Singapore Pools held by Temasek, unlikely to donate more to charitable purposes?

Our regular insider ES, sent us the following Hansard links which were “startling”, if not “revealing”:

03-03-1982 Parliament reports

Mr Yeo Choo Kok asked the Minister for Finance (a) what were the profits of the Singapore Pools (Private) Limited during the past five years; (b) how the profits have been used; and (c) whether he will use a portion of the profits to provide scholarships to needy and outstanding students and to construct sports complexes in housing estates where sports facilities are much needed

Singapore Pools is now held by Temasek – unlikely will allocate much money for charitable purposes?

The Minister for Finance (Mr Hon Sui Sen):

Singapore Pools is now held by Temasek Holdings Ltd and its profits will be treated like those of any other member company in this group. It is unlikely that Singapore Pools will allocate much money for charitable purposes, including the provision of scholarships to needy and outstanding students and the construction of sports complexes.

30-08-1983

Dr Toh Chin Chye asked the Minister for Finance (a) what is the contribution of statutory bodies and companies in which the Singapore government has equity to the Consolidated Fund in the form of (i) income tax, and (ii) dividends, for the fiscal year 1982; (b) what is the capital share of he government in these statutory bodies and companies as at the end of fiscal year 1982; and (c) what is the yield on capital for 1982 from dividends.

The Minister for Finance (Mr Hon Sui Sen): Sir, the Singapore Government has equity (as I think the term is commonly understood) in two statutory bodies, namely, the Monetary Authority of Singapore (MAS) and the Telecommunication Authority of Singapore (TAS). These statutory bodies, like all other statutory boards, are exempted from payment of income tax under the Income Tax Act.

The Government directly holds equity, through the Minister for Finance, a corporation sole which invests directly in five operating companies and in three holding companies: Temasek Holdings Pte Ltd (THL), Sheng-Li Holdings Pte Ltd (SLH), and MND Holdings Pte Ltd (MNDH). THL, SLH, MNDH and their companies together made an income tax provision of $259 million for the year ended 31st December, 1982.

For the fiscal year 1982, the MAS paid dividends totalling $600 million. TAS is expected to declare a dividend of $20 million for the six-month period ended 30th September, 1982, i.e. immediately prior to its merger with the Postal Services Department.

Holding companies’ surpluses are for reinvestment?

The holding companies have not paid their dividend to the Government, as all their surpluses are held for reinvestment. The holding companies received dividends totalling $121 million from their operating companies for the 12-month period ended 31st December, 1982.

As at the end of fiscal year 1982, the total equity capital of the Government in MAS and TAS was $392 million and that through the Minister for Finance and in the holding companies was $1,726 million. All these entities are wholly owned by Government.

High dividends?

The annual yields on capital for 1982 from dividends were 10.3% for MAS, and 13.7% for TAS. The rate of dividend paid by MAS took into account not only Government’s paid-up capital but also Government’s cash balances in the current accounts with the Authority.

The dividend yields for the three holding companies were nil, The yields for the operating companies were nil for 34 companies (including eight which have yet to commence operations), 1% to 10% for five companies, more than 10% but less than 20% for 10 companies, and at least 20% for nine companies.

Dr Toh Chin Chye (Rochore): Mr Speaker, Sir, I am gratified that the companies which are owned by the Government, including the statutory bodies mentioned by the Minister for Finance, are not losing money and are not being subsidized.

Need to know how the revenue which the Government collects comes from?

But may I inquire of the Minister for Finance whether he will in future include dividends from these companies in the Budget Statement so that we will be able to fathom out how the revenue which the Government collects comes from. 

Secondly, may I inquire of the Minister whether it is the policy of the Government to have Government companies muscling into the private sector at all?

Mr Hon Sui Sen: I did not get the last part of the question.

Dr Toh Chin Chye: Put in simple words, Sir, is it the policy of the Government to allow companies owned by the Government crowding out private companies?

Mr Hon Sui Sen: Sir, I must inform the Member for Rochore that the companies are run on the basis of private sector companies, i.e. their budgets are drawn up by their boards of directors. I do not know to what extent their budgets follow Government budgets but they are certainly not regulated in the sense that Government budgets are rigidly enforced. At the end of the financial year when the results become apparent, it is only the results, the balance sheet and profit and loss statements, that are made public by these companies, and I think rightly so. The public is then able to judge whether the companies have performed profitably.

As regards the last part of the question whether the private companies are being crowded out, if that is the case we would not have a vigorous private sector. I think their vigour can be seen by the Stock Exchange quotations every day, and while there are Government companies in the list of publicly listed companies, I do not think they are a majority in this Exchange.