SINGAPORE - A mix of funding methods will finance the projected $100 billion cost of protecting Singapore against rising sea levels, said Second Minister for Finance Lawrence Wong in Parliament on Tuesday (Sept 3).
Smaller-scale infrastructure like localised flood barriers for public assets such as hospitals and bus depots can be funded from the budgets of ministries, he said.
Meanwhile, the Government will look at the option of borrowing to spread the cost across the generations which will benefit from long-lived major infrastructure works like sea walls.
"Where the measures include land reclamation, the land reclamation costs can already be met from past reserves," said Mr Wong, who is also National Development Minister.
He was responding to Nominated MP Walter Theseira on the extent to which the policy of using past reserves to fund land reclamation will be applied to the cost of climate change protection measures.
In his National Day Rally speech last month, Prime Minister Lee Hsien Loong announced that around $100 billion or more may be needed in the long term to protect Singapore against rising sea levels. This is one of the many threats posed by climate change that the country is especially vulnerable to, he said.
PM Lee also said solutions to the problem could include reclaiming offshore islands and connecting them with barrages, or building polders to protect the coastline.
Dr Theseira also asked about the roles of the President and Parliament in approving or overseeing the use of past reserves for climate change protection measures related to land reclamation.
Mr Wong said Parliament debates and approves the Supply Bill every year, part of which involves seeking approval for development expenditure, including land reclamation costs.
"The land created through reclamation will be protected as part of past reserves. When such land is subsequently sold, the proceeds accrue fully to past reserves," Mr Wong said. "So the reclamation of land is, in that sense, a conversion of past reserves from financial assets to state land, and the use is not a draw on past reserves."
He added that the use of past reserves to fund reclamation costs is in accordance with the Reserves Protection Framework, which is agreed on between the President and the Government.
Dr Theseira asked: "Is the commitment then that in all such cases, the cost of land reclamation will be coming from past reserves without a draw-down on the requirement to raise taxes currently?... Or is it going to be flexible based on the finance minister at the time?"
Mr Wong replied that the Reserves Protection Framework already allows the Government to use the past reserves for all land reclamation projects. "That is already the case today, and that is the basis on which we operate currently."