Mr Speaker, Sir, I beg to move,
That Parliament approve the financial policy of the Government for the financial year 1st April 2007 to 31st March 2008.
Economic Performance and Fiscal Position in 2006
1.1 Our economy has done well. It grew by 7.9% in 2006. Both the manufacturing and services sectors are doing well. Asset management in financial services is booming. The construction industry is now seeing a resurgence.
1.2 Singaporeans have benefited from this growth. An unprecedented 173,300 jobs were created last year, with more than half of these taken up by the local workforce. The unemployment rate went down to 2.7%. Our workers enjoyed good wage increases and better bonuses, with average wages rising by 3.2%. Overall, it has been an exceptionally good year, following two previous good years.
1.3 The fiscal position for the Financial Year (FY) 2006 improved on the back of these buoyant economic conditions. I expect a budget deficit of $1.3 billion for FY 2006, much smaller than the deficit of $2.9 billion we projected at the start of the year. Operating revenues and contributions from Net Investment Income have come in higher than projected.
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