Apr 16, 2011
Lowering land cost is like dipping into reserves: Mah
By Jessica Cheam
http://www.straitstimes.com/GeneralElection/News/Story/STIStory_657477.html
The point made by Minister Mah raises the pertinent question of how much the profits from sales of HDB flats affect the size of Singapore's reserves. The answer to this question can fall into either of the following categories (and, by logical definition, only these two):
A) not significantly; or
B) significantly
If the answer is A, not significantly, then the point is not worth discussing. Since the contribution from HDB sales is not significant, Minister Mah's point also carries similarly insignificant weight. It doesn't matter if we put that money into the reserves or not (it's not a significant sum, right?)
If the answer is B, significantly, then that raises the natural follow-up question of how much the glowing reports of increases in our national reserves have been padded by contributions from HDB sales. If we discount the contributions from HDB sales, would we still have shown such good performance in the management of our country's reserves? After all, HDB sales contributed _significantly_ to our reserves, right? So this option would mean that Singapore's reserves have not been as well managed as has been reported, since a significant portion of the upside was created by taking hard-earned money from Singaporean buyers of HDB flats.
In conclusion, Minister Mah's comment leads to one of two conclusions - either we should disregard his argument since the amount of money involved is not significant, or we can infer that the reserves have not been as well managed as has been reported.
Either way, I'm not suggesting that anything illegal or unethical has been done, nor am I suggesting any mismanagement of the national reserves by the PAP, since they could still have done a stellar job even without the contribution from the HDB sales (just not brilliantly stellar, maybe). I'm just a bit surprised that the PAP is opening itself to this kind of analysis by making this sort of remark. And they may be surprised that I'm making this analysis because the figures are probably all there in the periodic reports the government issues on how well they are doing.
Perhaps all this just means that we should scrutinize the figures a bit more whenever the government issues its own report cards, but hey, how many of us have time for that?
