You are here
Singapore Budget 2018: Big surplus, lower spending, one-off bonus for Singaporeans
SINGAPORE is expected to rack up a hefty budget surplus of S$9.61 billion for FY17 - significantly higher than the S$1.91 billion estimated a year ago - which will be partly used to dish out a one-off bonus for Singaporeans.
At S$9.61 billion, the surplus for the fiscal year which ends March 31 equates to 2.1 per cent of gross domestic product. This is the largest surplus in absolute value in the last three decades or so, although not the biggest in terms of percentage of GDP. In contrast, the budget surplus for FY16 was S$6.12 billion.
The surplus was a result of exceptional contributions from statutory boards clocking S$4.9 billion - with S$4.5 billion coming from the Monetary Authority of Singapore (MAS) - as opposed to the S$0.3 billion that was expected.
The increased contribution from MAS came as it saw an increase in net profits to S$28.7 billion in FY16/17. This was due to the depreciation of the Singdollar against the greenback and Japanese yen, as well as larger investment gains.
"MAS' contribution is based on 17 per cent of net profit for the year, after offsetting past cumulative deficits," said an MAS spokesman, adding: "Investment gains were much larger than in previous years due to higher interest and dividend income, higher realised capital gains, and lower valuation provisions - all reflecting the strong performance of global markets during the period."
Meanwhile, the pick-up in the property market allowed for stamp duty collections to rise to S$4.7 billion, higher than the S$2.7 billion anticipated.
In his Budget Speech on Monday, Finance Minister Heng Swee Keat warned that similar contributions from statutory boards and higher stamp duty collections are not expected every year.
"We cannot base our long-term fiscal planning on the basis of exceptional factors being positive, year after year," he said. As a result, a significant portion of the surplus is being set aside for future spending.
The government will channel S$5 billion towards the Rail Infrastructure Fund to support the development of future MRT infrastructure projects, as well as another S$2 billion to subsidise premiums and other forms of healthcare support for Singaporeans.
Singaporeans will receive a one-off SG Bonus, thanks to the bumper surplus.
All Singaporeans aged 21 and above this year will receive S$100 to S$300, depending on their income. This will cost the government S$700 million in total.
Total operating revenue for FY17 (revised) will reach S$75.15 billion, up 8.2 per cent from the estimated S$69.45 billion.
Expenditure will total S$73.92 billion, lower than the S$75.07 billion anticipated, as there was lower-than-estimated ministry expenditure in certain sectors, namely housing, transport, education and healthcare. This was partly due to the changes in the timeline of specific projects.
For instance, spending by the Ministry of National Development is now expected to work out to S$4.4 billion, compared to S$4.8 billion previously, while expenditure on healthcare is slated to come in at S$10.5 billion, versus S$10.7 billion.
Special transfers (excluding top-ups to endowment and trust funds) will come to S$2.22 billion, slightly lower than the S$2.57 billion estimated, while top-ups to endowment and trust funds will be, as expected, at S$4.01 billion.
Net investment returns contribution (NIRC) is expected to rise to S$14.61 billion, up from the S$14.11 billion estimated previously. Excluding the government's top-ups to endowment and trust funds and NIRC, this would work out to a basic deficit of S$1 billion, or 0.2 per cent of GDP.
- Big surplus of S$9.61 billion for FY17
- Expenditure lower than expected
- One-off SG Bonus of S$100-S$300
- Budget 2018: S$700m bonus; and some delayed pain for long-term gain
- One for the long haul: Ensuring a sustainable fiscal future
- Building a sustainable foundation
- GST up 2 points to 9% - but only from 2021-2025
- Impact of buyer's stamp duty hike to be felt most for big-ticket purchases
- 'Netflix tax' from 2020 for a new revenue stream
- Singapore's carbon tax to start at S$5 a tonne
- Reit ETFs to enjoy tax transparency
- Startups unfazed by lower tax exemptions
- Measures to bolster R&D and IP tax regime are heartening
- Innovation, R&D to get shot in the arm
- OIC will accelerate innovation and digital transformation
- Tackling challenges of next decade
- Businesses to get S$1.8b boost over next 3 years
- Working together for the collective good
- New Infrastructure Office for projects in Asia
- Calibrated approach to future-proof Singapore's plan for sustainable future
- Govt could provide guarantees on borrowings
- Ministries to spend S$80 billion
- Massive surplus in FY17, slight deficit for FY18
- S$550m increase in spending on health and social services
- Bigger handouts under enhanced Proximity Housing Grant
- S$190m yearly to boost philanthropy
- Maid levy to go up from April 2019