Ever wondered how the Government manages Singapore’s income and expenses?
Just like a family has to decide how to use its income to meet different needs, the Government manages the nation’s funds to ensure there is enough to go round for everyone today, with some left for a rainy day, and a portion invested for the future.
State spending is financed by government revenue, which comes from sources like taxes, fees and charges, statutory boards’ contributions, and the Net Investment Returns Contribution. Ensuring that our economy can continue to grow sustainably in order to provide steady revenue, as well as deciding how best to allocate the money each year, are no easy tasks.
Ahead of each year’s Budget are months of intense planning and discussion. At the heart of the big decisions are many questions on national priorities to think through.
Defence, education, the economy, healthcare… a country has different needs to meet and different segments of the society to take care of, from the very young to the not-so-young.
Do we support businesses with more grants or more tax breaks to encourage innovation? Distribute more GST vouchers or give higher workfare income supplement?
The more we spend on one area, the less we have for another, if our income remains constant. There will always be trade-offs to be made.
A family may need to choose between buying a car for use today and saving up for their children’s education tomorrow. Similarly, a country needs to weigh the considerations for these competing needs.
Spending more on immediate needs means having less to save and invest for future years.
Singaporeans today benefit from the contributions made by earlier generations. We have a strong education system, a pro-business environment, high-technology public infrastructure, and a clean and green living environment.
For the country to remain secure, competitive, and cohesive, we need to plan and put aside money for long-term goals, while providing for current needs.
This will be fair to future generations of Singaporeans, who may otherwise have to bear the burden if we consume all the benefits now.
Whether it is spending on today’s needs or future goals, how much we can spend depends on how much we earn.
If we spend more than what we earn endlessly, we will need to borrow from others and will be in debt. A part of our future earnings will then go towards paying interest, leaving less to spend on other areas. This is not a desirable situation to get into.
Alternatively, we can try to earn more. Indeed, Singapore’s revenue has been increasing over the years, along with steady economic growth.
However, spending has caught up even faster, as more support is channelled to the elderly, lower income families, and healthcare needs. So, the country must weigh our expenses carefully to keep a balance between income and expenditure.
With careful planning and use of public money, resources can go where they are needed, reach the people who need help and bring us closer to long-term national goals.
This is why each year, we pore over the plans and allocate our resources with great care.
In deciding how to use the billions of dollars in our Budget to cater to the millions of Singaporeans on this island, we are paving the way to secure the future of Singapore.
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