The Real History of the CPF and the Singapore Economy

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The PAP Government Made Singaporeans Pay More for Health Using Our Own Medisave and Returned Back Lesser Subsidies

Indeed, it was said that, “In addition to the transparency issue, CPF is also criticized as lacking overall strategic direction and therefore compromises the objective of retirement protection. Over the years, schemes with various objectives have been added to the coverage of CPF. They have usually reflected ad-hoc responses to a particular economic or social problem at a particular point in time. They are therefore not a product of an overall system-wide view. As an example, Medisave, which essentially represents mandatory savings allocated for healthcare services, was introduced in 1983 when the government wanted to increase the share of total health expenditure accounted for by individuals. As discussed previously, CPF has also been used as a macroeconomic stabilization tool, raising and reducing contribution rates as necessary to stimulate or limit domestic demand. These issues raise the question of whether the CPF has evolved to have multiple objectives and if so, to what extent are they in conflict?

The Medisave was “introduced in April 1984 (as) … a national medical savings scheme, (where) … individuals (have to) aside part of their income into their Medisave Accounts to meet their future personal or immediate family’s hospitalization, day surgery and certain outpatient expenses.

However, is Medisave necessary?

When the Medisave was first introduced and debated in parliament, it faced fierce resistance:

Mr Toh Chin Chye had said:

I feel that Medisave is being treated in isolation. Medisave is, as I pointed out in the Budget debate, a part of the Government budget and our budgets have been in surplus every year. It is misleading of the Minister for Health to go around the country and create the impression that we are encountering problems like the United States which face running deficits because of expenditure on social security programmes and defence. In fact, the only social security programme we have in Singapore is health. It is wrong to forget that even now patients make direct payments for medical treatment and hospitalization. It is wrong to create the impression that we are distributing health care for free. Payments made by patients constituted 24% of the recurrent expenditure of the Ministry of Health in 1981.

The Ministry of Health cannot avoid revising medical and hospital rates. The CPF account is a convenient means to collect hospital charges. For that, the Minister for Health has to be congratulated. I know there are bad debts incurred by the hospitals. These bad debts will now disappear. But for that matter if hospital cost will have to be paid from savings, why not allow patients to pay the cost of hospitalization from their savings accounts in the POSB? And there are over two million accounts.

The provision of health care facilities must be accepted as a social responsibility. It is not that an individual who has the misfortune to be inflicted with some particular disease is solely responsible for searching the facilities to cure his illness. This is a social responsibility which is accepted by governments all over the world. This is part and parcel of the organization of individuals into societies. It is a measure of the degree of civilization.

The problem which we are faced with is the cost of financing. Who is to pay? I believe it is wrong to say that the Government is paying for the cost of medical care. The costs of government are borne by taxpayers, us, either through direct taxation, like income tax, or indirect taxation. So the problem really is reduced to finding an equitable distribution of revenue in the Consolidated Fund to meet different objectives and purposes of the Government.

What we are faced with, therefore, is the problem of apportioning of responsibility and cost. The propaganda put out by the two Ministers for Health is that medicine is a commodity that is consumed. I think it is a very dangerous assumption to believe that persons love to fall ill, that they go around shopping for sicknesses in the supermarkets, or that they like to spend their weekend in a hospital as if the hospital is a hotel. Or that the food served in the hospital is a la carte or buffet. That is perverse propaganda. And, therefore, Medisave is now being treated as a consumption tax. This makes it difficult for one to support the arguments that have been put forward for Medisave. I do not know why the Member for Ayer Rajah was sold over so easily that he has already expressed his support without first listening to the rest of us.

What percentage of the cost of running ‘C’ class wards can be equitably borne by direct taxation such as Payroll Tax? What percentage of payments is made directly by patients? The proposal behind Medisave is that patients will now make their payments not directly to the hospitals but through their CPF accounts. It is like the check-off system that we have in the trade unions. Now we are being checked-off out of the CPF account. The snag of this scheme is that employers would be asked to contribute to Medisave in spite of the fact that they already have their own private health scheme for their employees. And, in effect, this would mean increasing their Payroll Tax by 3%, even though this contribution does not directly go to the Consolidated Fund but into the employee’s CPF account.

I am concerned that in presenting Medisave, the Minister has given no consideration to fundamental points. First, in what direction can the Ministry of Health reduce costs? The Member for Ayer Rajah has very eloquently explained that demand is not generated by patients, and I believe him, particularly patients in ‘C’ class wards. It’s the doctors who create demand as he has explained. Can the Minister, a political appointee, control his doctors?

Point No. 2. What is the projection of future revenue that will be collected by the Ministry of Health? In other words, in what direction is he anticipating the rate of increase in the cost of running the Ministry and therefore the increase in charges that he must pronounce periodically, next year or the following year?

Point No. 3. Can shortfalls be made up from the Consolidated Fund without calling for further contributions to the CPF which is now at 46%?

Point No. 4. Can part of, the interest earned on CPF accounts be credited to the cost of hospitalization? In 1982, the interest credited to members’ accounts was $846 million which is $187 million more than in 1981. The more CPF you pay the more interest you earn. And if, of course, a part of this CPF money is invested overseas where interest is higher than the 6.5% we earn, perhaps that additional interest will help to pay the cost of hospitalization. But contributors earn only 6.5%.

No firm can afford to have two parallel medical welfare schemes. The trade unions want Medisave and of course they want the existing scheme under the general collective agreement they have made with the employers. The Minister for Health, since he is not the Minister for Labour, has of course ignored all this. The buck is passed on to the employers. Believe me, I have not turned capitalist. I am not speaking on behalf of employers. There are big employers. There are small employers. There are small businesses who hire two persons, maybe even three persons. They have to contribute to all the taxes imposed by the Minister for Finance, including CPF, the Skills Development Fund and Payroll Tax. And these small businesses which pay Skills Development Fund do not see anything coming out of the Skills Development Fund. A barber shop applies for a Skills Development Fund. How can he develop the skills of his barbers? It is the small businesses that are subsidizing the big businesses.

So also is this Scheme. It is a taxation, and it is a recessive tax for the simple reason that those who are at the lower income level, because their CPF contributions are lower, will have to pay the full amount, whereas those with higher incomes do not pay the full percentage of their income towards the CPF because there is a ceiling. It is recessive. I feel that all this is a very short-sighted myopic view. As payroll costs rise, so also prices must increase. And this will have an escalating effect on the cost of living and demand for more wages, and more contribution to CPF. I know for sure there was one businessman who preferred to leave Italy to start a restaurant in Saudi Arabia, for the simple reason that he just could not afford to pay the social security cost imposed on him by the government.

I asked the Minister for Finance earlier this afternoon to find out what revenue Government companies and statutory bodies were contributing to his Consolidated Fund. The Minister was a bit quick in the reply. I was not sure of the figures I jotted down but, if my additions were correct, their contribution was more than the recurrent expenditure of the Ministry of Health. So why have more contributions to the CPF?

Has the Minister for Health, who was in the Ministry of Trade and Industry, who was in cahoots with the Minister for Finance, taken the trouble to investigate how he is going to get the money to run his Ministry? The first responsibility of the Minister for Health is to ensure the availability of health care services. That is his first responsibility, that he must go round and nag at the Minister for Finance for the money. But he is taking on the job of the Minister for Finance. I totally disagree with the approach of Medisave. However, as a former Minister for Health, I share with these two Ministers for Health their concern for preserving the existing standard of health care; preserving – I am not saying improving, the emphasis is “preserving”.


Mr Tan Soo Khoon had also said:

The Medisave Scheme assumes that each of us has the ability to avoid illnesses. Those who fail to do so will be penalized. Those who have the remarkable talent for doing so shall be well rewarded. What is even more discomforting to me is that the Government aims to reduce demand for health services by using the stick approach. What it amounts to is that Government now intends to transfer the responsibility of payment for such uses from the Government to the users at the point of use. If therefore increasing demand for health services is inevitable, if certain illnesses are unavoidable no matter how fit one wants to be, and if the individual is going to bear the greater brunt of the financial cost of his health care, is it not wrong to assume that the National Health Plan has been motivated by purely financial considerations, and that its more covert purpose is to lighten Government’s burden of escalating health care?

Sir, looking at the National Health Plan itself and the emphasis on financial considerations, I have the nasty feeling that the Ministry of Finance had quite a hand in it. What has happened to the Government’s social responsibility? I believe, Sir, that somewhere along the line we have to strike the proper balance between what is the Government’s social responsibility in so far as health care is concerned and the cost of providing it. My argument that the financial considerations have been foremost is reinforced by paragraph 27 of the National Health Plan which states that there will be more Class A beds at the expense of Class C beds in future. We all know that Class A beds are not subsidized by Government. So the Ministry will take away some Class C beds, convert them to Class A beds, sell them at higher prices and therefore increase Government revenue.

But what is worrying me, Sir, is the statement in the Plan that in future admission to Class C beds will be restricted by the means test. One can already begin to question the reliability of such a means test. It might have the undesirable effect of deterring many people from seeking essential hospitalization if they find that they have been deprived of low-cost hospitalization by this so-called means test. Furthermore, hospitalization charges will not be the only consideration of the individual when he falls ill. He has to think in terms of his loss of earnings when he is hospitalized, not only his earnings but of those members of his family who have to take time off to see him. He has to think of his travelling expenses to and from hospital.

But this is my main criticism of the scheme, because it fails to realize that certain illnesses do occur through no fault of the individual no matter how much effort you put in to stay fit and to prevent illnesses. Sir, nobody knows when his kidneys or his heart will fail him. Nobody knows when cancer will strike. Medical treatment for chronic diseases is in many instances, in fact, in almost all instances, life-long and can be a heavy burden on the individual and his family. Medisave is therefore inadequate in meeting such needs. The consequences, Sir, can be far-reaching. If individuals cannot use their Medisave account to cover either wholly or partially such expenses, they may delay seeking hospitalization till their health deteriorates or, worse still, they might resort to self-medication.

Finally, people may find Medisave a wholly unattractive proposition because there might not be the incentive to put money into the Medisave account if they find that their savings cannot be used when it really matters.

Despite the abhorrence to the Medisave, the PAP government continued to bulldoze their way through with the Medisave and it was passed. Within two years of the introduction of the Medisave, Mr Toh and Mr Tan’s fears were realised.

Prior to 1984, before the introduction of Medisave, you can see in the chart below that the government would spend about half of total health expenditure.

However, from 1984, as the government increased the shared of Medisave to be paid for healthcare, they started paying lesser and lesser subsidies. Just two years after the introduction of Medisave, the government’s expenditure for health went from 50% to just about a third of total health expenditure! From then onwards, the government’s expenditure on health stayed at around that level.


However, there are several questions we have to ask:

  • If Singaporeans were still paying tax, then where did the tax revenue that would otherwise go into paying for health subsidies go to, when the government started decreasing their share of health expenditure?
  • Why did the government reduce health subsidies and reneged on their responsibility? When the government announced Medisave, did they say that the intention was for the Medisave to replace health subsidies, or did they say they were going to reduce health subsidies? If they did, would Singaporeans have agreed to it?

Today, the Medisave has collected $66 billion but in 2012, only $768 million was withdrawn for direct expenses, or only 1.3% of the total Medisave balance. Why have Singaporeans contributed a whooping $60 billion into the Medisave, but were only able to use a miserable 1.3% in one year? What happened to the rest of the money?


And when you look at the $722 million withdrawn from Medisave in 2011, as compared to the total health expenditure of $13.1 billion in 2011, Medisave would only account for 5.5% of total health expendfiture!


Now, if withdrawals from Medisave grew by just 7 times to $5.1 billion in 2011, this would help Singaporeans pay for 38.5% of total health expenditure using Medisave, and together with current health subsidies, cover for 70% of total health expenditure, or the average expenditure that governments in other developed countries would spend on health.


The Real History of the CPF and the Singapore Economy

Increasing the Medisave withdrawals by 7 times would mean Singaporeans would still be only spending 9.1% of the total Medisave balance in 2011! There would still be more than 90% inside the balance for whatever uses the government would want to take our Medisave to use for!


So, why did the PAP government introduce a Medisave scheme but let us take so little out, such that we are not able to afford healthcare in Singapore? And not only that, why would the PAP government introduce Medisave and then push down health subsidies, so much so that in one fell swoop, all of a sudden Singaporeans have to pay so much for healthcare out from our own pockets? And the government all of a sudden pays next to nothing? Is this how a responsible government should function?

Where did the government’s responsibility go? Into outer space?

In fact, as Mr Leong Sze Hian has estimated that in 2013, Singaporeans would have paid about $8 billion into Medisave, and including for the interest earned on Medisave, this would add up to a total inflow of $10.8 billion into the Medisave. Leong also calculated that when you look at the total government expenditure of health of $7.1 billion, and even including for expenses for Medisave withdrawals ($1.56 billion), MediShield premiums ($817.6 million), Medifund payouts ($102 million) and the first-year costs for the Pioneer Generation Package ($260 million), this would only add up to $9.76 billion, or lesser than the $10.8 billion that Singaporeans would have paid into and earned in the Medisave!


In effect, whatever we are paying into Medisave is more than enough to pay for the annual health expenditure by the government! If so, why are we still paying tax? Where did the tax revenue that should rightfully go into paying for health subsidies go to? And if the health subsidies did not materialise from the tax revenue, doesn’t that mean that Singaporeans are being shortchanged by the health subsidies that are not being returned to us?

Does this mean that the government has calculated how much they should collect from Singaporeans every year for Medisave, such that this would allow them to use Medisave to fully pay for any health expenses on their end, and save the rest inside the Medisave for other uses unknown to Singaporeans?

What this means is that the Singaporean people are actually subsidising the PAP government, on top of the profits that they already make from us, instead of what the government should rightfully be doing, to subsidise us instead!

Today, the government health expenditure accounts for 30% of total health expenditure, or the lowest among the developed countries and one of the lowest in the world.

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Now, of the shortchanged health subsidies that should be rightfully returned to Singaporeans, if we use the benchmark of 50% that the government was spending before the introduction of Medisave, coupled with the 30% today, this would mean the government should rightfully be able to at least fund 80% of total health expenditure!

Not only that, Medisave currently makes up only 5.5% of total health expenditure and only 1.3% of the Medisave balance. If we were to increase Medisave withdrawals by 7 times, Medisave would be able to pay for 38.5% of total health expenditure.

In total, whatever Singaporeans are paying via tax and Medisave today should be able to fund 118.5% of total health expenditure or enough to give free healthcare to everyone in Singapore, and still allow there to still be savings!

So, what happened?

Why did the government extract an additional Medisave which today is more than enough to cover for all the government’s expenses on health, reduce health subsidies and force Singaporeans to pay more out of our own pockets, when there is more than enough to provide free healthcare for all Singaporeans?

Today, there is $66 billion inside the Medisave. What is the government using this money for?

Not only that, the CPF has now accumulated $260 billion from Singaporeans. But last year, Singaporeans were able to only use 5.9% of this.


The magnitude of the problem in Singapore might no longer be contained now that Singaporeans have had to choose to die instead of seek medical treatment and for the PAP government to continue to hold on dearly to using our CPF to profit instead of actually subsidising healthcare to a greater deal might only show up on the PAP government’s incredible irresponsibility to its citizens.

The PAP Government Introduced MediShield to Earn Profit

In 1990, MediShield was then introduced to which the government says is “to help members meet large Class B2/C hospitalisation bills, which could not be sufficiently covered by their Medisave balances“.

And when MediShield was introduced, there was similarly resistance.

Dr Lee Siew-Choh had said:

It would appear that MediShield’s first responsibility is not to the insured person, but to MediShield itself, to ensure that it will not involve the Government in any extra financial expenditure… It operates just like private commercial insurance companies. It operates with the object of sure profit and no loss. Yet, it provides less benefits than private commercial hospital and surgical schemes.

But Government MediShield does not have to operate like a commercial business undertaking. Government has a responsibility to look after the aged and the sick. Therefore, it should ensure that MediShield is a truly low cost medical insurance for the aged, that it truly accepts full responsibility in the care and treatment of those stricken with serious illnesses.”

Indeed, Dr Lee was right in her assessment that the PAP government had planned for “MediShield’s first responsibility … to ensure that it will not involve the Government in any extra financial expenditure” and that “It operates with the object of sure profit and no loss.”

In June this year, the Worker’s Party Gerald Giam revealed that “Between 2001 and 2013, based on CPF Board Annual Reports, MediShield collected $3.704 billion in premiums but paid out $2.190 billion in claims — a difference of $1.514 billion.” He said, “I leave it to Singaporeans to assess whether or not they consider $1.5 billion to be “a lot more” in premiums than pay-outs.”

What this means is that of the MediShield premiums collected since 2001, the government only paid out 59%! What about from 1990 to 2000? This data is not available.


Evidently, MediShield operates at no loss at all to the government and in fact incurs a profit! Gerald Giam had also detailed how the MediShield Fund has a capital adequacy ratio (CAR) of “165% at the end of 2012“. He said that this is 45% higher than the MAS’s requirements, which is only 120%. He pointed out that the government “has set a target CAR of 200% (for the MediShield Fund), which (would be) 80% higher than MAS requirements” and asked if this is necessary, since “At the end of 2013, the MediShield Fund had net assets of $613.3 million dollars, which is more than 1.8 times the total claims paid last year.”

But as many speakers have reiterated, the government should not operate healthcare on a commercial basis, as this is a public good that should be provided to the people, as the government’s responsibility.

As such, it is evident that there is little basis for the government to introduce the Medisave and MediShield. Prior to the introduction of Medisave in 1984, the government was able to subsidise as much as 50% of total health expenditure and still be able to earn annual surpluses. In fact, after the introduction of Medisave, the government was able to reduce health subsidies and earn even higher surpluses!

There is clearly no proof that Medisave and MediShield is necessary and not only that, it is evident that Medisave and MediShield has instead allow the government to further profit from Singaporeans, not only through the underutilisation of both the Medisave and MediShield, but also from the health subsidies which should have been rightfully returned to Singaporeans.

Indeed, not only has the government over-extended the use of CPF for too many purposes – housing, healthcare and education – it is clear that there is little need for such an over-extension. In fact, by over-extending the CPF for purposes other than for retirement, the government is instead able to profit from the CPF.

If so, since the government liberalised the use of CPF for housing in 1968, the addiction on using our CPF and the further possibility of income generation only got into their heads, such that they further introduced schemes to allow the to siphon money off Singaporeans’ CPF.

It is thus clear that the PAP government has ingeniously further split off another component of the CPF to earn even more profit for themselves. In 1968, the addiction to use our CPF for housing grew until the mid-1980s, which led to the first economic collapse of such unhealthy addiction. Then from 1984 and then 1990, the PAP government devised another method to latch their addiction onto our CPF.

For goodness sake, this is the people’s money you are talking about. Does the PAP government even have any moral integrity at all, if any?

The PAP Government Created the CPF Minimum Sum to Lock In Singaporeans’ CPF

In fact, the Medisave and MediShield were not the only schemes which drew fire.

When the government wanted to defer the CPF withdrawal age from 55 to 60 in 1984, Mr Toh Chin Chye again quickly saw through the government’s poly and quickly derided them:

The reason for all this uneasiness on the problems of the aged is related to the CPF. The problems of the aged have been forgotten because you are touching people’s savings.

This problem of touching the CPF should be related to the use of the CPF, the management of the CPF and the contribution of CPF. I have repeated, time and again, that the CPF, having risen now to 50% of wages, is becoming a vexatious burden, not only to the employee but also to the employer. The employer is now paying 25% of salary towards the CPF, plus 2% payroll tax, plus 4% Skills Development Fund. That makes 31% cost on payroll alone. Of course, if there is an increase in salary from NWC recommendations, all these taxes go up. The burden on the employee is that his take-home pay becomes less, and since his take-home pay becomes less it is an issue for union bargaining, (house-unions now) to bargain with the employer for more pay.

The Minister for Finance is extremely concerned with the amount of money being locked into CPF, reducing the liquidity in commercial banks. I think that is a very genuine concern which, as the Minister for Finance, he ought to be very worried out. He should not allow his Minister for Health to dip into the CPF or to increase the CPF, because this is a social problem that is popping up. It must be thought out in breadth. We must have a vision which encompasses breadth. Do not have tunnel vision. I would like to know that we have got telescopic vision. But, Mr Speaker, I have never had the problem of tunnel vision, and that is, looking at a problem along just one line without bothering, or researching in depth, the impact on other areas.

We need to clearly define the boundaries within which the CPF will be used for retirement. We must spell that out. You just cannot say, “Let us raise the withdrawal age to 60 or 65.” It must be 60. It must be 65. Now, at which age? This Paper does not contain any calculation at all to say what will happen if it is withdrawn at 60, or what will happen if it is withdrawn at 65.

Mr Speaker, I think fundamental principles are being breached. The fundamental principle is this. The CPF is really a fixed deposit or a loan to Government, which can be redeemed at a fixed date when the contributor is 55 years old. If I were to put this sum of money in a commercial bank and, on the due date I go to the bank to withdraw the money, the manager says, “I am sorry, Dr Toh, you will have to come next year”, there will be a run on the bank! It is as simple as this, that the CPF has lost its credibility, the management of it. This is fundamental. You were taken by surprise by Medisave. Then they say, “6% of your Special Account will be kept for Medisave and you cannot withdraw that, even if you were to die.”

Now I ask the Minister for Health, and I asked him last time, whether his word is binding on future Ministers. Neither will the Minister for Labour’s word be binding on future Ministers for Labour. Can any Government or any Minister guarantee that in future years a law will not be passed that will say, “All Special Accounts in the CPF cannot be withdrawn until you die”? Your Special Account now is up to 10%; 6% Medisave, 4% for what? So unless you use the CPF to buy property, your money is in real danger of being kept under lock and key by others, not under your own lock and key. This is the nub of the problem – the credibility of the management, gradual encroachment into the purpose of the CPF which was instituted really to provide for retirement.

According to The Straits Times, “Members applauded loudly at the end of Dr Toh’s 25-minute impassioned speech.

I regret never been able to speak to Mr Toh Chin Chye.

The PAP Government Introduced the CPF Education Scheme to Pay for Increasing Education Costs which They Pushed Up

Finally, in 1989, the CPF Education Scheme for students to “help lower income families support themselves or their children through full-time studies in approved educational institutions in Singapore“.

But Dr Ow Chin Hock (Leng Kee) said then:

Mr Chairman, Sir, once again tuition fees for university students have increased. This increase is not entirely due to the increase in costs but because over the last two years the increase in expenditure has been only about 20%. Here, I must declare that I am an academician and this increase in cost has nothing to do with me, because since 1985 I have not been promoted, and my salary has remained the same. The Prime Minister has announced it to all Singaporeans. In 1987, the Minister for Education in announcing a hike in tuition fees in the House said that he would not like to see another major increase in tuition fees. But no sooner had he said this that in the course of a short two years, there is another increase in fees by 30% to 85%. This is in comparison to the fees in 1987. If it is compared with the figures in 1986, the increase rates are 117 to 454%, according to the figures given by Dr Aline Wong. Some students were hit twice by such fee-hikes. I hope the Minister would think about the plight of the families of these students. For those students who come from poor families, such repeated increases have caused them and their parents endless trouble and worry. They do not know when will the next increase be, how big will it be and whether they will be able to shoulder such burden. We have to remember that the loan that they can get only pays for half of their tuition fees. On both occasions the fee increases were announced by the university during the examination when students were intensely preparing for and taking the examinations. To those who come from the well-off families it is all right but for those who come from poor families, on the one hand they have to prepare intensely for the examinations and on the other they have to worry about the increased financial burden on their families. This will greatly affect their mood and mental condition in the examinations. It seems the university is beset with a sadistic complex. This is incongruous with the benign and compassionate manner in which the Budget was presented by the Finance Minister. It is a full three months before the next academic term starts in July. Why should the fee increase be announced at this juncture amidst the examinations? On the one hand, the Labour Minister is delaying his announcement on the scheme for the use of CPF balances for university education. On the other hand, the Minister for Education is impatient and has been hasty in announcing fee increases. Can the two Ministers not coordinate on timing this policy?

Indeed, today, Singaporeans pay one of the highest university tuition fees in the world, the government would spend at least $354 million on scholarships for international students, the universities have at least $451 million in surplus last year, yet Singaporeans have to pay about $400 million out of our own pockets to pay for the fees.


In the meantime, the government would give scholarships to 52% of international students but only 6% of Singaporean students.


The PAP Government Over-Accumulated Surpluses from Singaporeans

Indeed, on the topic of “The accumulation of surpluses by the statutory boards, (this) can be questioned. A number of the large statutory boards are virtual monopolies in Singapore, and others are large enough relative to the market to influence prices. The fact that surpluses are accumulated implies that prices are above average cost. These prices constitute costs to both producers and consumers. The higher the price, the higher the costs of production and living. Instead of aiming at maximizing profits like any other company, (it was suggested by Krause that) the statutory boards could adopt pricing policies such that they break even, thereby lowering costs. The continued accumulation of surpluses by the government can also be questioned. To the extent that a sizeable proportion of government revenue is obtained from non-tax sources, it is possible for these charges to be reduced.

The Political Economy of a City-State Revisited Statutory Board Public Sector Surplus 1974-1996

As explained, “In the initial years, before the government built up budgetary surpluses, it borrowed funds from the CPF for its development expenditure budget.” “Funding public housing and other public projects through the consolidated loan fund and development fund enables expansionary fiscal policies used to pump-prime whenever a recession strikes.” However, “As surpluses grew, especially by the late 1970s, the CPF became redundant as a financing agent for the government in general, and the HDB in particular” and the government started channelling more of the CPF into investment in government bonds.

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    • @tan

      i guess, you are a woman’s, hmm, guess again, you are an old single woman, understand why are you so bitchy, you like stopping by, but always wrong door, your PAP’s door is not here, pls out ! never come back again ! here no welcome an old single woman like you , even no man in PAP wants you !

  1. I Am A New Citizen

    After reading Roy’s blog, I now realize my mistake.
    As a Singaporean citizen now, I fully understand the disadvantages of citizenship.
    I fully support all efforts to abolish CPF and NS.
    It’s definitely in my self interest to vote Opposition.

  2. Deaf Toad's Toothpick

    Does Ngerng really believe the rubbish he spouted? With all the accusations he made posts after posts, it would be hardpressed to believe that he won’t be sued over and over again.

    But it makes for good drama, I admit.

    • Monkey See, Monkey Do

      ” … its like saying the sky is blue because I am wearing a blue shirt.”

      Oh! You mean like;
      I once knew an old man who withdraw all his CPF money.
      Within 6 months he used up all his money on gambling (@ PAP’s 2 casinos) and women in Batam.
      And now he wants welfare from the PAP government.
      Because of this one instance (no proof that it happened)
      PAP government is fully justified to hold onto Singaporeans’ CPF money beyond 55 years under a set of ever “evolving” rules.

  3. Daryl

    It has always been the bane of Singaporeans that the govn is able to arbitrarily increase HDB prices year after year. It is not a free market as many professionals will attest to. How can it be when the govn owns the very flats we stay in and sets the prices based on factors that the govn control – like land costs, roads, carpark, recreation area costs etc !!!! Completely ridiculous !!! And the facts are that the monies in the CPF belong to the people and the govn should be responsible enough to manage the funds for the benefit of the people, not make use of them for their own enrichment !!! bull to the PAP !!! Crappy govn that we have !!!

  4. RYAN

    Lee Hsien Loong’s speech has brought a serious crisis for each CPF owner, not only govern long-term economic stagnation and corruption lead to social discontent over 10 years, also affect the government’s popularity. hope the people of Singapore unite forces, called on him to hand over power to step down as soon as possible.

  5. ThankURoy

    I am SURPRISED that @tan and @Deaf Toad’s Toothpick ‘read’ without realising that Roy is quoting from books and not come up with his own theory. Roy has made a GREAT EFFORT in bringing these information to the mass who may not be aware that experts have been warning the Govt. Whoever wants to SUE, should sue the source of the information, ie. the experts and authors of those books (including, the one who say ‘you will repent’).

    Blessings be with Singapore! (with people in the 60%)

    • The Oracle

      Roy quoted books but also put his usual anti-government its-easy-in-hindsight free-and-easy-with-the-numbers spin on everything.

      His numbers are rarely correct – for example: “By 1985, Singaporeans had to pay half our wages into the CPF!”. To be more precise at this time employees contributed 25% and employers contributed 25% so Roy concludes people are paying half their wages in CPF – but this is just wrong.

      The correct percentage in 1985, using an example of a $2,000 salary, is:
      Employee contribution: $500
      Employer contribution: $500
      Percent of total income to CPF = (employee + employer contribution)/(salary + employer contribution) = 1000/2500 = 40%
      Employee takes home 60% of total income or 75% of salary and at no time does he only receive 50%.

      It doesn’t matter that I’ve pointed this out before as Roy clearly doesn’t want facts to get in the way of a good story.

      • A PM Lee Fish Story

        I think PM Lee cares more for a discarded fishball stick than he does about disadvantaged Singaporeans.
        One brand new government agency because of a discarded fishball stick.

        Do you think PM Lee will form one new government agency because one Singaporean has been left behind?

      • ThankURoy

        Thank you @The Oracle, for highlighting the numbers, the way I thank Roy for his numbers.

        I think at the end of the day, the essence of the issue is ‘Are Singaporeans getting better?’
        Not just in terms of numbers stated in Statistics, but overall ‘FEEL’ as a Singaporean.

        @The Oracle cannot deny the fact that more SMCs being voted to the Opposition is an obvious sign that something is not right. Only about 30-over% votes given to an ex-PAP-related President is also a sign that more are getting unhappy with the incumbent. Social media is just a platform for more transparency.

        To add insult to Singaporeans, is the way that the incumbent solve problem, like forming a new agency, instead of looking at duplication of roles in the Ministries, over a ‘fishball stick’. It just goes to show how the incumbent too, does not want the facts (put up through the ‘voices’ in the social media) to get in the way of their ‘good show’.

      • The Oracle

        Definitely some truth in that – the world is changing and that it is much easier for citizens to criticize and harder to ignore them – and government needs to be more inclusive of all sectors of our society.

  6. anon

    Perhaps Roy could consider packing all the pages into a single file of a suitable format (eg .MHT, .PDF, .DOC .EPUB etc). It may be an easier read compared to 8 pages online all at one sitting

    Do take note of any copyright issues though.

  7. seesiwpeng

    @The Orcle…you lowly scum bastard dog is back after getting permission from your Line Leader?
    Who cares what you spew nonsense here, we allow you here to make u a scumbag bastardize idiot banana sucking dog eating from the crumbs of the table of all of us, as usual digging with fingers to satisfy of your lowly scum swine masters…
    honest to the bone, even unto you wearing a skirt is so insulting to women! asking you to screw a spider is so insulting to the creature…guess what, you are the lowest of evolution ever seen here on Earth!

    • The Oracle

      Hahahahaha! You can’t stand even the slightest criticism of Roy and this just proves you and your fellow members of Roy’s gang are not fit to run a country!

      • reply "The Oracle"

        The Oracle,
        in your country, Your happiness index ranked first outside,
        95% women never married , and you still enjoy the paper,
        don’t you think a severe deformity of Singapore, as a leader to be responsible,

        about you, The Oracle !
        you took huge pay daily , you talk a bunch of unrealistic here with a group of unemployed & unfortunately people, such person like you, if still alive today, better go as good as dead.

  8. The Oracle

    I apologise to all that m such a scum, please forgive me and I shall learn to jerk out well before coming to this Blog again.

    • The Oracle

      I apologize for being a PAP idiot-savant.
      My PAP parents dropped me on my head when I was an infant.
      They say it was an accident.

  9. 请他早点滚下台

    你们的总理不喜欢听到贪污这个字,那么, 用“贪心”两个字最适合他 。他170万年薪, 是全部4000户人家的生计总和,是美国总统的4倍。 可见他是那么的贪心, 用巨大地胃口来满足贪心, 排名全球贪心指数第一名。

    新加坡人民团结起来,推翻这个腐败贪心的领导人。请他早点滚下台 !

    Your Prime minister Lee don’t like to hear the ” corruption ” such word,
    therefor, use “greedy” word most suitable for him.
    His annual salary is 1.7 million USD, is the sum of all the 4000 people’s livelihood, is four times of the American president’s.
    Showing that he is so greedy, too greedy.
    with an huge appetite to satisfy the greedy, greedy index ranked first worldwide.
    Singaporeans unite to overthrow the corrupt greedy leaders.

  10. 他要挤干你的最后一滴血

    过了55岁继续扣押我们的公积金,因为李总理老婆的淡马锡控股某个交易亏本, 所以要拖死我们,那么某个交易赚钱,为什么不分给我们 ? 他老婆亏本要我们多赔10年, 他老婆赚钱分红没有我们,他要我们省吃俭用,租出房间来套现, TMD这一家子不是人 !

    做老公的李总理,要为老婆何晶每天从淡马锡控股拿巨额回报保密,什么天机不可泄密,一对缺德货色,不如他们早早死掉算了 , 他们活着对人民一点意义都没有, 反而整天控告人民, 搞到有工作的人, 被失去工作, 没工作的人,被晾在一边。好像一切不关他们的事。不做好事的总理,不为人民做事的总理, 他们是人民的公敌, 现在,人民要团结,把他赶下台。

  11. Pingback: What PAP Has Done to Your CPF and Doesn’t Want Singaporeans to Know (The Real History) | The Heart Truths
    • The Oracle

      Even that is way too high. The potential short-changed amount:

      1) Start with total funds in CPF today: $264,767,600,000

      2) Interest paid ranges from 2.5% to 5% with many getting 3.5% to 5% as Roy asserts more than half have circa $55,000 (less than the potential $60,000 that gets an extra 1%). All in all we can assume the average is 3.5% as paid on the special Singapore government bonds (those with smaller balances do better and those with bigger balances do a bit worse).

      3) What should CPF pay? Given GIC real rate of return over the past 20 years of 4.1% and inflation over the same 20 years of 1.9%, a case can be made for 6% return instead of 3.5%.

      4) Other assumptions: Average CPF member in the scheme for 20 years, annual wage growth of 6% notional. I put it all in a spreadsheet and:

      CPF Contributions CPF Actual CPF Ideal
      6.00% 3.50% 6.00%

      1995 5,250,000,000 $5,433,750,000 $5,565,000,000
      1996 5,565,000,000 $11,383,706,250 $11,797,800,000
      1997 5,898,900,000 $17,887,497,469 $18,758,502,000
      1998 6,252,834,000 $24,985,243,070 $26,512,016,160
      1999 6,628,004,040 $32,719,710,759 $35,128,421,412
      2000 7,025,684,282 $41,136,483,868 $44,683,352,036
      2001 7,447,225,339 $50,284,139,029 $55,258,412,018
      2002 7,894,058,860 $60,214,434,815 $66,941,619,130
      2003 8,367,702,391 $70,982,512,009 $79,827,880,813
      2004 8,869,764,535 $82,647,106,223 $94,019,504,068
      2005 9,401,950,407 $95,270,773,611 $109,626,741,744
      2006 9,966,067,431 $108,920,130,479 $126,768,377,726
      2007 10,564,031,477 $123,666,107,625 $145,572,353,755
      2008 11,197,873,366 $139,584,220,325 $166,176,440,748
      2009 11,869,745,768 $156,754,854,906 $188,728,957,707
      2010 12,581,930,514 $175,263,572,910 $213,389,541,514
      2011 13,336,846,345 $195,201,433,928 $240,329,971,130
      2012 14,137,057,125 $216,665,338,240 $269,735,049,950
      2013 14,985,280,553 $239,758,390,451 $301,803,550,333
      2014 15,884,397,386 $264,590,285,411 $336,749,224,582

      Difference: $72,158,939,171
      Per member short: $24,052.98
      Above based on average balance of: $88,196.76
      For Median balance of $55,000 as stated by Roy:
      Per member short: $14,999.57

      So, the average member as defined by Roy has about $15,000 less in their CPF account, subject to confirmation of my assumptions. You can’t count the money withdrawn over the years for housing loans unless you also count the profit members have made on those properties.

      $15,000 is still significant but nothing like the crazy numbers Roy claims.

      • reply The Oracle

        old man at trickery and sly wily like old fox, you are the black hand ruined your premier

  12. Pingback: 行动党是如何操纵我们的公积金资金?为什么他们不让新加坡人民知道公积金的历史真相?《第一部分》 | The Heart Truths
  13. Pingback: How PAP Created Inequality in Singapore: Will Singapore Collapse? | The Heart Truths
  14. teoenming

    Singapore Minister Mentor Lee Kuan Yew and Prime Minister Lee Hsien Loong Want Teo En Ming Dead

    Singapore Minister Mentor Lee Kuan Yew and Prime Minister Lee Hsien Loong want Teo En Ming dead. Lee Kuan Yew and Lee Hsien Loong want Teo En Ming to die young. I am only 36 years old. I do not want to die young. I want to live to a hundred years old and beyond!!! I want to live to a hundred years old and beyond!!! I want to live to a hundred years old and beyond!!! I want to live to a hundred years old and beyond!!! I want to live to a hundred years old and beyond!!!

    In fact, I want to live forever!!!
    In fact, I want to live forever!!!
    In fact, I want to live forever!!!
    In fact, I want to live forever!!!
    In fact, I want to live forever!!!

    Teo En Ming has filed an official complaint against the Singapore Government at the United Nations Human Rights Council Branch and the International Criminal Court. Read the letter here:


    Teo En Ming’s Open Letter (Plea for Medical Help/Assistance) to World Leaders dated 27 Aug 2010. Read the letter here:

    Mr. Teo En Ming (Zhang Enming)
    Singapore Citizen
    Republic of Singapore
    14 Jan 2015 Wednesday

  15. Pingback: This is How the PAP is Not Taking Care of Singaporeans | The Heart Truths
  16. Pingback: Thoughts on CPF and Update Thirteen of Defamation Funds | The Heart Truths

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