Chee Hong Tat's call for fiscal prudence rings hollow amid contradictory government spending

Transport Minister and Second Finance Minister Chee Hong Tat’s comments at the Economic Society of Singapore’s annual dinner on 28 August present a puzzling contradiction when juxtaposed with the government's recent spending decisions.

Speaking at the event, Chee emphasized the need for responsible fiscal management, stating that the government could have taken “the easier and more populist approach of fixing prices and giving out broad-based subsidies” but instead chose to support firms and individuals in a more targeted manner.

He added, “This is also how we steward our resources responsibly, instead of indulging in ‘fiscal fantasies’—that we can somehow keep spending more and more, and find the taxes or loans to support this increased expenditure down the road, without having to carefully assess the consequences upfront.”

Yet, these remarks seem to ring hollow when considering the government's recent financial commitments, which suggest a departure from the very fiscal conservatism Chee advocated.

A prime example is the construction of the Founders’ Memorial, a project with a projected cost of S$235.66 million. The Memorial, intended to honour Singapore’s founding fathers, is being built despite the founding leaders’ own wishes against such a monument.

As noted by the government itself, “The Founders’ Memorial will honor the values and ideals of our founding leaders,” but the substantial financial commitment to this project raises questions about whether such spending aligns with the principles of fiscal prudence.

Every Singaporean knows how late founding prime minister Lee Kuan Yew made it very clear throughout his life that he did not need and did not want any monument, a reason why he willed for his 38 Oxley property to be demolished after his death. Yet, the expensive project seems to go against his wishes, possibly in favour of political propaganda.

Moreover, the government’s decision to allocate S$900 million annually to support SPH Media despite its inflated circulation scandal further complicates the narrative of responsible fiscal management.

This massive funding to the media conglomerate, designed to “ensure the sustainability of a trusted and credible media,” well against public opinion, has sparked debate about whether such state intervention is necessary, particularly when contrasted with Chee’s warning against excessive spending.

Let's also not forget the Electronic Road Pricing (ERP) 2.0 device, which Mr Chee defended vigorously in Parliament as well.

The government invested S$556 million in the ERP 2.0 system, and despite widespread criticism from motorists over the bulky and inconvenient design of the new On-Board Units (OBU), the design is somewhat fixed, and there is no revision to the design by the Land Transport Authority (LTA).

This goes against LTA's initial promise of a compact, smartphone-sized device when the tender was awarded in 2016. Instead, the final product—a clunky three-piece unit—has raised concerns about whether the government is truly being prudent in its spending and ensuring value for money.

The contradiction becomes even more apparent when examining the recently announced SkillsFuture Jobseeker Support (JS) scheme, introduced by Prime Minister Lawrence Wong during his first National Day Rally speech in August 2024.

The JS scheme, slated to commence in April 2025, is aimed at helping involuntarily unemployed Singaporeans and Permanent Residents (PRs) by providing financial assistance while they search for new jobs.

The government has set aside over S$200 million annually for this initiative, which will benefit an estimated 60,000 individuals each year—comprising more than 60% of the involuntarily unemployed population.

However, despite the seemingly generous allocation, the scheme is explicitly not designed to meet the immediate financial needs of those it aims to help.

The government has stated that the JS scheme “is not a social assistance scheme,” with payouts capped and structured to taper off over time. In the first month, eligible individuals will receive up to S$1,500, but this amount decreases to S$750 by the sixth month, leaving many questioning the adequacy of such support.

As noted by members of the public on social media, “What’s the point of having an unemployment scheme when the funds paid out cannot meet the immediate needs of the individual to tide them over during tough times?”

Additionally, the inclusion of PRs in the JS scheme has sparked further debate.

Singaporean taxpayers might reasonably question why their money is being used to support PRs, especially those who are not married to Singaporeans and could, theoretically, return to their home countries in search of better opportunities if they lose their jobs.

This raises the concern of whether the inclusion of PRs is a politically motivated move aimed at securing future support from potential new citizens.

Is it a political move to nurture support for would-be citizens so that they would support the incumbent when it comes to election?

We don’t know, but the spending on foreigners for the purpose of supporting them for unemployment seems awfully contradictory to what Chee said about stewarding Singapore’s resources responsibly for Singaporeans.

The contrast between the PAP’s JS scheme and the Workers’ Party’s (WP) long-proposed redundancy insurance scheme further highlights the inconsistency in the government’s approach.

The WP has advocated for redundancy insurance since 2006, proposing a scheme funded by contributions from both workers and employers.

As detailed in the WP’s 2020 manifesto, this scheme would provide a payout equivalent to 40% of the last drawn salary for up to six months, with a cap of S$1,200 per month and a minimum payout of S$500 to benefit low-wage workers.

Importantly, these payouts would be conditional on the worker actively seeking new employment or undergoing retraining, ensuring that the scheme promotes both financial stability and continued employability.

In contrast, the PAP’s JS scheme, which relies on taxpayer funding, offers lower payouts that taper off rapidly, potentially leaving many individuals without sufficient support.

As one would wonder, isn’t WP’s policy more prudent for the coffers, for having employees pay for their own unemployment insurance to obtain a higher payout, which is sustainable, contrary to PAP’s scheme which uses taxpayers’ money to sustain a payout which is hardly sufficient for many?

Chee Hong Tat’s warning against “fiscal fantasies” and unsustainable spending seems to stand in stark contrast to the government’s own actions.

The lavish spending on projects like the Founders’ Memorial and SPH Media, coupled with a poorly designed unemployment support scheme, raises questions about which policies are truly “politically irresponsible” and “economically sound.” These are just a few recent examples among many questionable expenditures, including the infamous S$800k rubbish disposal centre.

If the government is serious about stewarding resources responsibly, it may need to take a closer look at its own spending habits and consider whether they align with the fiscal principles it so vocally champions.