SINGAPORE: Singapore’s longstanding approach to government budgeting and safeguarding reserves – seen by some as overly safe – has become a crucial “lifeline” in an increasingly uncertain world, President Tharman Shanmugaratnam said as he approved the government’s spending plans for the coming financial year.
In a Facebook post on Wednesday (Mar 19), Mr Tharman warned that Singapore must never lose its habit of “looking far ahead”.
“So even as we deal with today’s problems like the cost of living, we also protect ourselves against future problems – and build opportunities for Singaporeans to do well, come what may,” he said.
“In fact, it’s the only way to stay optimistic: By being prepared for things going wrong. And it frankly matters more than ever before.”
Singapore’s Budgets over the years and the “rules that safeguard the reserves that have been built up, may have appeared conservative to many observers as recently as two decades ago”, said Mr Tharman.
“It is now a lifeline to a future of growing insecurity everywhere.”
During Februry’s Budget debates in parliament, Leader of the Opposition Pritam Singh hit out at what he called the government’s “poor fiscal marksmanship” in forecasting Singapore’s financial needs.
For the 2024 financial year, the government collected more revenue than anticipated, with operating revenue rising to S$116.6 billion (US$87.5 billion), an increase of S$8 billion or 7.3 per cent more than estimated.
Responding to the Workers’ Party chief’s criticism, Prime Minister Lawrence Wong defended the government’s projections, stating that they have “generally not been far off the mark”.
He noted that from 2010 to 2019, the average deviation in revenue forecasts remained within a reasonable 5 per cent range. However, in the past two years – amid heightened uncertainty – the deviation was larger, at around 7 per cent.
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