At the media briefing on GIC’s annual reports, the sovereign wealth fund company handling taxes and CPF retirement funds claimed reported it’s lowest twenty-year return since 2009. The twenty-year return indicator is determined by GIC, which refuses to declare year-to-year income statement. According to GIC, the twenty-year return fell from 4% in 2016 to 3.7% in 2017, and then further to 3.4% in 2018.
GIC did not declare how much losses were made, but it is estimated to be US$10 billion in 2018.
Refusing to admit that GIC lost money, chief investment officer Jeffrey Jaensubhakij tried to propagandise the bad news saying that the “best returns are only dropping out”:
“It really isn’t that recent returns have been poorer, but that the best returns are dropping out from 20 years ago.”
The CEO of GIC was also unsure if GIC would be making losses next year and return below 3%:
“I am unable to predict a yearly number.”
GIC CEO Chow Kiat blamed the losses due to “disruptions”:
“In the past, start-ups tried to sell things to incumbents. They invent something, come up with new services and products and sell them to the incumbents. This time round, they are not just doing that, they want to take over and disrupt incumbents and whole industries.”
GIC borrows from Singaporeans’ CPF money and the tax collections by paying only a coupon rate pegged to the CPF Ordinary Account at 2.5%. Any margin earned above the coupon rate is kept as private profits by GIC, where GIC Chairman Lee Hsien Loong is estimated to draw S$10 million a year on top of his S$2.2 million a year salary as Prime Minister. Unlike other sovereign wealth fund companies, Singapore’s GIC and Temasek Holdings – where Lee Hsien Loong’s wife Ho Ching sit as CEO due to legalised corruptions – do not declare the salaries drawn by the management.
In 2015, it was reported that Temasek Holdings spend S$1 billion in “administration” a year, including salaries.
In recent months, the ruling party PAP government raised numerous taxes to fill GIC’s pockets. Water prices were raised by 30%, electricity tariff by 13.7%, carpark fees by 40%, airport taxes and new taxes like a GST increase and sugar tax have been decided.