Mr Chua Kheng Wee Louis asked the Deputy Prime Minister and Minister for Finance (a) whether the value of state land which has not been sold is recorded in the Government Financial Statements; (b) if so, whether this is recorded on a historical cost or fair value basis; and (c) whether the total value of Government assets on the balance sheet becomes higher when there is a sale of state land.
Mr Lawrence Wong: Land that is owned by the state and used by a Government Ministry for public infrastructure purposes, such as for Government schools, hospitals and bus interchanges, remains as state land. Since there is no disposal, such land remains as part of the Past Reserves. As such, the issue of payment into the Past Reserves does not arise.
State land may be sold to Statutory Boards to enable them to fulfil and discharge their statutory functions. For example, state land is sold to JTC for the development of industrial land, and to HDB for the development of public housing. When ownership is transferred to the Statutory Board, for example, under a 99-year lease, the state can no longer use the land for the duration of the lease. To ensure there is no draw on Past Reserves, the land is disposed of to the Statutory Board at fair market value, and the proceeds accrue to Past Reserves.
The Government does not record the valuation for unsold state land. Instead, the Government maintains a listing of state land that is protected as part of the Past Reserves. The Government only values state land at the point of sale to enable disposal at fair market value and avoid a draw on Past Reserves as explained above, and not on an ongoing basis.
Government assets include financial assets and the listing of state land and buildings. As has been explained before in this House, most recently on 7 November 2022, disposal of land in exchange for land sale proceeds only converts a physical asset to a financial asset. The total value of the Government’s assets, therefore, does not become higher when there is a sale of state land.
Ministry of Finance
28 November 2022