No draw on reserves to fund support package

The $1.5 billion support package to cushion the impact of inflation does not require a further draw on past reserves and will be funded out of the existing Budget, Deputy Prime Minister and Finance Minister Lawrence Wong said yesterday.

"This is because we expect our fiscal out-turn for fiscal year 2021 to improve compared to the estimates at Budget 2022," he added.

He said the latest slew of measures to help Singaporeans cope with rising prices comes on the back of higher revenues in fiscal year 2021 due to a stronger-than-expected economic recovery.

At the same time, the budget set aside for Covid-19-related spending was not used up as the impact of the Omicron variant was less severe than anticipated, he said.

As it is still early in the financial year, with this year's Budget just approved by Parliament three months ago, ministries will reprioritise their spending within their existing budgets to fund the support package, he added.

There is thus no need to introduce a Supplementary Budget - required when there is a request for more funding after the Budget has been passed - at this point, he said.

In the three financial years from 2020 to 2022, the Government made a total expected draw of $42.9 billion on past reserves to fund various measures to protect lives and livelihoods as the pandemic plunged the world into a deep recession. This is less than the initial draw of $52 billion it had projected it would need at the onset of the pandemic.

In FY2020, the Government had planned to draw up to $52 billion through the Resilience, Solidarity and Fortitude supplementary budgets.

But Mr Wong had said in February when delivering the Budget statement that the Government expects to use just $31.9 billion of the sum as Singapore managed to avert worse public health outcomes and also had a stronger-than-expected economic recovery.

Likewise, in FY2021, the Government had planned to draw $11 billion to pay for the Covid-19 Resilience Package, but now expects to draw just $5 billion due to a reduced expenditure of $10 billion for the package, as well as ministries not needing to spend as much due to projects delayed by the pandemic.

Mr Wong had also said in February that the Government had received extra revenue from one-off earnings such as vehicle quota premiums and stamp duties.

The money from these budgets had gone towards paying for public health measures to curb the spread of Covid-19, as well as measures such as the Jobs Support Scheme, which has disbursed some $28.1 billion since 2020, and the Care and Support Package, which disbursed $1.5 billion in cash to Singaporeans.

Announcing the new measures yesterday, Mr Wong emphasised the importance of fiscal responsibility and sustainability, adding that keeping to these principles would put Singapore in a strong position to deal with any future challenges ahead.