3/5/2018 12:17:39 PM
|written By : Team India Se|
Singapore cannot draw more from its reserves to fund healthcare spending, as this will quickly deplete its nest egg, said Prime Minister Lee Hsien Loong on March 4.
Speaking at a Chinese New Year dinner in his constituency Ang Mo Kio GRC, PM Lee urged Singaporeans to support the government’s plan to increase the goods and services tax from 7 per cent to 9 per cent some time between 2021 and 2025, to fund increased spending, especially on healthcare.
Since the start of this decade, the government has more than doubled its healthcare spending, from S$3.9 billion in FY2011, to an estimated $10.2 billion in FY2018. The increase went into building and operating more hospitals and other healthcare facilities, as well as enhancing healthcare subsidies.
“We will need to spend more on healthcare year after year, for many years to come,” PM Lee said, because Singapore has an “ageing society”.
"If we use the reserves for something (which requires) money every day, soon you will find that the reserves are going down, depleted," he added.
Under the Net Investment Returns (NIR) framework introduced in financial year 2009, the government can spend up to half of expected real returns from assets managed by the Monetary Authority of Singapore, state investment firm Temasek Holdings, and the GIC.
In FY2016, the NIR contribution (NIRC) overtook corporate income tax collections for the first time to become the Singapore’s largest source of revenues. It is expected to contribute about S$15.9 billion to national coffers in FY2018.
Some MPs and observers have suggested increasing the NIRC cap to boost national coffers, or tapping on the Republic’s past reserves through revenue from land sales, which are currently excluded from budgetary spending.
But PM Lee said: “It is our duty to manage the reserves, invest them wisely... to keep them safe and intact for a rainy day."
In the next financial year, expenditure is projected to hit S$80 billion, up by S$6.1 billion or 8.3 per cent from FY2017. An overall budget deficit of S$600 million is expected in FY2018.