Disturbing implications of the POFMA of Yeoh Lam Keong

November 25, 2022

The two POFMA Correction Directions issued to Yeoh Lam Keong, former Chief Economist of GIC, is disconcerting. This has wide and negative implications for freedom of speech and public discourse in Singapore.

POFMA was instituted to counter false statements of fact but not dissenting opinions. For example, the numbers reported in audited financial statements and reports are factual. However, there are different interpretations on what these numbers mean and how these numbers were derived. The Government may claim their interpretation as correct, but that does not necessarily mean other interpretations are wrong.

Minister Desmond Lee said the following in his reply to my Parliamentary Question on 4 October 2022:

Land cost paid by HDB to SLA for the Ang Mo Kio Central Weave BTO project was $500 million.
HDB incurred a $270 million net loss on that project, because HDB provided subsidies to buyers and did not fully recover costs.

Therefore, it can be established that the Government enjoyed at least $230 million of net positive cash flow from this BTO project because the payment of land costs can be considered a transfer within the Government, or in layman terms, “from one pocket to another”.

However, Yeoh was not wrong to point out that the Government had used a different accounting method. Based on the Government’s self-devised accounting principles, the $230 million net positive cash flow is non-existent because the $500 million land cost is treated as a cost that HDB paid into the Past Reserves instead of a transfer within the Government. Hence, a $270 million loss by HDB is charged to the Budget, and only this loss is real!

And regarding the second POFMA on the Government’s fiscal surplus, Yeoh explained in his Facebook on November 21 that he had used an internationally respected and accepted method of fiscal accounting adopted by the IMF. The IMF method has consistently shown a much larger fiscal surplus than the figures derived from the Government’s accounting method (refer to table below). Again Yeoh was not wrong in pointing out the structural fiscal surplus.

The Government’s heavy-handed response to Yeoh Lam Keong’s expressed alternative views, suggests that it may use POFMA liberally on public opinions on socio-economic issues whenever they differ from the Government’s narrative.