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Imagine no GST, free medical and school fees, cheaper utilities and lower public transportation fares | The Online Citizen
Temasek had previously disclosed S$58 billion losses in their portfolio and GIC is rumoured to have lost US$ 50 billion. How can we improve the system to manage the funds better?
This paper discusses the events which have led us to the current situation and proposes changes to the system for the better.
I propose major changes to improve the system by making it more transparent and there must be public disclosures on the size and performance of the funds. Firstly the government must be transparent about governance structure and reporting lines for accountability. They must disclose clearly about who proposes the investments, who makes the investment decisions, which government entities are the ultimate owners of the funds and what the organisational structure is.
Secondly there must be transparency on the investment objectives such as the purpose of the investment, the time horizon, what are the rules governing allocations or withdrawals from the funds.
Thirdly there must be transparency on the investment strategy including how the investments are split between asset classes, the size of the funds and returns. I believe that transparency is a very forceful disciplining mechanism to ensure accountability. The loss and returns of this fund should be public knowledge. Since, if the managers of the funds do a bad job then the public can relate to it. It is good for any business to be transparent and this principle should extend to the managers of our reserves.
Finally, I propose that how we use the returns from the funds must be debated in Parliament during the budget debates. This is a major departure from the current situation where the public is kept in the dark about the size of the reserves and the returns generated from it. If the public is no longer in the dark, there will be more scrutiny on the amount and the uses of public funds.
No one actually knows how much we have in our reserves, but some analyst estimate it at S$ 500 billion. If this is the case, than our reserves should generate returns which will cover most of the country’s budget expenses.
For example, following the average historical return of 11.9% per annum, as disclosed by Temasek and GIC we would have S$59 billion worth of returns. Such an amount can cover most of the 2009 estimated budget. Imagine no GST, free medical and school fees, cheaper utilities and lower public transportation fares.
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the following is Mr Tan’s proposed structure for GIC and Temasek Holdings:
Temasek had previously disclosed S$58 billion losses in their portfolio and GIC is rumoured to have lost US$ 50 billion. How can we improve the system to manage the funds better?
This paper discusses the events which have led us to the current situation and proposes changes to the system for the better.
I propose major changes to improve the system by making it more transparent and there must be public disclosures on the size and performance of the funds. Firstly the government must be transparent about governance structure and reporting lines for accountability. They must disclose clearly about who proposes the investments, who makes the investment decisions, which government entities are the ultimate owners of the funds and what the organisational structure is.
Secondly there must be transparency on the investment objectives such as the purpose of the investment, the time horizon, what are the rules governing allocations or withdrawals from the funds.
Thirdly there must be transparency on the investment strategy including how the investments are split between asset classes, the size of the funds and returns. I believe that transparency is a very forceful disciplining mechanism to ensure accountability. The loss and returns of this fund should be public knowledge. Since, if the managers of the funds do a bad job then the public can relate to it. It is good for any business to be transparent and this principle should extend to the managers of our reserves.
Finally, I propose that how we use the returns from the funds must be debated in Parliament during the budget debates. This is a major departure from the current situation where the public is kept in the dark about the size of the reserves and the returns generated from it. If the public is no longer in the dark, there will be more scrutiny on the amount and the uses of public funds.
No one actually knows how much we have in our reserves, but some analyst estimate it at S$ 500 billion. If this is the case, than our reserves should generate returns which will cover most of the country’s budget expenses.
For example, following the average historical return of 11.9% per annum, as disclosed by Temasek and GIC we would have S$59 billion worth of returns. Such an amount can cover most of the 2009 estimated budget. Imagine no GST, free medical and school fees, cheaper utilities and lower public transportation fares.
–
the following is Mr Tan’s proposed structure for GIC and Temasek Holdings:
