In the classic marshmallow test, young children were given two choices. They could either 1) eat their marshmallows immediately or 2) hold off the urge and have two marshmallows instead. Subsequent studies revealed that the group who waited enjoyed better outcomes in life, ranging from higher test scores to better stress tolerance. While numerous factors could have affected these results, the main idea remains – the pursuit of instant gratification seldom does any good.
Now, if only the Opposition could have grasped this concept. If so, the government would not need to go around in circles, explaining itself to the point of exhaustion on the following. Why are we guarding the reserves so judiciously? Why don’t we disclose the full value to the public? Why are we not spending more when we clearly have enough?
These questions came under the spotlight again when Non-constituency Member of Parliament (NCMP) Leong Mun Wai filed a motion in parliament last Wednesday (7 Feb). The Government must review its budget and reserve accumulation policies to help Singaporeans while continuing to save for future generations, declared Mr Leong. It is a painfully generic statement. One that most people would nod their heads in agreement. But like a benign tumour with a high chance of turning cancerous, the underlying motives behind the motion are positively lethal.
For a start, helping Singaporeans is something any responsible government would do. It is also something the PAP Government has done for over fifty years. Tweaking and reviewing the Budget. Taking care of Singaporeans from cradle to grave with generous subsidies in housing, education and healthcare, not to mention additional schemes targeted at seniors, lower-income groups and people with disabilities (PwDs). To pay for all these and more, net returns from the reserves already help finance one-fifth of the Budget.
As for wondering when that rainy day we are saving up for would come, look no further than COVID-19. Remember the year 2020 when a pandemic paralysed the global economy? The government acted decisively. Introducing not one or two, but five Budgets to help Singaporeans weather through the storm. The cost? S$31.9 billion drawn from past reserves in that year alone. Going further back is the Global Financial Crisis in 2008-09. The period saw the government draw out $4 billion in reserves to cushion the economy and put aside $150 billion to guarantee deposits and prevent a bank run.
These actions would not be possible if Singapore had not been fiscally prudent. In fact, even Low Thia Khiang of the Workers’ Party applauded the Government for returning the money to the reserves. Therefore, it is disingenuous for Mr Leong and the Progress Singapore Party (PSP) to suggest that the PAP is driven by some extreme form of fiscal conservatism. That it would prioritise a mindless hoarding of resources rather than extend a helping hand to struggling Singaporeans.
Surely, the Opposition is aware of how the reserves have been used, acting as a lifeline to secure Singapore from economic collapse and social upheaval. The unpredictability of how things would turn out is also why there is no answer to how big of a nest egg a country ought to accumulate.
As Prime Minister (PM) Lee Hsien Loong asked, “We can never say for sure how much is enough because we do not know what kind of crises we will face in the future or how our investments will fare.”
What then, is the motive behind this motion filed by PSP when the government is already doing what the motion is proposing that it does? As the debate wore on, it became clear it was never about transparency. Instead, it is about deviating from Singapore’s well-tested fiscal principle – that every elected Government must spend within its means during their term of office.
The deceit did not escape PM Lee, who saw right through the political gamesmanship PSP was playing at. “I hear the Opposition arguing that we should change the rules and draw more from the reserves…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.”
Astutely, PM Lee knew that secrecy and transparency to the people of Singapore, as Mr Leong and his colleagues claimed, was not the real issue here. Rather, it was all about dipping unnecessarily into the hard-earned reserves to spend irresponsibly on the current generation. It is a reckless thing to do just to win votes. Yet, as usual, the Opposition had cleverly tried to paint a picture of them selflessly trying to help current voters with the past reserves without being upfront about the costs of doing so. Then again, it must be easy for them to say so. Acting as armchair politicians who do not have to manage major crises (i.e. COVID-19 and the Global Financial Crisis) or come up with practical solutions to find the money.
In the end, Mr Lee was right in challenging the Opposition to put their stance on raiding the reserves to the ballot box in the next General Elections. However, when policymaking is driven by gratification, grandstanding or political points at the expense of the people, one can be assured that no good can come out of it.
Photo Source: PMO
