A response which FAILS

When I read Mr Donald Low’s commentary in The Straits Times recently headlined, Budget 2015: In deficit, yet very prudent at heart, I thought that I learnt something. (In fact, he posted his views on my FB wall as well a little earlier). Like many people, including MPs, I was concerned that we were going too much to the left that we have “nothing left’’, to borrow a phrase from an NMP which received a lot of thumping from her other colleagues in the House.

But I am not a bean counter/economist so I am not clear about whether the “spending’’ will really affect the country’s financial position and what it means for future spending. So we are in deficit. To the layman, a deficit is a “bad’’ thing, as it is spending more than what you earn. Maybe to a trained economist, it might well be a good thing as it might lead to more spending by other people. Or something like that. I don’t know. So I have asked many times about what a “deficit’’ really means.

Mr Low suggested “concerns about fiscal sustainability are mostly misplaced’’.

“The main reason is that the Singapore Government presents its Budget position in a conservative way. Some revenues are excluded and some “expenditures” should not be wholly counted as spending in the current fiscal year. Consequently, Budget surpluses are understated and deficits overstated.’’

Ah….that’s interesting, I thought, so we may be panicking for nothing. He talked about how land sales are excluded as revenue, how the Constitution already puts a brake on fiscal spending and what is seen as expenditure might well be defined as capital transfers.

He did a lot to allay my concerns.

Somebody else also dug this up for me: For the 2011 Budget by way of official Singapore accounting had a $3.8 b surplus. By International Monetary Fund accounting standards, the 2011 Budget had a surplus of nearly $38 b. To further provide a sense of proportion that’s missing from this debate: the $38 b surplus would put Singapore at no. 7 for national budget surpluses in the world, between the UAE and Qatar.

Ooh. Even more interesting.

Then comes a letter from the head of the Government Parliamentary Committee on Finance and Trade and Industry, Mr Liang Eng Wah.

MR DONALD Low dismisses the dangers of spending beyond our means (“Budget 2015: In deficit, yet very prudent at heart”; last Saturday).

He is right that the Government is fiscally conservative. But he is wrong to be dismissive about the concerns raised by me and other MPs that social spending must be sustainable.

Government spending is going up steadily. The new social programmes – for example, Silver Support, higher subsidies for health care and MediShield Life, and the Pioneer Generation Package – are necessary and right.

But we must proceed carefully. As our economy matures and growth moderates, revenue growth will slow. Spending programmes, once committed to, cannot be cut back without the utmost pain and political resistance, as seen in every advanced society. There will be constant pressure to spend more; indeed, Mr Low’s article is a prime example.

Moreover, often, more government spending alone has not solved social problems. Many countries went overboard on welfare with the best of intentions but with unintended results, including massive unsustainable deficit. Now they are forced to cut back and restore financial sustainability, with the harshest impact on the young.

Mr Low ignores this and argues that if something cannot be financed sustainably by the Government, with its ability to pool risks, it cannot be done by households either, which is an unacceptable outcome.

This is a false dichotomy between two extreme choices. Every society must support those with less, find the right balance between personal responsibility and state welfare, and muster and safeguard the resources to meet essential needs.

No government can spend to meet all possible wants, or ignore how its spending will impact individual and family responsibility. Singapore is no different.

Mr Low had earlier posted an intemperately worded version of his commentary on his Facebook page which asserted that “there is something inherently flawed with the concept of sustainability”. Significantly, he omitted this radical claim from last Saturday’s commentary in The Straits Times. But he has not retracted his earlier version, which was circulated widely online. Instead, he described it (on Facebook) as a “rant”, and thanked a Straits Times journalist for turning his “rant against the sustainability prudes into an op-ed”.

How are we to read a commentary which represents, not the writer’s sincerely held position, but a pose to gull us into believing that he holds reasonable views?

If I were grading this article, I would give it an F. Because it doesn’t engage Mr Low’s points at all. Everybody wants a “sustainable budget”, even Mr Low I would think. But the big question is whether we are all talking about the same “budget’’. What goes into the definition of surplus, deficit, spending and revenue? I would have thought that Mr Liang would take issue with Mr Low’s point that the G isn’t painting a true picture of the country’s finances. That it is deliberately being opaque for some (nefarious?) reason

I also fail to see how Mr Low is asking for MORE spending in his article. What I got from it is that he’s telling people not to worry about over-spending because we ain’t..

What is more upsetting to me is how Mr Liang chooses to side-track into whether Mr Low’s views are “sincere’’. Why?

I can’t help but think he’s annoyed at this portion of Mr Low’s article.

One cannot applaud higher social spending that meets real needs on the one hand, and criticise it for not being sustainable on the other. Such a critic has an obligation to explain how those needs can be met without State support, or take a stand to argue it should be cut back if he believes it is a luxury that those with lesser means should not spend on. Failing to do so is just as irresponsible and populist as the people who call for more spending without saying how it would be financed.’’

In other words, if MPs are worried about sustainability (and we all are), then why aren’t they looking at whether some spending should be cut or how more revenues should be raised? I so agree. In fact, isn’t this what the G keeps accusing the opposition of? What alternatives do you have to what you criticize or worry about? Is it enough to merely say we should be “cautious’’?

But what gets my goat is his mention of what Mr Low wrote on his FB wall which he calls an intemperate version. I hate to get into the same ad hominem fallacies that Mr Liang engaged in. But I don’t suppose Mr Liang has ever said anything in private at any time of his life that contradicts/exaggerates/diminishes his public views….

So, postings on a FB wall are now evidence of a person’s sincerity? The place we put pictures of our leftover lunch? We do not write on my FB the way we would if something is intended for widespread publication. I’m sure no MP speaks the way Mr Liang writes either.

It’s disappointing. There I was thinking that Singapore has moved away from questioning people’s agenda/ motivations and that public discourse has shifted into an analysis of content. How can the level of public discourse be raised if this is the sort of “right of reply’’ we see?

Methinks Mr Liang also needs an education in the role of editors. Yes, they turn “rants’’ into something publishable – that’s their job. And that’s because they see something in the “rant’’ worth sharing, a germ of an idea, an argument. They try to draw it out. In fact, it was very nice of Mr Low to thank the journalist because most editors don’t get thanks for working on someone’s article.

This sort of responses from politicians will only drive views underground. There are people (like me and probably plenty of others) who really want to LEARN something and appreciate different perspectives.

How is this kind of response (so 1980s…) good for Singapore?

* Now I am worried that someone will look at my primary school essays, my diary and my FB wall, of course, to make the case that I am not sincere.