The PAP Goverment Takes Singaporeans’ CPF to Invest in the GIC and Denies Doing So, but Finally Admits to the Truth This Year
Which is why it is highly problematic that for more than a decade now, the PAP government had refused to admit that they take our CPF to invest in the GIC and Temasek Holdings.
In fact, it is only on 30 May this year that the PAP government finally admitted to the truth that “The Government’s assets (which our CPF is part of) are therefore mainly managed by GIC.”
But this is after numerous denials.
Lee Kuan Yew denied the truth in 2001.
Lee Kuan Yew denied this again in 2006.
Then-Manpower Minister Ng Eng Hen also denied this in 2007. The Worker’s Party’s Low Thia Kiang had asked, “Does the Government Investment Corporation (GIC) use money derived from CPF to invest?” Ng Eng Hen said, “The answer is no.”
In fact, in 2008, then-Second Finance Minister also claimed that the “Government does not get involved in managing (GIC’s and Temasek’s) investments” and that “these agencies make their own independent commercial and operational decisions”, because it will otherwise “raise even more concerns”.
However, there is indeed even more concern today now that it is known that the PAP government would undoubtedly be involved in managing the GIC, but has continuously denied their involvement!
For the PAP Government is on the Board of Directors of the GIC, with the Singapore Prime Minister as the Chairman no less, and the two Deputy Prime Ministers, two other ministers and an ex-minister. Lee Kuan Yew is the Senior Advisor.
And yet, the GIC Board of Directors are also in the government!
As such, how can it be possible that the government “does not get involved?
It is thus ridiculous that the GIC claims that, “The government holds the GIC board accountable for portfolio performance, but does not interfere in the company’s investment decisions.”
It is even more absurd that the PAP government would claim that, “The Government plays no role in decisions on individual investments that are made by GIC, MAS and Temasek. At the GIC and MAS, whose boards include Ministers, these investment decisions are entirely the responsibility of their respective management teams.”
It is quite impossible that the PAP government does not interfere or gets involved in the GIC, unless they are two-headed with two different brains, which in this case, is quite clear that two heads are not better than one. The lack of transparency and accountability is thus glaring and it cannot be even clearer the conflict of interest, which puts Singaporeans at a serious disadvantage.
In fact, I had written two articles in 2012 and 2013 which traced specifically on the government’s websites how our CPF is indeed taken by the government to invest in the GIC and Temasek Holdings. However, the PAP government deleted the evidence from their websites later on.
Thus it is no longer possible for Singaporeans to know that our CPF, via the government bonds, are invested in the reserves.
And it is also not possible for us to know that the reserves (and our CPF) are managed by the MAS, GIC and Temasek Holdings.
All these, until the PAP government was finally forced to admit that they do take our CPF to invest in the GIC on 30 May this year. And in spite of the Temasek Holdings’ denial of having used our CPF, it is clear that the Temasek Holdings is guilty of having done so.
Indeed, from what this article, it can be seen that the PAP government is completely hooked to Singaporeans’ CPF to achieve every means and ends which they set their hearts to, except to actually use it to take care of the people. How the PAP government have such audacity to do this is perhaps astonishing, and the blatant denials of the truth for more than the past decade. That the government has reneged on protecting Singaporeans, by manipulating our CPF for their own uses has become a national security threat to Singaporeans and to have the PAP continue to be in government is of great disservice to the people of Singapore and puts the lives of Singaporeans at risk.
Indeed, “It was clear from the very outset that the CPF would make available to government a cheap source of credit for social and economic development. For many years, CPF funds were invested almost exclusively in Singapore government bonds. This provided the state with vast resources to pursue its developmental and social goals.”
However, “Noting that some had hit out at the Government for using their CPF funds as ‘cheap money’ for its investments, (Lee Hsien Loong) said: ‘Some people say…Government wants cheap money to go and make a profit. We do not have to make cheap money. This is not that kind of government.’”
Also, when Low Thia Kiang asked, “is the motive of holding payment of CPF, the draw-down age, to enable GIC to have a readily available and cheap source of funds to invest?”, Ng Eng Hen had replied, “if it was that cheap, we would have a line of suitors waiting for that money. There is none.”
Really? In 1983, it was already reported in The Straits Times that, “The CPF … provided a cheap source of finance for the government. The CPF purchases government stocks, and the government loans the money cheaply to the HDB.”
So, will the PAP please come clean? Will they please admit the truth as to what they are really doing with Singaporeans’ CPF monies?
Today, many Singaporeans are unable to retire and indeed if what we could potentially have saved enough to allow us to retire, but we are yet unable to do so, then the PAP has some serious answering to do.
And they do.
Indeed, Yasue Pai asserted that “The lack of transparency in the way the government invests CPF balances and the lack of an overall strategic objective of the CPF puts into question whether the system is really in the best interest of members.”
The Elephant in the Room: Will CPF go Kaput when Flats Have Zero Value?
And yet, there is still one thing the PAP government has not dared to address. It is all fine and dandy for the PAP government to skip along and take our CPF away for their foolhardiness, and for them to build castles in the air, but when the flats have lived out their lifespans and are left to linger, what then of the flats, and what then of our CPF which have been quarried away?
Indeed, Gerald Giam had questioned the Minister for National Development Khaw Boon Wah who “confirmed that the value of the flats will be zero at the end of their 99-year lease” and that the Selective En Bloc Redevelopment Scheme (SERS) “is not a scheme intended solely to replace old flats reaching the end of their lease”, which means that if your flat is not en bloc prior to it losing its value, you are sitting on a ticking time bomb, which your CPF will be sucked into, or away.
In effect, the PAP government has siphoned your CPF off for their housing profit, knowing full well that as much as they claim that Singaporeans have a “rich asset” in the HDB flats, this asset will be worth nothing because of their lease management.
And as Gerald puts it, “This number will grow larger each year” which means the problem will only get bigger and bigger.
And even as the PAP government invents the Lease Buyback Scheme, at last night’s National Day Rally, Lee Hsien Loong only went as far as illustrating how much Singaporeans could earn if the last 35 years of lease of the flat is sold back to the HDB.
However, Professor Joseph Cherian had shown that the HDB flat starts losing its value after Year-66 and will eventually have zero value at the 99th year, which means that if the flat only has 33 years of lease left, the flat would start declining in value.
So, what if a person has less than 33 years of lease left? If he/she decides to sell the lease back, he/she would be terribly shortchanged. And in light of how SERS is not a mandatory scheme, the person would either be stuck with an over-priced flat he/she paid too much far or be left with too little savings to retire on, since he would now be “cash-poor” and “asset-poor” as well.
Thus the PAP’s “asset-rich” rhetoric will run its course soon. It can only be proclaimed as long as the majority of the flats have not reached 66 years of age, but once a significant threshold starts to cross over, the PAP’s rhetoric will quickly unravel.
And if the PAP government would keep turning a blind eye to not just the over-extravagant use of the CPF for housing, and the seriousness to tackle the issue of flat pricing and lease, then we are looking at the end of the Singapore Miracle come to fruit.
Perhaps now when we understand how the PAP government has tied the CPF into almost all aspects, if not all aspects of the Singapore economy and constructed the economy around taking Singaporeans’ CPF to use as their financial bedrock, you will understand why the PAP government would do anything at any costs to contain any talk about the CPF, to protect this system that they have so craftily created to wean on.
The short story of it all is – the PAP has styled their survival along leeching on Singaporeans’ CPF and our sustained modern-day slave-labour to generate wealth for their livelihoods. In all honesty, Singaporeans matter only as much as the lives of the PAP are sustained.
Perhaps now we might understand why there were no significant changes made to the CPF at the National Day Rally last night – the PAP government has come to the end of their tweaking. They have over-stretched themselves with our CPF and are willing to strike a balance on the use of our CPF to as far the extend as they are doing now, in order for them to still be able to tap on our cheap source of funds for their easy access. To them, they have perfected this feedback loop for their purposes. Doesn’t matter if it doesn’t work for Singaporeans or that it is our money. They have legalised the usage.
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