How much of the Reserves has been really used?

How much of the Reserves has been really used?

Posted by theonlinecitizen on August 10, 2011

by: Leong Sze Hian/

I refer to the article “Past reserves tapped on to fund land reclamation and Sers” (ST, Aug 7).

It states that “President S R Nathan’s office has been approving the use of past reserves to fund land reclamation projects since 2001 and land acquisition for the Selective En-Bloc Redevelopment Scheme (Sers) since 2002”

To the best of my knowledge, I do not think anyone in Singapore knew about the use of the Reserves in the past.

Was this ever disclosed in Parliament or reported in the media?

When the Resilience Package was announced in 2009 to combat the recession, I believe Singaporeans were given the impression that it was the first time ever that the Reserves were being used.

Reserves for Sers?

I cannot understand the logic of using the Reserves for Sers.

Since the HDB sells flats which recovers the cost of land as well, wouldn’t the revenue from the redeveloped Sers land sold to private developers or used to build new HDB flats, be more than sufficient to recover the Sers’ land costs in the first place?

Hence, why the need to use the Reserves?

Budget surpluses and land sales?

Also, since the Budget has been in surplus like about nine out of every 10 years, and land sales amounting to around $10 billion a year are not counted as revenue in the Budget, why was there a need to use the Reserves?

Why didn’t the Auditor-General pick up these anomalies?

Sers flats for foreigners?

Since about 800 of the 2,000 Sers flats awaiting redevelopment have been rented out to non-Singaporeans at market rates for profits, is not the Reserves in a sense being used to benefit foreigners?

Reserves to Temasek?

As to “Mr Nathan and his advisers have judged that these projects do not deplete the reserves because the resulting increases in land value ultimately add to the reserves”, I would like to point out that the revenue derived from the use of reclaimed land and Sers, may have gone to the Government which may ultimately end up in the books of Temasek and the Government Investment Corporation (GIC).

For example, the land on which Changi Airport sits, if some of which is reclaimed land, has been privatized to Temasek for a paltry $3.3 billion.

Surely, the unfetted utilization of the 1,300 hectares of Changi Airport land, is akin to a ‘raiding’ of the Reserves.

Privatisation = moving Reserves?

Since “According to the Constitution, all state land and buildings are considered part of past reserves”, any privatization of state assets that contain land and buildings, may in a way, also be a ‘raiding’ of the Reserves.

With regard to “Before 1999, such projects were funded out of current reserves, even though the government of the day would usually not benefit from them. Mr Nathan noted that infrastructure projects often span across terms of government, which may disincentivise the government of the day to undertake them using current reserves, even though they benefited Singapore in the long term”, was this significant change debated in Parliament and reported in the media?

Booking current surpluses?

In my view, another side to the revelation now of the justification for the use of the past Reserves, may be that the Government may be incentivised to report surpluses every year, when in reality there may have been a deficit, since in a way, by a mere slight of the hand it has used past Reserves to spend instead of current Reserves.

In the corporate world some may liken this to a “cooking of the books”, as it is somewhat like reporting more profits, simply by booking current revenue and spending retained earnings or accumulated capital as expenses instead.

I would like to suggest that the “set of guidelines for processing all such cases of land development”, “agreed upon”, by “the president’s office and the relevant government department” be made public.

In respect of “Such projects include Sers and land reclamation”, does it mean that there may be other projects whereby the Reserves were also used?

How much used?

Finally, I am rather surprised that with this explosive disclosure now, no one has asked or answered the obvious question – how much of the Reserves has been used?



About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.