DPM Heng says independent Budget office would be 'wasteful duplication' of functions after Pritam Singh cites necessity

SINGAPORE: With independent audits by the Auditor General's Office and Parliamentary scrutiny of the Government's spending, an independent Budget office would be a "wasteful duplication of these functions", said Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).

He was replying to Leader of the Opposition MP Pritam Singh (WP-Aljunied), who on Wednesday proposed an independent Budget office to examine the Government's Budget and assure "public accountability and transparency in light of the massive drawdown of reserves” to fight COVID-19.

Mr Heng said information on the results of last year’s Budget measures has been published, referring to the interim report released by the Ministry of Finance earlier this month. 

Singapore will draw on its past reserves for a second consecutive year to cushion the impact of the COVID-19 pandemic. The overall amount the Government expects to draw from the reserves will rise by S$1.7 billion, totalling up to S$53.7 billion for FY2020 and FY2021. This is because the estimated S$52 billion fenced off last year for the crisis will not be fully utilised, Mr Heng said in his Budget speech last week.

The Government expects to use S$42.7 billion of the S$52 billion for FY2020, leading to a S$9.3 billion balance.

“I am glad Mr Singh agrees with the need to be prudent and accountable in our spending. And in fact, it would be very helpful if each time Mr Singh or his colleagues ask the Government to spend more, to give us their estimates of how much it will cost and how they will fund it,” Mr Heng said in his Budget wrap speech on Friday.

“But instead the Workers’ Party has called on the Government to spend S$20 million to set up an independent parliamentary Budget office to do this job for them, even as they call for more scrutiny on Government expenditure."

READ: Rise in petrol duties ‘ill-timed’ with electric vehicles not yet a viable option, says Pritam Singh

When Mr Singh asked Mr Heng where he got the S$20 million sum from, Mr Heng said it was from MP Jamus Lim (WP-Sengkang). Associate Professor Lim clarified that it was for the Finance Ministry’s upcoming committee of supply debate. 

Mr Singh said the Finance Ministry's committee of supply debate had not begun then and that Assoc Prof Lim's figure should not be part of this debate.

The WP chief said such an office, although fairly new, is not unusual. Such institutions are not meant to help the Opposition, but to help all MPs and is “consonant with the separation of powers schema”. 

Mr Singh cited an incident when he was part of the parliamentary estimates committee - which MPs are part of - a few years ago. 

“A senior civil servant said ‘I cannot be smarter than my boss’,” he said. “Who’s her boss? Her boss is the Minister of Finance."

“So a parliament Budget office or officer is there to provide independent analysis to confirm the nature of the Budget, to confirm that programmes are delivering their outcomes that are desired,” Mr Singh continued. 

Mr Singh asked how the S$24 billion that is set aside for businesses and workers transformation over the next three years will be used, the outcomes of the Capability Transformation Programme, and whether subsidies to private hire bus drivers will be extended as they have been affected by the lack of tourists.

READ: Budget 2021: S$24 billion to transform businesses and workers over next three years

Before Mr Heng responded, Leader of the House and Minister in the Prime Minister’s Office Indranee Rajah asked Mr Singh to clarify the purpose of the Budget office, and whether it is the same as the independent fiscal council that Assoc Prof Lim had asked about. 

Initially, Mr Singh said it was not the same proposal and that the House should wait for Assoc Prof Lim to deliver his cut. But when Ms Rajah asked again if the Budget office and fiscal council are the same thing or separate, Mr Singh said it will be "the same thing".

In response, Mr Heng said he was “totally confused” as they are "very different entities". 

“Mr Singh said earlier we should set up such an office because it is important to examine outcomes. You had an encounter with a Ministry of Finance official who said that, ‘I’m not smarter than my boss’,” Mr Heng said.

“Your arguments are totally convoluted. One does not lead to the other.” 

Mr Heng asked if Mr Singh and WP members have read the assessment report on the Budget measures.

"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," said Mr Heng.

He also argued that no one questioned the outcome of the measures.

“So what is the purpose of setting up an office when the information that is publicly available is there for you to ask,” Mr Heng said. 

Mr Singh replied that the recommendation for a Budget office is a question about organs of state, and separate from the issue of outcomes.

WATCH: Budget 2021 debate: Heng Swee Keat responds to clarifications sought by MPs 

The Budget office will offer an independent perspective and help Parliament who is going to approve the Budget, Mr Singh said. 

“Those who are approving the Budget ought to have I think access to an independent analysis,” he said. 

Mr Heng replied saying he did not want to “prolong the debate” and they could discuss this at the Finance Ministry’s committee of supply debate, while specific issues can be brought up at relevant ministries' committee of supply debates.

Mr Heng added that the Budget debate is whether “our broad direction is correct”. He asked whether Mr Singh had any suggestions about how they can do it better because he has received none so far. 

Mr Singh said he would ask his questions about specific issues at the committee of supply debates.

LAND SALES REVENUE 

After Mr Singh and Mr Heng’s exchange, MP Louis Chua (WP-Sengkang) asked how the country’s cash surplus is generated aside from government land sales.

He calculated that Singapore has a cash surplus of S$29 billion a year, of which S$15 billion come from land sales revenue, and asked where the other S$14 billion comes from. 

“The incentives for using land sales as a means to increase revenue, I think that something that is already done indirectly, and so that is already in place although to a different extent. I think the broader point that I also like to share, I think in the context of Singapore, I think when it comes to land sales it is something which I believe is a recurring source of revenue for the Government as well,” Mr Chua said. 

He also asked how long it will take for Singapore to replenish its reserves, and where its current levels are at compared to what it was five or 10 years ago. 

Mr Heng asked Mr Chua to "take back" his allegation that the Government uses land sales to meet its revenue targets. 

“When we do land sales it is to meet the needs for our people, for our economy,” Mr Heng said.

"I totally reject your allegation that the Government has an incentive to sell more land in order to generate revenue. If the Government had the incentive, I would not have pointed out the problem," he added.

"In many countries - and I studied this in many countries - where unfortunately where the government, especially the local government, is so reliant on land sales that they have a vested interest to keep land prices high because they needed the revenue and in turn that creates a lot of hardship for people.

"So our system cannot incentivise. And the URA has long term plans - 50-year plans, 20-year plans - so land use planning has been a great strength of Singapore.

"So I think you should seriously look at what the agencies have been doing and do not make allegations like this because I think it will demoralise the many good officers that we have in our planning department."

WATCH: Heng Swee Keat rounds up debate on Budget 2021

Mr Chua said he did not make an allegation, but to try and understand how Singapore generates its cash surpluses. 

Mr Heng thanked Mr Chua for taking back his claim, adding: “Our reserve protection framework has safeguarded all the assets that we have. You are just converting one asset to another form of asset, and these are guarded.”