Overall, this year's budget continues to emphasise the Government's priorities on education, security, health, public housing, environment, transportation and economic development. Chief among these are education and security which have a strong bearing on Singapore's long-term strategic interests.

Total spending on education will rise by a hefty 30 per cent from $4.4 billion in FY97 to $5.7 billion in FY98. The jump from 3.0 per cent to 3.6 per cent of GDP brings our spending on education closer to the medium-term target of 4 per cent of GDP. We can take pride in having developed an educational system which we believe is one of the best in the world. Our students performances have been outstanding in international maths and science surveys and Olympiads. This year, higher enrolments are projected in schools and tertiary institutions, leading to a 12 per cent increase in operating expenditure. The main boost in the education budget however comes from a 80 per cent increase in development spending on the building of new and better schools and campuses, the single session secondary school buildinprogramme and the roll-out of the IT Master Plan in schools.

Defence spending will amount to 4.6 per cent of GDP, up from 4.4 per cent in FY97, but still well below the 6 per cent of GDP that Government is prepared to commit to develop and maintain a strong and credible defence force. So long as revenues hold up, we should not slacken spending in this area since the security of our nation is the very basis of our survival and prosperity.

With the emphasis on education, the social and community services sector as a whole will account for the lion's share of 37 per cent of total expenditure in FY98, with security coming in close at 34 per cent. The share of spending on economic and infrastructural development will exceed 20 per cent for the second consecutive year, up from an average of only 15 per cent in FY93-96. The increase in this sector is driven by higher development spending.