SINGAPORE - Singapore will not dip into its reserves to fund a new $800 million Covid-19 support package, said Finance Minister Lawrence Wong on Friday (May 28).
Instead, it will pay for the package by reallocating development expenditure, some of which can be capitalised under the recently passed Significant Infrastructure Government Loan Act (Singa).
Mr Wong said he will introduce a Supplementary Supply Bill at the next Parliament sitting in July to effect the reallocation of spending.
Explaining the decision, he noted that Singapore's circumstances are very different from what they were last year, when an unprecedented five Budgets were rolled out to help keep workers in jobs and businesses afloat at the height of the pandemic.
This year, most parts of the economy are still operating, he said. Businesses and individuals have learnt to adapt, while other government schemes like the Jobs Growth Incentive are helping to create new opportunities for Singaporeans.
"Under such a circumstance, I don't think we should be going to the President to seek permission to draw on our past reserves," Mr Wong told reporters at a virtual press conference.
In fact, the country must expect to run into situations like this from time to time - when restrictions will have to be temporarily tightened following an occasional outbreak of community cases, he added.
"So we will have to learn to adapt to such situations using our own resources, rather than to dip into our past reserves."
The package, aimed at businesses and workers impacted by the tightened Covid-19 restrictions, includes rental reliefs and enhanced wage subsidies under the Jobs Support Scheme.
Mr Wong was asked if there would be scope for further reallocation of funds from development expenditure, should further support packages be needed.
He replied that the move is intended as a "one-off exercise" rather than recurrent ongoing expenditure. "If it were, I think we would run into difficulties."
Should Singapore encounter a similar situation in the future, it will have to look at various factors - such as the scale of the outbreak and the extent of the restrictions required - to decide its next steps, Mr Wong added.
If the outbreak is relatively insignificant, Singapore should be able to "find some ways to reprioritise, and do a package of a similar scale - or maybe a bit smaller - just to help business tide along".
The hope is that businesses, too, will find ways to adapt and include such contingencies in their business community plans, he said.
But if the outbreak is much larger and requires restrictions to be tightened, such reallocation would not yield sufficient resources to cover such a package, which would have to be greater in scope.
"Under such an emergency scenario, we will have to consider possibly going to the President and seeking permission to draw on past reserves," he said.