Tharman: Second key in unlocking past reserves should only be used in ‘bottomless’ crisis

SINGAPORE: On Monday night (Aug 28), one of the topics the presidential candidates were asked about was the country’s reserves, given that whoever is elected President will have the discretion to not approve of a proposal from the Government to draw down past reserves.

IN CNA’s Presidential Forum, the candidates were asked what factors they would consider before using the second key to unlock past reserves. This safeguarding measure is referred to as a “second key” against excessive or misused spending.

Former Senior Minister Tharman Shanmugaratnam, 66, stated flatly that crises emerge from time to time, and the Covid-19 pandemic is by no means the final one.

“The first thing a president has to understand is the nature of a crisis. Is this for the short-term, or is this a crisis where we can’t actually see the end of the crisis, we can’t see the bottom to the crisis.”

Therefore, he said the second key to allow for the reserves would only be useful for crises where the end and the bottom cannot be seen.

Reserves spent in a crisis must be done wisely, ensuring that Singaporeans emerge from the crisis stronger, and must also be distributed fairly.

“So, if you’re saving jobs, you’ve got to make sure we help lower-income and middle-income Singaporeans build up strengths, build up new skills, build up new capabilities for the recovery. Don’t just favour the big firms, don’t just favour those who already have it good — be fair.”

On his part, Mr Tan, 75, said that using the reserves must be in people’s interest.

He also called for a “proper use” of the reserves—giving the example of wise versus unwise spending, saying that during the pandemic, when past reserves were drawn down, “there was some part of the money that went into banks that were making huge profits and were given subsidies by the government. I consider that to be (a) not suitable use of the reserves.”

Mr Ng stressed that the reserves must benefit the present and future generations of Singaporeans.

“How much to save and how much to spend is a very important decision.”

And, like Mr Tharman, he said that understanding the nature of a crisis is key to unlocking past reserves.

He added that he is familiar with the issues surrounding the reserves because of his past work experience at the GIC.

/TISG

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