Where your cpf money is going: learning from the city harvest trial
Last week, Channel NewsAsia reported about how, “The founder of City Harvest Church Kong Hee and his five deputies (are) accused of misusing millions of church building funds.”
According to Channel NewsAsia, “The court accepted that there is evidence to show that the monies were moved from the church to the various firms to generate a false appearance that the church’s investments were redeemed. The judge said the six had been dishonest in the use of the money.”
It was also reported that, “Judge See said the auditors’ opinions were “only as good as the information they were given”.”
Below is the chart that Channel NewsAsia had created to show the relations of Kong Hee and his five deputies, and the funds that they have misappropriated.
Source: Channel NewsAsia
Meanwhile, something bears an uncanny resemblance to how the money is being misappropriated.
Channel NewsAsia had reported that, “The court accepted that there is evidence to show that the monies were moved from the church to the various firms to generate a false appearance that the church’s investments were redeemed. The judge said the six had been dishonest in the use of the money.”
“Judge See said the auditors’ opinions were “only as good as the information they were given”.”
Meanwhile, the GIC claims that the “GIC manages the Government’s reserves, but as to how the funds from CPF monies flow into reserves which could then be managed by either MAS, GIC or Temasek, this is not made explicit to us.” The GIC also claims that, “The Government, which is represented by the Ministry of Finance in its dealings with GIC, neither directs nor interferes in the company’s investment decisions. It holds the board accountable for the overall portfolio performance.” However, the PAP prime minister, the two deputy prime ministers and the ministers for Trade and Industry and Education also sit on the board of directors. Lee Hsien Loong is the Chairman and Lee Kuan Yew is the Senior Advisor.
Here are some things for you consider:
Do you know that apparently the CPF is now the 8th largest pension fund in the world?
And do you know that the GIC and Temasek have used our CPF to become the 8th and 9th largest sovereign wealth funds in the world?
Yet why do Singaporeans have the least adequate retirement funds in the world?
And why are nearly 90% of Singaporeans not able to meet the CPF Minimum Sum, are unable to take our money out and are unable to retire?
How did the government make us set aside $253 billion in the CPF to let them earn $1 trillion for the reserves?
And why is it that Singaporeans have saved a massive $253 billion in the CPF but nearly 90% of us are unable to meet the CPF Minimum Sum, are unable to take our money out and are unable to retire?
Do you see something amiss? You are not the only one.
The financial effect is this: SMRT profit is entirely attributable to subsidies given to it by the Singaporean tax payer and not high quality management at Temasek. Put another way, Temasek and its senior executive are only able to declare a profit for SMRT because the Singapore government gives it money.
SMRT is socializing the risk and privatizing the profits. When losses are incurred it is the Singapore tax payer that suffers but when profits received, it is the executive of Temasek that enjoys the benefit. SMRT is placing the risk on the tax payer but capturing the benefit for itself. While individuals or firms taking individual or corporate risk should be allowed to keep those profits private or socialize risk and profits, it is truly objectionable to socialize the risk but privatize the profits.
Third, the true financial and economic cost of SMRT and related infrastructure is not being recognized. As one economist noted, if something cannot go on forever it will stop. Singapore, SMRT, and Temasek cannot maintain a loss making firm dependent on regular bail outs to report profits or eventually it will stop. By hiding the true cost of ownership, maintenance, and investment, the government is attempting to protect its Temasek owned asset rather than the tax payer.
Mass and public transport is a notoriously difficult and generally loss making industry. It is however, morally reprehensible to pretend that a company is making money and use tax payer money to create profits for the investments of family members. The people of Singapore are being defrauded by bearing the risk of investment but seeing none of the profits.
If the average Singaporean had earned the average Singaporean wage since 1980 and saved the amount required by law but earned the GIC long term average rather than CPF interest, the average Singaporean would have approximately $850,000 SGD in the bank. This is approximately $300,000 more than they would have earned with the same amount of savings in a CPF account. To put this number in perspective, Singaporeans pay higher fees than what the typical hedge fund would charge. The Singaporean government is directly harming everyday Singaporeans by mandating savings into a seriously underperforming asset for the governments benefit.
Third, Singapore operates a one sided model where the tax payer assumes the risk but the government gets the benefit. If the investments do well, the government keeps everything above the 2.5-4% CPF interest payment; if the investments do poorly, and let’s assume, the CPF collapses, the tax payer will guarantee the payment to CPF holders. In other words, risks are socialized while benefits are privatized.
The assets of Temasek, GIC, and the CPF are the assets of the people of Singapore. Only in certain people’s imagination are Temasek and GIC assets private and separate from the people of Singapore. The earnings in excess of 2.5-4% that the government keeps for itself that it does not return to CPF savers are directly harming Singaporeans who are on average $300,000 poorer. GIC and Temasek assets that the government insists are private despite all evidence to the contrary demonstrate the governments disdain for the blessing of the financial bounty it has received from the Singaporean taxpayer.
In view of the unreasonable increase in the CPF Minimum Sum, we will be organising an event on 7 June at 5pm to call for Singaporeans’ CPF to be returned to us.
The PAP has used government to pursue their own hidden agenda, while forcing Singaporeans to live more difficult lives. The PAP has taken our retirement for themselves to earn high interests on it, while devaluing our CPF and our ability to retire.
This is wrong. We have to stand up and speak up against this scourge. It’s time to stand up and come together to speak up against such wrongdoings.
You can join the Facebook event page here.
We have also started a petition to the Singapore government to honour our contributions to our CPF and return our CPF to Singaporeans. You can sign the petition here.
Video: How The PAP Started Cutting Down On Singaporeans From 1984