Sizeable surplus, but important to save for rainy day: Heng

SINGAPORE — While the current term of Government has accumulated a sizeable budget surplus in recent years, Finance Minister Heng Swee Keat on Tuesday (Feb 19) cautioned against spending it quickly without squirreling it away for a rainy day.

Speaking at a “live” televised forum a day after delivering the national budget statement, Mr Heng said: “It doesn’t mean that ‘Wow, we have this surplus so therefore let’s splurge it tomorrow’.

“If our founding fathers had taken that approach, we would not even have one cent of this Net Investment Returns Contribution,” he added, referring to the reserves contribution which has grown to become the Government’s largest revenue source.

He reiterated that point when speaking to reporters after the Ask The Finance Minister forum.

Responding to TODAY’s question on whether the Finance Ministry’s Budget estimates in the past few years have been overly conservative, Mr Heng noted that surpluses for Financial Year 2018 occurred because of the postponement of the Kuala Lumpur-Singapore High Speed Rail (HSR) project.

“Whether the project will come online later, whether it will continue to be deferred, we don't know at this stage,” Mr Heng said.

“What is important for us to consider (is), how do we meet such unexpected events? Nobody expected this development when we made provisions for it.

“If we hadn't made provisions for it, then we would be worse off if the (HSR) project had taken place,” he said.

Singapore is expected to have a S$2.1 billion budget surplus in the year ending March 31. The initial forecast was a deficit of S$0.6 billion.

It is important for the Government to plan its Budget “not just from year to year, but plan with our needs in mind, and plan to be able to meet unexpected events”, said Mr Heng.

“The economy goes through cycles, and if the economy does better, it will allow us to have (surpluses), but if it goes into a slowdown, then we will have to think of how we can have sufficient resources to support the economy, to support our workers,” he added.

At the forum, Mr Heng said that it is not possible for a single year’s Budget to cover everyone in Singapore.

“What this Budget seeks to do, what every Budget seeks to do, is to address issues of priority.

“We must not look at it on a year-to-year basis... because many of the things announced will go on for many years,” he said in response to a question on the Budget’s measures for the younger generation.

Asked by another participant why property measures did not feature in this year’s Budget, he said: “You cannot have one Budget hit 10 targets at one time.”

The forum, which featured 25 invited guests, covered topics such as the S$6.1 billion Merdeka Generation Package for Singaporeans born in the 1950s, the S$1.1 billion Bicentennial Bonus, support for businesses, as well as the Government’s fiscal position.

Budget 2019 includes a raft of initiatives on security, and support for businesses and households.

Mr Heng was also asked whether this year’s Budget was an “election Budget” that signals the possibility of a General Election this year.

He said he does not plan the Budget on such a basis. “It’s not about, ‘Okay, we are near the election, therefore let’s spend this and let’s spend that'… I think we have a responsibility to our future generation,” he said.