After NDR 2018 when Prime Minister Lee Hsien Loong acknowledged that land in Singapore would always be sold again due to its 99 year lease, prominent academic Prof Donald Low questioned the Ministry of Finance's past rejection to use more money from Singapore's reserves to fund future spending. Prof Low believes that since 99 year leasehold land was a renewable resource that generates money on a 99 year basis for the government, wouldn't it be sustainable for Singaporeans to dip our hands into the reserves? 

Why then is the PAP Government constantly scaring Singaporeans into believing that it is unwise to use money from the reserves and because of that, GST will be increased in the near future, electrical and water tariffs would be increased, all in the name of generating more income to sustainably fund future spending. Perhaps it is time, to consider using more of our reserves to make the lives of all Singaporeans better now, instead of hording the money in the name of the next generation. 

Prof Donald Low's argument in full:

Also, when the PM explained why HDB leases have to be 99 years (so that land can be recycled and sold again after 99 years), he confirmed what all of us should know but probably don’t: that land in Singapore is a renewable fiscal resource.

And it is because land is a renewable resource, MOF was on very weak grounds when it rejected suggestions during the Budget debate this year to use more of the NIR from reserves or use (part of) the revenue from land sales (which are currently wholly locked up as reserves).

If land is a renewable fiscal resource - that is, land reverts to the state after 99 years, which it can then sell again - the major implication is that in the stable state (i.e. in equilibrium), all of the revenue received each year from selling 99-year leasehold land can be used in the current budget. There's no need to lock up any land revenues in reserves (except for revenue from sales of freehold and 999-year leasehold land). It's certainly not the case, as the Minister for Finance then said, that at most 1/99 of the revenue from land sales each year can be used. This is because in equilibrium, the state would be recycling and re-selling “only” 1/99 of its land holdings each year.

In fact, using all of the revenue from the sale of 99-year leasehold land is the very definition of sustainability: you only use what you can earn each year, in perpetuity.

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