<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Don't turn elections into auctions
</TR><!-- headline one : end --><TR>S'pore not immune to populist calls to spend more, says PM Lee, on need to protect reserves </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Jeremy Au Yong
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The Sydney Morning Herald's pork-o-meter measured the cost of party promises in the Australian election last year. -- PHOTO: SYDNEY MORNING HERALD
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WHEN politicians bid to outdo one another with more and more goodies for voters, expect trouble in paradise.
That was the message from Prime Minister Lee Hsien Loong yesterday when he cited Norway and Australia to make a case for protecting Singapore's reserves.
In both countries, he said, the populist call for government handouts had coloured local politics.
In Australia, the war between its two main political parties prompted newspapers to introduce a 'pork-o-meter' to track the race to offer voters more and more goodies during the last election.
In Norway, the clamour was for more money to be taken from a reserve fund meant for the future. Newsweek magazine, in describing the situation, headlined it Trouble In Paradise.
Yesterday, PM Lee gave an extensive account of what went on in both countries when he spoke during the debate to amend the Constitution to allow the Government to tap more of the returns from investing the country's reserves.
In Norway, the saga began with the discovery of oil in the 1970s. It became rich.
In 1990, it started a Petroleum Fund, into which was channelled the sales proceeds from its oil and gas. The reason: It did not want to be left with nothing when the oil wells dried up.
Today, the fund has an estimated US$350 billion (S$519 billion).
'Even Norway, famously prudent, with conservative, hard-working, frugal people, finds it difficult to resist a populist push - spend just a little more.'
In 2001, Norway's government included some of the fund's money in its budget. Parliament capped the sum at 4 per cent of the value of the fund.
'But once they had set the rules, they broke the rules,' Mr Lee noted.
The Norwegian government exceeded the 4 per cent limit from 2002 to 2005, arguing the economy was not doing well and it was thus necessary to spend more.
In 2005, they renamed the fund the Government Pension Fund - Global, to remind Norwegians that the money was not to be touched.
Spending slipped below the 4 per cent ceiling in 2006 and last year, and that is because oil prices soared. Still, some Norwegians clamoured for more.
Said Mr Lee, referring to Newsweek's story: 'This is a country which had everything - oil, gas, welfare state, womb to tomb, all provided for - but still there is an opposition party arguing you should pump more oil and have more profits, improved services and lower taxes. So there is no way you can avoid these pressures.'
Elections are due in Norway by next year. 'Then, we will see whether the majority of Norwegians continue to uphold the principle of saving for the future,' Mr Lee added.
For Australia, the events played out during last year's election.
Then-prime minister John Howard announced a A$34 billion (S$34.3 billion) tax package on the first day of the campaign. Labor Party leader Kevin Rudd responded with a A$31 billion package.
Mr Lee said: 'So major newspapers in Australia started to keep track of the cost of campaign promises. They called it a pork-o-meter. So as you put in more, the dacing (weighing scale in Malay) goes up.'
In the end, Mr Howard's promises hit A$65 billion and Mr Rudd's, A$56 billion.
'Finally, the election was not decided on the pork-o-meter. The people wanted a change...and they chose Kevin Rudd.'
In telling these stories, Mr Lee stressed he was not out to criticise others but to show the nature of election politics, to which Singapore was not immune. 'We too, face the reality of election politics. Opposition parties often demand the Government spend more, particularly near election time. They never ask where the money will come from, least of all do they explain where the money for their programmes will come from at election time.'
Mr Lee added: 'Therefore, we have to take extra care to safeguard our reserves for the future, to frame the rules to prevent our elections from becoming auctions. Therefore, we need to put in place a system that will subject the Government to tight fiscal discipline regardless of which party is in power.' [email protected]
</TR><!-- headline one : end --><TR>S'pore not immune to populist calls to spend more, says PM Lee, on need to protect reserves </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Jeremy Au Yong
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
The Sydney Morning Herald's pork-o-meter measured the cost of party promises in the Australian election last year. -- PHOTO: SYDNEY MORNING HERALD
</TD></TR></TBODY></TABLE>
<TABLE><TBODY><TR><TD>
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WHEN politicians bid to outdo one another with more and more goodies for voters, expect trouble in paradise.
That was the message from Prime Minister Lee Hsien Loong yesterday when he cited Norway and Australia to make a case for protecting Singapore's reserves.
In both countries, he said, the populist call for government handouts had coloured local politics.
In Australia, the war between its two main political parties prompted newspapers to introduce a 'pork-o-meter' to track the race to offer voters more and more goodies during the last election.
In Norway, the clamour was for more money to be taken from a reserve fund meant for the future. Newsweek magazine, in describing the situation, headlined it Trouble In Paradise.
Yesterday, PM Lee gave an extensive account of what went on in both countries when he spoke during the debate to amend the Constitution to allow the Government to tap more of the returns from investing the country's reserves.
In Norway, the saga began with the discovery of oil in the 1970s. It became rich.
In 1990, it started a Petroleum Fund, into which was channelled the sales proceeds from its oil and gas. The reason: It did not want to be left with nothing when the oil wells dried up.
Today, the fund has an estimated US$350 billion (S$519 billion).
'Even Norway, famously prudent, with conservative, hard-working, frugal people, finds it difficult to resist a populist push - spend just a little more.'
In 2001, Norway's government included some of the fund's money in its budget. Parliament capped the sum at 4 per cent of the value of the fund.
'But once they had set the rules, they broke the rules,' Mr Lee noted.
The Norwegian government exceeded the 4 per cent limit from 2002 to 2005, arguing the economy was not doing well and it was thus necessary to spend more.
In 2005, they renamed the fund the Government Pension Fund - Global, to remind Norwegians that the money was not to be touched.
Spending slipped below the 4 per cent ceiling in 2006 and last year, and that is because oil prices soared. Still, some Norwegians clamoured for more.
Said Mr Lee, referring to Newsweek's story: 'This is a country which had everything - oil, gas, welfare state, womb to tomb, all provided for - but still there is an opposition party arguing you should pump more oil and have more profits, improved services and lower taxes. So there is no way you can avoid these pressures.'
Elections are due in Norway by next year. 'Then, we will see whether the majority of Norwegians continue to uphold the principle of saving for the future,' Mr Lee added.
For Australia, the events played out during last year's election.
Then-prime minister John Howard announced a A$34 billion (S$34.3 billion) tax package on the first day of the campaign. Labor Party leader Kevin Rudd responded with a A$31 billion package.
Mr Lee said: 'So major newspapers in Australia started to keep track of the cost of campaign promises. They called it a pork-o-meter. So as you put in more, the dacing (weighing scale in Malay) goes up.'
In the end, Mr Howard's promises hit A$65 billion and Mr Rudd's, A$56 billion.
'Finally, the election was not decided on the pork-o-meter. The people wanted a change...and they chose Kevin Rudd.'
In telling these stories, Mr Lee stressed he was not out to criticise others but to show the nature of election politics, to which Singapore was not immune. 'We too, face the reality of election politics. Opposition parties often demand the Government spend more, particularly near election time. They never ask where the money will come from, least of all do they explain where the money for their programmes will come from at election time.'
Mr Lee added: 'Therefore, we have to take extra care to safeguard our reserves for the future, to frame the rules to prevent our elections from becoming auctions. Therefore, we need to put in place a system that will subject the Government to tight fiscal discipline regardless of which party is in power.' [email protected]
