Singapore — The country’s financial position will be a lot weaker in the years to come, according to Deputy Prime Minister Heng Swee Keat an interview with CNA on Wednesday (May 27).
Mr Heng, who is also Finance Minister, said the economic fallout from the Covid-19 pandemic has been considerable but added that the Government is prepared to keep on finding ways to manage this difficult financial situation. He emphasised that the important thing is keeping people safe.
He said: “I will address the issue of how we are going to ensure that we continue to have the fiscal power to keep Singapore safe, not just in this one year, two years, but for the long term and I will address Parliament on this issue later.
“But for now, I think the most important thing is, first, keep our people safe and second, let’s get the economy going again, as much as possible.”
The Government is drawing S$31 million from the reserves in order to fund the Fortitude Budget, which is the fourth tranche of financial aid to businesses and households during the Covid-19 pandemic. The total amount of the Fortitude Budget is S$33 million.
Mr Heng announced details of the Fortitude Budget in Parliament on Tuesday (May 26).
The only other time Singapore had drawn funds from the reserves was during the financial crisis in 2009. At that time, it drew S$4.9 billion in order to preserve jobs and to extend credit to businesses.
When the economy recovered in 2011, the amount was returned to the reserves.
In the interview, Mr Heng noted how very fortunate Singapore is to have enough reserves to carry the country through an even more prolonged difficult period, although he admitted that there are many challenges yet ahead. “But we have to be very careful in how we spend this and make sure that we use it wisely and use it well,” he added.
The Deputy Prime Minister spoke with optimism of the county emerging stronger from the crisis. “It will not be easy … if we put our minds to it, we can emerge stronger, and with that, I think we can begin to rebuild our resources over time.”
As to whether or not a fifth supplementary budget will be needed during this difficult time, Mr Heng said: “After presenting four Budgets within such a short period of time, I will say that ‘never say never’.”
He added that the country now has a contingent fund of S$13 billion. Previous to this year it had only been S$3 billion. This gives Singapore some flexibility in the matter.
“That is why in this Budget I have a bigger contingent sum. So I hope that we do not need to have another Budget in order to respond because if the situation deteriorates, it is going to be very very fast.” /TISG