Singapore — Deputy Prime Minister and Finance Minister Heng Swee Keat, noting that the country faces a challenging fiscal environment ahead, said on Friday (Aug 28) that the Government will take steps to strengthen its revenue position.
In the Finance Ministry’s Addendum to the President’s Address at the opening of Parliament on Monday (Aug 24), Mr Heng said that it will do so in a way that fosters collective responsibility, with each generation contributing its fair share.
He pointed out that “a generation’s worth of savings”, that is equivalent to more than 20 years of past Budget surpluses, was used to combat the Covid-19 pandemic and its repercussions. As such, it was necessary for some fiscal prudence in order to put Singapore back on a stable path.
He said the MOF, therefore, plans to raise the Goods and Services Tax to help fund growing healthcare and social spending needs, while making responsible use of borrowing to finance infrastructure investments that will benefit many generations to come. The GST rate increase will not take effect in 2021.
The Government will carefully monitor the timing of such moves, including the state of the economy and the country’s spending needs.
Mr Heng noted that the MOF will continue to “steward the reserves well” to prepare the country for future shocks and crises and to invest them for long-term returns that will be shared equitably between present and future generations.
The DPM added that policies are being reviewed and enhanced to build a “fair and just society”.
“A strong society is our stabiliser in an ever more uncertain and volatile world,” he said.
The MOF will deploy resources to “maintain social mobility and opportunities for all at each stage of life”, he added.
“We will continue to support affordable and quality education, healthcare, and housing for the broad base of Singaporeans, particularly the lower- and middle-income segments. These investments build human and social capital,” he said. /TISG