Tuesday, October 22, 2013

HIdden In The Budget

The quote is from the 29 July 2013 Defence Writers Group interview of General Herbert J. "Hawk" Carlisle, Commander, Pacific Air Forces. "Hawk" was expounding on the Theater Security Plan of the United States Air Force, balancing of their "rotational presence" through the Pacific, increasingly moving south to Darwin, Tindal, Changi East in Singapore, CARAT in Thailand, Trivandrum in India.

If anyone missed the reference, Hawk also talked about the speed of response of the Navy, "And again, going into Singapore, for example, for the USS Freedom that's there now. Our ability to land at [Pilbara], Changi East and unload and reload right away with [assembling] LCSes in the — that’s one of our ConOps."

We may not have achieved the Swiss standard of promised - except maybe for the elites and their cronies - but it must make better sense to aim for the Swiss standard of neutrality. The Swiss Confederation  has not been in a state of war internationally since 1815, and its non-alignment with warlike factions must have contributed to its suitability as the  birthplace of the Red Cross and home to a large number of international organizations, including the second largest UN office. That stance has not prevented it from pursuing an active foreign policy and being involved in peace-building processes around the world.

Welcoming the American military hardware to Changi to "rebalance to the Pacific" when China is getting antsy about Diaoyu Islands doesn't sound very prudent a strategic move. Especially when we already have so many PRCs in-country. When push comes to shove, identity crisis may clash with nationalistic loyalties. Dogs are known to bite those who feed them, we have seen one ugly episode when our own senior citizens have been castigated as canine equivalents.

The most troubling bit about Hawk's statement is about "where they're are putting it in their budget". If Uncle Sam does not have the answer to that, you can bet Uncle Tony Tan will not be volunteering the information any time soon. Unlike the US, which has committees to oversee defence procurement, Singaporeans are treated like mushrooms in this purchase - keep them in the dark, and feed them shit. Even with the price of the F-35B having fallen to US$104 million per aircraft (sans engines, which have to be bought separately), that's an awful lot of money that could be expended on making housing affordable and transportation reliable.

13 comments:

  1. With so many generals and admirals in charge what chance is there that things will change? Expensive toys can always be justified with the scare of security. To hell with transparency.

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  2. Uh, they should worry about our NSmen saying "I don't know what I am defending anymore.". You can have all your hardware, but where's the missing heartware? SAF is stupid enough to hire PRC "talents" to build our underground caverns. Nothing is secret no more.

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  3. The US General is more or less hinting that our Budget will not be showing All Defence expenditures in an orderly manners! Do not laugh. He is speaking from the USA perspectives and maybe ours too !

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  4. Maybe our purchases for latest defence toys are hidden under the MND's yearly deficit since they are certainly bought for protecting our National Development, no ?

    If they are never actually used to fight any war, are they expensive toys to begin with and what accrued benefit do they really bring? If the old man says we need to send a strong deterrent to any potential enemy, why can't we outsource some rogue country to send our enemy a nuclear bomb if we are ever attacked ?

    Isn't that a better cost-benefit or value for money measure where we can save the money & maybe give a bigger angpow to everyone just before every GE ? Does our Defence Minister look like someone with pig brains ?

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  5. When uncle Tony was defence minister, he justified that Singapore could not adopt a feast and famine approach towards national defence. Since then, Mindef does not know what famine is like.

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  6. Finally the smoking gun on the back accounts - if the F35Bs is not on budget, then its no business of the prying eyes. Unfortunately even alternative parties would be salivating at the astronomical scale kick-backs and bank accounts. In red dot, they like to scorn at their northern and southern neighbours, laugh at them for buttering their cronies with 15% "fees" for their Migs, F18s and other military toys purchases. So much for the cleanest garmen sheeple, there is no corruption here... lets move on!.

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  7. This article is a disappointment as it is all over the place. You started and ended with asking where the money is coming from for the F-35Bs as it is not in the budget.

    Every year Mindef gets voted a budget for both operational and capital expenditures. In the last budget the total was about $12 billion. Out of this amount let us say $8 billion was for recurrent operational expenses, such as salaries, fuel, maintenance and cost of exercises. This money is spent.

    The balance of, say, $4 billion is credited to a capital account for purchases of new equipment. The cost of new equipment is drawn from this capital account, and in some years when no new equipment is bought the balance accumulates with each new budget allocation.

    That is why the defence budget does not fluctuate from year to year but remains steady, growing only with the overall growth in the total national budget.

    If the government has plans to buy big ticket equipment in the coming years it is probable that the funds are already in the capital account accumulated from previous allocations.

    There is no mystery.

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    1. Moneys not spent is "accumulated" in the capital account? I thought that that money is returned to the treasury and that is why ministries had been chided for over budgeting. Secondly, the annual budget requires specific information on the needs of each ministry for Parliament to vote on. If you are correct any ministry can have a general fund to do anything it likes with it.It will deat the purpose of having the Budget being debated and passed with or without change to ensure prudence ond propriety.

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    2. Have a look at the Ministry of Finance statement of assets and liabilities (balance sheet). You will find several funds (endowments etc.) that were voted by Parliament in previous budgets for future spending which have not been spend and are being accumulated.

      The "capital account" is not in the Ministry of Finance balance sheet. I suspect it is held by Mindef separately.

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    3. Money approved but not spent goes into "endowments"?

      Pse tell us, what is the equivalent accounting principle in General Accounting principle? As an accountant, I will tell you this is a loophole for not only for in efficient use of state funds but potential for abuse. Look - its so easy for the MoF and PMO to say: 'these last few years, we have been running deficits. See, we need $12b for mindef, $8b routine, and $4b is needed to buy F15s and submarines etc. So not enuf money for healthcare etc, hence we need to hike GST. In actual fact, they deliberately over-budgeted the F15 buy, which is not spent, and goes into "endowment". Meanwhile, the budget shows a deficit, a GST hike is levied.

      What does the MoF think? Is this good accounting practice, is this prone to abuse?

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    4. I am disappointed to learn that Mindef can over-budget and stash away unused budget for future purchases. Please enlighten "mushroom" like me about this mystery.

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  8. These F35B fighter jets are really amazing. VTOL/STOVL. Integral part of the equation for consolidating our airbases.

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    1. yeah, that was wat the US marines thit when they bought the VTOL harrier jump jet, remember that shitty piece of engineering pain in the behind? The marines needed to be deployable anywhere, even with no airstrip. They ended up stuck in mainland US of A because with the frequent breakdowns and maintenance problems, might as well not deploy overseas. Of course, every 3 years rotation none of the paper genderals and top echelon of the Dstar engingeers have a clue on history of VTOL, peice of junk, junk junk....

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