The Budget Statement
For many Singaporeans, the word Budget means goodies and giveaways. But it’s more than that.
The Budget is drawn up every financial year which begins on April 1 of each calendar year. It tracks both national revenue and expenditure patterns to ensure that Singapore’s current and future needs are addressed — all while remaining fiscally sustainable.
Think of the Ministry of Finance as the CFO for Singapore. The Budget Statement, delivered by the Finance Minister, explains the rationale for government spending in the upcoming year and outlines where the funds will come from.
The government’s funds come from taxes, fees and charges, as well as contributions from our national reserves. But the largest source of revenue actually comes from the Net Investment Returns Contribution (NIRC) comprising assets invested by GIC, MAS and Temasek.
How does the government decide which areas to prioritise on spending? Well, it differs from year to year.
In 2019, healthcare was a key focus for our ageing population — a total of $5.1 billion was earmarked for subsidies such as CHAS and Careshield Life. Local companies also received greater support, with measures worth $1 billion to help them scale up by adopting new technologies. But what you probably remember is the $300 “hongbao” all Singaporeans aged 21 years and above received.
This year, amid the Covid-19 outbreak, Mr Heng Swee Keat gave assurance that the Government “will do all that is necessary” to get workers and companies “back on their feet”. This includes wage support for firms and help for households on cost of living.
In what is widely regarded as the 13th Parliament’s last Budget before the general election, we can expect social safety net spending to rise, as well as support packages to help individuals and businesses cope with the 7 to 9 per cent GST hike.