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Response to Mr Leong Mun Wai’s Adjournment Motion on “Ensuring Better Oversight of Public Expenditures”

03 Oct 2022

1. Mr Deputy Speaker, the thrust of Mr Leong’s speech is that the government is not fiscally prudent and public expenditure is not well managed. He makes various allegations about the Sports Hub and SPH Media Trust in purported support of these allegations. He says that he requires the Government to answer in full.

2. Sir, these assertions are without basis. The Government has already responded in full many times.

3. The issues with regard to the Sports Hub and SPH Media Trust were explained in detail in this House. However, so that Members of the House as well as members of the public are not misled by Mr Leong’s presentation, let me re-state the facts briefly.

4. On the Sports Hub, Minister Edwin Tong explained in his Ministerial Statement on 1 Aug 2022, that MCCY decided to terminate the Public-Private-Partnership (PPP) agreement as the interests of Singapore and Singaporeans would be better served by the Government taking over the ownership and management of the Sports Hub. The key consideration was the Government’s desire to bring stronger community participation and activities to the Sports Hub, and unlock the full potential of the Kallang Alive Precinct.

a. Minister Edwin has already explained why we chose the PPP approach for this project and how we benefitted from it. 

b. In particular, the construction risks were borne by the consortium. We did not have to bear the costs of constructions delays, defects such as roof leaks, issues with the pitch and sound quality. This also freed up our financial resources during the global financial crisis.

c. Mr Leong claims that the Termination Sum of $1.5b is too high. But Minister Edwin Tong had already explained the basis for this figure. The Termination Sum is derived based on a formula stipulated in the Project Agreement.  Most of it is made up of the capital expenditure which the Government would have had to bear if we had opted for the traditional procurement model.

d. Minister Edwin had also explained that the full costs of termination is comparable to the financial obligation that we would have had to pay under the PPP if we had chosen to continue with it.  In other words, the entire transaction is financially neutral, because we are not paying SHPL more than what we would otherwise committed to under the PPP model. 

e. Unfortunately, Mr Leong has chosen to ignore these detailed explanations, and instead makes a completely baseless and false claim that the termination sum can be lower. 

5. Likewise, for SPH Media Trust (SMT), this was addressed by Minister Iswaran as to the reasons why it was necessary to do so this in his Ministerial statement on 10 May 2021. Minister Josephine Teo further explained at length in this House on 15 Feb 2022 and at MCI’s Committee of Supply Debate this year, the rationale for Government support for SMT’s transformation, and how doing so would serve the larger public interest, and how the Government will ensure accountability.

6. As explained by them:

a. Government support will allow SMT to make long-term investments in capability development, in the areas of technology and talent;

b. This is needed to sustain and develop our local news media, and ensure that we have a trusted credible source of news and information for Singaporeans. Our local media companies provide citizens with a valuable Singaporean lens to make sense of global events. If they were to wither and fail, we would become reliant on foreign media. That would not be in our national interest.

c. It is also necessary in order to support our vernacular print media – the Malay, Chinese and Tamil press - which play a crucial role in preserving our mother tongues and cultural inheritance.  Next year, Zaobao will be celebrating its 100th anniversary, Berita Harian its 66th and Tamil Murasu its 88th.  It would be a great loss if they could not continue.

7. To be clear, the challenges faced by the media are not unique to Singapore. Media outlets around the world have seen their revenues fall with the rise of digital content platforms and new avenues for free content. Publications elsewhere have received life support from wealthy financial backers or funds. Billionaires have acquired established newspapers for philanthropic or other motivations. These include the South China Morning Post and The Washington Post.

8. Other governments too are providing funding for news media

a. The French government spends hundreds of millions of euros annually to support the press, including prominent papers like Le Monde and Le Figaro.

b. Scandinavian governments have supported their newspapers for decades, both through direct subsidies and tax breaks.  

9. Mr Leong asks why can’t the SPH shareholders pay more. But Minister Josephine Teo had already explained that the shareholders voted and agreed to an injection of $80m cash and $30m worth of shares for SMT. If the restructuring involved an even higher contribution the shareholders could have walked away, in which event there would be no SMT and along with that, all the downsides already mentioned.

10. Mr Leong fails to recognise the realities facing the media industry in the real world and that if we were to do as he suggests, it would leave SPH media on a trajectory of decline and eventually result in a Singapore without a viable English-language domestic media and without our Chinese, Malay and Tamil media – which is not in our national interest.

11. Mr Deputy Speaker Sir, Mr Leong’s allegations about the government’s management of public expenditure and his objections to the Sports Hub and SPH Media Trust transactions are completely without basis. Yet he has continued to pursue them repeatedly despite it having been explained to him many times. What he does today is to pull certain figures from public sources and then start to build on them, this giant edifice of figures, which one has no idea how he arrived at these conclusions. Then in a giant leap of illogic, he then attempts to link the Sports Hub and the SPH media trust matters to a completely unrelated issue – GST and now also to ComCare. 

12. You have to wonder why he does this. A charitable view is that Mr Leong genuinely does not understand the expenditure figures or the rationale that has been explained.

13. But as he constantly reminds us, and reminded us again today, he has 30 years of experience in business and financial management, so he shouldn’t have any difficulty understanding them.  So objectively, the rationale and figures are laid out, and if he does understand them, then there is only one other conclusion, which is that this can only be a deliberate and cynical attempt to stoke anxiety and disquiet, confuse Singaporeans, and damage the Government. I ask members of this House and Singaporeans not to be taken in, but to reject these bogus allegations, and to support the government. Then we can continue to sustain good governance and sound policies for the benefit of all Singaporeans, especially to take care of our elderly, and to support the disadvantaged and vulnerable members of our society. 

14. Mr Deputy Speaker, Mr Leong’s entire motion is an attempt to portray the government as profligate and heedless of our expenses. Nothing could be further from the truth.  In persisting with these insinuations, Mr Leong is doing a disservice to Singapore, to our Government and to our public servants, charged with the sacred responsibility of looking after the public purse.

15. Since the PAP government was first elected 60 years ago, we have made financial probity, honesty, prudence, incorruptibility, and transparency our watchword.

16. We have put in place structures to check ourselves strictly and repeatedly.

17. We have carefully built up our reserves and resources for the benefit of our people.

18. We have just steered our people and our country safely through the most devasting pandemic of our generation. Unlike other governments we did this without having to borrow.

19. This was not serendipitous and it was not by chance. We were able to do so only because we have been consistently careful and prudent with public funds, and this is so despite repeated calls by the opposition – Mr Leong included – to save less and spend more, use more of the reserves, draw more than 50% of the NIRC.

20. It is this side of the House that has repeatedly said no to all these suggestions of wanton profligacy. For our part, the PAP government will continue to exercise prudence in our public expenditure and act, as always, in the interests of Singaporeans and Singapore.

Supplementary Questions by Mr. Leong Mun Wai:

Thank you. Deputy Speaker. Two questions. One, so the Minister agrees or is of the view that by allowing SPH to take away $3.9 billion and leaving behind a burden of $900 million for Singapore taxpayer is agreeable by the Government, the Government accepts that? Secondly, I have offered a lot of information, in her words, an edifice of information. The way she put it is that this information is totally useless. It doesn't help the explanation of the situation. But what I can say is that if the Government did not bother to answer the questions I have raised, can the government allege that the information is not useful? And so all my allegations are without basis?

Reply by 2M Indranee Rajah:

With respect to the first question or clarification, the answer is no, I do not agree with what Mr Leong says. What Mr Leong fails to understand is that the support put in by the government for SPH media trust is because there are certain things that we hold dear. One, it is to have a media that can see things through a Singaporean lens and that can report things from a domestic viewpoint. That is very important to us. The second thing is to preserve our vernacular media. That means something, that has value, that is worth supporting. And that is why we are willing to put that money forward to support it for that purpose and in pursuit of those values.

With respect to the second clarification, Mr. Leong's consistent approach, every time the government responds and explains a set of figures, he will ask a question, we will set out the explanation and that explanation reflects the reasons why these figures are the way they are, and what the figures are. Mr Leong will then say, oh, but what about this? How about if we change that? How about let's say we have another scenario A? How about Scenario B? How about Scenario B and a half? How about scenario C? And every time the government is required, according to Mr Leong, to respond to all of these which have no bearing to the figures of the original transaction. That is not something which is useful of the government's time to do.