THE Government, which is tapping its past reserves for the first time to fight Singapore's worst recession, cannot rule out a further drawdown in the event of another exceptional situation, said Finance Minister Tharman Shanmugaratnam on Thursday.

'In that scenario, the onus will once again be on the Government to justify its case to the President and the Council of Presidential Advisors to seek Parliament's approval... and to explain to the public its reasons for doing so,' he said when rounding up the debate on the Budget statement in Parliament.

VIDEO Govt may tap reserves again (1:12)

In his stout defence on drawing from the past reserves now rather than use up all available savings first, Mr Tharman dwelt at length on the robust process for tapping Singapore's strategic asset, and explained the threshold and conditions that should be set for any future drawdown.

'This draw on past reserves does set a precedent. It is therefore important that we are clear about the basis for the draw, which inevitably sets a benchmark for the principles that should apply in future,' he said, responding to backbenchers who have spoken on the issue during the debate.

'The current circumstances and the measures for which we are drawing on past reserves, are setting a high threshold for any future situation where such a draw is contemplated. It minimises the opportunity for future Governments to call for unjustified uses of our past reserves.'

Several MPs asked the government to provide more information about how the historic decision to draw on the reserves was reached.

Responding, Mr Tharman said when the Government sought the President's in-principle approval to draw $4.9 billion from the past reserves to fund this year's $20.5 billion budget, it set out these considerations:

First, a Government should only draw on past reserves in very exceptional situations, for example, when external events or crises pose a threat to Singapore's economy or society. The current severe global economic crisis is a clear example of this.

Second, the measures to be funded out of past reserves should be of a temporary nature, and not built into continuing Government programmes.

'We should not, however, prescribe strict quantitative rules or specific indicators of distress, on when a draw on past reserves can be justified,' said Mr Tharman. 'It is not possible to define quantitative rules that meet all circumstances.

'For example, should the criteria be that the Government is incurring a deficit of at least 6 per cent of GDP? This criterion can be met because a Government is profligate or over-spending.

'Similarly, there may be situations where a dire circumstance requiring a targeted and justifiable intervention of a magnitude not as large as 6 per cent. It is also not possible to anticipate the nature of the crises that can hit us in the future, whether due to natural disaster, health pandemic, major security threats or war.'