The Singapore way of calculating budget balances

Instead of one operating balance sheet, Singapore's prudent approach breaks the Budget into three chunks: the primary balance, the basic balance and the overall balance.

The Central Business District and Marina Bay Financial Centre seen from the Marina Bay Waterfront Promenade. Singapore's approach to budgeting may be considered too conservative, but given the twin challenges of maintaining fiscal sustainability and
The Central Business District and Marina Bay Financial Centre seen from the Marina Bay Waterfront Promenade. Singapore's approach to budgeting may be considered too conservative, but given the twin challenges of maintaining fiscal sustainability and staying tax competitive in the midst of an ageing population, it is probably prudent to continue to be fiscally conservative, says the writer.ST FILE PHOTO

Budget 2018 is consistent with the "Singapore way", namely being sustainable, pro-active and forward looking.

The "Singapore way" to ensure fiscal sustainability is to monitor our finances over both the near term and long term. This departs from conventional budgetary accounting laid out in the International Monetary Fund's (IMF) Government Finance Statistics, a point picked up by some on social media.

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A version of this article appeared in the print edition of The Straits Times on March 03, 2018, with the headline 'The Singapore way of calculating budget balances'. Subscribe