With the completion of the Singapore 2020 budget, most Singaporeans would probably like to unpack all the good news that comes with the announcement.
Some of the key announcements for the 2020 budget include:
- The GST will remain at 7% in 2021, but will increase by 2025. A $ 6 billion assurance package will help cushion the impact of the GST increase if it does.
- A $ 1.6 billion care and support package will help Singaporeans to cover household costs. As part of this package, Singaporeans aged 21 and over will receive a one-time cash payment of $ 100, $ 200 or $ 300 in 2020.
- Improve the employment support system and the wage credit program to support businesses and workers who remain employed as part of a larger $ 4 billion stabilization and support package
- Top up $ 500 SkillsFuture Credit for every Singaporean aged 25+
- CPF payments for senior citizens under the Silver Support Scheme are expected to increase by 20%
With all of these measures announced, this year's expansion budget is expected to have a historic deficit of $ 10.9 billion – the highest in 10 years.
The government will show a deficit if the government's expected spending exceeds its total revenue.
Here is a look at the historically estimated budget situation of the Singapore government in its current term:
|First estimates||Current / revised figures|
|GJ2016||S $ 3.45 billion||S $ 6.12 billion|
|GJ2017||S $ 1.91 billion||S $ 10.86 billion|
|GJ2018||-S $ 0.6 billion||S $ 2.12 billion (revised)|
|GJ2019||-S $ 3.5 billion||-S $ 1.7 billion|
|GJ2020||-S $ 10.9 billion||N / A|
Table source: TODAY
According to the Singapore Constitution, the ruling party that forms the government must maintain a balanced budget over each term, typically over a 4-5 year period.
A budget surplus or deficit cannot be carried over to the next term after each election.
However, the government can accumulate any budget surplus or deficit over its lifetime.
From 2016 to 2019, the total surpluses reached almost S $ 20 billion, so the government can now use them to implement extraordinary measures such as those in the current virus situation.
While a historic deficit of S $ 10.9 billion is forecast for the current 2020 budget, there are enough budget surpluses in the current 5-year term from which the government can withdraw.
At the end of each government period, unused surpluses are transferred to Singapore's reserves. This is in turn protected under constitutional law.
The government can use earlier reserves in Singapore at times of extraordinary spending. However, this is only possible with the consent of Parliament and the President.
The actual size of the Singapore reserve is a government secret, though most analysts estimate it to be well over S $ 500 billion.
Selected image source: xPhantomhive via Reddit