Singapore Budget 2020: Strategic financial plan as Singapore enters challenging time

The financial plan will help Singapore seize the new opportunities that arise even as support for globalisation wanes, technology threatens bifurcation, and Singapore transitions into an ageing society. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Singapore is entering a challenging time, with global structural shifts, economic uncertainties, and strategic tensions brewing, said Finance Minister Heng Swee Keat.

But "we can, and we will pull through", as long as people advance as one, he added.

Even as he unveiled measures in his annual Budget statement to deal with immediate problems like the coronavirus outbreak and the resulting economic fallout, he stressed the need to maintain focus on the country's future.

To this end, this year's Budget is the strategic financial plan that will prepare the country for the long term, said Mr Heng, who is also Deputy Prime Minister.

He laid out plans in four areas: to grow the economy, transform companies and create jobs; care for all Singaporeans and nurture them; build a sustainable city amid climate change and secure the country's sovereignty; and mobilise people to work together.

They will help Singapore seize the new opportunities that arise even as support for globalisation wanes around the world, technology threatens bifurcation, and Singapore transitions into an ageing society.

"To deal with these major shifts, we need a capable government, working closely with our people, and a good plan," he said.

Reiterating the themes he covered in previous Budgets, Mr Heng outlined how these broad shifts in the world order would affect Singapore.

While globalisation and the advancement of technology have brought prosperity to the world, they have also widened the income inequalities between the skilled and the unskilled, creating winners and losers, he said.

"There are growing sentiments that globalisation and the multilateral system have failed," he added.

The prosperity brought by the decades of peace after World War II allowed governments to establish safety nets and welfare programmes, Mr Heng said.

But governments around the world have struggled to maintain this spending, with ageing populations, jobs disruptions and slowing economies adding fiscal pressure, he added.

Yet, he said, it is politically untenable to cut back on social benefits, and governments resorted to issuing debt to fund social spending, increasing the debt burden on the next generation.

Central banks have also lowered interest rates to unprecedented levels, tying their hands to mount stabilisation measures in the event of crises, he added.

He noted that this is happening at a time when the global economy is experiencing weaker growth and greater uncertainty, with friction between the United States and China portending a bifurcated global order.

But even amid these challenges, Singapore had the means to remain exceptional, he said.

Elaborating, he said Singapore remains a trusted node for trade and investment, with its political stability, commitment to rule of law and multilateralism, ease of doing business, and strong intellectual property protection regime, among others.

"As a city-state, we are small, but nimble," he added.

The openness that Singapore has embraced all along has also resulted in a multicultural society that welcomes diversity, making the country more valuable to the world, he said.

But he added that Singapore's biggest asset is its exceptional people.

"We have come together and weathered many past storms, like the global financial crisis, Sars and now, the ongoing Covid-19 outbreak," he said.

Urging unity, he said: "Budget 2020 is our strategic financial plan to prepare Singapore and Singaporeans to meet these challenges and seize new opportunities."

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