Hoarding the reserves may be the “strategy of a chipmunk, not a visionary”

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Several Singaporeans have questioned why the Government does not appear to be making use of Singapore’s reserves and has resorted to hiking the Goods and Services Tax (GST) to manage rising expenditure needs.

Finance Minister, Heng Swee Keat, responded post Budget 2018 that while the Government uses 50 per cent of the returns of investing the reserves, relying any more on the reserves “will hurt our ability to respond to changing circumstances in the future”.

The Minister’s statement – which comes after the International Monetary Fund’s (IMF) assessment that Singapore is excessively prudent – is in line with the government’s economic strategy of saving ahead for the future.

Heng has said that abstaining from overly relying on the reserves marks our commitment to the future: “We must have the humility to recognise that we can never predict what will happen in our lifetime, much less our children’s lifetimes. So we must do our best to give them the best chance of a better life, whichever way the winds of change blow. What we have inherited from the past, we also owe to the future. That is our moral obligation.”

Singaporeans have questioned the legitimacy of such a strategy, even after the Minister’s explanation. One such voice belongs to writer Ryan Ong, who asserted on social media that hoarding all the money is the “strategy of a chipmunk, not a visionary” in a thorough post on why pumping money back into the economy instead of just saving is a more forward-thinking fiscal plan.

Read his post in full here:

I hear a lot of people say keeping our reserves is a good idea, because we may need it in hard times. Well you know what…

Posted by Ryan Ong on Tuesday, 6 March 2018

“I hear a lot of people say keeping our reserves is a good idea, because we may need it in hard times. Well you know what helps a country to survive hard times?
“Take a look at countries that, instead of hoarding their reserves, pump the money back into the economy. The money goes toward opening new companies, or expanding existing ones. The money goes into adult education subsidies, interest-free business loans, technology and university grants, and government funded, public access research. The money makes it toward private sector entrepreneurship , with the potential to build large MNCs that in future, will contribute millions in tax dollars.
“This in turn results in better employment – not more employment, mind you (we already have a lot of employment opportunities, the problem is that our graduates are becoming Uber drivers. We have an underemployment problem, not an unemployment problem).
“Expanding companies have more demand for accountants, coders, digital content creators, engineers, illustrators – some may even find a need for middle managers.
“Pumping more money into the economy also means people spend more. It means businesses manage to move their inventory, which means more revenue, which again means expansion and better jobs.
“People with higher wages, who are incentivized to develop skills because there are positions waiting for them, and people willing and able to innovate and take risks – countries that have these qualities don’t just survive hard times. They have the ability to seize opportunities in hard times, and countries like these thrive rather than merely survive.
“If your only solution to hard times is “hoard all the money”, then you’re frankly not qualified to lead. That’s the strategy of a chipmunk, not a visionary.”

54 COMMENTS

  1. It is always good to save. But how much to save & how big the accumulated savings should be? Sporeans do not know how much savings we have & non transparent!! This is probably the only country in the world where the citizens are deprived of this basic information?? Why?

  2. How come have so much surplus from last year budget?
    POOR BUDGETING?

    how many peoples went thru TIGHT budget to meet daily expenses last year?
    How many people who skipped medication because need money to buy food to stay alive?

    The surplus SHOULD BE USED to lighten people burden this year
    AND NOT USING SURPLUS TO BUILD AND MAINTAIN OUR RAIL SYSTEM
    FUTURE NEEDS OF RAIL SYSTEM SHOULD BE IN THIS OR NEXT YEAR BUDGET

  3. I’m always wondering.. They keep and have been saying that “is for the future”, but how about the current problems which are inherited and resulted from their past planning of “is for the future”…. You know what I mean…

    Get rid of the current state of problems immediately first then talk about the “is for the future”. We can’t even survive the “current” .

    Do they really understand the real days to days problems that ordinary folks are facing now or not especially in the job markets which has been flooded and manipulated by FT to a certain alarming degree? Gosh!

  4. Reminds me of the story of the seed that laid buried in the soil in springtime, and was afraid to germinate and take root for fear that its seed leaves may be nibbled upon by caterpillars or it may e pulled out of its roots by a child. And so it remained hidden waiting, thinking that there might be a safer moment to take root and sprout.
    Sadly a crow ravaging for food found the seed beneath the soil and quickly gobbled it up!

    Like the foolish seed, Heng hoards in fear of the future instead of putting it to good use, so we may be stronger for it. Sadly this government is paranoid to a fault and yes we have a feeble-minded chipmunk holding on to our purse strings!

  5. Like a millionaire who cannot give the poor a few dollars for them to buy their next meal, reason being the millionaires need to be prepared for bad times. But the miw are very liberal in rewarding themselves with millions salaries, bonus etc

  6. Actually there are two means of financing – deficit and surplus. US goes on deficit becos we all need the greenback. UAE also goes on deficit becos they have oil and support of Arab brothers. In fact, must countries float around – 2 to + 1 of GDP. The international financial institutions thought we would go into negative. Instead hot property sales which are really like one timer helped boost the surplus. So, you guys at this website know your stuff or not. Or simply look at cartoon and came out with Chip and Dale or Donald Duck. Having said all these, I agree we need more visionary leadership. There is no one that can say – I have a dream. In fact, I worry a lot about the next team becos they do not have the passion of LKY, the grief he had during the split, the fire in his belly, the guts of a student activist. The next team are simply ex civil servants, scholars, air con room officials, groomed in the laboratory called Pulau Singapura to govern the Republic of Singapore. I often worry if the next team can defend the constitution, interest of our nation, show care and concern to the people. Maybe they wanted, tried and did. But weighed on by the huge bureaucracy. And the effort … for the people fizzles out. And when you ask if they have a dream, they probably have to get CCC, then civil service, then PS, then form a committee, then white paper, with so many thumbprint in it that …. everyone is either right or everyone is either wrong …. in the same boat.

  7. Grace fu is driving a merc, I am sure the rest of the ministers and MPs will be driving cars almost the same category, so how do you think they understand what is hard time, what is meant to squeeze inside a jam pack train, they probably send all their kids to overseas university and kept telling us not to go for a degree..how u expect these group of ppl to understand how average guys on the street will feel..