S'pore's fiscal deficit is $11 billion, same as earlier estimates, no further draw on reserves

Singapore's operating revenue is projected to decrease by $100 million compared to estimates presented in February.
Singapore's operating revenue is projected to decrease by $100 million compared to estimates presented in February.PHOTO: ST FILE

SINGAPORE - Singapore's overall fiscal deficit for this financial year is $11 billion, the same as earlier estimates, and no further draw on past reserves is needed, said the Ministry of Finance on Monday (July 5).

It gave this interim update on financial year 2021 in conjunction with Finance Minister Lawrence Wong's ministerial statement on Monday in Parliament, where he said that the support package to help companies and workers affected by the period of heightened alert is expected to cost $1.2 billion.

Mr Wong's statement comes ahead of a Supplementary Supply Bill to effect the reallocation of funds for the measures announced on May 28, June 10 and June 18, in view of phases two and three (heightened alert).

Singapore went into phase 2 (heightened alert) on May 16, introducing measures to curb the spread of the more transmissible Delta variant of the coronavirus after clusters emerged at Tan Tock Seng Hospital and Changi Airport and unlinked community cases increased.

These meant restrictions in indoor settings where people do not have their masks on, including at food and beverage outlets, gyms and fitness centres, as well as live arts and cultural performance venues.

The restrictions were eased from June 14, when the country moved into phase 3 (heightened alert).

According to the interim update, operating revenue is projected to decrease by $100 million compared with estimates presented in February this year.

This is due to revenue foregone for the waiver of rental charges, to support individuals and businesses during periods of heightened safe management measures.

Total expenditure is expected to have a net decrease of $500 million compared with earlier estimates.

This is because the increase in operating expenditure for targeted support to affected individuals, is offset by decreases in development expenditure mainly due to Covid-19 construction delays.

Special transfers are expected to go up by $1 billion due to measures to support businesses and individuals during periods of heightened alert through the Jobs Support Scheme of wage subsidies and rental relief.

The capitalisation of nationally significant infrastructure under the Significant Infrastructure Government Loan Act is expected to free up an additional $600 million compared with earlier estimates.

Taken together, the revised overall fiscal deficit is $11 billion. There is no net increase in overall fiscal deficit compared with earlier estimates, and no further draw on past reserves, said the MOF.