SINGAPORE: The Government intends to issue new bonds to finance major and long-term infrastructure projects, Deputy Prime Minister Heng Swee Keat said in his Budget speech on Tuesday (Feb 16).
These projects include new MRT lines and infrastructure to protect against rising sea levels, and are crucial to Singapore’s long-term development and sustainability, he said.
The bonds will come under a proposed Significant Infrastructure Government Loan Act (SINGA). The Government will table a Bill in Parliament later this year, said Mr Heng, who is also the Finance Minister.
Mr Heng has said in previous Budget statements that the Government is exploring the use of borrowing to finance such major projects in a way that spreads out their costs more equitably across generations.
The Government has also been issuing bonds to develop the domestic debt market and meet the investment needs of the Central Provident Fund for Singaporeans’ retirement.
The Deputy Prime Minister said on Tuesday that the Government has briefed President Halimah Yacob and obtained her in-principle support for the use of borrowing to finance major, long-term infrastructure.
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He added that the new SINGA bonds will allow for a “fair and efficient” way of distributing fiscal responsibility.
“Fair, because these payments are borne by the generations who will directly benefit from the improved infrastructure. Efficient, because they allow us to benefit from the current low interest rate environment.”
Mr Heng said the Government will use SINGA borrowing proceeds in a prudent and transparent manner, and keep to a S$90 billion limit for borrowing under SINGA as a safeguard.
“This is based on a pipeline of major, long-term infrastructure projects over the next 15 years,” he said.
“We will also include other safeguards in legislation, which will be open to Parliamentary and public scrutiny. More details will be provided when the Bill is presented in Parliament later this year.”