GIC post US$10 billion losses in 2018
Singapore's sovereign wealth fund company GIC managing retirement CPF funds and the national reserves have just posted its third year consecutive losses. Declining to disclose the amount of losses, GIC merely wrote that its 20-year annualised return fell from 3.7% to 3.2% above inflation rate.
According to Reuters, GIC have US$344 billion as of 2017. Factoring government transfers from taxes collected, the estimated losses is at least S$10 billion for the financial year of 2018. The losses came in tandem with numerous tax increases and new mandatory insurance schemes.
In the past year, water prices were raised 30%, electricity tariff by 13.7%, school fees, airport taxes, carpark fees by 40%, property stamp duties, Singapore-Malaysia cross border tariffs and several existing taxes were increased. The total tax revenue is expected to increase by S$1 billion this year. There are also new taxes being decided, a sugar tax, carpark fees for teachers and a 2% GST increase in 2021. The GST increase will bring S$1.1 billion in tax revenue each year to the Singapore government. Two new mandatory insurance schemes were also introduced to pour an estimated S$2 billion into GIC, namely MediShield Life and CareShield Life.
The mandatory insurance were also designed to maximised profit. In CareShield Life, the disability insurance is optional for those aged 49 and above, while those as young as 30 years old are forced to sign up.
GIC manages all tax revenues and insurance funds collectively as a "private entity" paying only low interest rates to the Special Singapore Government Securities (SSGS). According to the government, SSGS has returns pegged only to the CPF interest rate, currently at 2.5%. Any investment returns above 2.5% are kept as profits by the GIC, which they claim were used to "reinvest".
With legalised corruption arrangements, Prime Minister Lee Hsien Loong sit himself as the Chairman of GIC drawing an estimated S$10 million a year on top of his S$2.2 million-a-year premiership position. The corrupted Prime Minister deliberately depressed CPF interest rate at 2.5% since his election in 2004, jeopardising the CPF retirement fund of Singaporeans.
Earlier in June, GIC lost S$7.4 million in a failed venture in Vietnam. The news went unreported in Singapore's 153rd-ranking state media, and several high profile losses were all reported by foreign medias.
Temasek Holdings last week tried to present a profit, claiming it made S$33 billion in 2018. However, the sovereign wealth fund company controlled by the Prime Minister's wife Ho Ching, omitted the fact it owed S$49 billion in debt and even took up 26% more debt in 2018.