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Fiscal sustainability key to coping with future challenges: Heng Swee Keat
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.
This comes as the country ramps up investment in key areas - such as defence and economic development - to prepare for an increasingly uncertain future.
The minister was speaking at The 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.