Parliament
Budget 2025 Debate: PM Wong rebuts Leong Mun Wai’s claim on surplus, defends Govt’s fiscal approach
During the Budget debate on 28 February, NCMP Leong Mun Wai suggested the government took a “the more, the merrier” approach to surpluses, arguing that excessive taxation and overcharging fuel structural inflation. PM Wong rejected this, stressing that all revenues benefit Singaporeans under strict fiscal rules.
SINGAPORE: During the Budget debate in Parliament on 28 February, Prime Minister and Finance Minister Lawrence Wong refuted NCMP Leong Mun Wai’s remarks on the government’s surplus, asserting that fiscal policies should be guided by sound principles rather than arbitrary spending increases.
Leong from Progress Singapore Party (PSP) posed over 10 questions to PM Wong, covering topics such as budget structure, public housing, and the Net Investment Returns Contribution (NIRC).
Leong: Govt Should Balance Surplus, Not Just Accumulate More
Questioning whether the government aimed to maintain a balanced budget or accumulate as much surplus as possible, Leong suggested that the government appeared to adopt a “the more, the merrier” approach to surpluses.
“The surplus are not always the more the merrier, there must be a balance, ” added Leong.
He argued that excessive taxation and overcharging are the drivers of structural inflation in Singapore.
Leong also raised concerns about the allocation of NIRC, estimating that S$70-S$80 billion was held in endowment and trust funds instead of being spent immediately.
He asked whether the government would reconsider using these funds for social spending or to mitigate tax hikes, such as the GST and property taxes.
On public housing, he asked for updates on the government’s solution to the lease decay problem, and further challenged whether the government had a better solution than PSP’s Affordable Homes Scheme (AHS) to address lease decay, which impacts retirement security.
Leong sought clarification on how the government would keep BTO prices below S$1 million amid rising land costs and asked about safeguards in case resale market prices collapsed due to increased BTO supply.
Additionally, he challenged the government’s stance on inflation, arguing that the GST hike had contributed to rising costs and that ground inflation, particularly for cooked food, felt much higher than official statistics suggested.
Leong challenged the government’s claim that the GST hike did not significantly contribute to inflation, arguing that price increases were already happening in anticipation of the tax rise.
He cited personal experiences, stating that ground inflation—especially for cooked food—felt much higher than official statistics reflected.
PM Wong: Govt Takes Prudent, Responsible Approach to Budgeting
In response, PM Wong rejected Leong’s characterisation of the government’s budgetary approach and reiterated that all government revenues are used for the benefit of Singaporeans while adhering to strict fiscal rules.
“I think Mr Leong has miscarrectorized the government’s position. It’s not the more bigger the supplies the merrier. ”
“We don’t just look at it from that point of view, we adopt a responsible and fiscal prudent approach in budgeting.”
Instead of altering fiscal policies to accommodate more spending, the government would raise revenues only when necessary.
Wong also warned that disregarding fiscal discipline could weaken Singapore’s financial position and ultimately harm its citizens.
Addressing Leong’s concerns on the NIRC, Wong clarified that all NIRC revenues are first deposited into the Consolidated Fund before being allocated for spending, countering Leong’s claim that trust funds do not constitute “real spending.”
He explained that funds earmarked for endowments support future infrastructure projects, such as Terminal 5, with financing done through a combination of direct funding and the SINGA model to ensure intergenerational equity.
Wong further argued that Singapore’s tax burden remains relatively low compared to other advanced economies, which allows the government to maintain fiscal strength while providing responsive support to its citizens.
Wong reaffirmed that VERS is the government’s strategy to address lease decay in HDB flats.
He stated that BTO prices are pegged to median incomes to ensure affordability.
Dismissing claims of overbuilding, he stressed that increasing BTO supply is necessary to restore balance after COVID-19 disruptions.
