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Budget 2016: Overall budget surplus of S$3.4b expected in FY2016
THE government expects an overall budget surplus of S$3.4 billion - 0.8 per cent of gross domestic product (GDP) - for Financial Year 2016, said Finance Minister Heng Swee Keat in Parliament on Thursday.
"This position seeks to strike a balance between being prudent given the continued rise in expenditures we expect in the years ahead, and being accommodating to support enterprises in the current economic climate even as we continue our restructuring efforts," he said.
"Should economic conditions turn, we stand ready to adjust and respond," he told the House.
In FY2016, total spending is expected to be S$5 billion, or 7.3 per cent, higher than the previous year. Mr Heng said the rise in expenditure in FY2016 was supported by increases in both operating revenue and higher net investment returns (NIR) contributions.
"We are benefiting from an increase in operating revenue this year due to one-off factors which we do not expect to be sustained," he said. "In addition, this year, Temasek will be added onto our NIR framework and this will be a source of revenue for the long term."
Mr Heng said the longer term picture would grow more challenging as expenditure needs are likely to grow faster than revenues.
"Even as we plan for rising expenditures, we must spend only when it is needed and where it best achieves our social and economic objectives. We will review the major expenditure items we expect ahead to ensure efficiency and effectiveness," he said.