SINGAPORE - The Government’s position of discipline, prudence and a willingness to sacrifice for the next generation has remained constant, while the Workers’ Party (WP) seems to have shifted its stance on the use of past reserves, Deputy Prime Minister Lawrence Wong said on Friday.

Rounding up the debate on Budget 2023, Mr Wong, who is also Finance Minister, recounted how former WP chief Low Thia Khiang expressed surprise in 2009 at the need for the Government to draw $4.9 billion of past reserves to help tide Singapore over the global financial crisis, when Parliament was debating the matter.

“Mr Low said, and I quote: ‘Past reserves are a strategic asset meant for use in times of need, especially when the Government faces financial constraints due to unprecedented circumstances which require the Government to respond in the interest of the nation.’ I could not have said it better,” said Mr Wong.

In 2011, Mr Low lauded the Government’s move to return the withdrawn funds to the reserves.

But WP MPs have been “completely silent” on the fact that the Government is highly unlikely to put back the $40 billion drawn on past reserves due to the country’s tight fiscal position, unlike several People’s Action Party (PAP) MPs who urged it to try to do so, he noted.

Instead, they have repeatedly called for the Government to spend more from the reserves, slow down the growth of the reserves and tweak the 50 per cent Net Investment Returns Contribution (NIRC) formula, said Mr Wong.

NIRC consists of 50 per cent of the net investment returns on net assets invested by GIC, the Monetary Authority of Singapore and Temasek, and 50 per cent of the net investment income derived from past reserves from the remaining assets.

Mr Wong said: “It sounds to me that the Workers’ Party has shifted its position since the days of Mr Low. But in the end, Singaporeans will have to judge what is the more responsible approach to managing our finances and to take Singapore forward.”

He added: “I say, let’s uphold the values of our forefathers and do what is right by past, present and future generations of Singaporeans. Let’s maintain a strong fiscal foundation so that Singapore can continue to prosper and thrive for many more years in this troubled world.”

Responding, Leader of the Opposition Pritam Singh said his party’s position has evolved because circumstances have changed significantly.

The WP chief said the Government’s attitude to the NIRC had evolved after the global financial crisis as well, with the inclusion of Temasek in the framework.

The net investment returns framework was introduced in 2008, and Temasek was included in 2015.

Mr Singh said the Government’s explanation on why Temasek was added – that there are greater healthcare and ageing population needs – was perfectly reasonable.

“Naturally, as circumstances evolve, the PAP also will change its position, and the Workers’ Party, of course, will be entitled to do the same,” he said.

Mr Wong disagreed that the Government had changed its position, noting it had made clear that Temasek would be included in the framework at some point. The implementation was staged due to the complexity of incorporating Temasek, he added.

“More importantly, our underlying philosophy, our intent, our principles, have never changed and will never change. It is about fiscal prudence, discipline, responsibility, stewardship, that is consistent... Whereas it seems to me on that part, the Workers’ Party has shifted,” he said.

WP MP Leon Perera (Aljunied GRC) said that while Mr Wong has set out the view that reducing the rate of growth of reserves is taking away from future generations, the PAP had done just that in 2008 when it created the net investment returns framework, and again in 2015, when including Temasek.

“Why is that not irresponsible and not taking money away from future generations? But when the Workers’ Party says it, then it is irresponsible. Is it seeking political mileage that it is okay when you do it, but it is not okay when we call for it?” Mr Perera asked.

Noting that the Government had always intended to include Temasek in the framework, Mr Wong said: “We put in place a framework that will provide discipline. Discipline for the Government to use the reserves as an endowment fund. It was meant to be a set of fiscal rules that we live by. Not to change at the time when we need money.”

The issue, he said, is the WP’s attitude of wanting to change the rules at the first sign of needing money, not long after the framework was finalised. “Shouldn’t we live by the rules that we have set for ourselves and agreed and put in place?” he added.

Mr Wong said a review of the NIRC could come “years later, after the benefit of lots of experience”, but not so soon.

“We do not think that is sound, nor does that reflect the values that we want to uphold in our fiscal system and in our society,” he said.