Keep govt spending sustainable: Committee

A parliamentary committee has urged the Ministry of Finance (MOF) to ensure that government spending remains sustainable in future, without imposing undue tax burdens on Singaporeans.

The number of government schemes, grants and subsidies has gone up in the past decade, the Estimates Committee noted in its annual report released yesterday. The eight-member committee, which examines the Government's Budget each year and suggests improvements, wanted to know how such disbursements could be sustained.

The public expects that these transfers - which include the annual GST Voucher to help households bear the cost of utilities - will not be reduced or removed, it said.

In 2015, disbursements from the top five regular transfers to households added up to $12.3 billion, more than double the expenditure in 2006. Spending on these five programmes, which include the GST Voucher and Workfare Income Supplement, has grown at a rate of 9.1 per cent annually on average.

The committee urged MOF to ensure that Singaporeans will not have to deal with a growing tax burden to finance the various programmes, given the higher spending.

MOF assured the committee that it had anticipated rising expenditure needs, especially as the country grapples with an ageing population.

It has taken steps to ensure sustainable budgets in the long run, it said. In Budget 2015, for instance, the Government had announced it would raise marginal tax rates for the top 5 per cent of income earners. And, changes in earlier years included increasing tax rates for higher-value residential properties, noted MOF.

The Government will continue to be prudent in its spending, it added. Social support schemes, for one, would continue to provide targeted and means-tested support only to those in need.

MOF stressed that even as the Government enhanced the social security system, there remained the need to maintain a balance between personal and collective responsibility.

The Government will continue reviewing both expenditure and revenue to ensure fiscal sustainability, said MOF.

It was confident that the recommendations of the Committee on the Future Economy - which will be released soon - will help grow the economy and create jobs for Singaporeans.

The committee acknowledged MOF's efforts, and noted that these government transfers have provided greater assurance of sustained support in education, healthcare and employment.

Chairman Foo Mee Har said: "The committee acknowledged that the substantial increase in Singapore's structural transfers in recent years has strengthened Singaporeans' social safety net."

The Government also needs to ensure that its schemes and programmes are regularly reviewed and monitored to check if the intended outcomes are met, she added.

The Estimates Committee comprises Ms Foo, six other People's Action Party MPs and Workers' Party MP Pritam Singh.

The committee also wanted to know how the Government would ensure that the Silver Support Scheme - which gives cash payments to the bottom 20 per cent of Singaporeans aged 65 and up - reached its targeted recipients.

MOF said that the scheme is administered automatically, based on existing administrative data, to ensure eligible seniors do not miss out.

Among the other matters the committee asked about was the national SkillsFuture initiative to encourage lifelong learning.

MOF assured the committee that the Government would check if various programmes were on the right track, such as by tracking the number of Singaporeans who used their SkillsFuture credits.

The committee also wanted to hear about cost-saving initiatives by ministries with large budgets.

The ministries have taken steps to reduce costs in various ways, including through innovation and improving procurement processes, said MOF.

A version of this article appeared in the print edition of The Straits Times on January 27, 2017, with the headline 'Keep govt spending sustainable: Committee'. Print Edition | Subscribe