"At a dialogue with residents of Laguna Park and Lagoon View on the Budget, inevitably, the use and adequacy of Reserves cropped up.
They asked, "Is our nest egg not big enough?".
I explained my position with the fable of "the hen that laid golden eggs". (Aesop used ‘goose’ instead of ‘hen’.)
Our Reserves is not just for a rainy day. If that is so, then it is right to ask how much is enough.
Our Reserves should be treasured as a hen that lays golden eggs, i.e. it gives us a sustainable stream of earnings or Net Income Returns.
For simplicity, I call it our golden hen. The healthier the hen, the more eggs it will lay.
Today, the NIR contributes $15 billion to our Budget revenue, more than the $11 billion from GST.
Doubling our reserves will double the NIR contribution to $30 billion, other things remaining equal.
Then we can keep our GST and other taxes low and internationally competitive, provided we keep a watchful eye on expenditure.
Some 20 years ago, there were similar calls to stop accumulating more reserves, and even to dip into them.
Our leaders put them down, and we thank them for it.
Imagine the parlous state we would be, and the high taxes we have to pay, if we had yielded to the pressure to stop growing our reserves.
Today, we are sitting comfortably with a golden hen which provides us with golden eggs. What will our children say of us in the future if we starve the hen now?
Moral: do not kill the hen that lays golden eggs. Fatten it instead."
- ESM Goh Chok Tong
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