FY2008 Budget Position
6.1 Mr Speaker, Sir, let me now summarise the FY2008 budget
position. Before taking into account Net Investment Income
Contributions, Special Transfers and the tax changes introduced
in this year's Budget, we expect a surplus of $3.2 billion
for FY2008. The various tax changes I have introduced will
reduce FY2008 operating revenue by $0.5 billion. Further,
the special transfers and tax rebates provided as part of
the surplus sharing package this year, as well as the special
transfers for FY2008 that were committed in the GST Offset
Package last year, will cost an additional $2.8 billion. Together,
these tax and transfer initiatives will bring the budget balance
down to close to zero.
6.2 This is before adding Net Investment Income Contributions
to our revenues, and setting aside funds to top up our various
endowment funds and the National Research Fund, as well as
the provisions we are making for other long term needs such
as V- and D-Bonuses and the L-Bonus. The net effect of these
additions is to bring the Overall Budget Balance for FY2008
to a deficit of $0.8 billion.
6.3 The Government will not need to draw on past reserves
as the deficit can be fully financed by funds accumulated
since the new Government took office in May 2006. Details
of the revised fiscal positions for FY2007 and FY2008 can
be found in Annex D.
Going Forward with Strength
6.4 Mr Speaker, Sir, this year’s Budget takes place
amidst a time of increasing uncertainty in the global economy.
Around the world, growth is slowing and inflation is picking
up, especially for food prices. It is a concern for us all
6.5 We are able to deal with the immediate problems and weather
any short term difficulties that Singapore might face. This
is because our fundamentals are strong, we continue to attract
major new investments, and we expect employment to remain
high. Our low-income households in particular are seeing more
members getting jobs.
6.6 This Budget is about developing the capabilities of our
people and enterprises, so that we stay in the
top league of global cities for years to come. The Budget
is also about our social resilience – holding
together as a community, and providing assurance for Singaporeans
as we age.
6.7 This Budget will enhance the breadth of opportunities
available for Singaporeans to discover and stretch their
potential, from young and right through their lives. Our
schools are unique in the extent of social mobility that they
make possible, in each new generation, providing every child
the best chance to do well and move up. Take Mumtaz d/o Mohamed
Yusoff, 17 this year. She lives with her mother, who is the
family’s sole breadwinner, and two older brothers in
a one-room flat. She receives financial assistance from MOE.
In last year’s GCE ‘O’ Level exams, Mumtaz
scored distinctions in all her nine subjects. On top of that,
she was also given the Tanjong Katong Girls’ School’s
Outstanding Service Award 2007, for being a role model of
leadership through service to others. Mumtaz is now at Meridian
Junior College, where she continues to strive to do well,
and to aspire, knowing that family circumstance will never
hold her back.
6.8 We are enhancing the bursaries for lower and middle-income
students at our polytechnics and universities,
to give them further assurance that they can advance their
learning to the fullest, without having to incur excessive
financial burdens at the start of their working careers. We
are also investing in a whole range of continuing education
opportunities, from certificates to diplomas to degrees,
to encourage Singaporeans to keep upgrading and re-skilling
once they are in the workforce.
6.9 This Budget seeks to make innovation pervasive
in our economy. In every industry, we have to raise our game,
and differentiate ourselves in quality and value. Chew’s
Agriculture, a local farm, has been experimenting with “designer
eggs” over the last decade. They produce eggs enriched
with Omega-3 and Vitamin E, and now the latest – eggs
enriched with cordyceps (often cited for properties similar
to ginseng). Together with home-grown biotech firm, AP Nutripharm,
they created “cordyceps eggs” by raising chickens
on specially formulated feed. I hesitated to raise the example
at this time because these are not the cheapest eggs in the
market. But I am told that with the price of cordyceps having
increased sixfold in the past six years, the eggs represent
excellent value for those who believe in its many stated benefits.
6.10 The Budget provides more favourable tax treatment for
our SMEs and further encourages wealth creation. After we
have amended the Constitutional framework for drawing Investment
Income from our reserves, we will be able to consider further
improvements to our competitiveness. We are finalising the
details, and will present a Constitutional Amendment Bill
to Parliament later this year.
6.11 The Government has taken major steps to help lower-income
households benefit from our economic progress. This is
why we introduced Workfare, and why we have made major changes
to the CPF system, including the higher interest rates that
benefit those with smaller balances. This year’s Budget
provides special support for the older Singaporeans, who will
be among the first to join the CPF LIFE scheme, including
those who are not automatically included as they have limited
CPF monies but who want to participate in LIFE.
6.12 We have also focused on the needs of the lower-income
group especially, when we are able to distribute surpluses.
Last year’s GST Offset Package, which Singaporeans will
continue to receive this year and over the next two years,
plus this Budget’s surplus sharing package provide a
significant boost to their incomes. Both these exercises also
give the middle-income group support at a time when they too
face higher costs of living.
6.13 Whether we succeed as an economy, and whether we remain
a resilient society, however, will not depend on how much
we hand out, how much we top-up each year, or how large the
bonuses are. We will ultimately succeed and remain a country
that all Singaporeans feel proud of, if we continue to be
a place where every Singaporean can aspire, where there is
opportunity to develop every skill and talent, and where everyone
does his utmost to do better and surprise with his abilities.
That is how together, we will stay ahead, keep amazing the
world and achieve a better quality of life for all Singaporeans.
6.14 Mr Speaker, Sir, I beg to move.