In an uncertain and volatile world, more needs to be spent to save jobs and help those who start off in life with less.
But this has to be done in a way that is fiscally sustainable, with the better-off contributing more, said Deputy Prime Minister and Finance Minister Heng Swee Keat.
He made the point yesterday when laying out his ministry's plans in an Addendum to the President's Address.
He said that while the Government has stabilised the economy and stemmed unemployment through measures like the Jobs Support Scheme, this level of support cannot continue indefinitely.
Singapore has drawn the equivalent of 20 years of past Budget surpluses to combat the crisis, he noted, adding that the country faces a challenging fiscal environment ahead.
Covid-19 will give rise to new spending priorities, even as more money is devoted to supporting families with their healthcare and pre-school needs.
"In parallel, revenues will come under greater pressure from slower global growth in the aftermath of Covid-19 and sharper international competition over tax revenues."
On the planned goods and services tax hike, Mr Heng said the Government will carefully monitor the timing of the move, taking into account the state of the economy and spending needs.
Alluding to possible future tax-related adjustments, he said a fair and progressive fiscal system is one where the better-off contribute more, and lower-and middle-income households receive more in benefits than the taxes they pay.
"We will continue to adjust taxes on income, consumption and assets to achieve the right balance, while keeping our tax rates competitive."
The Ministry of Finance will also develop a framework for sustainable use of borrowings to finance major long-term infrastructure investments, he added.
Mr Heng stressed that the goal is to build a strong social compact - one with social mobility and opportunities for all at each stage of life, and more help for those who start off with less.
"A strong society is our stabiliser in an evermore uncertain and volatile world. It has helped us to weather crises, while avoiding the social fractures seen in many other countries."
He highlighted the Government's efforts over the years to progressively strengthen social security, through such schemes as Workfare and Silver Support, and enhancements to pre-school, education and healthcare subsidies, particularly for the lower-and middle-income groups.
Boosting capabilities and building resilience extend to the public service, too.
Minister for Trade and Industry Chan Chun Sing, who is also Minister-in-charge of the Public Service, said the public service has to contend with a more volatile external environment, higher expectations from the public and tighter resource constraints.
To deal with these challenges, cross-agency teams will become more common, he added.
Public servants will also be recruited from more diverse backgrounds and developed differently, with more exposure to the private and people sectors.
"This will keep them close to the ground, and give them a diverse body of networks, skills and experiences to solve problems effectively," said Mr Chan.
All government services will go digital by 2023. National digital infrastructure, platforms and standards will be built, like the National Digital Identity platform which will provide greater convenience and security for citizens in online transactions.
Dr Vivian Balakrishnan, Foreign Minister and Minister-in-charge of the Smart Nation Initiative, said the digitalisation push will help develop capabilities in the local information and communications technology (ICT) sector.
He added that the value of government ICT contracts is projected to rise by over 30 per cent this year, to $3.5 billion.
Small and medium-sized enterprises can take part in up to 80 per cent of procurement opportunities.
The Smart Nation and Digital Government Group will also work with the Ministry of Communications and Information to equip less digitally literate people with hardware and skills.
"This will ensure that digitalisation benefits Singapore and Singaporeans, by transforming how we deliver government services, grow new economic opportunities, strengthen the core of local talent and improve the lives of our people," said Dr Balakrishnan.