By Vernon Lee and Lauren Ong
SINGAPORE — The Singapore Democratic Party (SDP) can fund its proposed programmes in its General Election (GE) campaign without tapping the country’s reserves, said its chairman Paul Tambyah on Thursday night (2 July).
Dr Tambyah, who was speaking to residents at an HDB block in Bangkit Road, was referring to the three components of the SDP’s “Four Yes” campaign: suspend the Goods and Services Tax (GST), pay retrenchment benefits and provide income for retirees.
Using the analogy of deriving interest from a fixed deposit account, Dr Tambyah said the SDP is proposing using the Net Investment Returns Contribution (NIRC) for its programmes.
“You do not touch the reserves. The reserves are the principal,” he said. While the size of Singapore’s total reserves is unknown, Dr Tambyah estimated it to be around $1 trillion.
His comments come a day after Foreign Affairs Minister Vivian Balakrishnan questioned the SDP chief Chee Soon Juan at a televised debate about how the opposition party is going to fund its programmes.
Dr Balakrishnan had said, “I think my voters want to know what the total size of the bill is and who bears it. Some of your proposals have got very big holes in terms of fiscal deficits.”
The People’s Action Party’s candidate for Holland-Bukit Timah GRC also mentioned the SDP’s proposed suspension of the GST, saying that it would create an $11 billion fiscal gap every year, which has to be accounted for.
The SDP’s proposed programmes for retrenchment benefits and income for retirees would total around $5 billion, said Dr Tambyah, who also noted the GST shortfall cited by Dr Balakrishnan.
The SDP candidate for Bukit Panjang SMC suggested raising the rate for the NIRC to finance the party’s programmes.
There are two components to the NIRC: up to 50 per cent of the Net Investment Returns (NIR) on the net assets invested by GIC, the Monetary Authority of Singapore and Temasek Holdings; and up to 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets, according to the Ministry of Finance’s website. The annual NIRC is published in the Government Budget.
“If we increase that to 75 per cent, that increases another $15 billion, which can come just purely from the interest without touching the capital. So that is the primary source where we are going to get funding for these two (SDP) programmes,” said Dr Tambyah, who was using his estimate for the reserves in his calculations.
The infectious diseases expert also assured voters that the programmes are not a “sinkhole”. The retrenchment benefits given to affected workers and the income for retirees will get recirculated back into the local economy, he added.
“So say you have a retiree, you give him $500, what is he going to do? He's going to spend the money in the hawker centre, he is going to spend the money in the shops, he is going to spend the money in Bukit Panjang. He's not going to put the money in the Cayman Islands or some Swiss bank account where it goes out of the country,” Dr Tambyah said.
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