Budget Debate 2006
Tue, Feb 28, 2006
Sir, I had been misled. The public had been misled. Everyone had been misled to think that the government budget had been very tight these last four years, and we will enter FY2006 with a huge deficit. But Sir, that is not true at all. Not reflecting capital receipts is indeed even more misleading than reporting the whole truth. As stated earlier, this government have more than S$18 billion in the consolidated fund waiting to be transferred to the reserves. Can the Prime Minister & Finance Minister deny this fact? We want the truth, nothing but the whole truth.. . .
Budget Speech Debate 2006
Thank you Mr Speaker, Sir for allowing me to participate in this debate. I will comment on the electioneering behind this budget first, before making a thorough analysis of this budget, and will close of with a few important ideas for the MOF and other ministry officials to take note and look into.
As several PAP MPs before me had rightly pointed out yesterday, this is indeed an election budget. It is a budget used to sweeten the ground support for the PAP government in the run up to the election. The budget is use -- to reduce the anger and frustration of the lower income, the poor and the aged workers � against the rising income / wealth divide -- at least temporarily. And I can place my bet that the GE will be called within 30 days from 1st of May 06 -- after the people had collected the money.
And Sir, I believe the government had succeeded in this political objective. The poor, the aged, and the lower income are definitely thankful and appreciative of such a helping hand. That appreciation -- by the lowest 30% of income earners and small size HDB flat owners -- will translate into appreciate votes for the PAP government come polling day. We, especially the new faces, and non-incumbent members of the opposition contesting this GE will be wiped out.
How then can we still get people to be interested in contesting in the elections? Especially when they can�t create much impact individually in a single-member-constituency. As I told some Ministers in the commons room yesterday, we in NSP -- under the SDA -- may not be able to field a team to contest the 5 person Jalan Besar GRC � for short of a candidate.
Unless there is a big change to the electoral boundaries, Singaporeans should expect to see lesser constituencies being contested than in 2001. Their right to vote being eroded by a monopolistic anti-competitive PAP government. As the ST news headlines on Sunday put it: Lack of political choice is harmful to our Singapore society. I hope the PAP government will not continue to play this political advantage � at the expense of causing greater harm to our Singapore society.
Therefore, if the PM takes the coming GE as seriously as in this budget. I hope he will also play it more fairly. Play fair to spur more interest for concerned citizens to participate in this general election � whether as independents or opposition party members. The PM can easily do it by reducing the size of the GRCs back to the 1988 proposal of 3 men team each, and that will immediately quadruple the number of SMCs to around 42. Singaporeans will immediately see more contest, and 50% of citizens will immediately be able to exercise their right to vote in this GE. Society will be better off and richer for this experience. Sir, please don�t hide behind a big GRC any longer.
Now, let me come back to analysis the budget in detail Sir. The headline figures project operating revenue of S$28.96 billion, and a total expenditure of S$30.62 billion. Factoring in special transfers and NII contributions, we are told that the government will make an operating deficit of S$2.86 billion. Can this be true?
A look at appendix 7.1 of the Budget highlights (page 35) tells us that this is not the accurate picture painted by the Government. According to the appendix, the government�s actual total receipts for FY2004 and 2005 is $37.7 billion and S$38.8 billion respectively. For FY2006, it is estimated at S$40.69 billion. This means all expected money to be collected by the government going into the consolidated fund is actually S$40.7 billion.
This is S$11.7 billion more than what the government said it will collect as operating revenue. The government is collecting more money than it dares to declare. So, after deducting all the special transfers and deficits, the government is in actual fact, still holding on to S$8.8 billion of surplus revenue receipts.
Given that only 50% of Net Investment Income (as required by constitution) amounting to S$3.7 billion cannot be touched and must go into the national reserves, the government will still expect to have an operating surplus of S$5.1 billion. This S$5.1 billion comprises S$4.1 billion of capital receipts (mainly from land sales and other capital receipts) and an additional S$1 billion of investment income, allowed but also not reflected in this budget. Apparently, the government decides to use only 33% of projected NII returns for this term of government. Why did it not use up all the 50% allowed � to show a smaller budget deficit of $1.86 billion is something beyond my understanding! Can the Prime Minister explain?
Sir, the figures presented by the Prime Minister & Finance Minister do not reflect the overall fiscal position of the government. After deducting the total expenditure of the government for FY2004 (S$28.96 billion) and FY2005 (S$28.85 billion), the government is still holding on to surplus cash receipts of S$8.74 and S$9.95 billion respectively. Not inclusive of the 2001 transfers, FY2002 and FY2003 surplus receipts not previously reported (because I can�t find any figures of that from the highlight,) a simple calculation tells me that there is a obscene total of at least more than S$19 billion still sitting in our consolidated fund waiting to be transferred to the national reserves -- when this current term of government ends in the next four months.
That Sir, is a lot of money. More importantly Sir: that money has not been reflected in the budget. And Sir, it gives a misleading picture of our government�s fiscal position.
Although MOF had defended its �more stringent definition� of avoiding these �lumpy uncertain capital receipts,� the figures from appendix 7.1 clearly shows that these lumpy amount of $3 - $5 billion has been appearing with quite certain regularity yearly that it should be clearly reflected in our budget. I believe everyone here and all accounting experts will agree that all revenues going into the Government�s consolidated funds must be clearly reflected. There should be no exception unless mandated by the constitution.
Not reflecting such big government capital receipts in the budget is certainly more misleading to the public than reflecting it � more misleading than what the MOF spokesperson said in a queries by the Today paper last saturday, and I quote:
�� otherwise Singaporeans could be misled about how much revenue is available for expenditure.�
Sir, I had been misled. The public had been misled. Everyone had been misled to think that the government budget had been very tight these last four years, and we will enter FY2006 with a huge deficit. But Sir, that is not true at all. Not reflecting capital receipts is indeed even more misleading than reporting the whole truth. As stated earlier, this government have more than S$18 billion in the consolidated fund waiting to be transferred to the reserves. Can the Prime Minister & Finance Minister deny this fact? We want the truth, nothing but the whole truth.
As Mark Twain ever wrote in his most famous quote, �There are lies, damned lies, and statistics.� No wonder the IMF, in their report last year said that Singapore�s budget balances underestimates the strength of Singapore�s fiscal position.� Now we know why. Clever statistics had been used. We can only hope the government can be more transparent in its disclosures henceforth.
Sir, in view of our better understanding now of total government receipts, I believe the government can be a lot more generous. Generous not only in the element of giving handouts, but also in the aspect of takings. Mr Low Thia Kiang was right when he said that �only the government is rich, not the people.� With 60% of households earning below S$3,400, and the next best 20% of households making only an average of S$5,400 per month, how rich can our Singaporean citizens be? Sir, it is high time to reduce the indirect taxation and fees on our people, and allow them to truly grow richer by their efforts � not just from government dividend handouts.
Table 6.2 of the Budget Highlights shows that �other taxes, other fees and charges, and others� account for S$4.36 billion in FY2004, S$3.87 billion in FY2005, and estimated S$3.97 billion for FY2006 respectively. These revenue receipts are higher than total GST collections of S$3.47 S$3.6 and S$3.75 billion respectively for each of the following years. Yet, they are all lumped together as �others� � together with stamp duties, foreign worker levies etc.
Can the government be more specific about the etc etc? These are not small peanut amount of money that the government collects. The total revenue from these �others� is bigger than the revenue collected from the 5% GST, and I think it is important for these others to be more clearly and transparently reflected.
From the appendix 7.1 again, we understand that the government expects to collect S$870 million from stamp duties, S$160 million in water conservation tax, and S$1 billion from �other taxes�, although it is not reflected what this �other taxes� is about � that it can amount to a billion dollars. Is the S$111 million collected from the Radio and TV licences reflected in this $1 billion too?
The point I am driving is this Sir: That the government should scrap (or at least drastically reduce) the water conservation tax, the radio and TV licenses, and the Domestic Foreign worker levy. They can afford to, and they should.
Water is an essential constituent for life. Without it, we all die. Thus the message to conserve is important. But to impose a �water conservation tax� from the first drop of water coming out from the tap is wrong. People should not be taxed for at least the first 15 cubic meter of water needed for daily necessities and living. Any taxes imposed on the excess water used above that amount will be reasonable. Not below it.
This is especially so since the technology to produce desalinated water is here, and water is no longer a limited resource, constantly threatened to be cut off by our Malaysian neighbors. With this new secured source of unlimted water supply from the sea, residents should be charged fair market rate from the provision of such water, and not be imposed such out-dated unfair taxes. I hope the Ministry of Environment and water resources will expedite their reviews and remove it soon.
As for TV and Radio license fees, it is not fair for residents to do national service, and subsidize our national objective of promoting local content developers. That economic objective should be funded by the government. The government can afford to subsidize more than the current S$5 million given for this fledging industry. License fee holders should not be asked to fund this government objective. This is an out-dated tax and should be reviewed and abolished soon. Only England, Ireland and some other commonwealth states continue to impose this license fees. Other developed nations like America no longer impose such fees to subsidize national broadcasters. I hope MICA will act on this soon.
The Government should also reduce the foreign domestic worker levy, so that the minimum pay of these migrant workers can be raised. It is incredible that the government earns more from its levies than the domestic worker herself. This is cruel, and profits excessively from the undue hardship of migrant workers. With better pay, Singaporeans can recruit more experience maids to look after their families � and not the fresh young maids coming here with adjustment problems, and no experience of working in a high-rise flat. The experienced ones are going Hong Kong and other countries leaving Singapore with new inexperienced workers. Looking at total government receipts, the government can well afford to be kinder.
Lastly, I now want to touch on the �progress� package announced by the government. It is good of the government to return the money back to the people. I don�t see it as a problem like some MPs see it. When the government collects more, then more must be returned to the people. Period.
On behalf of the people, I thank the Government for heeding my calls (from past budget debates in 2002 through 2005) to return the budget surplus to the people; to take greater care of our elderly pioneer generation of workers; and to care for the low income and poor � suffering from the high cost of living in our Singapore society. Thank you Sir for heeding our calls.
To all citizens out there, you can see this is what some of the things opposition MPs can do in Parliament -- to press the government to take greater care of you, the citizen, and not take you for granted.
That said, is that all? Can the government do better? I think so. And it should � if it wants greater support from the people.
Firstly, a big group of non-salaried workers are being left out of the work-fare package. They are the housewives and home-makers. They work hard 24 / 7 / 365 days to take care of the family (which is the building blocks of our society,) and nurture worthy Singaporean citizens with the right values for our society. Their contribution to Singapore is crucial but is often neglected, because there are no economic indicators to capture their contribution.
I feel strongly that the Government should include them in this progress package and give them the same recognition as we give our NS men. They do their national duties to produce babies for the country, sacrifice their career to look after them, and guide them up as proper citizen. We must appreciate them. I suggest a 1-time bonus of $100 per housewife per child. i.e. $200 for housewives with 2 children, up to a max of S$400 per housewives with 4 children or more. This is to give them some ang-pow spending money for doing a different form of non-financial national service. It will cost the government some money, but not something they can�t afford.
Secondly, the whole work-fare package -- announced with great fan-fare, to help the lowest 20% income earners in our society. This is a good scheme, and I praise the government for it. It only cost the government S$400 million, but it goes a long way to help the estimated 200,000 of low income earners. This is what I would truly call �peanut expenses� compared to the overall total government expenditure.
If the government doesn�t first lead to show care for the poor of our society, nobody can take that initiative to make that big impact. As an Australian visitor, Richard Tan expressed in the ST forum last week, �has Singapore become so selfish in its quest for economic prosperity that the poor and the aged get discarded along the way?�
I hope not. And I believe not. With this new workfare package, it is a big shift in the government�s philosophy on welfare. And I want to credit our PM Lee for his bold step in this direction. The rich and well-off in our society must help the poor and low income in our society, through the re-distribution of wealth by the government. Everyone who wants to work must get a decent comfortable income from it. Therefore, I beseech the government to fine-tune this work-fare program into a yearly programme � possibly through the use of negative income tax (NIT).
In today�s term, the cost of living and the wages of the low income workers have not risen proportionately. The costs of utilities, public transport, and housing have all risen tremendously by profit centered businesses; whereas the wages of the low-income unskilled workers are artificially suppressed � by increasing supply of low semi-skilled migrant workers.
We need to raise the earnings of the non-and-semi-skilled Singaporean workers. We need a more stained effort at improving their lot. As some MPs had also agreed earlier, help must be given on a more consistent and sustainable basis -- not just in the run-up to a general election where the one-off cash handouts will be spent in no time.
The government can well-afford to spend up to a maximum of half a billion dollars every year to generate tax-credits for every aged working citizens above 45 earning below the minimum income of S$1200 per month. On a tiered basis, it will go a long way to help the really poor in our mists. If the Government is genuinely more caring now, I (like madam Halimah) challenge it to install this work-fare programme every year, not just at this election year.
Thirdly, and most important, the government needs to incentivies help for the young family. Our modern society and family is being attacked by the onslaught of decaying moral values through the mass and digital medium. Parents no longer know what their teenaged children are doing, and even if they do know, no longer has the power to control nor influence them. What we read on the papers of late, are but the surface cream of more troubles brewing underneath with our teens.
Our values are being badly eroded, and our youths grow up lost, disoriented and led by peers with less than proper character. Young parents really need help bringing up their children. And this guidance cannot be coming from child-care centres, maids or schools. It must come from the family -- in the person of the parents and grandparents.
The government urgently needs to provide greater fiscal incentives for grandparents, and even mothers, to consider quitting their outside jobs to spend quality and quantity time with their children, and grandchildren -- especially in their first seven years of development. If we seriously care for our families and society 10 to 20 years down the road, we need to act now. Immediately.
Mothers need to consider giving up their job for their children and family. Husbands and fathers need to spend more love and attention on their family, other than chasing the economic dole. Grandmothers must be encouraged -- through limited government subsidies -- to provide home-based infant and child care.
To subsidize the cost of child child through grandparents is a big paradigm shift. But it is a shift that we can no longer take for granted. The right and proper family authority and guidance must be established to guide the growing youths from being led astray in our society. The government can help in a big way. I hope the MCYS will review this proposal fast and give a satisfactory reply in the COS debate.
In conclusion Sir. This is a good budget. Returning money to the people is always good, albeit for the wrong motives. I support this budget even though it comes with personal political expense. This could be my last budget debate here in the house if I am not elected at the coming GE. I hereby wish all colleagues and citizens the best of wishes for the coming year.
Thank you Mr Speaker sir.
Million Dollar Ministers........????
March 2, 2006
MPs should make time for Budget debate
YEAR in and year out, I watch the Budget debate on television in bewilderment and disbelief. Most of the time, there are many empty seats in Parliament. The current session is no exception.
I am sure that Members of the House are given prior notice on the parliamentary sittings for them to prioritise their schedules.
While I can understand that ministers and Members of Parliament (including Nominated MPs and the Non-Constituency MP) have their own portfolios and private careers, surely attending parliamentary sessions should take some priority.
All ministers and MPs are elected Members of the House. They represent their constituents, speak on their behalf and bring up their concerns to the Government. The Budget debate is one such avenue for them as representatives of the people to voice their concerns, to hear and to be heard.
Yet it is so disappointing to see so many empty seats when such an important debate is going on.
Christopher Teo Kian Lam