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SINGAPORE – With a narrow window of opportunity to transform its economy, Singapore needs to press ahead with planned investments to secure its next decade of growth, Deputy Prime Minister and Finance Minister Heng Swee Keat said on Friday (February 26).
Doing so would allow the economy to create jobs in new areas even as it restructures, and would allow the country to emerge stronger after the Covid-19 pandemic has passed.
And if he has to tap into the country’s reserves to do so, he should do everything he can to comply with the draw, he told parliament.
“Now is the time to chart our course, position ourselves to take advantage of the winds of opportunity and navigate boldly in the reshaped world,” he said in his speech that rounded off three days of debate in which 65 deputies spoke.
Heng laid out what it means for Singapore to emerge stronger together – the issue of this year’s $ 107 billion budget – and stressed that the government cannot do this alone.
“The Government agrees to put the investments,” he said. “To be successful, all Singaporeans must come together to build the Singapore we want.”
By creating opportunities for workers to acquire the skills necessary for the new jobs of the future, the Government would help them remain employable and would also help prevent a “Covid-19 generation” of jobless youth.
He called on companies to look beyond hiring “plug and play” workers and consider hiring those with the potential to learn. At the same time, job seekers must keep an open mind, take the initiative to develop new skills, and remain receptive to new job roles.
Singaporeans also need to look out for each other, he said, adding that the government will go ahead with plans to develop deeper capacities in the social sector.
At the same time, Singapore has to consider how to pay for the decisions it makes, Heng said, noting that discussions about building a society with better social safety nets are “only half the conversation.”
“We must be frank: if we want to spend more, we have to increase revenues,” he said, reiterating that the impending goods and services tax (GST) will increase from 7% to 9%, which will take place soon. , between next year and 2025, is needed to fund Singapore’s growing spending needs in areas like healthcare.
“Economic growth alone is unlikely to generate enough income to fully meet our needs,” he added. “The honest, but difficult conclusion is that we will need to collect more tax revenue.”
The GST increase will be combined with a $ 6 billion guarantee package that effectively delays its effect for at least five years for most Singaporean households, he said.
Heng acknowledged that it is natural for everyone to look for what’s new in each year’s budget. But Singaporeans should also appreciate what’s already there and look at the nation’s spending as a whole over the years, he said.
Over the past decade, Singapore has gradually tilted its financial transfer and tax system in favor of low- and middle-income groups, he noted.
This year, a member of a low-income household can expect benefits of $ 6,500 after taxes on average, and a member of a middle-income household receives $ 3,500. In contrast, a household member in the highest income group pays about $ 9,500 in taxes, after accounting for benefits, he said.
Heng also addressed concerns raised by MPs that this year’s budget appears to have little short-term support for middle-income households. This is not the case, he said, noting the $ 42 billion set aside for social spending and transfers in addition to security spending and economic investments, all of which benefit Singaporeans.
“We shouldn’t look at every Budget in terms of ‘benefits for me’, but rather whether the totality of spending creates more opportunities for us and our children.”
He also quoted MP-nominee Hoon Hian Teck, who on Wednesday articulated Singapore’s need to balance stabilizing the economy to avoid a sharp recession and invest in structural policies for transformation.
Mr. Heng also pointed out how Shawn Huang (Jurong GRC) put it right when he said that for Singapore to survive, it had to turn and develop an edge to seize the opportunities of the future. “If we do this right, we can put our economy on a growth path for the next five to 10 years,” said the DPM.
Read Mr. Heng’s full speech here.
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