WP shifted position on reserves since days of Low Thia Khiang: DPM Wong

Deputy Prime Minister and Finance Minister Lawrence Wong observed how the Workers’ Party seems to have shifted its position on the use of our past reserves since the days of former chief Low Thia Khiang.

Below is an abridged excerpt from Minister Wong’s Budget debate speech which was delivered on Feb. 24.

We will have to brace ourselves for all sorts of possible disruptions and shocks in this new world.

Take pandemics as an example. We had SARS in 2003. And then Covid-19, almost 20 years later in 2020. We may not need to wait another 20 years before we face the prospect of another deadly and devastating pandemic in the world.

We face global warming and the growing threat of climate-related disasters and climate risks can lead to other risks that can disrupt the global food supply. It can facilitate the spread of more illnesses and pandemics.

We now have superpower rivalry between China and the U.S. and potential flashpoints in the region. The superpowers are now thinking in terms of spheres of influence, so small countries like Singapore will come under growing pressure.

We have enjoyed peace and stability in the region for close to 50 years since the end of the Vietnam War. It’s hard for us to imagine how things could be different, but look at Ukraine and Europe and how the situation changed so quickly.

With growing geopolitical tensions, can we be sure that our region will be able to avoid conflict in the coming decades? And if there were to be a conflict or hot war in this part of the world, how would that impact Singapore?

These are major risks that we will have to consider and take seriously.

Given these plausible scenarios of the future, what should our response be?
To blindly spend more from the reserves as the Opposition proposes because we are just slowing down the growth rate as they claim? Or to husband our reserves and uphold the principles that underpin the protection of our reserves, that have served us well all these years?

To me, the answer is clear.

Workers’ Party used to share the same perspective on reserves

In fact, I would say there appears to be a time when the Workers’ Party seemed to me to share the Government’s perspective on the reserves.

Because in 2009, when this Parliament debated whether to draw $4.9 billion of past reserves that year to help Singapore Singaporeans tide over the global financial crisis, Mr Low Thia Khiang, then from the Workers’ Party, expressed surprise and the need to do so.

He said, and I quote:

“Past reserves are a strategic asset meant for us 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.”

I could not have said it better.

Later in 2011, after we recovered well from the crisis, we were able to put back into past reserves what we had drawn earlier.

Mr Low applauded this move. He said in his speech in Parliament that this was one thing right that the Government had done in the Budget that year — many things were not right, but that one thing was done right.

Workers’ Party shifted its position since the days of Mr Low

Several PAP MPs — Mr Liang Eng Hwa, Mr Zhulkarnain, Ms Tin Pei Ling — have in this and recent Budgets emphasised the importance of fiscal discipline and urged the Government to try and put back the money into past reserves, should our fiscal position improve.

But the Workers’ Party has been completely silent on this.

Instead their repeated call is for the Government to spend more from the reserves, to slow down the growth of the reserves, increase the 50 per cent NIRC formula, change the reserves’ rules.

Different options, different suggestions, dressed up in multiple ways, but it boils down to the same consistent ask.

It sounds to me that the Workers’ Party has shifted its position since the days of Mr Low.

In the end, Singaporeans will have to judge what is the more responsible approach to manage our finances and to take Singapore forward.

I say let’s uphold the values of our forefathers and do what is right by past, present and future generations of Singaporeans. Let’s maintain a strong fiscal foundation so that Singapore can continue to prosper and thrive for many more years to come in this troubled world.


Images via National Archives, Martin Sanchez on Unsplash