Calvin Cheng says that drawing from our reserves is like “breaking the piggy bank”

Sharing an analogy of saving money, former Nominated Member of Parliament (NMP) Calvin Cheng commented that drawing from our reserves is akin to “breaking the piggy bank”.

The Resilience Package announced by Deputy Prime Minister and Finance Minister Heng Swee Keat yesterday (Mar 26) put aside an additional S$48 billion, which amounted to nearly half of the government’s S$106 billion Budget for 2020.

Mr Heng said that President Halimah Yacob gave her in-principle support to draw up to S$17 billion from the country’s past reserves to fund part of the Resilience Budget.

In his Facebook post on Thursday (Mar 26), Mr Cheng wrote, “Watching the emergency Resilience Budget.

For those older ones like me, remember the piggy bank?”

He explained that for piggy banks, the only way that money can be taken out would be to break the entire bank.

“This is so that the money saved inside can only be used in a real emergency”, he said.

This is the second time Singapore has drawn on its national reserves to fund special Budget measures. The first time was during the 2008-2009 global financial crisis, when then President S R Nathan approved using S$4.9 billion of the reserves to fund support measures.

Referring to using the reserves, Mr Cheng wrote, “Well, we are breaking the piggy bank now”.

In his speech, describing the coronavirus pandemic as an “unprecedented crisis of a highly complex nature”, Mr Heng said: “In economic terms alone, this will likely be the worst economic contraction since independence.”

“This extraordinary situation calls for extraordinary measures,” he added. /TISG