DPM Heng slams Pritam Singh’s independent Budget office idea as ‘wasteful’ in Budget round-up speech

• In wrapping up the Budget 2021 debates, DPM Heng criticised an idea by WP chief Pritam Singh
• Mr Singh had renewed WP’s call for an independent parliamentary Budget office to analyse government expenses
• But Mr Heng said this was wasteful duplication of the Auditor-General’s Office, for example
• WP’s Jamus Lim asked why the Government would not consider such an office to serve all MPs
• Ms Indranee Rajah said WP is effectively calling for a S$20 million office to serve the Opposition

SINGAPORE — Deputy Prime Minister Heng Swee Keat on Friday (Feb 26) hit back at a suggestion by Leader of the Opposition Pritam Singh to form an independent office to scrutinise Budget expenses, calling it a “wasteful duplication” of existing measures.

The idea came from Mr Singh, who is also Member of Parliament for Aljunied Group Representation Constituency (GRC). In his speech on Wednesday, Mr Singh renewed the Workers’ Party’s (WP) call for an independent parliamentary Budget office to provide expert analysis to the public in light of the unprecedented drawdowns on past reserves to fund Covid-19 measures.

Mr Heng, who is also Finance Minister, was wrapping up three days of debates on Budget 2021, after 65 parliamentarians covered a wide spectrum of topics including economic support, social safety nets and Singapore’s fiscal strategies.

Referring to Mr Singh’s suggestion for an independent entity to scrutinise national budgets, Mr Heng said: “I am glad that Mr Singh agrees with the need to be prudent and accountable in our spending.

“It would be very helpful if each time Mr Singh or his colleagues ask the Government to spend more, (they) give us their estimates of how much it would cost and how they would fund it.”

He then characterised the S$20 million independent Budget office as “doing the job” of WP. Mr Heng later said that the cost of the office was derived from another WP MP's “on record” remark.

“Even as they call for more scrutiny on government expenditure, we invite them to hold themselves to the same scrutiny,” Mr Heng said.

He then spoke about the high standards of the Government in ensuring that spending is cost-effective, and said that such an independent office would repeat the work of the Auditor-General’s Office, which produces annual reports that delve into the governance and controls of public agencies, as well as two parliamentary committees that inspect budgetary spending.

“The WP is represented at both of them. Such an office (as a parliamentary Budget office) would be a wasteful duplication of these functions.”

The statement drew a rebuttal from Mr Singh after Mr Heng’s speech.

The WP secretary-general first questioned the S$20 million figure, which was not something he said in his Budget speech but was a remark by Sengkang GRC MP Jamus Lim, also of the WP, that was yet to be delivered at the time when Mr Heng spoke.

To this, Assoc Prof Lim said that he had sent his speech containing the statistic to the Ministry of Finance (MOF). He later delivered his speech during the debate on the MOF budget on Friday evening.

In his speech, Assoc Prof Lim proposed an “independent fiscal council”, which he said would cost S$20 million.

Ms Indranee Rajah, Second Minister for Finance and National Development and Minister in the Prime Minister’s Office, sought to clarify whether Mr Singh’s suggestion for a parliamentary Budget office was the same as the one put forward by Assoc Prof Lim under a different name.

Mr Singh said that it was.

He added: “The parliamentary Budget office is not an unusual institution in many parliamentary democracies… It is there to provide independent analysis to confirm the nature of the Budget, to confirm that programmes are delivering the outcomes that are desired.”

He also explained that he was looking at the Canadian model of a parliamentary budget officer, which provides independent analysis to the Canadian parliament on the state of the nation's finances.

Hearing this, Mr Heng said that while many MPs had spoken passionately and elevated the Budget debate for Singaporeans, some ideas he had heard over the past three days were “selective” and did not acknowledge the broad impact of Covid-19 and the Government’s interventions.

He then asked Mr Singh if any WP members had looked at MOF’s interim assessment of key Covid-19 measures, which was released on Feb 11.

“There is a reason why I put up the interim report, even though the full effects have not been done, because I am conscious that we have used a big part of last year's budget… we have used the past reserves and that I have a responsibility to account for those outcomes,” Mr Heng said of the report.

To this, Mr Singh reiterated that his call for such an office would give an independent perspective of the Budget that would be separate from the organs of state.

Mr Heng was not satisfied at the answer, stating that Mr Singh has different names for his suggestion and urged WP to be clear on its proposals.

“This Budget debate is a serious debate about whether our broad direction is correct," Mr Heng said. "Do you have suggestions on how we can do it better? I'm open to your ideas, but I have to say, unfortunately, so far I have heard none.”

Mr Singh responded that as a point of order, he would not be able to address a topic — the interim report by MOF — that he has not spoken about, and that he would reserve his questions for the debate into the various ministries’ budgets.

'A STRONG SYSTEM' EXISTS TO SCRUTINISE SPENDING

During the debate on the MOF budget later in the evening, Ms Indranee explained that independent fiscal councils around the world were formed in the aftermath of financial crises because existing rules were unable to prevent the crises from occurring.

But she said there is no need for such an institution here since Singapore already has a strong system to scrutinise spending and debate budgetary matters without the cost of an additional fiscal monitor.

The Government has also been disciplined in keeping to its fiscal rules, running a balanced budget in each governmental term other than in major crises.

“Ultimately, there is no substitute for having the political courage to make difficult budgetary choices. Members of an independent fiscal council are not elected representatives in Parliament.

“But the responsibility for making difficult decisions ultimately lies with the elected government,” Ms Indranee said.

Assoc Prof Lim then sought to clarify whether a second opinion, in the form of an advisory, would be useful and also serve all members of the House, rather than be considered as a form of constraint on the Government and its “illustrious track record”.

For example, MPs could ask such a fiscal council to score a policy or proposal, he explained.

Ms Indranee said that the Government already has civil servants to help analyse its proposals, though they are not available to backbenchers or opposition MPs.

“So in essence, what the learned member is asking is for this council to serve the opposition members because the PAP members are not asking for this, and the Government does not need it. Effectively, it's a request for a S$20 million fiscal council to assist the opposition members with their proposals. Effectively, that's what it is,” she said.

NIRC AND RESERVES

In his speech, Mr Heng also took aim at the Opposition’s take on the reserves, criticising Progress Singapore Party's Non-Constituency MP Leong Mun Wai's proposal to increase the Net Investment Returns Contributions (NIRC) threshold to 100 per cent from 50 per cent currently.

The NIRC is the largest contributor to the state coffers, comprising half of the returns generated from the assets owned by the central bank, sovereign wealth fund GIC and state investment firm Temasek Holdings that can be spent by the Government each year.

Mr Heng said: “I do not know how Mr Leong could say with such confidence, ‘For the foreseeable future, we do not see any shortage of fiscal revenues.’ If Mr Leong could give me the basis of that projection, I would study it carefully. But if it is his hunch, I hope that as an MP, he would agree that we cannot be advocating national policy on the basis of personal hunches.”

He pointed out how in February last year, before the impact of the Covid-19 pandemic was felt, Mr Singh had said that the current Government had the privilege of “far more budgetary elbow room” than past governments.

“Unfortunately, instead of elbow room, Covid-19 has given governments around the world a very sharp elbow. Ouch — it hurts, and will continue to hurt for some time,” Mr Heng said.

Mr Leong’s suggestion to use 100 per cent of NIRC for Government spending, as opposed to 50 per cent, would mean that there will be zero yearly returns that are reinvested for the benefit of future generations.

“Mr Leong’s suggestion… is akin to treating our reserves as a gold mountain. If we adopt his suggestion, one day, even this mountain will be eaten up completely,” Mr Heng said.

Addressing other MPs in the House, Mr Heng cautioned that it is “foolhardy to underestimate the risks and uncertainties” that Singapore faces.

He said that the amount drawn from the past reserves — totalling S$53.7 billion — is equivalent to about 20 years of fiscal surpluses, in order to finance Singapore’s crisis response. And if more draws are needed in future, the Government should do its best to make good on the draw.

“This is the ‘crisis fund’ function of the reserves. Nonetheless, we should strive to remain fiscally prudent to build back our reserves gradually,” Mr Heng added.

He stressed that the decisions that are made or not made today will determine the starting point for future generations of Singaporeans, urging MPs to have “courage” to confront the hard issues now.

“Doing so will give us the resources to deliver on social, economic and security priorities to further the welfare of Singaporeans. Not just today, but also tomorrow.”