserves more, then bring it to the ballot box, put it upfront, say you want to touch, you want to spend, you want to shift the rules. Do not pretend that you are being just as prudent, only more kind-hearted. Campaign in the next General Election on this issue. Ask voters for a mandate to form the Government. Change their Constitution. Dismantle the second lock and key. Put this squarely to the people and let them decide that PAP will join issue with them and convince Singaporeans that our way is the right way for Singapore and I believe Singaporeans do believe us. Because, if I may come back to the IPS survey which we referred to and which you still have in your hands, it was not just a survey of the trust for input on reserves and therefore, trust in the PAP Government in general.

If you look at the paragraph under paragraph 3.3, it says, "In the case of the PAP Government, the statement was modified to refer to the level of trust in it to manage the reserves." In other words, Singaporeans have high confidence in the PAP Government's management of the reserves. And therefore, we are confident that we will win the argument and we will be able to get Singaporeans to do the right thing.

Taking a long-term view of the reserves, striking the right balance between present and future needs, these are vital responsibilities of any Singapore government. I have spent 40 years of my life stewarding, safeguarding, improving the system, continuing the work of those who had come before me. Now, I am preparing to hand over to my successor in good order, a Singapore which is more prosperous, more secure.

I ask everyone to help them maintain the prudent policies that have served us well to keep Singapore on the right track so that we can all continue to benefit from the nation's success for many years to come. [Applause.]

Mr Pritam Singh.

Mr Singh.

Mr Speaker, with regard to the land point that the Prime Minister was referring to, I think the issue here is, at the end of the 30-year lease, the money has to go back into the reserves once the land is sold. So, it is the same piece of land that is sold. Every time it is sold, the land sale receipts go into the reserves. That is the only point I am seeking confirmation off from the Prime Minister.

Any other clarifications? I was going to invite Mr Leong, but I know he has run off for a short bio break, so, I request everyone just hold on for a while, because he is due to make his closing speech.

Okay, Mr Leong is back. Mr Leong, can I now invite you to make your closing speech?

Mr Speaker, Sir, I thank the Prime Minister, Minister and the Members for participating in this debate. Indeed, it is an honour for Hazel and myself.

There has been a lot of discussion and debate on various topics. We understand all the good things that the Past Reserves will bring to us and bring to our country, but what I want to emphasise today, is that all the good things that the Prime Minister, the Minister and other PAP Members have said will not go away even if we reveal our reserves. And it is right to reveal the reserves to the Singaporeans who are the rightful owners of the reserves. People in the know like myself, we can make an estimate. Just like any speculators, they can make an estimate from the data, from the statistics released by the Government. But Singaporeans need to know. We need to put Singaporeans, all of them on the same page because we are all in this together.

So, all the good things that the Prime Minister, the Minister the PAP Members have said, they are not going to go away after we reveal our reserves. And the reasons, I will say afterwards again.

And it will not go away. If some of the policies that PSP and WP have proposed are implemented – we have already said again and again. Of course, the Prime Minister said, a little here a little there, you are going down the hole, be careful. And with the wealth of knowledge and experience the Prime Minister has, of course, we will take his advice very seriously.

But at the same time, we still think that for Singaporeans of today, there is a sense that they want to do better, but the environment is as such that they seem to be facing a lot of limitations. So, we are here, talking about better policies, than what the PAP is offering today. The PAP policies are not that bad, but we think we can do better together. This is because what we are proposing is only going to slow down the reserve accumulation, and in exchange for that, to postpone the taxes increases so as to help Singaporeans cope with inflation and rising property prices. By the way, inflation, rising property prices, we can also say part of it is attributed to the policies of the Government.

So, we are talking about better policies here. I hope in this Chamber, we can discuss and debate things, so that we can bring these better policies out and not keep saying that whatever the Opposition says, this is going to bring us down. That is not necessarily true. If you look at the details of the things, the policies, the opinions that PSP, and I think – although I cannot speak every time for WP, those things that we are we are proposing. We aim to be a responsible Opposition.

After today's debate, I am sure many Singaporeans will continue to be disappointed, that this Government probably would still not want to disclose the figure of our financial reserves. Despite all the reasons I have given, that it will not compromise the stability of our Singapore dollar and our economy.

Let me elaborate a bit more on that. Relying on the experience I have in the financial industry and also based on my exchanges with Members, Mr Liang Eng Hwa, and the feedback from Members Mr Saktiandi Supaat and Mr Sitoh Yih Pin.

First, I think the issue of defending our Singapore dollar against speculators and the issue of disclosing our reserves are actually two different issues. Because to defend our Singapore dollar against the speculators, first of all, the PAP Members had mentioned about the Hong Kong dollar peg, George Soros' attack on the Pound and all that. But they fail to point out that all these are what we call fixed exchange rate systems. And, of course, the speculators will attack the fixed exchange rate system when there is a mispricing. But our Singapore dollar is essentially a float. It is a floating exchange rate system. As long as MAS runs its monetary policy properly and we have full confidence in MAS, and makes sure our Singapore dollar value is in line with our economic fundamentals, that is the most important line of defence.

And, of course, there are short-term speculators who may still come in to test and try their luck. Then, our MAS today, I would say have sufficient official foreign reserve to defend ourselves. MAS has official foreign reserves equivalent to 80% of our GDP. How many countries in the world today have that? That is a very strong defence already. In fact, there are other reasons why MAS have very good control over the forex market and control over the value of our Singapore dollar, but I would not go too much into that.

So, we have all the tools and the position and advantages to defend the Singapore dollar. But to reveal the figure of our reserve to the Singaporean is important for the Singaporeans to have full confidence without any other misconceptions. Full confidence and full knowledge of what our country has in the reserves.

I hope Singaporeans do not need to wait for another 56 man years before they get an answer about our financial reserves at least. I like to emphasise here again. That Singaporeans are the owners of the reserves and they are entitled to the precise information of at least the financial reserves.

Mr Speaker, Sir, I hope that today's debate has helped Singaporeans gain more insight into our public finances and has put more Singaporeans on the same page on Singapore's financial position.

Even though the budget and the reserves are very technical topics that may not appeal to many Singaporeans, I have chosen to make many speeches in this House on these issues, because they fundamentally impact our cost of living, quality of life, economic competitiveness, income equality and social cohesion. It is especially important in the past two years because the Government has made a number of tax increases that PSP thinks are not necessary.

Given the fact Singaporeans are facing unprecedented problems in terms of cost of living and runaway property prices and, anyway, in our opinion at least our budget and reserves we still have the leeway.

I also hope that by having more discussion on these issues, we can dispel the misconceptions and fake news relating to our reserves.

Today, I do not think the majority of Singaporeans are really fully confident that we have over $1 trillion dollars of reserves. Why? Because when you listen to some of the talk on the ground, they say, "If we have so much reserves, why is the Government keeping our CPS savings?" I have to explain to them actually these are two different issues. CPF are for your retirement, has nothing to do with the fact that we do not have reserves. But this is a misconception, nevertheless, and we have to address that.

Some fake news in the social media say Singapore has external debt equals to 200% of our GDP. You know how we get that? From the Government financial statements because we have total liabilities of about $1 trillion. But those are not real liabilities actually. But we must explain to the Singaporeans that we have all these assets. If not, the fake news will continue to be there. And, of course, all the rumours about the performances of GIC and Temasek, which I think are sometimes very unfair for the fund managers in those two organisations.

So, I would like Singaporeans to have three takeaways from today's debate.

First, our financial reserves amount to more than $1.2 trillion at least. Ms Hazel Poa has explained two methods to calculate this based on the figures published by the Government in the Government financial statements.

This $1.2 trillion, as I mentioned, will also continue to grow although the Prime Minister, the Minister and many Members have said that the rate of return on the financial reserves are not certain, not for sure. Yes, granted.

But there are other sources of growth and by the way, the 4% the Prime Minister mentioned about long-term investment growth, that is a standard assumption made by investment management entities. And, of course, you can say that okay, in a few years' time the whole world will change but that 3% to 4% is based on a long-term forecast of the investment returns generated by these investment firms' forecast. I mean, the actual track record of investment based on a universe of asset classes and this is a standard measure used by the investment firms worldwide. It is not something very special.

So, we can use 4% or maybe a bit more conservative 3%, but that is a reasonable number because as long as this world, this Earth is still intact, human beings will have economic activities and their economic activities will generate a return.

The second takeaway is that the continued accumulation of reserves comes at a cost to Singaporeans. The cost can come in the form of higher taxes, higher property prices, higher cost of living or lower interest for CPF balances, depending on which of the five sources of growth the new reserves come from.

Hence, the cost of accumulating reserves has a direct impact on some of the top concerns of Singaporeans, such as the affordability of HDB flats, the rising cost of living, retirement adequacy, prospect for the younger Singaporeans and a host of other social ills.

PSP also would like to continue to grow our reserves at the current rate, if not for the fact that the heavy costs to Singaporeans are becoming more and more apparent, especially with the Government's tax increases over the last two years.

We have asked about the reserves, we have asked about the land sales, NIR. And the Government has said all cannot be used.

So, today in my debate, I then said how about NIRC? The NIRC also does not seem to be totally used for the benefit of Singaporeans. I mean, and it is a matter of interpretation, but I pointed out some of the NIRC has been locked up. Some of the NIRC has been applied to very long-term infrastructure projects, including coastal and flood protection, all that. Coastal and flood protection – these are our existential problem. Is this not an example that we should use our reserves or some parts of the reserves and not rely all this on the NIRC, which from the PSP's point of view is supposed to enhance the welfare of Singaporeans so as to avoid the necessity to increase taxes. Of course, you take that away, then you have to increase taxes.

The third takeaway is, fortunately, we actually do not need to draw down our reserves, but just slow down the rate of reserve accumulation marginally to produce much better economic outcomes for Singaporeans. And that is the message that Opposition has been presenting in this House. We are not being fiscally irresponsible. We are just saying policies can be better.

There is no tension between providing for present-day Singaporeans and continuing to provide for future generations – although hon Member Vikram Nair has cast doubts on that. But I have asked him that question whether he knows how much reserves we are accumulating each year and how much are our policies are going to spend, even at the very worst.

The numbers are as follow. We are accumulating reserves by the tens of billions. According to my checking the Government financial statements and all that, probably about $50 billion a year, $50 billion to $100 billion, depending on which year it is.

And over the last two years, we are lucky. When there was a huge influx of capital into our country, the Government was able to accumulate an additional $250 billion. Additional reserves over the last two years.

So, with that, we are accumulating reserves by tens of billions and we are proposing policies that spend at the very worst, very worst a few billion dollars. Is that not a win-win situation? Because not that we want to spend the money but present-day Singaporeans, many need the money especially the second half of Singaporeans in terms of income.

But this is not happening because the PAP Government was overly conservative fiscally and it has continued to raise taxes and fees which will maintain the current rate of reserve accumulation and in exchange giving out ad hoc handouts to appease Singaporeans.

That is why we are confident that some of our policies, long-term policies, even implemented, it will not lead to a big increase in the budget because there are so many of these ad hoc schemes that you can actually integrate into some long-term scheme.

PSP strongly supports fiscal prudence. But we believe we have set aside too many resources currently and inadequate spending and investment and heavy overall taxes have weakened the present-day Singaporeans. I am sure Singaporeans will much prefer to be taxed less than receiving ad hoc handouts from the Government.

I hope this House today will appreciate that PSP is not even asking for more NIR or land sales revenue for the budget, at least for today we are not asking although we support all these policies. What we are saying today that even the NIRC has not been totally deployed for the full benefit of Singaporeans. And there is also this artificial deficit created by the current policy of charging land cost on HDB flats.

None of the policies that PSP recommended will weaken fiscal prudence and compromise our future ability to spend on any crisis that may come up in the future. In fact, what our policies are aiming at is to increase our social cohesion, increase, improve the conditions and the quality of life of Singaporeans, so that we have a stronger, present-day Singaporean Core and we can take crisis in our stride.

Mr Speaker, we want Singaporeans to be confident in Singapore's future by giving them the true and complete picture of a strong financial position. A strong financial foundation is a good start. With the resources we have accumulated as a nation, we are confident that we can realise a new social compact together.

The 4G PAP leadership has presented a new social compact, Forward SG, which contains many invaluable insights from 200,000 Singaporeans on what future Singapore they want. We share Singaporean's aspirations to pursue fulfilment and contentment, instead of simply focusing on material needs. What is needed next are concrete policy prescription to realise their future.

PSP thinks that financial freedom is the key to enabling Singaporeans to realise the aspirations they have articulated in Forward SG. When relieved of their financial burden, Singaporeans will be free to exercise their creativity, make their plans to realise their own potential and lead a happy life.

As the most important way to enhance financial freedom for Singaporean is to lower housing cost, PSP has tirelessly pushed for the Affordable Homes Scheme and Millennial Apartments Scheme to be implemented. I would like to reiterate again that implementing these schemes will not need to draw down our reserves, but just accumulate a little bit less. The raiding of reserves allegation by the Government is just a distraction.

PSP will continue to share with Singaporeans policies to facilitate a happy life and to ensure Singapore remains a secure place to live in, with rising incomes and good jobs for everyone, not just the rich and famous.

Today, many Singaporeans are struggling with their finances, even as Singapore becomes a paradise for the rich and famous, and sometimes the unscrupulous, like those in our recent money laundering case. The household expenditures survey in 2020 shows that the bottom 20% of Singapore households by income, in 2018, spent $2,235 in expenses and got $2,570 in income, including employer CPF. This means that after deducting the employer and employee CPF contributions, the bottom 20% of households, or more than 200,000 households are essentially, in deficit and must rely on Government handouts, charity or loans from legal or illegal moneylenders to survive. For the second quintile, it is $3,752 in expenses versus $5,981 in income, again, including employer CPF. After accounting for CPF contributions, this group of Singaporeans have very little left to save each month.

The survey suggests that the bottom 40% of Singapore households are really struggling to survive while the Government has accumulated lots of savings or reserves. It will be the right policy for the Government to start to relax its fiscal grip, which may reduce reserve accumulation slightly, but to offer more financial support to this group of Singaporeans.

We should also be worried about the many social ills we are grappling with today, which can be traced back, at least partly, to financial difficulties. The most important ones today are the low total fertility rate and increasing mental health issues. A pre-conference poll shared by the IPS at the Singapore Perspective Conference last week found that high costs and stress were the top reasons for not wanting to have children across all age groups. If the current generation of Singaporeans are struggling to maintain their standard of living, what incentive do they have to have children?

We acknowledge that the share of welfare spending in the Budget has increased significantly since 2011. But these spending do not address the root causes of the harsh economic realities faced by Singaporeans. Ad hoc handouts do not change the structural economic realities that are faced by present-day Singaporeans. After receiving the temporary relief, they continue to be burdened by the rising cost of living and the prospect of having to downgrade from their current HDB flats in order to retire.

Without policy changes to address these structural economic issues, lower-income and even middle-class Singaporeans will become more and more dependent on Government handouts to survive. This is not the kind of future we want for Singapore and Singaporeans. We must find other ways to improve the conditions of the Singaporeans. PSP wants all Singaporeans to benefit from our economic prosperity, not just the rich and famous. This is the future that PSP wants for Singapore and Singaporeans.

Mr Speaker, our Past Reserves is the pride of our nation, a monumental task achieved by the trust between the people and the Government. To maintain that trust, the Government must now ensure that the Past Reserves are put to work for present-day Singaporeans to ensure that they can be competitive and lead a happy life in a globalised world.

The well-being of the current generation affects the ability of the future generations to thrive. A family that is constantly stressed by financial worries is not a good environment for children to grow up in. More than leaving behind national reserves to our future generation, it is more important to ensure that they are being brought up in a conducive family and social environment which allows them to develop the necessary skills to do well in the globalised world.

PSP's policy proposals like the Affordable Homes Scheme and Millennial Apartments Scheme are aimed at making our past Reserves work harder for both the present-day generation and future generations. We especially want to give the financial freedom to our younger Singaporeans to establish themselves quickly so that they can strive towards their ambition early in their lives.

When this House supports this Motion, it will reaffirm that our budget and reserve accumulation policies should aim at laying the financial foundations for every Singaporean of every generation to achieve a life of fulfilment and contentment. Mr Speaker, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, Sir, the Progress Singapore Party (PSP) tabled this motion today to request two things from the Government on behalf of the people.

First, disclose the total amount of our reserves, allowing the people to have an accurate understanding of our finances and related policies. Second, actively utilise our country's substantial financial resources to help reduce the financial burden on the people and improve their quality of life.

The total amount of our financial reserves should not be a secret, because it is the hard-earned money of the people. The reserves have five main sources, including land sales revenue and investment returns of CPF deposits, all of which come from the people, especially considering that much of the land was acquired by the Government from our forefathers at low prices.

The total amount of our national reserves also does not need to be a secret, as the Government has already disclosed a significant amount of financial information to comply with regulations from international organisations, such as the IMF. With this information, anyone, including foreign exchange speculators, can estimate the size of our reserves.

According to PSP's estimation, excluding land reserves, our total reserves has reached $1.2 trillion. Furthermore, from these assets, we earn nearly $50 billion in net investment returns each year. Therefore, the Government's earlier portrayal of itself as a poor Ah Gong and the comparison of our vast reserves to "coffin money" is misleading.

PSP urges the Government to be a responsible leader and disclose the total amount of our reserves, allowing every citizen to use this information to assess our nation's fiscal and tax policies. With the investment returns from the reserves each year, we will have sufficient financial resources to cope with the increased medical expenses resulting from our aging population in the future. Therefore, PSP strongly opposes the two consecutive increases in GST and property tax in 2023 and 2024.

These two tax increases and the increase in the Government's fiscal surplus allow the Government to accumulate more reserves, but they also seriously exacerbate inflationary pressures and increase the people's burden. Therefore, the current predicament faced by the people is not solely due to external factors, such as the Ukraine war; the Government also bears some responsibility.

In addition, since 1985, the Government has been charging land costs to HDB. These costs have increased with the rise in property prices, leading to a significant increase in BTO prices. However, high BTO prices only absorb a portion of the land costs. The remaining portion is subsidised by HDB, resulting in a deficit for HDB, which is ultimately borne by all taxpayers.

PSP strongly urges the Government to waive the land costs for owner-occupied HDB flats. This policy would allow every generation of young Singaporeans to realise their dream of owning a home at an affordable price around the age of thirty. Also, they would not need to sell their HDB flat in old age and would have sufficient CPF savings for retirement. Without the lingering worry of repaying housing loans for years, the next generation of Singaporeans can boldly seize the opportunities brought about by globalisation, creating a better economic future for our country.

PSP believes that a responsible Government and party should not solely pursue the maximisation of reserves but should aim to maximize the happiness of the people. PSP will do everything in its power to persuade the Government and assist it in achieving this goal.

(In English): Mr Speaker, I beg to move. For country, for people.

Are there any Members who have clarifications to ask of Mr Leong Mun Wai? No.

We have come to the conclusion of the debate and I shall now put the questions to the House for a decision.

We have four amendments proposed by Mr Liang Eng Hwa. We will deal with the amendments first.

Amendment No 1 is, "In line 1, to delete 'review' and insert 'ensure'."

The question is, "That Amendment No 1 be made", put.

As many as are of that opinion say "Aye".

Hon Members say "Aye".

To the contrary say "No".

Some hon Members say "No".

Does any Member wish for his or her dissent to be recorded before I declare the result? For those who wish to, I request for you to stand and we will record your dissent.

Hon Members Mr Chua Kheng Wee Louis, Mr Gerald Giam Yean Song, Ms He Ting Ru, Mr Leong Mun Wai, Assoc Prof Jamus Jerome Lim, Mr Muhamad Faisal Bin Abdul Manap, Ms Hazel Poa, Mr Pritam Singh and Mr Dennis Tan Lip Fong stood at their seats for their dissent to be recorded.

Mr Speaker: Okay. We have that recorded. Thank you. The Ayes have it, the ayes have it.

Question, "That Amendment No 1 be made", agreed to.

Mr Speaker: Amendment No 2 is, "In line 1, to delete 'current'."

The question is, "That Amendment No 2 be made", put.

As many as are of that opinion say "Aye".

Hon Members say "Aye".

Mr Speaker: To the contrary say "No". I think the Ayes have it, the Ayes have it.

Question, "That Amendment No 2 be made", agreed to.

Mr Speaker: Amendment No 3 is, "In line 2, after the words 'reserve accumulation policies', to insert 'always stay fiscally responsible and sustainable'."

The question is, "That Amendment No 3 be made", put.

As many as are of that opinion say "Aye".

Hon Members say "Aye".

To the contrary say "No".

I think the Ayes have it, the Ayes have it. Are there any Members who wish for their dissent to be recorded? Kindly stand. I thought I heard a very faint "No".

Mr Speaker, Sir, can I confirm that we can object to the Motion once —

Mr Speaker: I will go through the amendments and then we will have the amended Motion.

Mr Leong Mun Wai: That is right. We will wait for that.

Mr Speaker: So, do you want your dissent to Amendment No 3 be recorded?

It is alright.

It is alright? Okay. I think the Ayes have it, the Ayes have it.

Question, "That Amendment No 3 be made", agreed to.

Mr Speaker: Amendment No 4 is, "In line 3, to delete 'continuing to save' and insert 'planning and providing'."

Question, "That Amendment No 4 be made", put and agreed to.

The amendments have been agreed to. The Original Motion as amended is now before the House.

*The question, "That this House calls on the Government to ensure its budget and reserve accumulation policies always stay fiscally responsible and sustainable in order to help present-day Singaporeans reduce their financial burdens and improve their quality of life, while planning and providing for future generations of Singaporeans." (proc text)]

As many as are of that opinion say "Aye".

Hon Members say "Aye".

Mr Speaker: To the contrary say "No".

Some hon Members say "No".

Mr Speaker: I think the Ayes have it. Does any Member wish for his dissent to be recorded before I declare the result? Kindly stand.

Hon Members Mr Chua Kheng Wee Louis, Mr Gerald Giam Yean Song, Ms He Ting Ru, Mr Leong Mun Wai, Assoc Prof Jamus Jerome Lim, Mr Muhamad Faisal Bin Abdul Manap, Ms Hazel Poa, Mr Pritam Singh and Mr Dennis Tan Lip Fong stood at their seats for their dissent to be recorded.

Okay. We have it recorded. Thank you. You may sit down. The Ayes have it.

Original Motion, as amended, agreed to.

Resolved, "That this House calls on the Government to ensure its budget and reserve accumulation policies always stay fiscally responsible and sustainable in order to help present-day Singaporeans reduce their financial burdens and improve their quality of life, while planning and providing for future generations of Singaporeans."

Leader.