Singapore Budget 2020: Ensuring S'pore's present and future needs are taken care of
SINGAPORE (The Straits Times/ANN) - Five key facts about the annual Budget that go beyond goodies and giveaways for Singaporeans
Deputy Prime Minister and Finance Minister Heng Swee Keat will deliver Singapore's 2020 Budget statement in Parliament on Tuesday.
For many Singaporeans, this means goodies and giveaways galore. But the annual Budget goes beyond this - revising government revenue and expenditure projections for the current financial year, as well as planning ahead for the new financial year. It ensures that Singapore's current and future needs are addressed as part of a fiscally sustainable strategic plan.
Here are five key facts about the Budget.
1. SPENDING WITHIN OUR MEANS
The Government is required to maintain a balanced Budget over each term under Singapore's Constitution. Any budgetary surplus or deficit cannot be carried over to the next term of government.
The Government also does not borrow to fund recurrent spending.
2. LARGEST SOURCE OF REVENUE IS NOT GST
The Budget is funded by various sources of income: taxes and fees, and returns from Singapore's invested reserves, or the Net Investment Returns Contribution (NIRC).
The Government can spend up to 50 per cent of the long-term expected returns from the reserves, enabling it to balance between spending on Singaporeans' needs today and growing the size of the reserves for future generations.
The NIRC comprises up to 50 per cent of the Net Investment Returns (NIR) on the net assets invested by sovereign wealth fund GIC, the Monetary Authority of Singapore and Temasek; and up to 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets.
In 2018, the NIRC was about $16.44 billion - about 18 per cent of overall revenues. It is now the single largest source of Government revenue, larger than any single tax, including the GST, and corporate and personal tax.
3. CONSULTATION - LOTS OF IT
The Ministry of Finance (MOF) and other government agencies hold multiple rounds of discussions. Key considerations include national priorities, trade-offs that need to be made, and the financial viability of plans.
MOF then carries out a public feedback exercise using dialogue sessions, listening points across the island, and online channels, to seek views from businesses, unions, individuals and households.
This year's feedback phase started in December last year and ended on Jan 10.
The ministry worked with the People's Association (PA) and grassroots organisations to solicit views and suggestions from the public at 25 Ask Kopi Kakis kiosks islandwide.
Six sessions took place across the island on Jan 4 and 5.
The 4G leaders have also met hundreds of workers, businesses, volunteers and young people in the last three months as part of a Singapore Together series of pre-Budget conversations.
4. BUDGET APPROVED? THERE'S MORE
After the Government has approved the Budget, the finance minister presents it to Parliament.
Parliament reconvenes the following week for the Budget debate. The finance minister then delivers a round-up speech that sums up the Budget and addresses issues raised by MPs.
Parliament sits as the Committee of Supply (CoS) to examine each ministry's plans. Individual MPs may ask for a symbolic "cut" to a particular ministry's proposed budget, before speaking on issues relating to the ministry.
After the CoS has voted on all the ministries' estimates, it reports its decision to Parliament, which debates and votes on the Supply Bill.
The Supply Bill is sent to the President for assent. She can withhold her assent if she believes the estimated expenditure may draw on past reserves.
Following her assent, the Bill is passed into a law called the Supply Act, which authorises the Government's spending in the coming financial year.
5. SINGAPORE'S FINANCIAL YEAR DID NOT ALWAYS START ON APRIL 1
Before 1969, the Government's financial year (FY) used to follow the calendar year. But it was announced in December 1968 that the FY would be adjusted from January-December to April-March.
In the transition, FY1969 lasted from January 1969 to March 1970. There was no Budget statement in 1969.
Then-Finance Minister, Dr Goh Keng Swee, explained that the move gave the Government enough time to take into account economic data from the preceding year when preparing the next Budget.
Singapore's FY now begins on April 1 of every calendar year, and ends on March 31 the following year.