WP MPs challenge Murali Pillai on government transparency regarding reserves

SINGAPORE: Leader of the Opposition, Pritam Singh, engaged in a parliamentary debate questioning Mr Murali Pillai, PAP Member of Parliament for Bukit Batok SMC, regarding his speech on the government’s stance on “conscientious objection” to disclosing the full value of Singapore’s reserves and its implications for labelling opposition proposals as populist.

Associate Professor Jamus Lim, WP MP for Sengkang GRC, also voiced disagreement with Mr Pillai’s assertion about the adequacy of information for budget calculations. He further queried whether the government would be open to formulating public policies based solely on publicly available information.

Mr Pillai emphasizes NIRC estimation for strategic budget planning

During his Budget 2024 speech on Monday (), Mr Pillai took on Mr Singh’s earlier remark, in which Mr Singh urged the PAP government to provide crucial information for Singaporeans to actively participate in policy discussions.

Mr Pillai dismissed Mr Singh’s idea and defended that details of the Government’s revenue and expenditure are in the yearly statement of accounts presented to Parliament for MPs’ scrutiny.

With this information widely available, it is incumbent upon MPs to support policy proposals with suggestions about how much it would take to fund them, he said.

Merely proposing that more be done, without also assessing existing programmes and figuring out where the money would come from is akin to populism, he added.

He said that it was a “red herring” to claim that more information is necessary to better inform debate, since “all the information needed to calculate revenue is there”, including the proportion of revenue coming from the net investment returns contributions from investing past reserves, for instance.

He referred to a previous session where Prime Minister Lee Hsien Loong provided an overview of the budget projections, in which PL Lee projected a 4% increase in returns from reserves, suggesting that if 2% is spent on the budget, the reserves would grow at a rate of 2% per year, roughly keeping up with the GDP.

“So we roughly know what is the band of the Net Investment Returns Contribution (NIRC) which just remains stable and contributes about one-fifth of our revenue.”

In his speech, Mr Singh highlighted economists’ views from a February Straits Times article, emphasizing one economist’s call for disclosing past reserves. He echoed the shared desire of Singaporeans to scrutinize government actions.

Contrarily, Mr. Pillai defended the government’s “conscientious objection” to revealing reserves. He stressed the significance of estimating Net Investment Returns Contribution (NIRC) amounts for effective budget planning.

Assoc Prof Lim presses Murali Pillai on Government’s policy-making approaches

Mr Pillai’s speech prompted Assoc Prof Lim to seek further clarification from him, He questions the assumptions made about expected returns to reserves, GDP growth, and the amount returned to reserves based on the government’s calculation of the primary surplus versus IMF recommendations. He seeks clarification on whether it is reasonable to question these assumptions in the debate.

Mr Pillai responded by underscoring the relevance of the NIRC to the budget, pointing out its stability and significant contribution to expenditure.

He suggested that the debate over the adequacy of public information and the assumptions used in budgetary calculations might be a red herring, asserting that all necessary information for calculating revenue, specifically the NIRC and operating revenue expenditure, is publicly available.

Mr Pillai maintained that this information suffices for budget analysis and policymaking.

Assoc Prof Lim further clarified his inquiry, “the government routinely made policy. My question is whether he (Mr Pillai) thinks that the government would be willing to be comparably hamstrung in terms of only making public policies on the basis of all the publicly available information, or they feel that the government can only make policy when there is additional propriety information?”

In response, Mr Pillai claimed there’s a false premise in the question, arguing that the government provides operating revenue, proposed operating expenditure, and ensures a balanced budget, allowing for analysis based on constitutional requirements.

Assoc Prof Lim further sought clarification on whether Mr Pillai believes that the stable share of NIRC has nothing to do with the assumptions about expected returns or GDP growth.

Mr Pillai responded by stating that the stability of the NIRC is an empirical fact presented in budget statements. He acknowledged that projections are made by reference to a certain framework, subject to the assumptions inherent in that framework, and not arbitrarily plucked out of the air.

WP Chief sought clarification on the “conscientious objection” remark by Mr Pillai

WP Chief Pritam Singh subsequently weighed in on the debate and sought clarification on Mr Pillai;s remark about the government’s “conscientious objection” to certain alternative parties’ proposals.

“If there is a conscientious objection, then what happens to the populism argument? Is it wrong for the opposition to bring up those points?”

Mr Pillai clarified that his reference to conscientious objection specifically relates to non-disclosure of the total value of reserves, emphasizing its connection to maintaining fiscal prudence rather than directly addressing populism.

He implied that responsible fiscal proposals, regardless of the party, should avoid populism and be grounded in thorough analysis and fiscal sustainability.

Mr Singh also sought clarity on how proposals, such as building more HDB flats than currently planned by the government, should be substantiated in Parliament.

In response to Pritam Singh’s reference to the BTO example, Murali Pillai advises using the analytical framework he proposed.

He encouraged identifying the program, determining the committed spending, expressing a stance on the matter, and addressing financial issues by considering budget allocations for other aspects.

Mr Singh challenges this framework, asserting that examples like the BTO would fail the test Murali Pillai presented.

“Nobody said cost of living crisis, but I heard “affordability crisis” today, by PAP members.”

“I am assuming that in Mr Murali’s schema, that analysis would also have to follow.”

Murali Pillai reaffirms that the analytical framework applies to proposals involving extra spending, whether from the PAP or the opposition.

He emphasized that going through this framework will provide clarity on whether the proposed extra spending is in the best interest of Singapore and Singaporeans.

Mr Singh further probed Mr Pillai on whether government commitments, like the S$40 billion for Forward Singapore initiatives, should also be subjected to the same scrutiny.