During a parliamentary session held on Wednesday (7 Feb), the discussion over the motion on Singapore's public finance management, particularly on the treatment of land sales receipts, drew considerable attention.
Mr Vikram Nair, MP from the People's Action Party representing Sembawang GRC, in his speech, articulated his rebuttal to the proposal made by the Workers' Party and Progress Singapore Party, suggesting that land sales be treated as annual revenue instead of being transferred directly into the reserves.
Mr Nair contended, "But what you are selling, in fact, is 99 years worth of land, which is an asset under any definition. If you spend all of it in a single year, essentially spending the principal, the more responsible way of dealing with it is the way we are dealing with it right now. Land is an asset, even if sold at 99-year leases that since it's a translation of a physical asset into a cash asset, that cash goes into the reserves and the income from that reserves will then be part of the NIR (Net Investment Returns)."
Following Mr Nair's assertions, Ms Hazel Poa, PSP's Non-constituency Member of Parliament (NCMP), sought to address and clarify the PAP MP's claims.
She had earlier proposed that revenue from land sold on a 99-year lease should be recognized over the duration of the lease rather than upfront.
Ms Poa elucidated, "We did mention that we are proposing land to be treated as revenue to be divided over the entire period of the lease. So, for example, if a land is sold on a 99-year lease, then that land's [revenue] is perceived to be divided over 99 years as revenue."
She further questioned the logic behind considering this approach as a depletion of the principal, especially given that the land eventually reverts back to the government.
In response, Mr Nair maintained that the sale of any asset, including land, should contribute back to the asset pool, reinforcing the government's current fiscal policy.
He argued, "So, the sale of land, the sale of shares that the government may hold, all of this must go back into the asset pool of the reserves." This stance was justified by aligning with logical and standard accounting practices where land with leases extending beyond 30 years is classified as an asset.
Ms Poa countered this perspective by emphasizing the unique nature of land leases in Singapore. She highlighted a critical distinction, "In the case of other assets like that, he mentioned like shares once sold is gone forever. But this [sold] land returns back to government."
This distinction, according to Ms Poa, necessitates a different treatment from other types of assets that, once sold, are permanently divested.
Mr Nair reiterated his stance, comparing the treatment of land to company shares and underscoring the relevance of their lifespan in accounting practices.
He suggested that the treatment of land as an asset is aligned with standard accounting standards, advocating for what he termed "simple, honest accounting."
21 окт 2024
