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Budget 2020 to 'transform, support and sustain', says Indranee Rajah
HELPING businesses to innovate, go regional and build capabilities is a priority for the government even as it helps workers to upskill and reskill to seize new opportunities, Second Minister for Finance Indranee Rajah said on Tuesday.
In the first official speech to outline the government's strategies for Budget 2020, Ms Indranee said it can be summarised in three words: transform, support and sustain.
This comes on the back of an increasingly challenging external environment, she said, notably the US-China trade tensions. At the same time, the world is changing in "deep, structural" ways leading to growing income inequality, which in turn has triggered unrest and uprisings in other parts of the world, the minister said.
The Budget then is a tool for Singapore to make the most of its advantages in the face of these challenges.
"We must see the national Budget as a strategic financial plan to position ourselves for the future," Ms Indranee said during a pre-Budget dialogue organised by the government's feedback arm REACH.
She noted that a Goods and Services Tax (GST) hike, planned for some time between 2021 and 2025, is needed to ensure financial sustainability, as the government looks to spend more on supporting younger families and older workers while fighting climate change.
In addition, security spending is expected to rise in the face of ever-evolving security threats.
"Over the past decade, government expenditure has more than doubled. While our operating revenue has also grown, it is still outstripped by our growing spending needs.
"One main reason why we have been able to increase our social spending is the Net Investment Returns Contribution or NIRC," Ms Indranee said.
The NIRC grew from S$7 billion in 2009 to S$17 billion in 2019, partly due to the inclusion of Temasek Holdings in the framework in 2015.
"However, the change in our age profile and the need to spend more on healthcare, pre-school and security – all of which are recurrent spending - will require a more sustainable or recurrent source of funding. The GST increase will allow us to meet these needs," Ms Indranee said.
But a GST offset package for Singaporeans is in the works, and details will be announced at Budget 2020.
Ms Indranee also asked dialogue participants to contribute ideas to help shape Budget 2020 as she called for unity between the government and the people.
"All of us, you and I, feel a sense of ownership of our nation and wish to have some part to play in shaping the future of Singapore. This is the essence of the SG Together movement."