SINGAPORE – Singapore has avoided what many countries are doing, which is to spend before they have the money, then hope that revenues will somehow grow enough to pay for government debts that are at unsustainable levels, said President Tharman Shanmugaratnam on March 22.
“There is actually something unusual about Singapore’s Budgets each year – something that has become quite unusual among countries internationally,” he added.
“We avoid magical thinking.”
Such magical thinking always ends up unhappily, with the next generation getting a raw deal as governments eventually have to cut spending, allow critical public facilities to get run down or raise taxes much more, he said.
Noting that such a state of affairs is “simply unfair”, he said this is something the whole system of rules in Singapore’s Constitution is set up to avoid.
He made the remarks in a video message posted on Facebook as he gave his approval to the Government’s spending plans for the coming financial year starting on April 1.
Deputy Prime Minister and Finance Minister Lawrence Wong had outlined a $131 billion Budget in February, with immediate measures to help people with the cost of living and longer-term plans for society.
In the years to come, governments in almost every country will have to spend more on healthcare as populations get older, and invest more in green energy to tackle climate change, President Tharman said.
Singapore, too, will have to do so, but what is unusual is that the Republic prepares in advance for this spending, and makes sure it can be financed, he added.
He said he and the Council of Presidential Advisers had paid particular attention to the financial sustainability of the Government’s spending plans when briefed by DPM Wong and the Ministry of Finance earlier in March.
“It is how we ensure that we never have to draw down our reserves, except when exceptional crises hit Singapore,” he noted.
“And that we remain fair, to today’s generation and to our grandchildren’s generation. And their grandchildren too.”
