Budget debate: DPM Heng, Pritam spar on need for independent parliamentary budget office

Deputy Prime Minister Heng Swee Keat (left) and Leader of the Opposition Pritam Singh in Parliament on Feb 26, 2021. PHOTOS: GOV.SG

SINGAPORE - The creation of an independent body to monitor the Government's expenditure was at the centre of a sustained exchange between Deputy Prime Minister Heng Swee Keat and Leader of the Opposition Pritam Singh in Parliament on Friday (Feb 26), during the debate on the national Budget.

The Workers' Party (WP) secretary-general had called for the creation of an independent parliamentary budget office to enhance scrutiny of government expenditure.

In his round-up speech, DPM Heng said there are already independent audits by the Auditor General's Office, as well as parliamentary scrutiny through the Estimates and Public Accounts Committees.

With the WP already represented on both these parliamentary bodies, Mr Heng said the creation of a new office would be "a wasteful duplication of these functions".

Mr Singh responded that a Parliament budget office is "not an unusual institution in many parliamentary democracies", and that it is not just to help the opposition, but also all MPs.

He recounted that when he was a member of the Estimates Committee some years back, a senior civil servant had remarked then that she could not be smarter than her boss, the Finance Minister.

A parliamentary budget office would hence be able to provide independent analysis to confirm the nature of the Budget and that state programmes are delivering the desired outcomes, explained Mr Singh.

Mr Heng rebutted Mr Singh's arguments and the anecdote about the senior civil servant as "totally convoluted (as) one does not lead to the other".

The Ministry of Finance (MOF) had released its interim assessment on the impact of Covid-19 Budget measures earlier this month, ahead of the Budget speech, so as to be accountable about the outcome of various support measures, said Mr Heng.

"There is a reason why I put out the interim report, even though the full effects have not been (felt), because I am conscious that we have used a big part of last year's Budget, we have used the past reserves, and that I have a responsibility to account for those outcomes," said Mr Heng.

The MOF's report on Feb 11 showed that Budget measures to combat Covid-19 last year helped to blunt the recession, saved or created some 155,000 jobs over 2020 and into 2021, and shaved the rise in unemployment rate by 1.7 percentage points.

A total of $27.4 billion in grants - 18 times the amount given out in 2019 - was used to shore up beleaguered firms. Support was tilted towards harder-hit sectors, smaller firms and lower-income households, which mitigated the uneven impact of the pandemic and reduced inequality, said Mr Heng.

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Mr Heng asked if Mr Singh or any of the WP MPs had read the interim report, and questioned the purpose of setting up a new office when information on the impact of programmes in last year's Budget was already readily available to be scrutinised.

"Does the Workers' Party have any comments on that, because I sat through the debate, I read your transcripts, but no one mentioned about outcomes, no one raised a question about could this have been done better, could that have been done better," said Mr Heng.

"So what is the purpose of setting up an office when the information that is publicly available is there for you to ask?"

In response, Mr Singh said that the proposed parliamentary budget office will balance out the MOF and its political office-holders' agendas by providing a perspective that is "completely independent of what Government is saying about the outcomes".

The office can therefore aid all MPs - who have to vote on the Budget - with an independent analysis on the efficacy of government programmes, he added.

Mr Heng said that the details of different schemes gets discussed in the debates over the various ministries' budgets.

"This Budget debate is a serious debate about whether our broad direction is correct, and do you have suggestions on how we can do it better? I'm open to your ideas, but I have to say, unfortunately, so far I have heard none," he told Mr Singh.

During the debate on MOF's budget later in the day, WP MP Jamus Lim (Sengkang GRC) also suggested setting up an independent fiscal council to evaluate the budgetary implications of major policy proposals by the Government and opposition, at a proposed cost of $20 million.

Ms Indranee Rajah, Second Minister for Finance, said that similar entities in countries such as Australia, the Netherlands, UK and US, were created in the aftermath of the Global Financial Crisis from 2008 to 2009.

"In these cases, fiscal rules had proved insufficient to ensure prudent management of the public finances before the crisis," she said.

"The context in Singapore is very different. The ills which led to the need for IFIs (independent fiscal institutions) in other systems are not present in our system and we continue to keep a very strict eye on our fiscal prudence."

She added that Singapore has a strong system to scrutinise budgetary matters, and is among a small number of countries with a AAA credit rating.

"Most importantly, the Government has been upfront about the hard choices that we have to make on budgetary matters. For example, we have not shied away from highlighting the need to raise taxes to meet longer-term increase in healthcare and social spending needs," she said.

Noting that members of an independent fiscal council are not elected representatives, Ms Indranee said difficult decisions cannot be outsourced, and that political leaders ultimately have to be the ones with the courage to make the tough decisions on what to spend on.

"Robust, intellectually honest analysis is important, to foster more informed parliamentary debate," she said.

"But ultimately, this is no substitute for having the political courage to make difficult budgetary choices."

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