No fixed amount to say Singapore has ‘enough’ reserves: PM Lee
There have been calls for the government to review its “reserve accumulation policies.”
Prime Minister Lee Hsien Loong said there’s no specific amount that defines having “enough” reserves for Singapore.
“We can never say for sure how much is enough because we do not know what kind of crises we will face in the future, or how our investments will fare,” Lee told the Parliament during the debate on the motion on Singapore’s public finances.
“That does not mean we should mindlessly save every dollar we earn, without regard for present needs. Instead, our mindset should be to treat past reserves as a precious resource that generations of Singaporeans have built up,” Lee added.
PM Lee also underscored that under the Constitution, Singapore’s spending rule is 50-50.
“Half for now, half for the future. This is fair and just, and as I would like to explain now, it also happens to be about the right sustainable proportion to keep the reserves in proportion with the GDP,” Lee said.
PM Lee added that Singapore's reserves have been about 3.5% a year.
“It hasn’t gone 3.5%, 4%, 5%, suggesting that I have more and more money in the kitty. It’s about there. If I keep on doing this, I will keep on being able to do this and spending 3.5% from the reserves every year, saving me a doubling of the GST. I think that’s a good thing,” PM Lee said.
“That is the way to protect our nest egg. This is the right thing to do,” he added.