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Ministry of Finance's Addendum to The President's Address

23 May 2014


1. Our fiscal policies will aim to ensure a vibrant economy and a fair and equitable society, so as to enable a higher quality of life for all Singaporeans. They will continue to be anchored in a system of sound and sustainable finances, especially as our society gets older and government spending needs to go up.

2. Our economy is in the midst of transformation. This is a critical journey to build deeper capabilities, bring about pervasive innovation and uplift productivity. This is the only way to ensure that Singaporeans have good jobs and to sustain rising incomes.

3. We are also building an inclusive society. We are doing more to preserve social mobility and help every citizen share in our nation’s progress. We are providing the Pioneer Generation with special healthcare support for life, and providing the vulnerable with a stronger sense of assurance.

Continue to Maintain a Sound and Sustainable Fiscal System

4. A healthy fiscal position has enabled us to set aside funds for the Pioneer Generation Package and other future needs. But our fiscal position will tighten in the coming years, driven by rising expenditures, especially in healthcare and infrastructure. We must ensure that spending is sustainable, through judicious allocation of resources, maximising outcomes for every dollar, and keeping a lean and efficient public sector.

5. Over the longer term, we must nevertheless build up our revenues to anticipate and meet higher spending needs. We will do so in a way that will sustain a dynamic economy, and a fair and progressive system of taxes and benefits. We will continue to tap on the Net Investment Returns Contribution that provides a significant supplement to the annual Budget. This is enabled by a framework that allows GIC and Temasek to pursue investment strategies that generate sustainable portfolio returns for the long term.

Transforming our Economy for Sustained Quality Growth

6. We are providing comprehensive support for businesses and industries to innovate and improve productivity. We are also boosting incentives for SMEs to adopt proven ICT solutions and pilot emerging technologies. We will continue to develop strong R&D capabilities through the next phase of Research, Innovation and Enterprise Plan. We will also invest further in every worker, to help Singaporeans prepare for the jobs of the future.

7. We will continue to enhance the ease of doing business in Singapore, by amending the Companies Act and Business Registration Act to keep regulatory burdens low, and streamline registration and filing processes.

8. On the international front, we will advance Singapore’s economic interests through our active participation in major regional and global financial fora, and enhancements to our network of double taxation agreements. We will also contribute to global initiatives on Base Erosion and Profit Shifting, while maintaining a conducive business environment.

Building an Inclusive Society and a Liveable Home

9. Our most important social strategy is to provide opportunities for all Singaporeans to do well and contribute to a strong society. We will sustain social mobility by investing in early childhood education, strengthening support for weaker students, widening cohort participation rates at the tertiary level, strengthening applied pathways at the polytechnics and ITEs, and building a first-rate system to support lifelong learning.

10. However, we will also provide Singaporeans greater assurance of housing and healthcare affordability, and retirement adequacy. In healthcare, we will strike an equitable and sustainable balance of funding, including greater pooling of risks through MediShield Life, enhancing Government subsidies, and looking into effective ways to avoid an upward spiral of costs. For the Pioneer Generation, the $8 billion Pioneer Generation Fund will provide strong assurance of support for the rest of their lives. We will also strengthen retirement adequacy for other Singaporeans.

11. We are making major moves to enhance Singapore’s living environment, with very significant investments in public transport system to better meet commuters’ needs. We will also rejuvenate and upgrade our housing estates and introduce more innovative urban design and greenery. We will build more facilities for citizens to enjoy sports, the arts and heritage, and engage in community activities.

A High Performance Government

12. Finally, we will push for more widespread online and mobile e-services for the convenience of citizens and businesses. We will make more data available to the public so that more people can make use of the data to create useful applications for Singaporeans. We will also strengthen internal controls and bolster capabilities in procurement and internal audit.