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New term of government starts from 'challenging fiscal position': DPM Heng
SINGAPORE'S new term of government is starting "from a most challenging fiscal position", said Deputy Prime Minister and Finance Minister Heng Swee Keat on Monday as he presented revised revenue estimates to Parliament.
The latest revised figures were similar to those provided by the Ministry of Finance in an interim update in August.
For the current financial year operating revenues are now expected to be S$63.7 billion, 16 per cent lower than the initial S$76 billion estimate in February's Unity Budget.
Revenue collection is expected to fall across all categories, said Mr Heng. Goods and services tax collections, for instance, are now expected to be 14 per cent lower than the initial estimates.
Singapore's revenue position is expected to be weak for a number of years, as the effects of Covid-19 on the global economy linger and the economy slows, said Mr Heng. At the same time, expenditure will rise with continued support for households and businesses.
While this challenging fiscal position is a result of a global pandemic that could not have been predicted, Mr Heng said, "what is within our control is how we use our fiscal resources well to respond to this crisis, and to prepare for the future".
Close to S$100 billion has been committed in Covid-19 support, but at the same time, he said, Singapore must be careful not to squander its reserves. With a guiding principle of "prudence, not austerity", Singapore will keep investing in national priorities while funding this sustainably through higher taxes and more effective spending.
Recurrent needs such as healthcare spending will be funded by recurrent revenues such as taxes, while borrowing will be reserved for long-term infrastructure that will benefite many generations.
Noting that past reserves were key in the fight against Covid-19, he added: "We must have the discipline to start earning, saving, and investing for the future again."
The revised estimates reflect a S$1.5 billion draw on past reserves resulting from measures in the Fortitude Budget, such as the foreign worker levy waiver. There is no additional draw for the latest support package announced in August, with the total draw on past reserves remaining within the S$52 billion for which in-principle approval was given.