Fiscal prudence is imperative

There is no such thing as a perfect budget. As we prosper, we will hear more voices on how to share the fruits of our labour.

We should not assume that good times will last forever. From past recessions, we witnessed how things can turn for the worse quickly. Thus, fiscal prudence is imperative (S'pore will continue to be financially prudent: Indranee; Feb 22).

We see how powerful countries turn weak by racking up huge budget deficits protractedly, which effectively indebts their future generations. We see fiscal irresponsibility when some spend heavily on defence while their citizens go hungry.

We saw how countries went bankrupt overnight when their currencies were raided because they overextended themselves during good times but had little reserves to back them up.

We cannot assume that net investment returns will always rake in impressive returns year after year. Some quarters may argue that squirrelling half of it away may be too conservative, and call for more to be spent. But nothing stays static.

As an open economy, we are vulnerable to the vagaries of external forces.

I suggest that we preset a minimum sum to be put away for rainy days, irrespective of the returns from investments. This extra buffer will prepare us for storms ahead.

It seems there is great disquiet on how we should apportion spending on healthcare, education and defence. Opinions vary but all have their merits. I see these as means to future-proof ourselves. We may not see immediate results but the continual prosperity of Singapore depends on them. It is a matter of priority and the exigency of the moment.

As a developed country, we cannot expect world-class standard of living without the attendant infrastructural build-up. Nor should we expect prices to stay low. Taxes can only rise in the long term. Any increase should be progressive, so that people have time to react to them. The laggards should always be given extra help.

Singapore has been blessed with foresight, fortitude and luck. We should not take the good times for granted and develop an entitlement mentality. Fiscal prudence will win the day.

Lee Teck Chuan

A version of this article appeared in the print edition of The Straits Times on February 26, 2018, with the headline 'Fiscal prudence is imperative'. Print Edition | Subscribe