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Singapore Budget 2018: Drawing from reserves to fund healthcare will deplete 'precious nest egg': PM Lee
SINGAPORE cannot draw more from its reserves to fund healthcare spending in the future, as this will quickly deplete its nest egg, said Prime Minister Lee Hsien Loong on Sunday.
"An ageing society and healthcare is not a rainy day. It is an 'everyday need money' day. It's a long-term trend. We will need to spend more on healthcare every year, year after year, for many years to come," he said at a Chinese New Year dinner in Ang Mo Kio GRC.
"If we use the reserves for something (which requires) money every day, soon you will find that the reserves are going down, depleted."
Mr Lee said that the government had carefully thought over its options before deciding to raise the Goods and Services Tax (GST).
Finance Minister Heng Swee Keat had announced at the Budget two weeks ago that the GST will go up by two percentage points to 9 per cent some time between 2021 and 2025, to fund increased spending especially on healthcare.
Mr Lee said that the government decided against tapping more of its reserves as the reserves are Singapore's "precious nest egg".
"When the rain comes . . . and the children and grandchildren need the money, really truly, they will find it's gone."
The prime minister's comments - his lengthiest on the Budget to date - come after some MPs suggested during the Budget debate last week that Singapore can consider using more of its reserves to fund additional spending, instead of increasing the GST.
Outside the House, some have also called on the government to relax its rules on how much of the reserves it can tap.
Last Thursday, 89 MPs present in parliament voted in support for the Budget, while eight MPs from the Workers' Party voted against it - the first such decision in over three decades.
In his speech on Sunday, Mr Lee said that his government has done the responsible thing by not just listing out "all the good things" it will do, but also how these will be paid for and what taxes need to go up.
He called on Singaporeans to support its plans - both the increased healthcare spending for the aged, and the GST hike to pay for that.
"This is a prudent, responsible, long-term approach," he said. "We are the stewards of Singapore, we are responsible for this country. We are responsible for making it work for ourselves, but we are also responsible for making it work for the next generations, beyond our working lives, beyond our lifetime."
Mr Lee said that it is also the responsibility of all Singaporeans to think like this.
"Our children may not be voting yet, our grandchildren may not yet be born. But their lives and future depend on us - the present generation - acting on their behalf, thinking for them, planning for them, making wise and far-sighted decisions that protect their interests," he said.
Touching on why the GST hike was announced so far in advance, Mr Lee said this was so that people can plan ahead for the tax increase and understand why it is necessary.
"We do not need the money yet, but we can see the way things are going very clearly, and we know that by the next decade, in three or four or five years' time, we will need the money," he said.
His government has announced its intentions "as early as possible" so that people can plan ahead, and "will not be suddenly surprised when it happens".
Mr Lee highlighted how Teck Ghee, his own ward, will be able to look forward to new infrastructure such as the Thomson-East Coast MRT line, due for completion in 2020.
It will also need more healthcare facilities to serve the needs of its ageing residents in future.
The new Ren Ci Nursing Home in Ang Mo Kio Avenue 8, for example, started operations last year, while capacity at the Ang Mo Kio Polyclinic has also been ramped up after a recent renovation.
"Old age also means needing more healthcare . . . What we see happening in Teck Ghee is also happening all over the island, as our national policies work in every town and neighbourhood, and make a difference to all our lives."
He concluded by saying that generations of Singaporeans have supported the government when it has pursued long-term policies and "year by year built a better Singapore".
"If we continue to do this, we can keep on building a better home for ourselves, our children and our grandchildren, for many years to come," he said.