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SINGAPORE: Singapore has taken the unprecedented step of tapping into its past reserves to give it the flexibility of dealing with future uncertainties even as it responds to the current economic downturn.
Finance Minister Tharman Shanmugaratnam said the government has sufficient savings built up during this term of government to fund the $20.5 billion Resilience Package he unveiled as well as the resulting record budget deficit of $8.7 billion.
However, he said that Singapore will not borrow to fund its budget as this would burden current or future generations with the need to repay that spending. Instead, it is tapping on past reserves, with the President's approval.
Mr Tharman said this gives the government the resources to deal decisively with the current economic crisis and that Singapore has reserves, well in excess of its liabilities. He added the reserves are a valuable asset in responding to this 'unprecedented crisis'.
The two main measures to be funded from past reserves are the Jobs Credit scheme and the Special Risk-Sharing Initiative for bank lending. These would require S$4.9 billion in total.
Mr Tharman said the government had requested for the money on grounds that the extraordinary measures being taken are temporary and will not be built into longer-term programmes.
The President has given his in-principle approval to draw the S$4.9 billion from the reserves.
- CNA/ir
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