Using Past Reserves as One of the Methods to Finance Climate Change Adaptation Measures03 Sep 2019
Parliamentary Question by Associate Prof Walter Theseira (NMP):
To ask the Deputy Prime Minister and Minister for Finance (a) to what extent the policy of using past reserves to fund land reclamation will be applied to finance the projected $100 billion cost of climate change protection measures announced by the Prime Minister; and (b) what are the roles of the President and Parliament in approving or overseeing the use of past reserves for land reclamation-related climate change protection measures.
Parliamentary Reply by Second Minister for Finance, Lawrence Wong:
We will need a combination of funding methods to finance the various climate change adaptation measures. Smaller-scale infrastructure such as localised flood barriers for public assets like hospitals and bus depots can be funded from the budgets of Ministries. For long-lived major infrastructure such as sea walls, the Government will look at the option of borrowing to spread the cost across the generations which will benefit. Where the measures include land reclamation, the land reclamation costs can already be met from Past Reserves.
Parliament debates and approves the Supply Bill every year. Under the Supply Bill, the Government seeks approval for development expenditure, which includes land reclamation costs. The land created through reclamation will be protected as part of Past Reserves. When such land is subsequently sold, the proceeds accrue fully to Past Reserves. The reclamation of land is in essence a conversion of Past Reserves, i.e. from financial assets to State land. This use is not a draw on Past Reserves.
The use of Past Reserves to fund reclamation costs is in accordance with the Reserves Protection Framework, which is agreed between the President and Government. The Government provides the President with a statement on land-related expenditure annually.
MOF will continue to study equitable and sustainable ways to finance the full suite of climate adaptation measures we need to protect our island.