Concerns that higher public spending will worsen Singapore's primary deficit have prompted experts to call for a more transparent and accountable approach to how taxpayer dollars are spent.
Economists at a post-Budget forum yesterday called for better- quality discussions on how money is used on healthcare and transport expenditure. They also suggested the establishment of a body like the United States Congressional Budget Office, which provides Congress with non-partisan analyses for economic and budget decisions.
Singapore should create its own "independent Budget review agency" to publicly report on the effectiveness of Government-funded programmes, said SIM University economist Walter Theseira.
He told those at the forum organised by the Economic Society of Singapore: "The Accountant-General's Department does not fulfil this function exactly. Its focus is on waste and inefficiency - different from economic effectiveness.
"Every few years, we have a big transformation package. We spend a hundred million dollars here, a billion dollars there on different kinds of programmes, but we never really find out years later whether those programmes were any good or not."
While the Government keeps tabs on the outcome of these expenditures, little is made public. Other members of the roundtable, held at the Mandarin Orchard hotel, also called for more transparency.
SIM University economist David Lee said Monday's Budget was a step in the right direction, with $2.4 billion being committed over the next four years to bold economic transformation plans.
But bottlenecks have to be worked out, such as the lack of "new economy trainers" who can teach the desired skillsets like data analytics, he said, and there needs to be more discussion on how the $2.4 billion will be allocated.
Maybank Kim Eng economist Chua Hak Bin said Singapore has to strike a tough balancing act: "The question is that in three to four years' time, if expenditures keep rising, where is additional revenue going to come from?"
He noted that despite projecting a small overall fiscal surplus of $1.91 billion for the 2017 financial year, the Government is eyeing a primary deficit of $5.62 billion, worse than it was during the 2009 financial crisis. A primary fiscal deficit does not take into account investment contributions from GIC or Temasek Holdings, and broadly implies that tax revenues are not keeping up with government spending.
And this can only mean that the goods and services tax will go up in a matter of time, said CIMB economist Song Seng Wun. "Nobody wants taxes to go up. But as we know, taxes (will) go up, so we might as well be clear and transparent on where (our tax revenue) is coming from and where it is going to."
Dr Theseira said: "We need to analyse longer-term projections of social expenditures, taking into account what people actually have in their Central Provident Fund (CPF) accounts.
"The recent CPF review was a good review... but it was mostly a micro policy review of how your own individual savings and decisions are affected. It was not meant and designed to be a review of the broader fiscal impact, and I think that is what we need."
