D. Budget Position
D.1. Madam Speaker, let me now summarise our budget position.
FY 2015 Fiscal Position
D.2. For FY2015, our Budget is expected to record a deficit of $4.9 billion (1.2% of GDP). This is lower than the deficit of $6.7 billion (1.7% of GDP) we had budgeted a year ago.
FY 2016 Fiscal Position
D.3. In FY2016, total spending is expected to be $5.0 billion (7.3%) higher than in FY2015.
D.4. As we spend more, we must also spend right –
i. Provide immediate relief to businesses,
ii. And support longer term economic transformation;
i. Provide targeted support to those in need,
ii. And invest in developing our people.
D.5. The rise in expenditure in FY2016 is supported by increases in both Operating Revenue and higher Net Investment Returns (NIR) Contributions. We are benefitting from an increase in operating revenue this year due to one-off factors which we do not expect to be sustained35. In addition, this year, Temasek will be added onto our NIR framework and this will be a source of revenue for the long term.
D.6. As earlier mentioned, the longer term picture will grow more challenging as we expect expenditure needs to grow faster than revenues. Even as we plan for rising expenditures, we must spend only when it is needed and where it best achieves our social and economic objectives. We will review the major expenditure items we expect ahead, to ensure efficiency and effectiveness.
D.7. We expect an overall budget surplus of $3.4 billion (0.8% of GDP) in this first year of the term. This position seeks to strike a balance between being prudent given the continued rise in expenditures we expect in the years ahead, and being accommodating to support enterprises in the current economic climate even as we continue our restructuring efforts. Should economic conditions turn, we stand ready to adjust and respond.
Last updated on 24 Mar 2016