May Day Rally 2024

‘We have built a strong foundation for future generations’: Prime Minister Lee Hsien Loong

In his last major speech at the May Day Rally, he asks Singaporeans to rally behind leadership team, to make the nation succeed

By Chin Soo Fang, Senior Correspondent, The Straits Times, 2 May 2024

Prime Minister Lee Hsien Loong said he has prepared a leadership team to succeed him that deserves Singaporeans’ confidence and support, and asked that all Singaporeans rally behind it to make the nation succeed.

Despite dark clouds on the horizon, the Republic has built a strong foundation for its future generations to continue to write new chapters of the Singapore story, PM Lee said at the May Day Rally on May 1.

In a valedictory speech at the Sands Expo and Convention Centre, he said he felt “a sense of satisfaction and completeness” as he prepared to hand over Singapore in good order to his successor, Deputy Prime Minister Lawrence Wong, on May 15.

“I have done my duty, and I am very happy I chose this path of public service all those many years ago,” said PM Lee to a standing ovation from the 1,400 unionists, business leaders and government officials who were present.

However, leading a country is never a one-man job but that of a national team, he said as he thanked MPs and union leaders, as well as Singaporeans for their trust and support.

“I have strived to lead you and to govern Singapore in the way you deserve, to mobilise Singaporeans to show what we can do together,” he said. “I have also prepared a leadership team to succeed me that deserves your confidence and support.”

‘We have improved everyone’s lives’

PM Lee, who had spoken at almost every May Day Rally since he became prime minister in 2004, said he had sought in his tenure to build on Singapore’s strengths under past leaders such as founding PM Lee Kuan Yew and Mr Goh Chok Tong.

Mr Lee Kuan Yew and his team overcame tremendous odds to forge an improbable nation with multiculturalism as its creed, and made home ownership, education and healthcare available to all.

Mr Goh showed it was possible to take Singapore forward with a different style for a different era, and under his leadership, Singapore matured and became more vibrant, resilient and cohesive, PM Lee said.

Of his 20 years since he took over in 2004, PM Lee said Singapore has become better off.

Investments in promising sectors such as biotech, information technology and financial services have paid off, while the economic base has diversified as the country climbed the value chain, from factories to research and development in pharmaceuticals and nanotechnology.

Singaporeans’ quality of life has also improved across the board, including for those with lower incomes, he added.

New Housing Board towns with green spaces and amenities have been built, such as Punggol, which has turned from an ulu (Malay for “remote”) place to an attractive town full of young families.

Meanwhile, older towns have been kept up to date with the many upgrading programmes that made them fit for a more elderly population.

“This is why, unlike public housing projects elsewhere in the world, our HDB estates never turn into slums or ghettos,” he said.

Public transport has likewise improved, going from just the red (North-South) and green (East-West) lines to a much more colourful map today with the addition of the purple (North East), yellow (Circle), blue (Downtown) and brown (Thomson-East Coast) lines.

In time to come, there will also be a light green Cross Island Line and light blue Jurong Region Line, PM Lee added.

Singapore has also invested heavily in a first-class healthcare system to make it accessible and affordable to all, and poured more resources into pre-schools and infant care while transforming the broader education system to have more diverse pathways.

“In Singapore, unlike in some other countries, your postal code does not determine your destiny,” he said.

The Government has also made every effort to leave no one behind as the country progressed, PM Lee added, alluding to the promise he made in his 2004 swearing-in speech to forge an inclusive society.

One of his earliest moves as PM was to create ComCare, which brought together existing social programmes and enhanced them to channel more resources towards the needy.

Workfare was then launched to supplement the incomes of lower-wage workers, and the Progressive Wage Model to raise wages and skills in a sustainable way.

Today, children from disadvantaged backgrounds also get an extra boost through KidStart, while ComLink+ works with vulnerable families to put them on the path of home ownership.

Other components of Singapore’s social safety net were also strengthened, PM Lee added.

MediShield Life and CareShield Life help deal with large medical bills and long-term care costs; CPF Life and Silver Support are for retirement adequacy; and the Pioneer, Merdeka and Majulah packages take care of older Singaporeans.

PM Lee said he was also proud of the Singaporean pride and work ethic that has evolved, which the trade unions had helped to foster.

Whether they are teachers who spend their own time to help weaker students, uniformed personnel who become first responders even when off duty, or healthcare professionals who go the extra mile for their patients, Singaporeans take their responsibilities seriously even though not everyone can be at the top of the totem pole, he said.

“Ours is a society that takes pride in whatever we do and makes a point of doing it well,” he added.

“A society that is egalitarian and meritocratic in its ethos, where those who have done well feel a sense of duty to give back to the society that nurtured them.”

Next chapter of the Singapore story

The next chapter of the Singapore story is off to a strong start, though there are many uncertainties in the world, PM Lee said.

These include rising tensions and rivalry between big powers, deglobalisation and protectionism, technological advances and climate change, and questions of war and peace.

“The world has changed, and we must come up with updated creative responses, but some hard truths have not changed,” he said. “These imperatives will stay relevant in the years ahead.”

First, social cohesion is important, and race, language and religion are traditional fault lines that will never go away for Singapore.

While huge efforts have been made to build a shared Singaporean identity, the nation will always be subject to external forces that pull different segments of its population in different directions.

Singaporeans cannot disavow their diverse ethnic roots and religious affinities – Chinese Singaporeans with China, Indian Singaporeans with their various ancestral homes in India, Malay Singaporeans with the rest of the region, and with the global Muslim ummah (Arabic for community), he said.

While these can be vulnerabilities, Singapore does not want to lose these rich cultural and historical heritages.

“Therefore, for us, racial and religious harmony will always be a continuing work in progress,” PM Lee said. “Never think that we have ‘solved the problem’ and that we have left it behind.”

There are also other potential divisions, he noted, between the haves and the have-nots; Singaporean-born and naturalised citizens; conservatives and liberals; and the current and future generations.

“All these differences can be exploited politically, to pit Singaporeans one against another, and divide and weaken us,” he said. “Hence, we have got to continue to work hard to overcome social stresses and tensions, to enlarge our common space, and to strengthen our shared Singaporean identity.”

This is why the Government moved to allow Muslim nurses in Singapore’s public healthcare sector to wear the tudung, and repealed Section 377A of the Penal Code. These were controversial and difficult issues, but they were tackled instead of being left to fester, PM Lee said.

“So we prepared the ground carefully, worked out practical compromises and moved to a more sustainable, long-term position, while fostering mutual understanding and acceptance.”

Second, the PAP Government has always planned and acted for the long term. While having a vision and sense of stewardship beyond immediate problems and crises is important for every country, most find it very hard, he said.

Pointing to the rally venue, he recounted the long journey to turn Marina Bay into today’s reality.

The Government started thinking about reclaiming land there in the 1960s, and the reclamation project began in 1971. When he took over as PM, the Government started talking about integrated resorts (IRs).

“This was one of my first major decisions as prime minister – whether or not to allow IRs in Singapore, which would introduce casino gambling to Singapore,” he said. “After a full public debate, we decided to proceed, but with suitable safeguards in place.”

The IRs opened in 2010, just in time to catch the recovery from the global financial crisis, and they took off, he said. Today, besides the IRs, Singapore also has Gardens by the Bay, the Marina Barrage, Marina Reservoir and an iconic skyline around the bay.

There are more plans for Singapore in the decades ahead, he said. They include a new megaport in Tuas, a new Terminal 5 at Changi Airport, a redeveloped Paya Lebar after the airbase there is relocated, and a Greater Southern Waterfront for future generations to live, work and play.

Singapore will also reclaim a Long Island along the east coast, to protect itself from rising sea levels, and create more land and another freshwater reservoir, he added.

“I have no doubt that the next team and their successors will conceive more creative and ambitious projects, which will challenge us, inspire us and take our country to the next level,” he said.

Stability key to Singapore’s exceptionalism

The third fundamental principle is political stability and trust, PM Lee said.

Singapore’s whole system is anchored on a strong base of trust between the people and their Government: The people elect a PAP Government, and in turn the PAP Government works hard to maintain their trust and support.

“It shows, through words and through deeds, that it has the nation’s best interests at heart and is improving your lives,” he said.

At each election – 15 times in a row – the PAP has won a renewed mandate, fair and square, and continued to deliver results for Singaporeans, he added.

“Getting our politics right is absolutely crucial,” he said. “Please understand: We have succeeded, and Singapore has made exceptional economic and social gains, because our system is exceptional.”

The system does not have to fail outright for Singapore to get into trouble – as a 700 sq km island without a hinterland or natural resources, just being average means that the Republic will be worse off than other countries, he stressed.

“Graver still, if our system malfunctions – becomes beset by populism, tribalism, nativism, or obsessed by short-term gains, like some other countries – then we will certainly be sunk,” he said, on why it is crucial that Singaporeans uphold an ethos of excellence and to maintain political stability.

Concluding, he urged the people to make the most of the advantages that Singapore has accrued – adequate reserves, international respect, a cohesive society, and a vibrant and inclusive economy – without taking them for granted or tossing them away.

PM Lee, who was also marking his 40th year in politics, said that having done his best to lead a team that has stewarded Singapore and safeguarded its future, his successors must do the same.

“That is our path forward: For each generation to steward Singapore to the best of its ability, so that the next generation can take on a better Singapore, and, in turn, lead our nation onwards and upwards.”

Prime Minister Lee Hsien Loong to hand over leadership to Lawrence Wong on 15 May 2024

It marks Singapore's long-planned leadership transition to 4G political team

PM Lee to stay on as Senior Minister; any major Cabinet changes will come after General Election: Lawrence Wong

By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 16 Apr 2024

Singapore will have a new prime minister on May 15, with Deputy Prime Minister Lawrence Wong set to take over from Prime Minister Lee Hsien Loong on that day.

The date for the handover was announced in a statement from the Prime Minister’s Office (PMO) on April 15, a key detail in Singapore’s long-planned leadership transition from the third-generation to the fourth-generation (4G) political team.

When he is sworn in at 8pm on May 15 at the Istana, DPM Wong, who entered politics 13 years ago, will be Singapore’s fourth prime minister.

In a video message put up shortly after the announcement, DPM Wong said he had never expected to be asked to serve as prime minister one day when he first agreed to enter politics in 2011.

“I accept this responsibility with humility and a deep sense of duty. I pledge to give my all in this undertaking,” he said.

“Every ounce of my energy shall be devoted to the service of our country and our people. Your dreams will inspire my actions, your concerns will guide my decisions.”

PM Lee said on his social media pages that leadership transition is a significant moment for any country.

“Lawrence and the 4G team have worked hard to gain the people’s trust, notably during the pandemic,” he said. “Through the Forward Singapore exercise, they have worked with many Singaporeans to refresh our social compact and develop the national agenda for a new generation.”

PM Lee said the 4G team is committed to keeping Singapore working well and moving ahead, and asked that Singaporeans give DPM Wong and his team their full support to jointly create a brighter future.

DPM Wong, who is 51, had been the presumptive next prime minister since April 2022, when he was picked by his peers as the leader of the People’s Action Party’s (PAP) 4G team.

Before DPM Wong, who is also Finance Minister, emerged as leader, former minister Khaw Boon Wan had spoken individually to the 4G leaders and other members of the Cabinet to move along the process of finding a successor for PM Lee. Mr Khaw revealed that 15 out of the 19 he had spoken to had put DPM Wong as their top choice.

It capped a period of uncertainty in Singapore’s leadership succession.

A year before, in April 2021, Deputy Prime Minister Heng Swee Keat – originally earmarked for the job by his 4G peers in November 2018 – had stepped aside to pave the way for a younger person to lead the country. He was going to turn 60, and the Covid-19 pandemic, which began in 2020, had shortened his runway as the next prime minister, he had explained.

The pandemic, meanwhile, was also what helped DPM Wong come into prominence, pundits had said.

As co-chair of the multi-ministry task force on Covid-19, DPM Wong had been front and centre in Singapore’s fight against the pandemic, along with Health Minister Ong Ye Kung and Trade and Industry Minister Gan Kim Yong.

His assured manner during the task force’s many media conferences and ability to break down issues simply had gained him admirers.

The usually business-like minister also showed a gentler side, choking back tears as he thanked healthcare and other front-line workers during a speech in Parliament at the height of the crisis.

PM Lee, 72, later said that his younger colleague and the 4G team had “earned their spurs” during the pandemic. The baptism of fire they went through put paid to worries that the team would have only a short time to forge bonds and learn to work together before having to take over.

Since then, DPM Wong and his team had gone on to take on more responsibilities, chief among them spearheading the Forward Singapore exercise to forge a new social compact with Singaporeans.

The team’s report, put out in October 2023, set the public agenda for the years ahead. It called on Singaporeans to partner the Government in developing a fair, caring and inclusive society with people progressing together.

While the Forward Singapore report has been described as a continuation of the work of the Government, there are signs that the new team will go further than their predecessors, as signalled by policy shifts such as the forthcoming introduction of unemployment assistance.

The coming into power of the 4G team also happens at a more troubled time for the world, with wars raging in Europe and the Middle East, and uncertainty in the global economy.

Amid this, Singapore is restructuring its economy for the future.

While there have been positive signs that Singapore’s economy will do better in 2024 than it did last year, more layoffs are expected due to rising costs and greater automation. Overall growth for 2024 is projected to be between 1 per cent and 3 per cent.

In many developed countries, rising inequality and slowing mobility have also divided people, and a key plank of the 4G team’s agenda has to do with strengthening bonds between people through sports, the arts and philanthropy in order to build national resilience.

With DPM Wong taking over before August, he will have the National Day Rally to lay out his plans for the year ahead. He also has his work cut out as he prepares his party for the next general election (GE).

At the biennial PAP convention held at the Singapore Expo in November 2023, PM Lee, who has been prime minister for 20 years, made his intention clear that he wanted to hand over to DPM Wong before the next general election, due by November 2025.

DPM Wong, on his part, signalled his readiness for the task. Speaking to a hall full of his party’s members, he said: “I am ready for my next assignment.”

The handover announcement sparked an outpouring of tributes from both political office-holders and backbencher MPs on PM Lee’s two decades as head of government. Many, like DPM Heng, reflected on PM Lee’s role in building a Singapore that is cohesive and future-oriented.

PM Lee will relinquish his role on May 15, and is required under the Constitution to inform President Tharman Shanmugaratnam of his decision to step aside.

He will also formally advise the President to appoint DPM Wong as his successor, said the PMO.

At the PAP convention in November 2023, PM Lee had said he will be at the new prime minister’s disposal after he steps down.

Giving an indication of his possible next steps, he had said: “I will go wherever he thinks I can be useful. I will do my best to help him and his team to fight and win the next GE. I want to help him to fulfil his responsibilities leading the country so that Singapore can continue to succeed beyond me and my 3G colleagues, for many years to come.”

Singapore Budget 2024: Building Our Shared Future Together

A Budget for all as Singapore tackles immediate cost-of-living challenges, invests in longer-term goals

By Goh Yan Han, Political Correspondent, The Straits Times, 17 Feb 2024

Everyone will have a slice of the Budget 2024 pie, which aims to address immediate challenges like cost-of-living pressures while investing in longer-term goals of strong economic growth, better jobs and a culture of lifelong learning.

Key policy moves include enhancements to the Assurance Package like giving out more Community Development Council (CDC) vouchers.

A significant top-up of SkillsFuture credits will benefit mid-career workers, while a corporate income tax rebate aims to help companies manage rising costs.

The Government will also be rolling out strategies to improve retirement adequacy, lower healthcare costs and provide more for lower-wage workers.

Many of these moves were signposted earlier in the Forward Singapore report released in October 2023.

Budget 2024 rolls out the first instalment of the Forward Singapore programmes, Deputy Prime Minister Lawrence Wong said in Parliament on Feb 16 as he delivered his third annual Budget speech.

He laid out a $131.4 billion proposal – about 18.3 per cent of Singapore’s gross domestic product.

These moves are part of an “ambitious agenda” to achieve the shared goals of building a nation that is vibrant and inclusive, fair and thriving, as well as resilient and united, he said.

They come amid a mixed outlook for 2024, he said. Growth in major economies is expected to be resilient, but geopolitical risks continue to loom large.

At the same time, global inflationary pressures are tipped to further recede, said DPM Wong, who is also Finance Minister.

He was “cautiously optimistic” that 2024 will be better than 2023, as he projected a $0.8 billion surplus for the upcoming financial year – “essentially a balanced fiscal position”.

Tackling cost-of-living pressures

DPM Wong acknowledged the pressure of higher living costs faced by many households.

While the economic situation is expected to improve in 2024, there are still uncertainties, which is why he has further enhanced the Assurance Package, said DPM Wong.

The package, meant to offset the impact of the goods and services tax hike, will be boosted by another $1.9 billion.

This includes an additional $600 in CDC vouchers for all Singaporean households, with the first tranche of $300 to be disbursed in end-June, and the remainder in January 2025.

All adult Singaporeans with an assessable income of up to $100,000 and who do not own more than one property will also receive a Cost-of-Living Special Payment of between $200 and $400 in cash.

Other measures to help individuals with costs include a MediSave top-up of up to $300 for about 1.4 million adult Singaporeans aged 21 to 50.

Those aged 51 and above will receive up to $1,500 in their Medisave Accounts under the earlier announced Majulah Package.

To help parents, fee caps – the maximum amount that school operators can charge – will be reduced for government-supported pre-schools. There will also be fee reductions for special education schools.

In addition, there will be a personal income tax rebate of 50 per cent, capped at $200, for the 2024 year of assessment.

Businesses will also receive help to manage rising costs, such as a 50 per cent corporate income tax rebate, capped at $40,000.

Supporting workers and businesses

A key component of the Budget is a suite of measures targeted at mid-career workers.

All Singaporeans aged 40 and above will receive a $4,000 top-up in SkillsFuture Credit as part of a new SkillsFuture Level-Up programme.

This will benefit about 1.95 million Singaporeans currently, though those younger will receive the top-up as well when they turn 40.

While the existing basic tier of $500 SkillsFuture Credit covers a wide range of courses, the new credit will only be allowed for use for selected training programmes with better employability outcomes. More details will be announced later.

Under the new programme, there will be subsidies for all Singaporeans aged 40 and above to pursue another full-time diploma at polytechnics, institutes of technical education and arts institutions from the 2025 academic year onwards. Currently, only those studying for their first diploma benefit from government subsidy.

DPM Wong also unveiled a monthly training allowance for Singaporeans aged 40 and above who enrol in selected full-time courses.

These moves are meant to help Singaporeans develop to their fullest potential, and to have productive and meaningful careers, he said.

A key priority of the Government is to ensure a strong, innovative and vibrant economy – and it will do so by focusing on productivity and innovation, he added.

DPM Wong announced a new Refundable Investment Credit, a tax credit meant to help Singapore stay competitive and attract investments from global companies.

There will also be investments to upgrade the Nationwide Broadband Network to enable mass market access to broadband speeds of up to 10 gigabits per second in the second half of this decade. This would be 10 times faster than the broadband speed in most homes today.

DPM Wong also brought up the temporary financial support scheme for the involuntarily employed, which had been mentioned in the Forward SG report.

He said that the Government is working out the parameters for the scheme, and will provide more details later in the year.

“Ours must always be an economy that provides opportunities for all; an economy that benefits the many rather than the few,” he said.

In this vein, DPM Wong announced enhancements to schemes that uplift lower-wage workers, such as the Workfare Income Supplement scheme and Workfare payouts.

The Government will also provide more support for employers who raise the wages of lower-wage workers by increasing its co-funding levels of the Progressive Wage Credit Scheme – from a maximum of 30 per cent to 50 per cent.

To encourage and support more young ITE graduates in upskilling efforts, a new ITE Progression Award will be rolled out for those aged 30 and below.

This will include a $5,000 top-up to their Post-Secondary Education Accounts when they enrol in a diploma programme, as well as a further $10,000 top-up to their Central Provident Fund (CPF) Ordinary Account when they attain their diplomas.

Help for seniors

Another area that the Budget provides for is support for the retirement needs of senior citizens.

DPM Wong said there will be adjustments to the CPF system, such as an increase in CPF contribution rates for those aged 55 to 65 by 1.5 percentage points in 2025.

Employers will be able to benefit from the CPF Transit Offset for another year, to cover half of the increase in their contributions for 2025. This will help cushion the impact on business costs.

The Enhanced Retirement Sum – the maximum amount one can put in the CPF retirement account to receive CPF payouts – will also be raised from 2025, to become four times the Basic Retirement Sum (BRS). It is currently three times the BRS.

The CPF system will also be tweaked, as the Special Account will be closed for those aged 55 and above, starting in 2025. The savings in the Special Account will be transferred to the Retirement Account, up to the Full Retirement Sum. The rest will be transferred to the Ordinary Account.

In addition, there will be enhancements to retirement support schemes for seniors who need more help. These include the Silver Support Scheme and Matched Retirement Savings Scheme.

DPM Wong also provided more details on the Majulah Package, announced by Prime Minister Lee Hsien Loong at the National Day Rally in 2023. The scheme will benefit about 1.6 million Singaporeans.

The package includes an Earn and Save Bonus for seniors earning up to $6,000 a month to accumulate more retirement savings and a one-time Retirement Savings Bonus of between $1,000 and $1,500 for seniors with retirement savings below the BRS.

Rounding up his speech, DPM Wong said the Forward Singapore policy moves will cost around $5 billion in the 2024 financial year, and will in total reach close to $40 billion by the end of the decade.

Projections by the Finance Ministry in 2023 assessed that government spending would increase to around 20 per cent of GDP by 2030.

DPM Wong said that for now, that remains the Government’s assessment.

Assuming the Government stays within this range of spending increase, it should have sufficient revenues to maintain a balanced budget over the coming years, he added.

But the medium-term fiscal position is tight, as there are many pressures to spend more.

“We will have to manage these expenditures carefully, or we will end up with a significant funding gap,” he said.

This is already happening in many other advanced economies, where public finances are on an unsustainable path and fiscal systems are at risk of breaking, he added.

“We must never allow this to happen in Singapore. Instead, let us uphold the ethos of fiscal discipline and responsibility that has served us well, and ensure that our fiscal position always remains balanced, sound and sustainable.”

He reiterated that Singapore has been able to weather past storms and emerge stronger.

“I believe we can do so again in our road ahead, so long as we stay united, work together and continue to keep faith in each other.”

Parliament will debate the Budget and the spending plans of various ministries from Feb 26 to March 7.

PM Lee Hsien Loong addresses Singapore's public finances and reserves in Parliament on 7 February 2024

Singaporeans are both beneficiaries and stewards of the reserves: Prime Minister Lee Hsien Loong at the Debate on the Motion on Public Finances

By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 8 Feb 2024

Sacrifice and careful husbandry by earlier generations was how the Republic built up its nest egg of past reserves, and the current generation should see themselves as not just beneficiaries but also trustees who protect this inheritance for future Singaporeans, said Prime Minister Lee Hsien Loong.

The past savings were built up at a unique time in Singapore’s history when it could set aside budget surpluses, and if they are gone, it will not be possible to build them up again, he stressed.

This is why it is important to have the “right instincts”: to save where possible, to resist pressures to use the reserves, and to unlock them only when really necessary, he said.

PM Lee was speaking in Parliament on Feb 7, amid calls by opposition MPs for the Government to use more of the reserves.

“We must not erode the patrimony, this family treasure, which we have inherited from our forefathers, nor should we burden future generations with debt nor mortgage their future,” he added.

This compact of protecting the reserves has been forged across generations of Singaporeans, and had also been upheld across both sides of the House, he said.

He reiterated the Government’s long-held stance on the reserves in response to a call by Progress Singapore Party (PSP) Non-Constituency MPs Leong Mun Wai and Hazel Poa for the Government to review its current budget and reserves accumulation policies.

The two NCMPs had proposed that more of the reserves be used to “help present-day Singaporeans reduce their financial burdens and improve their quality of life”.

They were joined in this by Leader of the Opposition Pritam Singh and Workers’ Party (WP) MPs, who repeated their party’s position that using more investment returns would not jeopardise growth of the reserves.

Mr Leong said that in the face of the goods and services tax (GST) hike and rising cost of living, accumulating reserves at the current rate “hurts the welfare of present-day Singaporeans”.

PSP’s view is that current reserves are enough, especially if the Government is raising taxes “for the sake of maintaining the current rate of reserves accumulation”.

How much is enough?

But it is a misconception that a specific number can be deemed enough when it comes to the reserves, said PM Lee.

He recounted how Singapore first tapped $4 billion of the reserves in 2008 when the global financial crisis hit, to help employers pay Central Provident Fund contributions and protect jobs.

When the Covid-19 pandemic hit, some $40 billion was drawn from the reserves to fund assurance packages and pay for vaccines to save lives and livelihoods.

That is far from the worst thing that can befall Singapore, PM Lee added. He noted that the war in Ukraine costs the Eastern European country more than US$100 million (S$134 million) a day.

These examples are why there is no sensible answer to the question of how big a nest egg is enough.

“Looking ahead 50 years, can anyone promise that Singapore will enjoy another half century of peace and tranquillity? Or guarantee that someone will come to our rescue if we ever find ourselves in the same situation as Ukraine?” he said.

“We can never say for sure how much is enough, because we do not know what kind of crises we will face in the future, or how our investments will fare.”

But that does not mean Singapore should mindlessly save for a rainy day without regard for present needs, said PM Lee.

That is why the Government had enshrined in the Constitution the “50-50” rule, which allows up to half of returns from investing the reserves to be used for current spending.

This also happens to be about the right ratio to keep the reserves in proportion with the gross domestic product, PM Lee added.

With long-term expected real returns of the reserves currently at about 4 per cent, the Government can spend about 2 per cent and save the other 2 per cent. Singapore’s economy is expected to grow at about 2 per cent a year if things go well.

Keeping this balance means the Government can count on the reserves to provide one-fifth of its annual revenue – or around 3.5 per cent of GDP – without having to double the GST, said PM Lee.

Reserves spent on current generations

Among the points Mr Leong made was that too much money from the reserves was locked up in trust and endowment funds to pay for longer-term spending, at the expense of current generations.

Ms Poa, meanwhile, suggested that it was excessive to plough the proceeds of land sales back into the reserves, since land is sold on leases and is thus more akin to a renewable resource.

The Government’s policies therefore prioritised future generations at the expense of current Singaporeans.

Rebutting these arguments, Minister in the Prime Minister’s Office Indranee Rajah said that money in these funds was “not just for the far unknown future”, but was set aside to meet specific funding commitments for the benefit of today’s Singaporeans.

These include the over $2 billion disbursed each year from the GST Voucher Fund to help lower- and middle-income households defray their GST expenses, and money in the Pioneer Generation Fund and Merdeka Generation Fund that is drawn down regularly to support Singaporeans in those cohorts.

As for funds set up to pay for large infrastructure projects, these help to smoothen the lumpy spending on such projects and ensure that future generations will not have to scramble to find money to pay for them, Ms Indranee said.

“This is prudent, thoughtful and responsible fiscal policy – not evidence of excess fiscal resources,” she added.

As for treating land sales as revenue, Ms Indranee said selling land did not generate wealth. Instead, it merely converted a physical asset into a financial asset.

The cash proceeds accrue to the reserves and are then invested to generate returns, which contribute to government spending. In this way, the proceeds of land sales are used indirectly in each year’s budget, she said.

Past savings are also a strategic asset during crises and emergencies. Thus, it would be imprudent to disclose the size of the reserves, she said in response to calls for greater transparency from PSP and WP MPs.

Take it to the ballot box

PM Lee noted that the growing political pressure to use more of the reserves was not new, and that it would always be tough to raise taxes.

Early in Singapore’s history, founding prime minister Lee Kuan Yew and his team had anticipated this, and that is why they had formulated a two-key system that required the president’s approval to unlock the country’s savings, he said.

When Singapore instituted the 50 per cent spending rule in 2001, the former prime minister intervened in the debate to remind the House that at the end of the day, the Government’s deepest obligation is to the future.

“Not just to the present; certainly not to the past,” said PM Lee.

He said that is why in taking care of today’s citizens, the People’s Action Party (PAP) Government is conscious to also safeguard the interests of young people not yet of voting age, future citizens not yet born, and the long-term interests of Singapore.

This ethos was in fact shared across the aisle in the past, he added, noting that former WP leader Low Thia Khiang had commended the Government for being prudent when it returned $4 billion to past reserves in 2009.

“Now I hear the opposition arguing that we should change the rules and draw more from reserves, and that of course they have no intention to raid the reserves, far from wanting to bankrupt Singapore,” said PM Lee.

“They say we can easily afford what they are proposing, I conclude their tune has changed.”

Mr Singh’s rejoinder was that different times call for different measures, which was why the PAP Government has said it is unlikely to return to the reserves the $40 billion it took out to deal with Covid-19.

Mr Singh, who is WP chief, also said the Prime Minister was cherry-picking what Mr Low had said.

PM Lee said the PAP is convinced that it has the right approach to stewarding the reserves.

Opposition parties who want to spend more should therefore put the issue upfront and campaign on it at the next general election, he said.

“Say you want to touch, you want to spend, you want to shift the rules,” he said. “Don’t pretend that you’re just as prudent, only more kind-hearted.”

The PAP will join the issue and convince Singaporeans that its way – taking a long-term view of the reserves, and striking the right balance between present and future needs – is the right one for Singapore, said PM Lee.

“We are confident that we will win the argument, and we’ll be able to get Singaporeans to do the right thing.”

PM Lee said he had spent 40 years of his life stewarding and safeguarding the reserves, and was now preparing to hand over to his successor a Singapore in good order, one that is more prosperous and more secure.

“I ask everyone to help them maintain the prudent policies that have served us well to keep Singapore on the right track, so that we can all continue to benefit from the nation’s success for many years to come,” he said.

Cost of living means different things to different folks in Singapore

The Economist’s Worldwide Cost of Living index does not shed light on the bills that ordinary Singaporeans pay.

By Lin Suling, Opinion Editor, The Straits Times, 13 Dec 2023

As a sign of the lengths Singapore will go to in a bid to up its wow factor and entice more travellers here, consider the dramatic four-storey waterfall display unveiled at the recently refurbished Changi Airport Terminal 2 in November.

Just about everyone I know has already visited the attraction, now the centrepiece of the T2 departure hall, and told me the four-minute musical extravaganza is not to be missed.

Now, you may be forgiven for confusing this 14m by 17m digital display with the man-made, HSBC-sponsored rain vortex at Changi Airport’s Jewel, which was opened a mere four years ago. That spectacular sight remains the world’s tallest indoor waterfall.

If two waterfalls – one digital, one physical – sound like overkill, that is probably precisely the intent. Singapore is already home to the world’s largest air-conditioned glass greenhouse, Gardens by the Bay, and hosted the first Formula One night race globally.

We must keep filling this carousel of new shiny things so we can remain vibrant and attractive to visitors, investors and corporate leaders.

Singapore thus far seems to be doing this well. Why else would expats keep coming back to Singapore despite it being billed the most expensive city nine times in the last 11 years by The Economist?

News of Singapore – along with Zurich – topping the 2023 Worldwide Cost of Living index on Nov 30, nonetheless, raised many eyebrows.

Many Singaporeans have suggested that it confirms their longstanding concerns that making ends meet in Singapore is becoming an uphill climb for the man in the street.

Online, netizens cite anecdotal experiences corroborating this jump in prices, from the doubling of the cost of a bowl of fish soup at their local coffee shop to complaints about certificates of entitlement (COEs).

Another pointed to news of thwarted attempts to smuggle 120kg of beef and pork as an unequivocal sign that more Singaporeans are turning to the black market to fill their stomachs. Never mind that meat smuggling is possibly the most creative strategy to beat inflation nobody has ever heard of.

And most discussions eventually reached the same conclusion: that the Singapore Government has slipped, in letting in foreigners who push up prices while leaving Singaporeans behind.

The most expensive city in the world for whom?

What to make of all this? Some information about how the Worldwide Cost of Living is put together offers perspective.

The full index of how cost of living stacks up across 173 countries is available only with a US$1,195 (S$1,602) fee. Its website suggests this full report is useful for human resources, corporates, financial institutions, and legal and insurance firms, as “this purpose-built Internet tool quickly calculates cost-of-living allowances and (aids in) building compensation packages for expatriates and business travellers”.

A closer look at the items used in this benchmark of relative cost of living, which is meant to be a comprehensive dataset of over 400 individual price points across 200 goods and services, throws up things such as international school tuition fees, public golf course fees and three-course dinners.

These may just be a few outliers that stick out. Even so, not only are they hardly stuff the average Singaporean spends on, they are also more accurately the make-up of what the typical expat around the world splurges on.

Here in Singapore, I would also add to this list the doubling of Additional Buyer’s Stamp Duty for purchases of homes by foreigners, and higher personal income taxes for top earners beginning from the 2024 year of assessment.

Curiously, despite these higher projected expenses, the foreigners just keep coming.