Rebutting “Factually” and Kenneth Jeyaretnam

Balding's World

website in its rebuttals of my arguments about Singapore, Temasek Holdings and GIC data that I was preparing a multipart series on the topic.  However, now the government of Singapore and Kenneth Jeyaretnam have teamed up to spread absolute lies about what I have said.  Rather than present a full rebuttal of the lies spread by “Factually” and Mr. Jeyaretnam I am only going to address the lies he recently posted.

Point #1: Not all Funds Flowed to GIC

Factually:            Some of the confusion created by these recent “estimates” of GIC’s assets arises from the following errors.  First they assume that all the governments available funds are flowed to GIC alone.  The Government has significant deposits placed in MAS.  As of March 31, 2012, the government has $147 billion deposited with MAS….

Me:The government of Singapore has an official balance sheet as of March 31, 2011 listing $705 billion SGD of assets and of that $125 billion SGD is in cash.

I clearly note that money has flowed into government cash holdings.

Point #2: Debt Servicing Cost Not Included

Factually:Second, debt servicing costs are sometimes ignored in these estimates.

KJ:MICA are referring to Chris Balding’s analysis.

Me:  I had prepared estimates on the impact of the debt service cost and I believe that these estimates were on my first website which was suspiciously hacked.  I was unable to recover all the material from there.  I have previously dated spreadsheets with debt servicing costs included.  Here you can find my version of the most recent estimate of how much Singapore Inc.should have under management including debt service costs.  The interest cost of debt is taken from the Central Provident Fund (CPF) website which you can find here.  To simplify and be conservative, I used the highest listed interest rate for any single year.  In short, even being conservative, when factoring in currency costs, debt service costs, among others, Singapore Inc. should still manage at a minimum, $1.2 trillion SGD. Kenneth Jeyaretnam’s estimates are grossly wrong for two reasons.  First, he assumes a static 3% debt service cost going back to 1974.  That is obviously wrong.  Second, he discounts all returns by 3% rather than the amount of debt outstanding.  This creates an enormous discrepancy between the final number.

Point 3:  General vs. Operational Surpluses

**Factually:**Third, they overestimate the funds flow into GIC by including the interest and dividend income that the Government gets on its investment.  These estimates incorrectly assume the full amount of government budget surpluses as fresh fund injections, without first removing the interest and dividend income portion.

KJ:Chris Balding was using the general government surplus numbers and then compounding these surpluses at a carry rate of 7%.

Me:  Here is links to what I have actually written. a)  We have been working with official Singaporean general and operational budget revenue, expenditure, and surpluses.  The general and operational data comes from both Statistics Singapore and the International Monetary Fund.

b)  Singaporean data indicates that operational surpluses and public borrowing from 1974 to 2011 totaled between $645-701 billion SGD.

c)  Since 1974, Singapore has run operational surpluses of $279 billion according to the IMF.

I have used both operational and general using both Statistics Singapore and IMF data.  Regardless of which numbers are used, enormous discrepancies remain.  It is completely false to accuse me of using the general numbers.

In closing, I would like to make two brief points.  First, Kenneth Jeyaretnam has begun to attack me and make false accusations about me because I refused his offer to co-author everything I write with him.  I will not implicitly or explicitly endorse or associate myself with any Singaporean political party or figure.  I will answer questions or help anyone who asks but I will not endorse any party or figure and this is a policy I will continue.  I put these figures and research forward for others to use as they choose, not to promote a party or person.

Second, I will hopefully return to my plan to rebut point by point the issues raised by the Singaporean government on “Factually”.  Even when factoring in all these issues raised by the Singaporean government, this does not change the fundamental problem that enormous discrepancies remain in Singaporean public finances.