Clarification on Yeoh Lian Chuan’s post on Ministry of Finance Addendum to the President’s Address

In his FB post dated 29 August 2020, Mr Yeoh Lian Chuan took issue with the statement by Deputy Prime Minister, Coordinating Minister for Economic Policies and Minister for Finance in Ministry of Finance Addendum to the President’s Address that “We have used a generation’s worth of savings to combat a crisis of a generation.”

Mr Yeoh said: “…by any sensible measure of national savings, a $50+bn draw on past reserves does not represent anything close to a generation’s worth of savings”.^

Two points should be highlighted:

• First, Mr Yeoh did not set out the full quote. He only reproduced one sentence, and left out the preceding sentence which provides the context for the statement;

• Second, Mr Yeoh then went on to talk about “national savings”, which is not what the original quote refers to.

To clarify, the full paragraph in the Ministry of Finance Addendum says:

“To combat this crisis, we have drawn on our reserves, equivalent to over twenty years of past budget surpluses. We have used a generation’s worth of savings to combat a crisis of a generation. We must therefore ensure that our fiscal balance is put back on a stable path when the economy recovers.”

It is clear from the full quote that the “generation worth of savings” refers to the over twenty years’ worth of past budget surpluses.

“Budget surpluses” refer to the excess of Government’s overall revenue over overall expenditure. They are Government savings.

National savings is a broader concept which further includes savings from businesses and households.

Business and household savings are not available to the government for budget spending, whether to combat Covid-19 or otherwise.

The total of our budget surpluses from 1996 to 2019 is $52.3b.

The amount drawn from the reserves to combat Covid-19 is $52b.

The data for these figures are publicly available.

The intent of the Addendum was to inform the public that the amount drawn from the reserves to combat Covid-19 is equivalent to the amount of cumulative budget surpluses over more than twenty years (the broader point being that funds which are hard earned and built up over a long period of time can be used up very quickly) and to remind ourselves of the need for fiscal prudence.

The meaning of the Addendum is clear when the quote is read in full, and without conflating with concepts not present in the original text.


ˆ This refers to Mr Yeoh’s original Facebook post on 29 August, at 11.01 am. Mr Yeoh subsequently updated his Facebook post on 29 August 2020, at 2.38 pm to say: “… by any sensible measure of national savings, a S$50+bn draw on past reserves does not represent anything close to a generation’s worth of government savings…”.