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Singapore Budget 2018: Overall budget surplus of S$9.6b for FY17; budget deficit of S$0.6b expected for FY18

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At S$9.6 billion, the budget surplus equates to 2.1 per cent of gross domestic product (GDP). The budget surplus for FY2016 was S$6.12 billion.

BOOSTED by exceptional contributions from statutory boards as well as increased stamp duty collections, Singapore is expected to rack up an overall budget surplus of S$9.6 billion for FY2017, markedly higher than the S$1.9 billion forecasted a year ago.

Contributions from statutory boards clocked S$4.9 billion - thanks largely to the Monetary Authority of Singapore - as opposed to the S$0.3 billion that was expected. In addition, the swell in property transactions allowed for the stamp duty collections to rise to S$4.7 billion, higher than the S$2.7 billion anticipated.

At S$9.6 billion, the budget surplus equates to 2.1 per cent of gross domestic product (GDP). The budget surplus for FY2016 was S$6.12 billion.

In his Budget Speech on Monday, Finance Minister Heng Swee Keat warned that such contributions from the statutory boards and higher stamp duty collections are not expected every year.

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"We cannot base our long-term fiscal planning on the basis of exceptional factors being positive, year after year," he highlighted. As a result, a significant portion of the surplus is being set aside for future spending. The government will channel aside S$5 billion towards a Rail Infrastructure Fund, as well as another S$2 billion to subsidise premiums and other forms of healthcare support for Singaporeans.

Singaporeans will, however, 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 FY2017 (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 expenditure in certain sectors, namely housing, transport, education and healthcare.

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 come to S$14.61 billion, up from the S$14.11 billion estimated.

Mr Heng said: "Notwithstanding the overall budget surplus, FY2017 budget remains expansionary for the domestic economy."

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.

For FY2018, the budget will also remain expansionary. On the whole, an overall budget deficit of S$0.6 billion, or 0.1 per cent of GDP, is expected. Ministries' total expenditures are expected to rise 8.3 per cent to S$80 billion in FY2018.

For more Budget 2018 stories visit bt.sg/budget18

SINGAPORE BUDGET 2018

For more stories, visit bt.sg/budget18