In his keynote address at the 35th Singapore Economic Roundtable last week, Finance Minister Lawrence Wong elaborated on some of the drivers that will guide Singapore's fiscal strategy going forward. The main message was that economic, social and ecological expenditure needs will require new initiatives to raise revenues in ways that are both progressive and sustainable. Among economic issues, one of the challenges will be to reinforce policies to further reduce inequality, through expanding support for low- income groups, investing more in pre-school education and funding skill development. On the social side, the acceleration of ageing will not only shrink the tax base but also call for further increases in health spending, which has already tripled in dollar terms over the last decade. Measures to adapt to the impact of climate change, such as protecting Singapore's coastline from rising sea levels, will also involve substantial recurrent expenditure over several decades.

To finance these initiatives plus insure against unexpected future spending needs, Singapore will need to strengthen the resilience of its revenue base. Mr Wong revealed that besides a likely increase in the carbon tax, which has been acknowledged as being too low, as well as a hike in the goods and services tax by 2025, which has already been telegraphed, the Government is exploring new options in the area of wealth taxes. This is appropriate. Taxes on wealth are by definition progressive. Moreover, wealth inequalities have been increasing in recent years, even amid the Covid-19 pandemic, when asset prices rose sharply. A report by Credit Suisse in June found that last year, wealth gains were unusually high in many countries where GDP declined, including Singapore. Corroborating this finding, Knight Frank's Wealth Report 2021 showed that the number of individuals in Singapore with at least US$30 million in net assets rose 10 per cent last year.