BEYOND what is already factored into its existing projections, the government may need to spend more in areas such as enhancing the country’s economic competitiveness, social inclusion and mobility.

If this were to happen, said Deputy Prime Minister and Finance Minister Lawrence Wong on Friday (Apr 14), the government will either need more revenue or reallocate existing funds to the new priority areas.

He added that the Ministry of Finance (MOF) will continue to ensure “sound and stable” public finances for the nation through a “sustainable mix” of taxes on income, consumption and assets.

“We will uphold a fiscal system that is fair and progressive, where everyone contributes, but those who are better off will contribute more; where everyone benefits from government spending, and those with greater needs will benefit more,” he said.

Wong was one of five ministers who released their addenda to the President’s Address, which was delivered in Parliament by President Halimah Yacob on Monday.

In its occasional paper published in February, MOF projected that government spending will rise to about 19 per cent to 20 per cent of gross domestic product (GDP) in the 2026 financial year (FY) to FY2030. And by FY2030, spending may exceed 20 per cent of GDP.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The key drivers of this rising expenditure include healthcare and social spending, such as moves to uplift lower-wage workers and strengthen early childhood education, said Wong.

To close the funding gap, he noted that his ministry had taken steps to strengthen the revenue position at both Budget 2022 and Budget 2023, so that rising government spending can be balanced by total revenue in the coming years.

The progressivity of Singapore’s system of taxes and transfers has also been enhanced, said Wong.

In a separate addendum released by the Strategy Group in the Prime Minister’s Office, Wong – the minister-in-charge of this group – spoke about the government’s response to climate change.

He said that Singapore’s energy mix will be diversified with greener alternatives such as hydrogen and regional renewable energy.

“We will work with industry and other stakeholders to research, develop, and deploy low-carbon climate technologies such as carbon capture, utilisation and storage. We will build a pipeline of high-quality carbon credit projects to help meet our climate goals,” he said.

“We will also support Singapore’s industries to embrace green opportunities and develop a workforce ready for the green economy of the future.”

The carbon tax in Singapore will be increased to a range of S$50 to S$80 per tonne of CO2 equivalent by 2030, a move that will help the nation reach its latest climate goals.

Last year, the government announced that it will reduce Singapore’s emissions to around 60 million tonnes of CO2 equivalent in 2030 after peaking its emissions earlier, and achieve net-zero emissions by 2050.

The government, however, is prepared “for the worst” to happen, and the Strategy Group is concurrently working with other agencies to prepare the country for the effects of global warming, such as rising sea and temperature levels, and the increasing frequency of extreme weather events, said Wong.

In his addendum, Law Minister K Shanmugam indicated his commitment to build a “forward-looking” intellectual property (IP) hub that creates value for the economy and provides good jobs.

The ministry will support the development and use of intangible assets (IA) to create economic and business value, he said.

This includes providing a consistent basis for businesses to disclose and communicate details of their intangibles, and setting up an enterprise-centric online platform to provide companies with better access to professional IA/IP services.

Separately, Minister-in-Charge of the Public Service Chan Chun Sing indicated his commitment to reskill public officers and leaders with deeper and more diverse skills.

“In a fast-changing environment, the public service needs to develop a workforce that can learn, unlearn, and relearn, so as to continue serving Singapore better,” he said.

To ensure skills diversity and more career mobility for all public officers, the division will help them build new skills and experiences through training and development opportunities, ranging from structured job rotations to short-term immersions with other government agencies, he added.

Chan also said the public service is reorganising itself to leverage science and technology advancements to overcome manpower, fiscal, land and carbon constraints.

In her addendum, Minister-in-Charge of Smart Nation and Cybersecurity Josephine Teo pledged to work with agencies to ensure that technology bolsters Singapore’s resilience and improves lives here.

The Smart Nation and Digital Government Group will leverage technology to facilitate business activity, growth and innovation of Singapore-based enterprises, she said.

She added that the group will work with the Ministry of Trade and Industry to enhance the one-stop GoBusiness digital platform to support firms’ day-to-day transactions and longer-term investments, such as equipping workers with future skills.

Minister for Culture, Community and Youth Edwin Tong pledged to partner with Singaporeans in building a better and more caring society. He noted that businesses have a role to play in strengthening Singapore’s social fabric.

The ministry is extending and enhancing its corporate volunteer scheme so that businesses can continue to enjoy tax deductions when their employees volunteer at an Institution of a Public Character, he added.