President Tharman approves government's spending plan, says Singapore avoids 'magical thinking'

SINGAPORE: In planning the national budget, the Singapore government stands out among countries for preparing in advance and making sure any spending can be financed, said President Tharman Shanmugaratnam on Friday (Mar 22).

In a Facebook video announcing his approval of the government's spending plans for the coming financial year, which begins on Apr 1, Mr Tharman said Singapore avoids "magical thinking".

He noted how amid ageing populations and the need to invest more to tackle climate change, most countries would have to increase spending in the years to come. 

"We have avoided what many countries are doing: Which is to spend first, borrow so they can finance the spending, let government debts rise to unsustainable levels, and hope that revenues will somehow spring up to pay for it later," Mr Tharman said.

"Magical thinking always ends up unhappily."

This is because the next generation gets a "raw deal" as governments have to eventually "come to terms with reality". As a result, said Mr Tharman, government spending is cut, critical public facilities get run down, or taxes are raised to much higher levels.

"That’s simply unfair, and something that our whole system of rules in the Constitution is set up to avoid," he added.

He said he and the Council of Presidential Advisers had paid particular attention to the financial sustainability of the plans that Deputy Prime Minister Lawrence Wong and the Finance Ministry presented earlier in the month.

"It is how we ensure that we never have to draw down our reserves, except when exceptional crises hit Singapore," the President said.

"And that we remain fair, to today’s generation and to our grandchildren’s generation. And their grandchildren too."