Former employee-dean at the Lee Kuan Yew School of Public Policy said: "When the Prime Minister explained why HDB leases must be 99 years (so that land can be recycled and resold after 99 years), he confirmed what we should all do. know, but probably not: that country in Singapore is a renewable tax resource. & # 39;
He said that since land is a renewable resource, the Ministry of Finance was on very weak grounds when it rejected suggestions during the budget debate this year to use more of the net investment returns (NIR) of reserves or (part of of) the income to be used from the sale of land (which are currently fully enclosed as reserves). "
In May, the Labor Party called on the government to refund the 50 percent discount on spending from the return on reserves, last discussed in 2016. In response to the Labor Party, Minister Lawrence Wong said to them: it says about us and our way of thinking. If the moment we need the money, the first thing we do is to relax the rules? That would certainly not be disciplined, imprudent and unwise. & # 39;
"If the country is a renewable tax resource – that is, land returns to the state after 99 years, that it can then sell again – the main implication is that in the stable state (ie in equilibrium), all income generated each year are received from the sale of 99 years of leasehold land can be used in the current budget, "he said.
Addition: "It is not necessary to block the proceeds of land in the reserves (except for the income from the sale of real estate and 999 years of leasehold land) It is certainly not the case, as the Minister of Finance said at the time, that maximum 1/99 of the income from the sale of land per year can be used, because at a balance the state would only recycle and resell only 1/99 of its land positions annually. "
He said that the use of all income from the sale of leasehold land of 99 years is the definition of sustainability, in the sense that one can only use what is earned every year, forever.
In responding to a comment that is his opinion does not seem correct from an accounting point of view; in the sense that "when a 99-year leasehold is sold, it's like you're collecting all the rent in advance and that accountants still want you to save the revenue year after year, as in more than 99 years," said Mr. Low:
"I've been thinking more about what you're saying and I realized that what I suggest is the same – as soon as we adjust to price volatility, let me explain, so let's do what auditors say we should do: only 1/99 of record the proceeds from the sale of land each year in each of the following 99. In the long term, the income recorded for each year would be equal to the sum of 1/99 of the value of each 99-year piece of land sold, this year and in all previous 98. Assuming that the State repurchases the country equally (ie it sells about 1/99 of its stock of land each year), this means that the actual income received each year for land sales is not much different from the method you propose.
Now, of course, I recognize that this is a simplifying assumption. The reality is that the income from the sale of land is volatile. The use of the actual revenue received from year to year may cause too much volatility. In addition, the amount of land sold can vary considerably from year to year. Again, this creates too much volatility if the state only registers what is received each year. So doing what you propose is fine, that is to say that the state not only recognizes 1/99 of the income from land sales in that year, but also 1/99 of the proceeds from the sale of EVERY of the previous years. "