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SINGAPORE, Feb 25 — Leader of the Opposition Pritam Singh yesterday renewed the Workers’ Party’s (WP) call for an independent fiscal office that would look into how taxpayers’ money is spent in light of the massive drawdown of reserves to fund Singapore’s Covid-19 response.
Such a specialised office would add to public accountability and transparency, and accompany existing steps to ensure the fiscal prudence of government Budgets, said Pritam.
Around S$52 billion has been drawn down from the reserves so far, with Budget 2021 adding a further draw of S$1.7 billion if approved, totalling S$53.7 billion across two years.
“If the government would consider a more aggressive reset in this regard, the establishment of an independent Parliamentary Budget Office may well be another complementary addition towards the judicious use and accountability of taxpayer dollars,” said the Aljunied Group Representation Constituency (GRC) Member of Parliament (MP).
WP’s call for a non-government entity to scrutinise annual Budgets is not new. In the 2017 debate on the Finance Ministry’s budget, former WP secretary-general Low Thia Khiang called for a similar independent office in light of then-upcoming tax hikes.
Low, who has since stepped aside for Pritam, argued that this entity would provide expert fiscal analysis and would be similar to the United Kingdom’s Office for Budgetary Responsibility, which was set up in 2010.
The suggestion led to an exchange with then-Senior Minister of State for Finance Indranee Rajah, who said that such an office was not needed as the elected President, together with her Council of Presidential Advisors, can already seek out expert input when approving the Singapore government’s spending plan.
Under Singapore’s Constitution, the President must formally assent to the drawdown of reserves.
In a Facebook post on Wednesday morning, Deputy Prime Minister Heng Swee Keat had said that further drawdowns on the reserves would be needed were Singapore’s economic and fiscal situation to take a turn for the worse, including to fund moves aimed at helping the country emerge stronger from the crisis.
So far, the drawdowns of reserves were used mainly to finance Covid-19 support measures.
Said Heng, who is also Finance Minister: “In such a scenario, how then do we continue to ensure good fiscal discipline?”
“We should then think hard about how we can ensure that if we need to draw on past reserves for this purpose, we can, over time, build this back. We have benefited during this crisis from the prudence and long-term orientation of previous generations.
“We owe it to future generations to exercise this prudence and ensure they can deal with future crises.” Heng is slated to respond to the MPs’ speeches in his Budget debate wrap-up tomorrow.
Commenting on Singapore’s fiscal discipline in Parliament yesterday, Pritam said the public should be given “greater insight into the effectiveness of multi-billion dollar initiatives” that improve job opportunities for workers, echoing his call last year for more data from the Singapore government.
He acknowledged that there is already an Estimates Committee, which is chaired by Ms Foo Mee Har, a West Coast GRC MP, and comprises six other People’s Action Party (PAP) members, as well as Louis Chua from the WP.
Nevertheless, Pritam said Covid-19 gives an opportunity for a reset, and that the establishment of a new fiscal watchdog should not be seen as “political one-upmanship” but as an “administrative necessity”. It would also add to the success of various budget initiatives, he added.
In particular, he pointed to Heng’s announcement during his Budget speech last week of a three-year plan to help businesses and workers adapt to a post-Covid world, which would cost taxpayers around S$24 billion.
The WP chief said: “The effectiveness of the Singapore government’s measures should be readily determinable. Without such scrutiny, a perception may crystallise of large sums of money being deployed to address an issue for which effectiveness is hard to establish.”
WP parliamentarians question govt policies
Pritam had also questioned the disbursement of Community Development Council vouchers as part of Budget 2021, and together with other MPs on both sides of the aisle, had reservations about the immediate petrol duty hike announced by Heng last week.
On taxes, Louis Chua, a Sengkang GRC MP and an equity research analyst from Credit Suisse, brought up the impending hike of the Goods and Services Tax (GST) from 7 to 9 per cent sometime between 2022 and 2025.
He said that up to 2019, the Singapore government has earned a recurring cash surplus, with the contributions from the Net Investment Returns Contribution (NIRC) — returns generated from the assets owned by GIC, the Monetary Authority of Singapore and Temasek Holdings that can be spent by the Singapore government each year — on a “steady path of increase” even during the Covid-19 pandemic.
Chua thus questioned the need for a GST hike, calling it a “broad-based regressive tax”.
He added: “The bottom line to me then is therefore that we must caution against being overzealous in strengthening our revenue position through multiple pathways, such as the impending GST hike, especially amid the macroeconomic uncertainties of today.”
The WP MP then reiterated his party’s past proposals on implementing unemployment insurance amid the pandemic as an “automatic stabiliser” as opposed to the “discretionary, ad-hoc schemes” introduced so far.
Chua also asked if measures such as the Covid-19 Recovery Grant, which helps lower- to middle-income workers experiencing job or income loss, could become a more permanent feature.
In an exchange following his speech, Jurong GRC MP Shawn Huang reminded Chua of the S$6 billion Assurance Package that was meant to delay the impact of the GST hike by giving out five years of cash payouts.
In response, Chua said that the GST is regressive despite the existence of the Assurance Package because people will have to live with the impact of the GST hike throughout their lives.
Huang then acknowledged that although GST is “a regressive tax system” in itself, Singapore’s approach to its tax-and-benefits system should be looked at as a whole because of the way the benefits are redistributed.
WP vice-chairman and Aljunied GRC MP Faisal Manap also spoke for low-income earners, noting that the wages of healthcare workers in Singapore were lower than those in other countries.
He cited a Lien Foundation report in 2018 that found that the average monthly pay of nurses here was S$3,000, the lowest among five advanced economies with ageing populations in the Asia Pacific.
Heng had announced in his Budget speech that there will be a pay raise across all public healthcare institutions and publicly funded long-term care service providers, though details will only be revealed in the debate of the Health Ministry’s budget later.
Faisal then took aim at the Singapore Green Plan 2030, a key plank of the Singapore government’s environmental strategy, and juxtaposed it with the recent saga surrounding the erroneous clearing of 4.5ha of JTC-managed Kranji woodland.He said that a “pause” to the 2030 plan is needed in order to consider the lessons from the Kranji incident first.
Said Faisal: “The unsavoury truth that we have to accept as a nation is that our track record demonstrates that when it comes to making a choice between nature and modern development, it is always the former that is sacrificed.” — TODAY