| Operating expenditure is budgeted
at $15.2 billion, a small increase of $300 million or
2 per cent compared to FY98. Half of this increase is
on account of a re-distribution of defence spending
from development to operating expenditure. The other
half of the increase is due to a central provision of
$125 million kept by MOF to provide for new government
programmes which might arise in the course of the year.
Due to the policy of wage restraint
in the civil service, manpower cost will remain at $3
billion, despite providing for a net increase of 4,400
posts. The main increases are some 5,000 teaching posts
and 400 posts for immigration and prison officers. This
is partially offset by the deletion of some 900 posts
in PWD, with its corporatisation from 1 April 1999.
While running costs on the whole will
rise by some $350 million to $14.0 billion, transfers
will dip slightly by $50 million to $1.2 billion due
largely to an extraordinary contribution of $79 million
in FY98 to NTUC and ITE for the Skills Redevelopment
Programme. Still, the level of transfers remain some
18 per cent higher when compared to FY97. Subsidies
to restructured hospitals take up about half of transfers,
while a sum of $170 million is allocated to public housing
subsidies such as subventions to town councils. Another
$120 million is allocated to MCD for disbursement to
community self-help groups, voluntary welfare organisations
and needy individuals under various financial assistance
schemes.
As a share of GDP, operating expenditure
will rise to 10.7 per cent, up from 10.4 per cent in
FY98 and 9.7 per cent in FY97. This is largely the result
of slowing GDP growth, as operating expenditure has
not risen substantially in absolute terms and is practically
held at a standstill compared to FY98. It has been our
policy to constrain operating expenditure to grow in
tandem with, and no faster than GDP growth, in order
to keep public sector expansion in check. However, during
periods of economic slowdown, we can accept a rise in
the operating expenditure's share of GDP so as to avoid
a degradation of basic public services and to support
additional expenditure for early recruitment of teachers
and other staff. |
