SINGAPORE — The Singapore Budget 2023 was announced by Deputy Prime Minister and Finance Minister Lawrence Wong on 14 February, with media such as the state-funded Straits Times praising it as a progressive and generous national budget.
However, the numbers suggest that the government is collecting more, spending less, and hoarding more.
According to the Estimated FY2023 budget, the operating revenue is up 7.1% at $6.42b, while the total expenditure is down by 2.6% at $2.8b.
The operating expenditure, which is down by 3.1%, with the development expenditure down by 0.5% at $0.1b.
All in all, the budget’s overall fiscal position is said to be at a negative $0.35b, which the government then tries to suggest that it is spending a lot while not earning enough to pay for the increased expenditure.
However, this may not be the case, given the huge transfers to endowment and trust funds, which have increased by a staggering 169.1% for the fiscal year.
The contribution of $19.58b (an additional $10.57 billion from 2022) to these funds — which includes special transfers — is especially concerning, given that there is little transparency on how and when the funds will be used.
For example, the Pioneer Generation Fund and Merdeka Generation Fund were charged at $8 billion in 2015 and $6.1 billion in 2019 as one year’s expenditure, but as of March 2022, only a portion of these funds has been disbursed.
According to a parliamentary reply in October 2022, as of March 31, 2022, the Pioneer Generation Fund has disbursed only $3.04 billion, with a fund balance of $6.16 billion. The Merdeka Generation Fund has disbursed only $0.72 billion, with a fund balance of $5.72 billion.
This raises the question of whether schemes such as PG and MG should be written off as a one-off expense that could overinflate the budget and provide a distorted sense of government spending when funds are largely untouched or self-sustaining due to the interest generated.
Had it not for the increase in transfers to endowment and trust funds, in particular, the Singapore Government Development Fund, Singapore would have reported a huge surplus in its budget this year.
Moreover, the funds are not allocated to the individual ministries, making it difficult to ascertain the extent to which they will benefit the people or whether would it be just be hoarded somewhere to generate interest.
It is understandable that the government needs to have financial reserves in place. However, the focus should not be solely on hoarding funds at the expense of the people.
In times of economic uncertainty, the government should invest in social programs and services that would benefit the people, boost economic growth, and provide much-needed relief to those who are struggling.
While the government’s efforts to collect more and spend less may seem financially prudent, it is crucial to balance this with the needs of the people.
A point that Workers’ Party Member of Parliament for Seng Kang GRC, Mr Louis Chua, had cornered Mr Wong with back last year is that Singapore’s reserves are still higher than they were five years ago despite the drawdown of $43 billion in our reserves for the COVID-19 packages.
With many Singaporeans still struggling to get by with life, the Singapore Budget 2023 should prioritize the welfare of the people rather than focus on hoarding funds for future use.
