The 2023 Budget round-up speech delivered last Friday by Deputy Prime Minister Lawrence Wong, who is also Minister for Finance, addressed the concerns raised and the suggestions made by parliamentarians during the vigorous debate that had followed the presentation of the Budget on Feb 14. The parliamentary interventions had ranged over a variety of areas but had fallen broadly into three categories: whether the Government was taking too much and giving back too little, whether Singapore was doing enough to stay competitive, and whether enough was being done to help citizens in need. Mr Wong addressed these issues in turn. He reiterated also the resilience of the fiscal framework which has allowed Singapore to regain its feet after the economic havoc created by the coronavirus pandemic, which caused the Government to spend $72 billion, of which $40 billion came from past reserves.

Fiscal fairness bears directly on social equity. Mr Wong noted how the tax system contributes to a fair and inclusive social compact by ensuring that everyone benefits from government spending but that those with greater needs benefit more. Thus, the top 20 per cent bear the heaviest burden in taxes but receive the least in benefits. In recent years, for every dollar they paid in taxes, they received only about 30 cents in benefits. Conversely, the bottom 20 per cent paid the least in taxes but received the most in benefits. For every dollar paid, they received around $4 in benefits. Benefits received by the middle 20 per cent amounted to about twice the amount they paid in taxes. Progressive taxation underpins the social compact that Singapore requires to take it forward.