The Worker’s Party’s Gerald Giam had asked “DPM Tharman Shanmugaratnam on 4 August 2014 in Parliament regarding the Government’s “net assets” and how the returns from the reserves managed by GIC make their way back to CPF members.“
Are Singaporeans Guaranteeing the Returns on Our CPF by Ourselves?
Tharman had said, “The CPF Board invests CPF members’ savings in Special Singapore Government Securities (SSGS), which are guaranteed by the Government,” and that, “GIC manages a major part of the Government’s funds, including those derived from long-term liabilities such as SSGS.
Tharman also said, “GIC has achieved good long-term returns to date. However, as investment markets are uncertain and volatile, GIC’s returns over shorter periods could be low or even negative. The Government is able to absorb these short-term market risks, because it has a strong balance sheet. It has a substantial buffer of net assets that enables it to meet the obligations on its liabilities, including its SSGS commitments.”
However, if the government’s “strong balance sheet” and “substantial buffer of net assets” also comes from Singaporeans’ CPF and HDB, then is it the government that is guaranteeing the returns on our CPF, or are Singaporeans actually guaranteeing the returns on the CPF by ourselves?
Then, are Singaporeans guaranteeing the returns on GIC as well?
If so, shouldn’t whatever returns earned by the GIC using our CPF be returned to Singaporeans?
Are Singaporeans Funding the Losses of GIC and Temasek Holdings
Gerald Giam asked Tharman, “specifically on the eight years in the past 20 years where GIC’s investment returns were below what the Government pays on SSGS, were these shortfalls funded from the Government’s net assets or from the GIC’s assets?”
Tharman replied: “And as for the eight years within the last 20 years, which was what I had stated in response to Mr Gerald Giam’s question at the previous Sitting – just to reiterate, that is eight years in the previous 20 years ending 2013 – that is when in fact the GIC’s returns on the total assets that it is managing fell below the SSGS rates. That by definition would have meant that net assets would have been lower than otherwise because the Government has fixed obligations on its liabilities, and because of the fluctuations in returns on its assets.”
However, did Tharman answer Gerald’s question and are the “shortfalls funded from the Government’s net assets or from the GIC’s assets”?
Earlier on, Tharman had also said, “GIC is managing Government assets. It is not GIC’s assets. GIC is a fund manager, so the assets are assets on the Government’s balance sheet, rather than on the GIC’s balance sheet.”
Thus if the GIC does not have any assets of its own, does it not mean that any shortfalls are funded by the government’s assets?
And since the government’s assets are also made up of our CPF and HDB value, does this not mean that Singaporeans are funding the losses of GIC from our CPF?
If so, when GIC and Temasek Holdings lost $117 billion in 2008 or 77% of the $151 billion value of our CPF at that time, did the government increase the CPF Minimum Sum to fund for their losses?
#ReturnOurCPF 3 Protest on This Saturday 23 August 2014 at Hong Lim Park
Come down to the #ReturnOurCPF protest this Saturday at 4pm at Hong Lim Park. You can join the Facebook event page here.