SINGAPORE — There can be no answer to the question of how much reserves is enough, or too much, said Prime Minister Lee Hsien Loong on Wednesday (2 September).
“The future is unknowable. We have no way to tell what may hit us from out of the blue,” he said in Parliament.
Speaking during the debate on the President’s Address, Lee said that as social safety nets are strengthened, a “permanent imperative” is to keep such programmes fiscally sustainable.
“As a matter of principle, our social safety nets should be paid for out of current revenues. We should not draw down on what we have inherited, nor should we mortgage the future of our children,” he said.
Lee noted that Singapore has built up significant reserves after several generations of frugal prudence, and that the founding generation never asked themselves whether they had too much savings.
“Now the opposition says: show me how much we have in our reserves, before I decide whether to support your Budget and tax plans,” he said.
“Basically they are asking: I have something in the bank already. How much of that can I touch?
“This was not the attitude of our forefathers, the founders who were building for the future. But the attitude of inheritors who think they have come into a fortune, and want to consume the fruits of their predecessors’ labours,” he added.
Calling it “fundamentally the wrong approach”, Lee said that with the future unknowable, Singaporeans should take the attitude of its founders.
“Whatever reserves we have, big or small, let us not think of touching them in normal times,” he said. “They are our rainy day fund, our guan cai ben (coffin fund), in Chinese it sounds better because that’s the coffin fund.
He added, “Every year, we live within our means; and whenever we are able to, we add a bit more to the rainy day fund, to make ourselves a bit more secure for when it really pours. And that is the way to build Singapore for the long term, and secure the future for our children and grandchildren.”
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