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05-09-2015, 12:50 AM
An honorable member of the Coffee Shop Has Just Posted the Following:
http://www.tremeritus.com/2015/09/04...re-affordable/ (http://www.tremeritus.com/2015/09/04/sdp-singfirst-wp%e2%80%99s-economic-visions-are-affordable/)
SDP, Singfirst, WP’s economic visions are affordable (http://www.tremeritus.com/2015/09/04/sdp-singfirst-wp%e2%80%99s-economic-visions-are-affordable/)
http://www.tremeritus.org/simages/dmca_protected_sml_120n.png?69f311 http://www.tremeritus.org/wp-content/themes/WP_010/images/PostDateIcon.png?69f311
September 4th, 2015 | http://www.tremeritus.org/wp-content/themes/WP_010/images/PostAuthorIcon.png?69f311
Author: Chris
Kuan (http://www.tremeritus.com/author/ckyb1803/)
http://www.tremeritus.org/wp-content/uploads/2015/09/affordable.jpg?69f311And
worth it. The SDP, Singfirst and the WP are not lacking in political courage
when they articulated an equitable economic vision for Singapore to the best of
their abilities in light of the PAP government withholding full disclosure on
public finances.
Singfirst’s Social Safety Net has been criticised as “bankrupting” the nation
for spending a portion of the earnings from the reserves, accusations by people
who do not seem to know that the PAP is already spending those earnings and had
been for 15 years.
SDP’s Economic Vision was lambasted by PAP Vivian Balakrishnan as “failed tax
and spend policies”. Of course, like any good PAP minister, he mentioned the
“Greece” thingy. All this rather rich coming from a man who knew a thing or two
about dropping a few hundred million of tax-payer’s monies.
Tired old “Greece” thing
First this article gets that tired old Greece thing out of the way since the
PAP cannot think of anything else than flogged that old dead horse whenever
social safety net or social expenditure get mentioned. Thought Singapore was
meant to be Switzerland in the first place.
The countries listed below are all double rated AAA / Aaa, similar to
Singapore.
CountrySurplus / Deficit to GDP ratio Debt to GDP ratioSocial Expenditure to GDP
ratioAustralia -0.1%26.3% 19%Canada +0.3%56.6% 17%Denmark +0.4%48.3%30.1%Germany -1.7%42.1%25.8%Luxembourg +1.0% 9.2%23.5%Norway+10.1%33.5%22.0%Sweden +0.2%55.5%28.1%Switzerland 030.4%19.4%Singapore +9.2%92.6% 2.0%
Clearly, in these countries with strong finances, tax and spend policies have
not failed despite the much higher social expenditure. But it is by looking at
countries with weaker finances that shows up the PAP’s incoherence.
CountrySurplus / Deficit to GDP ratio Debt to GDP ratioSocial Expenditure to GDP
ratioJapan-7.6%186%23%United Kingdom-7.9% 91%22.5%Greece-9.9%133%25%
If tax and spend policies have failed, then Japan and the UK would have
failed together with Greece. Do notice that Greece’s social expenditures are not
particularly high – this tells us that the root causes of the Greek problems are
not social expenditures.
Surplus, surplus and yet not a drop
Not quite but one should get the meaning of the PAP’s stinginess when it
comes to social expenditure but profligacy when it comes to government salaries
and defence spending. First on surplus let us hear from the folks at Singstats
(http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/reference/monthly_digest/mdsaug15.pdf (http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/reference/monthly_digest/mdsaug15.pdf))
FY 2013FY 2014Up to July 2015Surplus / Deficit25.3b25.3b10b
Then look at defence in comparison to health (not just spending on healthcare
but salaries, equipment, development costs, etc) and Social and Family
Development from which welfare spending is controlled.
FY 2013FY 2014Up to Q1 2015Defence11.3b11.8b2.7bHealth 5.0b 5.9b1.3bSocial and Family Dev 1.6b 1.3b0.2b
In other words, there are more expenditures going into defence than into
welfare and health where not all of the spending goes to patients.
Increased spending available from 2017
Mr. Balakrishnan seems to be deaf even to his own cabinet colleagues. For
Finance Minister Tharman had said there is no substance behind social media
speculation of a post-election increase in GST because of additional funds made
available from 2017 when the Net Investment Return Contribution framework fully
applied to Temasek. How much more additional spending power?
NIRC in 20142017 NIRC at GIC’s 4% real rate of return2017 NIRC at Temasek’s 6% real rate of returnTemasek’s $266b Portfolio2.7b5.3b8b
That means the NIRC will deliver $11.5b to $14.2b to expenditures by 2017
assuming those contributions from GIC and MAS remain the same.
Do remember that last year’s $8b Pioneer Generation Package and this year’s
$3b increase in social expenditures will not be repeated next year onwards.
There are huge spending resources, it is only a question whether these are spent
on an equitable socio-economic outcome for Singaporeans or on fancy weapon
systems, vanity infrastructure projects and government salaries.
Plenty to back SDP, Singfirst and WP
The size of the net investment return contribution shows that the SDP,
Singfirst and WP vision of a more equitable socio-economic outcome is not only
affordable but actually make some of their proposals, especially Singfirst’s
Social Safety Net appeared rather conservative.
Will the reserves be depleted by spending the returns? Definitely not,
because the NIRC framework only uses 50% of the real return, i.e. less than half
of the actual returns. It is also because the government continues to add to the
reserves through land sales and excess returns from investing CPF monies.
Finally think about it. What better way to make lives better for
Singaporeans, especially those socially excluded by absolute and relative
poverty by having earnings from the reserves returned to them through social
expenditures. And remember, those reserves came mostly from the high property
prices citizens paid and the low rate of CPF returns
received.
Chris Kuan
*
Chris was regional head of capital markets for Asia Pacific until his
retirement. He writes opinions and commentaries mostly on economic and financial
matters.
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?214946-SDP-Singfirst-WP’s-economic-visions-are-affordable&goto=newpost).
http://www.tremeritus.com/2015/09/04...re-affordable/ (http://www.tremeritus.com/2015/09/04/sdp-singfirst-wp%e2%80%99s-economic-visions-are-affordable/)
SDP, Singfirst, WP’s economic visions are affordable (http://www.tremeritus.com/2015/09/04/sdp-singfirst-wp%e2%80%99s-economic-visions-are-affordable/)
http://www.tremeritus.org/simages/dmca_protected_sml_120n.png?69f311 http://www.tremeritus.org/wp-content/themes/WP_010/images/PostDateIcon.png?69f311
September 4th, 2015 | http://www.tremeritus.org/wp-content/themes/WP_010/images/PostAuthorIcon.png?69f311
Author: Chris
Kuan (http://www.tremeritus.com/author/ckyb1803/)
http://www.tremeritus.org/wp-content/uploads/2015/09/affordable.jpg?69f311And
worth it. The SDP, Singfirst and the WP are not lacking in political courage
when they articulated an equitable economic vision for Singapore to the best of
their abilities in light of the PAP government withholding full disclosure on
public finances.
Singfirst’s Social Safety Net has been criticised as “bankrupting” the nation
for spending a portion of the earnings from the reserves, accusations by people
who do not seem to know that the PAP is already spending those earnings and had
been for 15 years.
SDP’s Economic Vision was lambasted by PAP Vivian Balakrishnan as “failed tax
and spend policies”. Of course, like any good PAP minister, he mentioned the
“Greece” thingy. All this rather rich coming from a man who knew a thing or two
about dropping a few hundred million of tax-payer’s monies.
Tired old “Greece” thing
First this article gets that tired old Greece thing out of the way since the
PAP cannot think of anything else than flogged that old dead horse whenever
social safety net or social expenditure get mentioned. Thought Singapore was
meant to be Switzerland in the first place.
The countries listed below are all double rated AAA / Aaa, similar to
Singapore.
CountrySurplus / Deficit to GDP ratio Debt to GDP ratioSocial Expenditure to GDP
ratioAustralia -0.1%26.3% 19%Canada +0.3%56.6% 17%Denmark +0.4%48.3%30.1%Germany -1.7%42.1%25.8%Luxembourg +1.0% 9.2%23.5%Norway+10.1%33.5%22.0%Sweden +0.2%55.5%28.1%Switzerland 030.4%19.4%Singapore +9.2%92.6% 2.0%
Clearly, in these countries with strong finances, tax and spend policies have
not failed despite the much higher social expenditure. But it is by looking at
countries with weaker finances that shows up the PAP’s incoherence.
CountrySurplus / Deficit to GDP ratio Debt to GDP ratioSocial Expenditure to GDP
ratioJapan-7.6%186%23%United Kingdom-7.9% 91%22.5%Greece-9.9%133%25%
If tax and spend policies have failed, then Japan and the UK would have
failed together with Greece. Do notice that Greece’s social expenditures are not
particularly high – this tells us that the root causes of the Greek problems are
not social expenditures.
Surplus, surplus and yet not a drop
Not quite but one should get the meaning of the PAP’s stinginess when it
comes to social expenditure but profligacy when it comes to government salaries
and defence spending. First on surplus let us hear from the folks at Singstats
(http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/reference/monthly_digest/mdsaug15.pdf (http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/reference/monthly_digest/mdsaug15.pdf))
FY 2013FY 2014Up to July 2015Surplus / Deficit25.3b25.3b10b
Then look at defence in comparison to health (not just spending on healthcare
but salaries, equipment, development costs, etc) and Social and Family
Development from which welfare spending is controlled.
FY 2013FY 2014Up to Q1 2015Defence11.3b11.8b2.7bHealth 5.0b 5.9b1.3bSocial and Family Dev 1.6b 1.3b0.2b
In other words, there are more expenditures going into defence than into
welfare and health where not all of the spending goes to patients.
Increased spending available from 2017
Mr. Balakrishnan seems to be deaf even to his own cabinet colleagues. For
Finance Minister Tharman had said there is no substance behind social media
speculation of a post-election increase in GST because of additional funds made
available from 2017 when the Net Investment Return Contribution framework fully
applied to Temasek. How much more additional spending power?
NIRC in 20142017 NIRC at GIC’s 4% real rate of return2017 NIRC at Temasek’s 6% real rate of returnTemasek’s $266b Portfolio2.7b5.3b8b
That means the NIRC will deliver $11.5b to $14.2b to expenditures by 2017
assuming those contributions from GIC and MAS remain the same.
Do remember that last year’s $8b Pioneer Generation Package and this year’s
$3b increase in social expenditures will not be repeated next year onwards.
There are huge spending resources, it is only a question whether these are spent
on an equitable socio-economic outcome for Singaporeans or on fancy weapon
systems, vanity infrastructure projects and government salaries.
Plenty to back SDP, Singfirst and WP
The size of the net investment return contribution shows that the SDP,
Singfirst and WP vision of a more equitable socio-economic outcome is not only
affordable but actually make some of their proposals, especially Singfirst’s
Social Safety Net appeared rather conservative.
Will the reserves be depleted by spending the returns? Definitely not,
because the NIRC framework only uses 50% of the real return, i.e. less than half
of the actual returns. It is also because the government continues to add to the
reserves through land sales and excess returns from investing CPF monies.
Finally think about it. What better way to make lives better for
Singaporeans, especially those socially excluded by absolute and relative
poverty by having earnings from the reserves returned to them through social
expenditures. And remember, those reserves came mostly from the high property
prices citizens paid and the low rate of CPF returns
received.
Chris Kuan
*
Chris was regional head of capital markets for Asia Pacific until his
retirement. He writes opinions and commentaries mostly on economic and financial
matters.
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?214946-SDP-Singfirst-WP’s-economic-visions-are-affordable&goto=newpost).