SINGAPORE - Unlike other countries, Singapore can depend on its national reserves and did not have to borrow or take on debt to fund its coronavirus stimulus packages, said Deputy Prime Minister Heng Swee Keat on Friday (June 5).
He was speaking about the role of the past reserves, which many MPs had touched on as they spoke about the Fortitude Budget and the ones before it, which draw on the reserves to a tune of $52 billion.
The MPs noted that Singapore was fortunate to be able to tap on the savings of past governments, built up painstakingly since independence, to boost its Covid-19 war chest. But they also asked how long it would take to restore the sum.
Mr Vikram Nair (Sembawang GRC) likened the reserves to a "golden goose" to be protected, warning that the more it is drawn on, the less there will be for future generations to depend on.
Ms Tin Pei Ling (Macpherson) and Mr Murali Pillai (Bukit Batok), meanwhile, said it has given Singapore a key strategic advantage in the current environment marked by great uncertainty.
Agreeing, Mr Heng said the reserves are Singapore's "rainy day fund" and have allowed the country to deal with the crisis from a position of strength.
It not only assures Singaporeans that the country has the means to navigate the challenges ahead, but also fosters confidence in global investors, and protects the economy from detractors and speculators who may otherwise try to take advantage of this period of flux to attack the Singapore dollar.
Noting that successive governments have husbanded the reserves with discipline and prudence, he said this has not always been appreciated.
He pointed to the vigorous debates in Parliament on whether the Government should spend more freely from the kitty instead of running Budget surpluses, saying: "Even as recently as January this year, before the Unity Budget was unveiled, many commentators inside and outside of this House speculated on how large our accumulated surplus would be."
"Yet, it took us just three months into FY2020 to use up the accumulated surplus that we had built up over the current term of government."
Mr Heng added that a draw of $52 billion from the reserves is not a trivial matter, and urged Singaporeans not to take the limited resource for granted.
He said Singapore managed to build up its savings as successive governments have put in place policies that discourage waste or overconsumption, and also run the public services based on outcomes and not the size of spending.
"In short, we are in this fortunate position because of consistent hard work, prudence, long-term planning and discipline of those who came before us," he said.
"We owe it to our people - seniors, middle-aged, young and those yet to be born - to be prudent and to ensure good governance, so that they too have the resources to navigate future challenges in an uncertain world.
Among MPs who spoke, several, including Ms Foo Mee Har (West Coast GRC), asked if there were plans to return the $52 billion drawn from the reserves, and how long this would take.
Mr Heng said there is no legal or constitutional obligation for the Government to do so, though it had put back the $4 billion drawn from the reserves during the global financial crisis in 2009.
But he noted that this time, the amount is much bigger, the crisis sparked by the pandemic is of a significantly larger scale, and the economy is not expected to bounce back as quickly.
"So how long would it take to build this back? We cannot be definitive. At this moment, we must focus our minds fully on making the best use of the resources that we have deployed, be prepared to work hard in the years to come, and have the resolve to rebuild our economy," he said.
"In this way, the Singapore economy can emerge stronger, and we will then be in a strong position to build up our resources. But rest assured that we are committed to rebuild not just our reserves, but also to continue developing Singaporeans and building Singapore."