$900 Million of Tax Dollars to Floundering SPH: Profits Shareholders Take, Losses Taxpayers Pay?

This speech was part of the Budget 2022 Committee of Supply Debate, and delivered on 8 March 2022.

I was surprised to learn at the February sitting that taxpayers may have to pay up to $900 million over 5 years to support SPH Media Trust (SMT), the government-owned publisher of most of Singapore’s mainstream newspapers.

Since we are raising a lot of taxes in this Budget, we should be careful about such a new and big outflow of taxpayers’ money.

Firstly, where is the plan to recoup the $900 million over time? Do we have an exit plan, or will we keep funding SPH Media Trust for many more years beyond the first five years?

Secondly, why didn’t the government ask for more money from SPH, the listed parent, before it agreed to take the loss-making business out of SPH?

SPH’s assets have grown over the years, thanks to the hefty profits of the near-monopoly media business it previously enjoyed. Although in recent years, the print business has become a loss-making business due to the Internet, SPH has maintained overall profitability because of its huge property portfolio. Thus, it is reasonable to expect SPH to continue to fund the transformation of the media business.

Hence the government’s arrangement with SPH is evidently a bad deal, as taxpayers have to foot the bill of SMT at least for the next five years while the property assets of SPH which are worth at least $3.9 billion and expected to generate annual cash flow of $300 million according to one broker’s estimate, are likely to be sold to Cuscaden Peak, a company owned by our local property magnate, Ong Beng Seng for the benefit of existing and future shareholders.

Can the Minister explain what is the rationale behind government’s acceptance of such a deal?

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