𝐍𝐨𝐰 𝐭𝐡𝐞 𝐨𝐩𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐬𝐚𝐲𝐬: 𝐬𝐡𝐨𝐰 𝐦𝐞 𝐡𝐨𝐰 𝐦𝐮𝐜𝐡 𝐰𝐞 𝐡𝐚𝐯𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐫𝐞𝐬𝐞𝐫𝐯𝐞𝐬, 𝐛𝐞𝐟𝐨𝐫𝐞 𝐈 𝐝𝐞𝐜𝐢𝐝𝐞 𝐰𝐡𝐞𝐭𝐡𝐞𝐫 𝐈 𝐬𝐮𝐩𝐩𝐨𝐫𝐭 𝐲𝐨𝐮𝐫 𝐁𝐮𝐝𝐠𝐞𝐭 𝐚𝐧𝐝 𝐭𝐚𝐱 𝐩𝐥𝐚𝐧𝐬. 𝐋𝐞𝐭 𝐮𝐬 𝐡𝐚𝐯𝐞 𝐚 𝐥𝐨𝐨𝐤 𝐚𝐭 𝐭𝐡𝐞 𝐦𝐨𝐧𝐞𝐲.

Recently it was reported in the news that there were Singaporeans in financial difficulties due to COVID-19. These were not the average earners. They are high earners who had not managed their funds well. Just as an individual must live within his means, so too must a family and a country.

In his speech in Parliament on 2 September, Prime Minister Lee Hsien Loong emphasized the need to live within our means and to save for rainy days.

He said:

As a matter of principle, our social safety nets should be paid for out of current revenues. 𝐖𝐞 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐝𝐫𝐚𝐰 𝐝𝐨𝐰𝐧 𝐨𝐧 𝐰𝐡𝐚𝐭 𝐰𝐞 𝐡𝐚𝐯𝐞 𝐢𝐧𝐡𝐞𝐫𝐢𝐭𝐞𝐝, 𝐧𝐨𝐫 𝐬𝐡𝐨𝐮𝐥𝐝 𝐰𝐞 𝐦𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐭𝐡𝐞 𝐟𝐮𝐭𝐮𝐫𝐞 𝐨𝐟 𝐨𝐮𝐫 𝐜𝐡𝐢𝐥𝐝𝐫𝐞𝐧.

When our founding generation were building up our reserves, they never asked themselves whether they had too much savings.

We were in our early days of nationhood. Things were so uncertain, and no one knew what the next day would bring.

Compared to today, incomes then were low but it was never a question of how much reserves would be enough.

The question was whether we could steadily squirrel away a bit more in our reserves, year after year, decade after decade, as protection for a rainy day.

After several generations of frugal prudence, we have built up significant reserves and 𝐛𝐞𝐜𝐚𝐮𝐬𝐞 𝐰𝐞 𝐡𝐚𝐯𝐞 𝐭𝐚𝐤𝐞𝐧 𝐬𝐮𝐜𝐡 𝐚𝐧 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡 𝐜𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭𝐥𝐲, 𝐝𝐞𝐜𝐚𝐝𝐞 𝐚𝐟𝐭𝐞𝐫 𝐝𝐞𝐜𝐚𝐝𝐞 in this enormous monster storm.

We have been able to draw on past reserves and fund our essential Budget packages and help people on a very big scale.

𝐍𝐨𝐰 𝐭𝐡𝐞 𝐨𝐩𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐬𝐚𝐲𝐬: 𝐬𝐡𝐨𝐰 𝐦𝐞 𝐡𝐨𝐰 𝐦𝐮𝐜𝐡 𝐰𝐞 𝐡𝐚𝐯𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐫𝐞𝐬𝐞𝐫𝐯𝐞𝐬, 𝐛𝐞𝐟𝐨𝐫𝐞 𝐈 𝐝𝐞𝐜𝐢𝐝𝐞 𝐰𝐡𝐞𝐭𝐡𝐞𝐫 𝐈 𝐬𝐮𝐩𝐩𝐨𝐫𝐭 𝐲𝐨𝐮𝐫 𝐁𝐮𝐝𝐠𝐞𝐭 𝐚𝐧𝐝 𝐭𝐚𝐱 𝐩𝐥𝐚𝐧𝐬. 𝐋𝐞𝐭 𝐮𝐬 𝐡𝐚𝐯𝐞 𝐚 𝐥𝐨𝐨𝐤 𝐚𝐭 𝐭𝐡𝐞 𝐦𝐨𝐧𝐞𝐲.

𝐍𝐨𝐰 𝐭𝐡𝐞 𝐨𝐩𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐬𝐚𝐲𝐬: 𝐬𝐡𝐨𝐰 𝐦𝐞 𝐡𝐨𝐰 𝐦𝐮𝐜𝐡 𝐰𝐞 𝐡𝐚𝐯𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐫𝐞𝐬𝐞𝐫𝐯𝐞𝐬, 𝐛𝐞𝐟𝐨𝐫𝐞 𝐈 𝐝𝐞𝐜𝐢𝐝𝐞 𝐰𝐡𝐞𝐭𝐡𝐞𝐫 𝐈 𝐬𝐮𝐩𝐩𝐨𝐫𝐭 𝐲𝐨𝐮𝐫 𝐁𝐮𝐝𝐠𝐞𝐭 𝐚𝐧𝐝 𝐭𝐚𝐱 𝐩𝐥𝐚𝐧𝐬. 𝐋𝐞𝐭 𝐮𝐬 𝐡𝐚𝐯𝐞 𝐚 𝐥𝐨𝐨𝐤 𝐚𝐭 𝐭𝐡𝐞 𝐦𝐨𝐧𝐞𝐲.

This was not the attitude of our forefathers, the founders who are building for the future.

But the 𝐚𝐭𝐭𝐢𝐭𝐮𝐝𝐞 𝐨𝐟 𝐢𝐧𝐡𝐞𝐫𝐢𝐭𝐨𝐫𝐬 𝐰𝐡𝐨 𝐭𝐡𝐢𝐧𝐤 𝐭𝐡𝐞𝐲 𝐡𝐚𝐯𝐞 𝐜𝐨𝐦𝐞 𝐢𝐧𝐭𝐨 𝐚 𝐟𝐨𝐫𝐭𝐮𝐧𝐞, 𝐚𝐧𝐝 𝐰𝐚𝐧𝐭 𝐭𝐨 𝐜𝐨𝐧𝐬𝐮𝐦𝐞 𝐭𝐡𝐞 𝐟𝐫𝐮𝐢𝐭𝐬 𝐨𝐟 𝐭𝐡𝐞𝐢𝐫 𝐩𝐫𝐞𝐝𝐞𝐜𝐞𝐬𝐬𝐨𝐫𝐬’ 𝐥𝐚𝐛𝐨𝐮𝐫𝐬.'

This is fundamentally the wrong approach.

How much reserves are enough, or too much? There can be no good answer to this question.