Budget 2021 to seek growth opportunities

It will also strive to make every dollar count amid record deficit, says Indranee

This year, close to $100 billion was dedicated to Covid-19 support measures over four Budgets.
This year, close to $100 billion was dedicated to Covid-19 support measures over four Budgets.ST PHOTO: KUA CHEE SIONG

As Singapore heads into the new year with a record Budget deficit, the Government will have to be prudent in spending and make every dollar count, even as it saves jobs and keeps the economy afloat.

This was Minister in the Prime Minister's Office and Second Minister for Finance and National Development Indranee Rajah's assessment of the challenges planners face as they prepare next year's Budget.

This year, close to $100 billion was dedicated to Covid-19 support measures over four Budgets - drawing up to $52 billion from the reserves, and leaving a hole of around $74 billion in the state coffers.

But going forward, the focus must now be on how to emerge stronger from Covid-19 despite limited resources, said Ms Indranee.

She said the Government's top priority is to exit the crisis and keep everyone safe and healthy.

But she noted that the fiscal road ahead will be a tough one.

"In previous years when we might have had Budget surpluses, you could think in terms of goodies.

"But next year... it's more in terms of: 'With the resources that we have, how do we use them in the most careful and prudent way such that we get the most out of limited resources?'"

She was addressing 150 Singaporeans at a virtual Singapore Together Emerging Stronger Conversation (ESC) last night, to seek their views and suggestions on next year's Budget.

The two-hour session, organised by government feedback unit Reach and the Ministry of Finance, was co-hosted by Mr Tan Kiat How, Reach chairman and Minister of State in the Prime Minister's Office and Ministry of National Development.

Participants discussed how to manage the trade-off between strengthening the economy while keeping the public safe; and how to encourage social responsibility and ensure greater digital inclusion, among other issues.

Ms Indranee told reporters a balanced Budget next year will be "quite hard" - echoing Prime Minister Lee Hsien Loong's remarks last month that there is unlikely to be a Budget surplus next year, given the ongoing economic crisis.

She said the Government will have to be prudent, spend where necessary, and ensure good returns on the money that is put in. "We have to make every dollar count and stretch the dollar."

She added that while cost management is important, one must also look at the growth side of the equation and find revenue which comes from that growth.

"Growth will only come when you have the economic activity, and at the same time, we have got to balance this with the health and safety part of it," Ms Indranee said.

This is why the Emerging Stronger Taskforce was formed to chart strategies for Singapore's post-pandemic recovery, she said.

Under the task force are seven Alliances for Action - industry-led coalitions tasked to devise ideas and generate jobs in areas such as sustainability, robotics and education technology.

Some growth areas Ms Indranee observed are logistics, mergers and acquisitions, and sustainability.

Yesterday afternoon, Deputy Prime Minister Heng Swee Keat met business leaders to discuss how the Government can partner businesses to emerge stronger.

He said in a Facebook post that there will be more pre-Budget conversations in the coming weeks, and urged Singaporeans to share their ideas. "Everyone can play a role... The Budget reflects our collective needs and aspirations as a society, and charts our direction as a nation," he added.

More than 2,850 Singaporeans have participated in over 45 Singapore Together ESC sessions since the start of the series in June.

A version of this article appeared in the print edition of The Straits Times on December 03, 2020, with the headline 'Budget 2021 to seek growth opportunities'. Subscribe