Home » How we use our fiscal resources is within our control; our guiding principle is prudence, not austerity: Heng Swee Keat

How we use our fiscal resources is within our control; our guiding principle is prudence, not austerity: Heng Swee Keat

Share This:

The Government is starting this new term of government from a most challenging fiscal position, DPM Heng Swee Keat said in his Ministerial Statement on Monday (5 Oct).

Operating revenues are expected to be 16% lower than initial estimates presented at the Unity Budget in February 2020.

Revenue collections are expected to fall across all categories of revenue. At the same time, expenditure will rise.

We expect our revenue position to be weak for a number of years, as the effects of COVID-19 on the global economy linger, and our economy slows.

At the same time, our expenditure will rise as we continue to provide support for our people and businesses.

– DPM Heng Swee Keat –

This challenging fiscal position is a result of a global pandemic that no oncould have predicted.

The Government has dedicated close to $100 billion to support our people and businesses through this difficult period.

As we do so, we must be careful not to spend in a way that squanders what generations before us have painstakingly built up, Mr Heng said.

Prudence, Not Austerity

“Our guiding principle is prudence, not austerity. We will continue to invest decisively in our national priorities, with a deep commitment to leave behind a better future for our children.”

“There is much work to be done to transform our economy, and to build a fair and inclusive society, a sustainable and liveable city, and a safe and secure Singapore,” Mr Heng said.

Difficult choices will have to be made ‘but we must meet them head on’ to find ways to fund these sustainably through higher taxes and more effective spending.

Pay for recurrent needs with recurrent revenues such as taxes

Recurrent needs, like healthcare spending, will be paid for with recurrent revenues, such as taxes.

Judicious use of borrowing for long-term infrastructure

Mr Heng said the Government will maintain a ‘disciplined and judicious use of borrowing, reserving its use for long-term infrastructure whose benefits are spread across many generations’.

Past Reserves have been critical in our fight against COVID-19

Governments around the world have committed trillions of dollars in response to COVID-19, and their debt levels have risen to record highs. Such debt will take generations to pay off.

Singapore has avoided this outcome, because successive generations have built up strong reserves ahead of this crisis.

“We must have the discipline to start earning, saving, and investing for the future again.

COVID-19 is not our first crisis, and certainly will not be our last.”

– DPM Heng Swee Keat –

This challenging fiscal position is a result of a global pandemic that no oncould have predicted.

What is within our control is how we use our fiscal resources well to respond to this crisis, and to prepare for the future.

The Government has dedicated close to $100 billion to support our people and businesses through this difficult period.

As we do so, we must be careful not to spend in a way that squanders what generations before us have painstakingly built up, Mr Heng said.

Reference:

  1. Ministry of Finance – Ministerial Statement – Oct 2020

 

Advertisements

Share This:

Related Posts