Should the public health and economic situation deteriorate and the need arise, the Government will seek President Halimah Yacob's consideration for the use of past reserves to support economic investments to ensure the Republic emerges stronger from the crisis of the Covid-19 pandemic.
Deputy Prime Minister and Finance Minister Heng Swee Keat said this yesterday as he highlighted the need to sustain investments in Singapore's future economy.
"How we recover from Covid-19 in the next few years is critical," he said. "It will determine our nation's long-term success. Beyond dealing with its immediate impact, we are making significant investments to position Singapore for our next bound of growth in the post-Covid-19 world."
Singapore's past reserves comprise assets invested by its central bank, the Monetary Authority of Singapore, as well as state investment firm Temasek and sovereign wealth fund GIC.
Singapore expects to draw $42.7 billion of past reserves for the last financial year. With the Government obtaining Madam Halimah's in-principle support to utilise up to $11 billion in FY2021, it is expected to draw up to $53.7 billion from the reserves since the onset of the coronavirus pandemic.
Mr Heng noted that Covid-19 has disrupted business models and global supply chains, while accelerating trends like digitalisation.
"To secure our future, it is crucial for us to seize opportunities in new growth engines, respond to structural trends and transform our economy. We will invest strategically in these areas over the next few years," he said.
Aside from the measures announced in Budget 2021, others are being developed by the Emerging Stronger Taskforce set up to guide Singapore's economic recovery from Covid-19; various industry-led partnerships with the Government, dubbed Alliances for Action; and other agencies.
Said Mr Heng: "Based on the current outlook, we expect that as the economy recovers, we will be able to balance our budgets, and our revenues will be able to support projected expenditure for these measures."
He acknowledged that such an assessment assumes the global Covid-19 situation would come under control by next year.
"We have carefully thought through the different scenarios. While we expect economic recovery in Singapore and globally, there is a wide cone of uncertainty," he said. "Even if the economic and fiscal situation turns out to be worse than expected, we must still press on to invest in new areas, so as to ride on the structural changes, transform and emerge stronger as an economy, and as a people."
He shared that Madam Halimah has been briefed on the Government's strategy and contingency plan in the event of prolonged economic impact from the pandemic.
The President expressed her understanding, said Mr Heng, and will consider the Government's specific proposals should there be a need to draw on past reserves.
Correction note: This article has been edited for accuracy.