ST Global Outlook Forum 2018: Fiscal sustainability key to coping with future challenges, says Heng Swee Keat

The Straits Times Global Outlook Forum 2018 saw Minister for Finance Heng Swee Keat speak on the importance of fiscal sustainability and how Singaporeans can stay relevant as tech disruption affects the economy.
Finance Minister Heng Swee Keat (right) and ST editor Warren Fernandez at the ST Global Outlook Forum at the Ritz-Carlton on Dec 5, 2017. Mr Heng said government spending must remain sustainable even as needs grow.
Finance Minister Heng Swee Keat (right) and ST editor Warren Fernandez at the ST Global Outlook Forum at the Ritz-Carlton on Dec 5, 2017. Mr Heng said government spending must remain sustainable even as needs grow.
Finance Minister Heng Swee Keat at The Straits Times Global Outlook Forum at the Ritz-Carlton on Dec 5, 2017.
Finance Minister Heng Swee Keat at The Straits Times Global Outlook Forum at the Ritz-Carlton on Dec 5, 2017. ST PHOTO: LIM YAOHUI

SINGAPORE - Singapore must make sure government spending remains sustainable even as needs grow and it becomes tougher to raise revenue, said Finance Minister Heng Swee Keat on Tuesday (Dec 5).

This comes as the country ramps up investment in key areas - such as defence and economic development - to prepare for an increasingly uncertain future.

Mr Heng was speaking at the annual Straits Times Global Outlook Forum at the Ritz-Carlton. His speech comes on the back of recent comments by Prime Minister Lee Hsien Loong that taxes will be raised as government spending grows.

This sparked speculation among economists and tax specialists about the format and timing of the tax increase.

In the coming years, Singapore will have to invest more in building an adaptable economy, a strong society and a secure home, Mr Heng said.

"These are all major investments for the long term - major investments in our people, and in our future."

Singapore's success in making these preparations for the future depends on "whether we have the means to put our visions and values into action", he added.

 

This means fiscal sustainability is key.

"This is about staying responsible and spending within our means. As expenditure increases and revenue growth slows, we must think of ways to manage expenditures and raise revenues."

It also means the Government must prepare for revenue risks in the face of technological changes and evolving business models.

This involves making sure Singapore's tax system remains pro-growth and progressive, while maintaining a diversified revenue base.

Titled 'Facing the challenges of a new world order', this year's ST Global Outlook Forum was attended by more than 320 participants.

OCBC Premier Banking is the presenting sponsor for the forum and Mercedes-Benz is the official car for the event.