Expenditure

Operating Expenditure

Operating expenditure for FY2001 is estimated at $18.66 billion, an increase of $142.21 million or 0.8% over FY2000. About 89% of the operating expenditure is for ministriesÉ running costs and the remaining 11% is for transfer payments to members of the public and outside organisations.

Running Costs is projected to increase by 9.4% to $16.63 billion because of higher manpower expenses, other operating expenditure and grants to statutory boards.

Manpower expenses are estimated to increase by 10.4% (+ $363.42 million) to $3.86 billion, to meet a higher wage bill arising mainly from the partial restoration of CPF cuts from 1 January 2001 and the service-wide salary revisions in the later half of 2000.

Other operating expenditure (OOE) is estimated to increase by 7.7% (+$679.33 million) to $9.45 billion. This includes a sum of $7.05 billion, or an increase of $522.61 million, for the Ministry of Defence (MINDEF). Excluding MINDEF, the OOE is $2.40 billion or an increase of $156.72 million. Most of the increase goes to the Ministry of Home Affairs.

Grants-in-aid (GIA) to statutory boards/aided institutions is estimated to increase by 13.2% (+$387.25 million) to $3.32 billion mainly because of higher grants required by the Ministry of Education and the Ministry of Community Development and Sports. The higher educational institutions and aided schools under the Ministry of Education require larger grants (+$143.07 million) to cater for increased student intakes and the salary revisions in 2000. The increase of $112.30 million for the Ministry of Community Development and Sports is due mainly to the transfer of existing financial and manpower resources amounting to $99 million from the ministry to the Community Development Centers. The transfer results in the expenditure being treated as GIA instead of operating costs of the ministry.

Expenditure on Transfers is estimated to decrease by $1.29 billion. There was a one-time payment of $1.94 billion in FY2000 to the telecommunications companies as compensation for bringing forward the liberalisation of the telecommunications sector. Excluding the compensation payment, there is an increase of $653.22 million or 47.7% in Transfers. The increase is partly for the restructured hospitals under the Ministry of Health to carry out new programmes. Budget allocations to Alexandra Hospital, Woodbridge Hospital and the polyclinics are now also given as subventions in transfer payments rather than as the running costs when they were departments of the Ministry before they were restructured from 1 October 2000.