The new criteria for assessing asset liquidity of investment holding companies (IHCs) by splitting their main countries of operation into four baskets, based on a 30-year history of those nations’ share market swings, put Singapore squarely into the third. Sven Behrendt, a managing director at Geneva-based GeoEconomica, which researches sovereign wealth funds explained Temasek's ire: “It’s understandable to me that Temasek doesn’t want the country to be put in the same category as Greece, Jamaica and Trinidad and Tobago".
A day after the Budget was announced by Deputy Prime Minister Tharman Shanmugaratnam, S&P issued a top AAA unsolicited rating on Singapore. S&P noted that investments in the $68.2 billion budget - including efforts to boost innovation, skills training, as well as funding to meet the needs of Singapore's ageing population - "significantly outsized" the $705 million transferred to households. Investments such as the $26 billion for trains that keep breaking down, while $9.3 billion is allocated for hospital grants and construction, and suspect "Medishield Life subsidies".
What is also impossible to miss is that the $10.5 billion to be harvested from Goods and Services Tax (GST) is second only to the $13.5 billion contribution from corporate income taxes. Even the poorest of the poor, who are spared the $8.9 billion to be collected from personal income taxes, will have to pay 7 percent extra for the bread and water to survive on. Lest we forget, our water bill is doubly taxed, the GST is applied on top of the 30 percent "Water Conservation Tax".
As long as there is sheep to be fleeced from, Singapore is in no danger of going broke.