Social spending rise requires cuts elsewhere

[SINGAPORE] Raising Singapore's social expenditure to 9 per cent of gross domestic product (GDP) - as was suggested by Nominated Member of Parliament Laurence Lien this week - is achievable without major tax hikes, but not without significant cuts in other spending areas, a look at the Budget numbers show.

During this week's Budget debate, Mr Lien had proposed that Singapore's social expenditure be raised from the current 7 per cent to about 9 per cent, arguing that this can be done without a major tax hike; it can be achieved, he suggested, by cutting spending on security and foreign relations to 4 per cent of the GDP, and that for economic and government administration, to 3 per cent.

Based on the 2014 Budget estimates, that would mean reducing spending on security, economic development and government administration by about 10 per cent, or about $2.3 billion overall. This is just over the total $2.2 billion budget for economic development in 2014.