Budget 2022: FY2021 fiscal deficit smaller than expected at S$5b

SINGAPORE'S fiscal deficit for FY2021 is expected to be S$5 billion or 0.9 per cent of gross domestic product (GDP), revised down sharply from earlier estimates of an S$11 billion deficit, and much smaller than FY2020's record S$51.6 billion deficit.

This was due to lower total expenditure and higher operating revenue than earlier estimates, as sentiments and economic performance exceeded expectations.

Total revised expenditure for FY2021 is S$98.4 billion, down from the estimated S$102.3 billion previously anticipated.

The operating revenue is S$80.4 billion, up from the previously-expected S$76.6 billion. Upsides mainly came from sentiment-driven revenues such as property tax and Certificates of Entitlement (COEs), as well as personal income tax.

The biggest difference came from stamp duty revenue, with a revised total of S$6.5 billion - S$2.2 billion higher than the original S$4.3 billion estimate, as the property market saw higher demand than expected

Personal income tax revenue is expected to total S$13.8 billion, up S$1.4 billion from the estimated 12.4 billion, on the back of higher-than-expected wage growth.

Revenue from vehicle quota premiums totalled S$3.2 billion, up from the S$2.3 billion estimated last year, on the back of higher-than-expected COE prices which more than made up for a smaller quota.

Apart from boosting revenues, the better-than-expected economic recovery also meant lower spending on pandemic-related financing schemes and enterprise support measures.

There was also lower-than-expected development expenditure due to construction delays.

The Ministry of Health remained the biggest spender at S$18.4 billion. However, this was lower than the previously estimated S$18.8 billion.

This was followed by the Ministry of Defence at S$15.4 billion and the Ministry of Education at S$13.2 billion.

Special transfers came to S$7.9 billion, significantly higher than the S$4.9 billion estimated previously, due to the added pandemic-related support provided during Heightened Alert and stabilisation periods.

This includes the Job Support Scheme, which involved S$4.6 billion in transfers - S$1.7 billion higher than previously estimated - and the Rental Support Scheme, which totalled S$1.5 billion and was not previously budgeted for.

Net investment returns contribution (NIRC) is expected to be S$20.3 billion, higher than the previous estimate of S$19.6 billion and also up from S$18.2 billion in FY2020.

Excluding the government's top-ups to endowment and trust funds and NIRC, the basic deficit for FY2021 was S$25.9 billion.

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