Government committed to rebuilding reserves: Heng Swee Keat

Singapore

THE Singapore government is committed to rebuilding the country's reserves, even though there is no legal or constitutional obligation to restore what it has drawn, Deputy Prime Minister and Finance Minister Heng Swee Keat said on Friday.

Some S$52 billion is being drawn from the past reserves to finance four major support packages - the Unity, Resilience, Solidarity and Fortitude Budgets - worth close to S$100 billion, in the country's fight against the Covid-19 pandemic.

Speaking in Parliament to wrap up the Fortitude Budget debate, Mr Heng said using the reserves to fund more than half of the total amount of the four packages is "not a trivial matter", especially when Singapore's yearly budget is about S$80 billion. The total of these four Budgets, which includes the government's usual spending, is S$193 billion - more than double the size of the Republic's annual Budgets in preceding years, he said.

"Our reserves are a limited resource, and we must not take them for granted.

"We owe it to our people - seniors, middle-aged, young and those yet to be born - to be prudent and to ensure good governance, so that they too have the resources to navigate future challenges in an uncertain world," Mr Heng said.

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While the government in 2009 put back the S$4 billion it had drawn from past reserves to fund an economic stimulus package during the Global Financial Crisis, Mr Heng noted that the current crisis is of a significantly larger scale and reach.

"What we do know is that there will likely not be a V-shaped recovery, unlike in past crises. And the amount that we are tapping is S$52 billion. So how long would it take to build this back? We cannot be definitive," Mr Heng said. Rather, what Singapore needs to do now is to focus fully on making the best use of the resources, be prepared to work hard in the years to come and have the resolve to rebuild Singapore's economy, he said.

Mr Heng also reiterated the government's rationale for not disclosing the size of Singapore's reserves, emphasising its role as a form of strategic defence for the Republic besides serving as a buffer against crisis.

"As a strategic asset, we will be diminishing its value if we disclose this for potential adversaries to use against us. No responsible leader will lay bare your nation's defence plan," he said.

In response to a question from Faisal Manap, MP for Aljunied Group Representation Constituency, Mr Heng said it is public information that the president, as custodian of Singapore's past reserves, has access to information about its size.

He added that the government conducted two briefings to President Halimah Yacob and the Council of Presidential Advisers in the process of seeking her approval to draw down, so that her decision is made in full knowledge of why the move is necessary. "We have a strict governance system scrupulously observed."