Government to spend more due to rising needs, will maintain balanced Budget in medium term: PM Wong

SINGAPORE – Government spending in the new term will increase as a share of Singapore’s gross domestic product to meet rising needs, but the Government will maintain a balanced Budget “over the medium term”, said Prime Minister Lawrence Wong on Sept 19.

He also pledged that his Government would continue to spend within its means.

To meet the spending needs, the Government had earlier made tax changes to strengthen its revenue base and structure, said PM Wong, who is also Finance Minister. At the same time, his ministry will steward fiscal resources prudently and effectively.

In the Ministry of Finance’s (MOF) addendum to the President’s Address, PM Wong sketched out how Singapore will invest more resources in securing its place in the world, transforming its economy and building cohesion amid a more uncertain world.

Key to this will be maintaining fiscal discipline and strength, which are Singapore’s strategic advantages, he said.

MOF will allocate resources judiciously and evaluate programmes rigorously to maintain sound and sustainable finances, he added.

“Our fiscal policies aim to ensure a dynamic economy and a strong social compact,” said PM Wong. “This provides assurance and opportunities, and enables a higher quality of life for all Singaporeans.”

During the opening of Parliament on Sept 5, President Tharman Shanmugaratnam had

set out the Cabinet’s agenda

for the next five years. This week, the various ministries released their addenda to the President’s Address to provide more details on their plans.

PM Wong said Singapore’s system of taxes and transfers will remain fair and progressive with everyone contributing, but those better off will give more and those worse off will receive more.

He also said that the Government will continue to steward Singapore’s reserves responsibly. This is under the Net Investment Returns framework, which allows the Government to tap part of the returns from investing Singapore’s reserves.

Through this framework, sovereign wealth fund GIC and Singapore’s investment company Temasek can pursue long-term investment strategies to generate sustainable returns, providing a continued stream of revenue for the Budget while maintaining the reserves as a strategic buffer against future shocks, said PM Wong.

On securing Singapore’s place in the world, PM Wong said the Government will continue to invest in defence and security, deepen cooperation with key partners, especially in Asean, and broaden relations with other countries.

All these efforts will require more resources, but are essential to advancing national interests and protecting Singapore’s ability to chart its own course, he said.

He added that MOF will also play an active role in regional and international economic and financial forums to support a rules-based multilateral system that protects the global commons.

On transforming the economy, PM Wong said it remains a priority for the Government to grow a vibrant economy that can provide good jobs for Singaporeans.

To this end, the

Singapore Economic Resilience Taskforce

and the Economic Strategy Review will work with agencies and stakeholders to keep Singapore competitive.

The Government will also help businesses, especially small and medium-sized enterprises, to harness artificial intelligence and other technologies, and support Singaporeans to reskill and upskill through SkillsFuture, he said.

To ensure that Singapore remains among the best places to do business in the world, it will also ensure a stable and efficient tax, Customs and regulatory environment.

Funds have been and will continue to be set aside for longer-term investments in infrastructure to enhance connectivity, support the green energy transition, and

build up climate resilience

.

On building a strong and cohesive society, PM Wong said the Government will continue to strengthen its social compact and provide assurance to Singaporeans.

It will do so by building on the major moves already introduced under Forward Singapore, such as the

Majulah Package

for retirement adequacy and

SkillsFuture programmes

to uplift workers.

These policies will help Singaporeans across all life stages to have opportunities regardless of their starting points. They will also keep public housing and healthcare affordable and accessible, help seniors to age with peace of mind and strengthen support for caregiving.

There will also be

more support for vulnerable groups

such as people with disabilities and special needs.

While the Government works to provide support to Singaporeans, MOF will work with government agencies to strengthen governance across finance, audit, procurement, grants management and risk management, PM Wong said.

This will involve adopting best practices, strengthening central systems and processes, and building capabilities across the public service so that government spending remains effective and delivers value for money, he added.

“MOF will steward fiscal resources prudently and effectively to enable Singapore and Singaporeans to overcome challenges and seize new opportunities in a changing world,” he said.