I noticed a couple of messages on the recent Budget 2024 announcement circulating in some of my group chats. The main points of these messages were essentially:
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When the government sets aside monies, it is not simply \u2018locking\u2019 the money away. This is done to assure funding.<\/strong> Unlike many countries \u2013 such as the Americans \u2013 the Singapore government does not practice \u201cunfunded mandates.\u201d<\/strong> Which is to announce programmes of benefits that stretch into the future, but do not fund them. An unfunded mandate is a statute or regulation that requires any entity to perform certain actions, with no money provided for fulfilling the requirements. This can be imposed on state or local government, as well as private individuals or organizations. The key distinction is that the statute or regulation is not accompanied by funding to fulfill the requirement.<\/p>\n– Wikipedia<\/cite><\/blockquote>\n\n\n\n Reject LMW Economics<\/p>\n","protected":false},"author":1,"featured_media":165,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/kopigao.net\/index.php?rest_route=\/wp\/v2\/posts\/164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kopigao.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kopigao.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kopigao.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/kopigao.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=164"}],"version-history":[{"count":1,"href":"https:\/\/kopigao.net\/index.php?rest_route=\/wp\/v2\/posts\/164\/revisions"}],"predecessor-version":[{"id":166,"href":"https:\/\/kopigao.net\/index.php?rest_route=\/wp\/v2\/posts\/164\/revisions\/166"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kopigao.net\/index.php?rest_route=\/wp\/v2\/media\/165"}],"wp:attachment":[{"href":"https:\/\/kopigao.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kopigao.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kopigao.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
I thought that these comments are dangerously shortsighted, and felt the need to write about this. And this line of thought is rather similar to the classic logic espoused by NCMP Leong Mun Wai on several occasions, e.g. in his views on the use of the national reserves and his other proposed \u2018Spend Now; Pay Later\u2019 schemes such as his Affordable Homes scheme – where he advocates not factoring the land cost when buying HDB flats and only pay when you sell.
Such a logic \u2013 let\u2019s call it LMW Economics<\/strong> for simplicity \u2013 will result in a country\u2019s financial ruin. Spend Now; Pay Later. More like Spend Now; Your Children Pay Later. Actually, not even your children. You \u2013 Young Singaporeans in your 20s and 30s right now \u2013 will have to pay the price when you are closer to retirement age.<\/strong><\/p>\n\n\n\n
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The logic in LMW Economics would have us do the same.<\/strong> That we shouldn\u2019t have trust funds or endowments, that we shouldn\u2019t set aside total expected costs of longer-term projects such as costal protection against erosion etc. In other words, spend the money on something else right now if you don\u2019t have the need for the full allocated money this year. Just take on more instalment plans! What could possibly go wrong?
But herein lines the problem: If you have not set aside the money in advance, you will have to raise even more taxes in future to pay for it. Failing which, your national reserves will gradually deplete. And as a small country, there is no one else to bail us out.
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This is similar to wanting to spend more of Net Investment Returns Contribution (NIRC). We can do so, yes. But it will mean that you will have to make up the difference in future. If the NIRC\u2019s contributions decline because it is not catching pace with GDP growth, that means Singaporeans will have to make it up in the form of taxes.
At the end of the day, we have to balance the books. And advocates of LMW Economics should spell out the trades off \u2013 if they object to 8.2 billion set aside for Majulah Package till the end, then how do they propose to fund it down the line? Make it clear as to what they are proposing, so Singaporeans know the alternatives.
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