SingFirst’s $6 Billion Social Safety Net Will Not Bankrupt Singapore

SingFirst’s social safety net package is not prepared overnight but is the outcome of several years of research and discussion. It started with the S$60 billion economic plan outlined in the 2011 essay “Creating Jobs and Enterprise in a New Singapore economy – Ideas for Change” by Tan Jee Say, our Secretary-General.

Our proposal has now been updated following discussions in the last few years with international experts in Finland, Norway, Berlin, Oxford and Harvard. It has also been discussed and debated internally over several months. We took into consideration what the Minister of Finance told Parliament about the use of returns on investment of Singapore’s national assets.

To help our readers understand our approach, we have decided to use simple illustrations and graphics, rather than post a long article. We believe these simple messages will help to communicate our proposal more effectively and clearly.

1. The ISSUE – Rising Social Inequality

Economic growth in Singapore has created a large gap between the rich and poor, leaving a big segment of society behind. Inflation and technology has widened the income gap. Singaporeans have also become the most stressed, unhappiest and least emotional people in the world.

According to an article in The Economist on 7 March 2014, Singapore is presently the most expensive city in the world as housing, education, healthcare and transport costs are rising day by day.

” It has been a long time coming, but Singapore, a tiny city-state of about 5m people, has finally made it: to being the most expensive city in the world. According to the Economist Intelligence Unit (EIU), a sister organisation of The Economist, after a decade of steadily climbing up the table from 18th place, Singapore now occupies the position usually reserved for the Japanese capital, Tokyo. Paris is now the second-most expensive, ahead of Oslo in Norway”.

– The Economist (article here)

Singapore has the biggest income gap among developed countries, as indicated by the Gini co-efficient, an international standard of measure of income inequality. The higher the Gini, the greater the inequality.


Singapore’s economic inequality is highest because its public spending as a percentage of GDP is the lowest among the developed countries.


2. Our PROPOSAL – Social Spending and Social Investment

SingFirst wants to increase social spending and reduce social inequalities with

a. Social Safety Net   (S$6 billion per annum)

b. Social Investment  (S$8 billion per annum)

This will be funded by the returns on our investment of national assets

  • GIC, MAS, Temasek Holdings etc generate huge investment returns
  • These huge investment returns are more than SingFirst’s proposed social spending amount
  • Principal sum (capital) of national assets WILL NOT be touched.

2.1 The Government’s existing framework on NIR (Net Investment Return)

  • Returns on investments (R)     : from GIC & MAS
  • Investment income (I)              : from Temasek Holdings
  • R + I = Net Investment Return (NIR)
  • average annual NIR is about S$16 billion

2.2  The Government’s existing framework on NIRC (Net Investment Return Contribution)

  • ½ R + ½ I = Net Investment Return Contribution (NIRC)
  • In last few years, NIRC has been estimated as S$8 billion
  • Balance ( NIR minus NIRC) = S$8 billion
  • Currently, this balance is RE-INVESTED into GIC & Temasek Holdings

nirc 2

To emphasize the above illustration, investment return contribution from GIC and MAS assets is STABLE, is based on expected long term real rate of return and is NOT AFFECTED by year to year fluctuations in actual returns (similar formula used by Norway and Yale University).

That means the total NIR of S$16 billion is a stable amount year after year.

In last few years (see illustration below), annual NIR is estimated at S$16 billion. NIRC is estimated at S$8 billion. So the balance for re-investment is S$8 billion on the average.


In the past 4 years, NIRC hovered around S$8 billion per year. So SingFirst proposes to use the NIRC for funding our S$6 billion social safety net package.

As we are only using S$6 billion per year (75% of NIRC), this is SUSTAINABLE.

There is a healthy surplus of S$2 billion per year (25% of NIRC) that is not used.

3. PROPOSAL 1 – Social Spending

The table below illustrates our social spending to defray the current high cost of living for all Singaporeans.

safety net

3.1 Monthly Benefits for Singaporeans

A simple illustration below of how our social spending will benefit a family with 2 elderly parents, 2 parents and 2 young children on the monthly basis.


3.2 Tax Restructuring – to phase out GST





 4. PROPOSAL 2 – Social Investment

Presently, the Ministry of Finance has re-invested approximately half of the net investment returns back into Temasek and GIC which are then used for Portfolio Investment. SingFirst proposes to broaden re-investment to include social investment (eg hospitals, schools). NOT only back into Temasek or GIC.





 4.1 Our Proposed Initiatives



4.2 Reserves are not RAIDED by our proposals

4.3  Pro-growth Social Package

Our package is not wasteful consumption but will give a strong boost to the local domestic economy. We will create a strong, stable and diversified economy that benefit local businessmen and families.

  • Social safety net                          $ 6 billion
  • Social investment                        $ 8 billion
  • Healthcare (from defence)         $ 5 billion     (over 5 years)
  • Consumer (from GST)                $ 9.5 billion  (over 5 years)
  • Re-investment per year over 5 years   $14 – 28.5 billion

4.3  Fair Society, Strong Families and Esteemed People

With this package, SingFirst will deliver


In Conclusion: Our difference from the PAP

At the Forbes Global CEO Conference on 28 October 2014, Prime Minister Lee Hsien Loong said that he wanted Singaporeans to always be paranoid about someone else stealing their lunch.


“Looking forward beyond the 50th anniversary, I think that is what Singapore needs to do – to be aware, to be paranoid so you always know that somebody can take your lunch away…”

While PM Lee wants Singaporeans to be paranoid (“kiasu”), SingFirst prefers to put esteem into Singaporeans. Do you want to feel inferior and be “kiasu” or do you want to stand tall and be esteemed?

You have a choice. Choose wisely.

Stand tall. Vote SingFirst.






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