http://www.straitstimes.com/PrimeNew...ry_808915.html

Govt 'cannot depend on land sales for income'

Published on Jun 9, 2012

By Robin Chan and Janice Heng


LAND sales are not a dependable source of government income, Prime Minister Lee Hsien Loong said yesterday evening in response to a question on other possible sources of revenue.

The income from land sales can be very good in some years but can be as little as zero in other years, he said during a question-and-answer session at the Economic Society of Singapore dinner.

'If we are renting out land for three to four years, fair enough it is current income. If it is 99 years and you want to spend it upfront, then I would consider doing it over 99 years. I would be hesitant as treating it as a bonanza,' Mr Lee said.

The audience member had asked if the Government would consider using money from selling land as a source of income as well as money from foreign assets in its current account.

Mr Lee said the amount of foreign assets in the current account is 'overstated', as significant amounts of these foreign assets are actually the earnings of multinational corporations which will be remitted back to their home countries.

But he said the Government taps on its reserves for spending through its net investment returns.

That makes up 2 percentage points of the 17 per cent of gross domestic product the Government spends each year.

In response to a separate question, Mr Lee said economic integration in Asia is a natural step as there is a 'trend of greater interaction between Asian economies' with the rise of China and India.

It is good for countries to expand their network further, he said, as long as 'individual pieces fit into the broader quilt'. But it would not be good if there are separate blocs, where 'Asia has free trade agreements amongst itself, the US is on its own and Europe is in its own corner of the world'.

He also said Singapore faces a domestic challenge of how to keep growing as it is 'now stretching at the seams' but cannot do so indefinitely.

'At some point we gradually have to slow down, and depend on qualitative growth, which means a transformation... people moving from old jobs to new jobs, old skills to new skills,' he said.

Singapore also needs 'some inflow of talent and people'.

'There is no country in the world where you can squeeze the economy, the size gets smaller and incomes rise at the same time. Never happens.'

His eyes then lit up when he was asked a question about robotics and its impact on workers.

Mr Lee said he could see the change 'happening dramatically'.

It was not just about robots doing household chores like vacuuming, but being able to deal with an environment, make mistakes and learn from them.

Robots would also be able to read company reports or press releases and make assessments of them. They may even be able to read scans of humans better than the human eye, he said.

He gave an example of a breakthrough in technology that has now enabled the creation of a robot that can debone a chicken.

He added: 'So robotics will be a big pressure on our society. If we can adapt to that, and our people can be smart enough to learn to operate the robots, use them and direct them, then of course we rise a level and life is better.'

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What others say

DIFFERENT SOCIETIES

'You cannot look at an economic model without incorporating the societal structure. If you ask the Danes whether they would prefer high welfare and no growth or high growth and no welfare, all political results show that they prefer high welfare and no growth. And they are ready to pay for it. Singapore is a completely different society, facing different challenges.'

- Former Danish ambassador to Singapore Joergen Moeller, agreeing with PM Lee's point that the Scandinavian model may not suit Singapore

SHIFT CAUTIOUSLY

'In this year's Budget, there were indications that we are shifting a little bit more left. But it cannot become a very 'leftist' kind of system, because Singapore's growth is largely driven by foreign companies' willingness to be housed here. And once you make that uncompetitive, we will force ourselves out of this race.'

- Mr Jimmy Koh, head of research and investor relations at UOB, on stronger safety nets and the corresponding need to raise taxes