The Reform Party Comments on the Opening of Parliament

Published: 13th October 2011

The Opening of the 2011 Parliament was truly an historic occasion for the Opposition and for Singaporeans in general falling almost thirty years after JBJ’s historic win in Anson. It has been a long time coming and should have happened in 1997 at Cheng San when JBJ was leader of the WP. Still, congratulations to WP for finishing the work JBJ started and finally cracking the GRC fortress.

While it is exciting to see so many Opposition MPs in Parliament for the first time since 1966, the percentage rise is smaller than the rise in absolute numbers since the number of seats went from 84 to 87. We also lost one of the Opposition MPs from another party so there was a reduction in the diversity of views.

The Presidential Election was also historic in that it was the first time since 1993 that the Presidency was contested. The presence of four candidates signals a new political awakening among Singaporeans .It was also unprecedented in that for the first time we have a minority President since he won with only 35.1% of votes cast and a lead of only .34% over his nearest rival. We should first note that he is a minority President having won election with only 35.1% of votes cast. Even the government received only a smidgen above 60% of the popular vote though the gerrymandering of our electoral system still yielded them 93% of the seats.

The Reform Party maintains its campaign to have the president elected by a majority through a second round of voting. We called for a run-off to determine the winner and we stay firm that this is the only fair method.

Therefore the President’s claim to speak for all Singaporeans is tenuous at best. His calls for cohesion and “constructive and responsible” politics are inappropriate when we continue to have a political system where such a large portion of the electorate has little or no representation. So far his views have been used by the CEO of WRS Parks as part of the reason for her decision to cancel the traditional Halloween event at the Night Safari. This is despite a lot of money being spent and some Polytechnic students who had spent seven months working on the costumes being understandably distraught. He has taken steps to distance himself from the decision. However this is unlikely to change the public perception of him as a minority President or to enhance his claim to speak for all Singaporeans

This perennial call for cohesion and constructive politics from the ruling party betrays a complete misunderstanding of the way parliamentary democracy should operate. It also shows a lack of understanding of the benefits of competition. Communist governments believe a one Party state is best as they all have the answers and democracy leads to wastage of resources. For the same reason they also dislike completion in the economic sphere. This government shares the same views. However itis the Reform Party’s view that only through relentless and ruthless competition between companies do we get better products and ultimately higher living standards. Only through competition can better ideas be tested and come to be applied. That is why most advanced countries have bodies designed to ensure that the economy remains competitive and that monopolies do not develop. Only in Singapore do we have a Competition Commission that is able to take action against a relatively defenceless group like Indonesian maids while ignoring the government’s control of key sectors of the economy.

Exactly the same is true of politics. The economic performance of advanced countries with vigorous democracies has not been worse than Singapore’s. Quite the contrary, if one looks at productivity where Singapore ends up near the bottom of most measures of productivity growth over the last ten years. In terms of output per hour worked we are only doing slightly better than the Czech Republic and South Korea. Even fisticuffs in Parliament between the government and opposition members do not seem to have held back the economic progress of countries like Taiwan and South Korea. We of course hope that things do not reach that stage here. But we say only through vigorous debate in Parliament and the holding up of government policies to transparency and accountability will we get better policies.

The President himself like no other president in recent times must be aware of pressure from the knowledge that if he does not perform this term he may not succeed to a second when we may have even more candidates coming forward. All our leaders should face this same competition. The Reform Party wants to promote competition, remove barriers to entry and ensure that the contest is open to all Singaporeans, not only the rich or well connected. We have consistently called for the abolition of the financial requirements that a candidate has to fulfil before he is allowed to stand.

Turning to the substance of the President’s speech, the Reform Party would question several points. On the historical record:

“We have grown a diversified economy and created good jobs for Singaporeans” – to the contrary most of our economic growth has come through the expansion of the labour force. This has been done through an open door for foreign workers not through migration up the value chain. Many of the industries that we have diversified into are dependent on cheap foreign labour and it is not clear how they will fare now that the era of cheap labour appears to be coming to an end.

“We have built education and healthcare systems that take care of our people” – our education system is certainly unique among advanced countries in that it is not free. This is despite our huge surpluses and apparently enormous reserves. Neither is it universal and compulsory (beyond primary level). A government that was committed to inclusive growth would fund teaching for disabled and special needs children and not leave it to the voluntary sector. It would also find ways of compensating NS men for their economic loss. This is more urgent because of the blatant inequity between Singaporeans and new citizens and PRs when it comes to liability. One of the ways could be to abolish or heavily subsidize further education fees for this group. If our education system is so good why is it that so many of the top posts, even in our GLCs, are occupied by foreigners?

On healthcare we rank near the bottom among high income countries in terms of the percentage of GDP spent on health just as we do on education. While certain measures, such as crude life expectancy and infant mortality, show that we seem to be getting remarkable value for money our performance on other measures does not look so good. We have high rates of diabetes and other chronic diseases (on visits to HDB blocks we are always struck by the large numbers of amputees). Medisave and Medishield are adequate provided you do not get sick. The high cost of cancer treatment means that many families are faced with tough choices in whether they can afford treatment for their loved ones. We also have lower numbers of doctors and nurses per capita than much poorer nations like Thailand, Malaysia and the Philippines. Also our overcrowded hospitals would not be tolerated in countries like the UK, which the government is fond of pointing a finger at as an example of a failed healthcare system!

“homes for all our families” – yes but Singaporeans do not really own their own properties as they only hold them on a 99 year leasehold and are subject to the whim of the government as to whether their blocks get upgraded or whether they get an advantageous SERS deal. We thought we had seen the back of the threats that the government used to such chilling effect in 1997 to win Cheng San until the PM revived it at the NUS forum before the election. HDB flat sizes have got much smaller and the blocks much higher and closer together than fifteen or twenty years ago yet this does not seem to be reflected in the CPI (a subject we will return to later). Thereis a clear move in the direction of the extreme high density blocks used in Hong Kong.

“an outstanding living environment” –on what basis? Singapore is short of parks and open spaces accessible to the general public compared to other wealthy cities, a consequence of the government’s ill-conceived project to find the maximum population density that a small island can support. Our housing is already become much more crowded in recent years. Our air quality is already low compared to other major cities in the developed world. Though crime is low so are personal freedoms.
“a strong SAF and Home Team to keep ourselves safe” – the fact that our ISD was unable to stop Mas Selamat escaping from custody or to look in the most obvious place after he escaped does not inspire confidence in the competence of our Home Team. Nor do the repeated break-ins to SMRT’s depots. And all this despite the draconian restrictions Singaporeans have come to accept on their personal liberties.

The rest of the speech is full of bland motherhood statements. Which government would say that it was not in favour of inclusive growth? We have yet to see any evidence that this government has any idea of how to raise living standards by its promised target of 30% by 2020.

The Minister of Finance’s Speech

It is good that the government has heeded the Reform Party’s advice that the scale of surpluses we have seen over the last five years are completely unnecessary and that they plan to spend more on infrastructure, health and education. They also have accepted our point that there are big gaps in current healthcare coverage for the less well off. However any extra spending is likely to be only a small proportion of disclosed surpluses. Even these may only be the tip of the iceberg as land sales are excluded as well as at least 50% of Temasek’s and GIC’s income. The Reform Party would also want to see tax cuts, particularly of regressive taxes like GST.

However maybe the government knows something we do not. In the financial crisis of 2008 both Ireland and Spain went from running budget surpluses to deficits very quickly as their housing markets collapsed. Economic growth went into reverse. The Irish banks had to be recapitalized after reckless lending and foreign borrowing. It is possible that this fate could overtake Singapore if there is a global recession and our HDB bubble collapses with painful consequences for the real economy. The government’s monopoly of the supply of land however makes it easier for them to prevent prices from collapsing.

Also worrying is the DPM’s insistence that our sovereign wealth funds should concentrate on the long term and not worry about the short term. If there is no short-term constraint then almost any investment can be justified if it is said to be long-term. A well worn adage, sometimes attributed to Keynes, is that “’the market can stay irrational longer than you can stay solvent”. The experience of Temasek and GIC with their investments in UBS and other financial institutions suggests they are discovering the truth of this the hard way. It is a sobering thought that the Nikkei index in Japan is only 20% of the level it was 20 years ago. With deflation in the US a similar fate could overtake the US market. The Reform Party has long advocated privatizing Temasek and GIC and distributing shares to Singaporeans just so as to ensure transparency and accountability in their investment strategy. We are gratified that this idea seems to be entering the mainstream with Mr. Tan Jee Say taking up our ideas during the recent PE.

Kenneth Jeyaretnam
Secretary General