Budget 2019: Spend More and Give More?

by Patrick Liew on August 20, 2019

Budget 2019: Spend More and Give More?

Recently, there were some talks about apportioning more profits from the National Investment Returns (NIR) and even revenues from land sales to meet national expenditures instead of putting them into the reserves.

1. Whatever position one takes in this regard, it’s hard to determine if it’s a right or wrong position, and to justify the position.

Furthermore, there won’t be a position that will satisfy everybody.

2. In my humble opinion, our forefathers have been disciplined in spending within a reasonable limit of the national revenues.

In addition, they spent almost half of the Net Investment Returns and invested the rest for our generation.

Those two principles are part of a wise, prudent and effective policy.

We should continue to do the same to support our future generation and strengthen our country.

3. It’s likely that in the future, national expenditures will increase because of our response to the fast-aging population and changes in climatic condition.

To better prepare ourselves higher expenditures and rainy days in the future, it’s better to build up a strong reserves.

As they say, it’s better to be safe than sorry.

4. Singapore is a relatively small country.

We have no major natural resources that we can leverage upon or export to help contribute to our coffers.

We cannot model ourselves after other countries because they have different socioeconomic models, structures and advantages.

We also cannot look to any expert to fully understand our needs, requirements and aspirations, and advice us on how we can progress and succeed in the new economy.

Few foreign gurus if any can fully understand the risks and challenges we face in this region and in the fast-changing world.

We can listen to their advice but we cannot adopt it completely because they don’t know for sure the risks and dangers that we will face in the future.

5. Having a strong reserve and being able to grow it steadily is an important part of our total defence.

It can help us continue to achieve a triple-A credit rating from international rating agencies, such as Moody, Standard & Poor, and Fitch.

Our credit rating strengthens our credibility, and underpins our trade and commerce, and investment initiatives.

6. If we have a stronger reserves, it ensures that we are in a better position to survive and succeed in a volatile, uncertain, complex and ambiguous (VUCA) environment.

We can better respond to various economic and geopolitical challenges.

7. History has taught us that we will never know when the next crisis will hit us and the world at large.

We will also never know how long the crisis will last and how much resources will be needed to survive the future crises.

8. For those who propose that we should spend more and give more, please reflect on the following questions:

a. How do you ensure that voters will not continue to want more and more from the net investment returns and reserves?

b. What’s the assurance that after the ruling government has spent more and given more, it will improve voters’ self-motivation and self-reliance to do more and do better for their lives?

c. How do you prevent the voters from developing a mentality of self-entitlement and self-gratification that is so common in many countries?

d. What’s the guarantee that politicians will not want to pander to desires of voters and end up spending more and giving more so as to be popular and to win votes?

e. How do we prevent unfriendly parties from finding ways and means to weaken our fiscal disciplines and financial positions?

It’s easy to spend more and give more. When will it ends?

My fear is that once the Pandora Box is opened, we may never be able to close it again.


I hope this message will find a place in your heart.

By the way, I have also recorded other reflections.

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