Presidential advisers had robust discussions

CPA chairman J.Y. Pillay (left) and member S. Dhanabalan said the council did not face any "borderline" decisions during Dr Tan's six years in office.
CPA chairman J.Y. Pillay (above) and member S. Dhanabalan said the council did not face any "borderline" decisions during Dr Tan's six years in office.ST PHOTO: KEVIN LIM
CPA chairman J.Y. Pillay (left) and member S. Dhanabalan said the council did not face any "borderline" decisions during Dr Tan's six years in office.
CPA chairman J.Y. Pillay and member S. Dhanabalan (above) said the council did not face any "borderline" decisions during Dr Tan's six years in office.

There were no government requests to draw down on past reserves during the term of President Tony Tan Keng Yam.

Still, the issue of the reserves was scrutinised by Dr Tan and his Council of Presidential Advisers (CPA).

They discussed how the estimated long-term real rate of return was calculated by the agencies responsible for investing the reserves, said Mr J.Y. Pillay, 83, chairman of the CPA since 2005.

This rate is important because it affects how much the Government can include in its annual budget for current needs - 50 per cent of expected returns can be used.

Making liberal assumptions about this rate might hence result in more reserves being spent, which could be imprudent.

The agencies managing the reserves are GIC, Temasek Holdings and the Monetary Authority of Singapore.

 
 
 
 

Mr Pillay said the CPA asked agencies to bring in independent consultants to give a second opinion on how the rates should be computed. He said the Government's rates were lower - and hence more conservative - than the consultants'.

Dr Tan weighed in on this issue during deliberations, and leaned in the direction of prudence. "His view was that the investment environment is becoming more risky and not necessarily more rewarding," said Mr Pillay, one of two CPA members who spoke to The Straits Times in interviews marking the end of the presidential term today.

During Dr Tan's six years in office, the CPA engaged in "robust" discussions on government budgets and key appointments, but it did not face any difficult or "borderline" decisions, they said.

The CPA also met prospective key appointees, including the chairman or chief executive of key agencies, judges, the attorney-general, the auditor-general and the top brass of the Singapore Armed Forces.

"We meet appointees to assess their quality and character," said Mr S. Dhanabalan, a former minister and CPA member since 2004.

Mr Pillay said the calibre of appointees has improved over time. They are better qualified, more educated - "and, I would say, smarter".

The CPA also visited key agencies such as JTC Corporation and the Housing Board, often with Dr Tan.

These visits help the CPA understand agencies' long-term plans, so that if a drawdown were requested, the council would have enough background knowledge to make an assessment.

"We have to be mentally prepared for all these eventualities, although they never arose," said Mr Dhanabalan.

A version of this article appeared in the print edition of The Straits Times on August 31, 2017, with the headline 'Presidential advisers had robust discussions'. Print Edition | Subscribe