Addendum to the President's Address09 May 2018
MINISTRY OF FINANCE
ADDENDUM TO THE PRESIDENT’S ADDRESS
MR HENG SWEE KEAT
MINISTER FOR FINANCE
1. The Ministry of Finance (MOF) supports the Government’s policies and programmes through a sound fiscal system that plans for the future, and an effective and efficient government that innovates and delivers value for money.
A Vibrant and Innovative Economy, Well Connected to the World
2. The shifts in global economic trends, ageing, and far-reaching innovations brought about by technology, present opportunities to transform the economy. To sharpen our competitive edge, MOF is partnering Government agencies to strengthen Singapore’s position as a Global-Asia node of technology, innovation, and enterprise. We are investing in making innovation pervasive, deepening capabilities in our firms and workers, and forging partnerships with businesses and trade associations to drive industry-level advancements.
3. We regularly review our corporate regulations to ensure we have an efficient, transparent, and business-friendly environment. We will partner the private sector to co-create solutions for businesses, and harness technology to improve services for businesses and citizens.
4. As ASEAN Chair in 2018, we are promoting ASEAN financial integration with initiatives to sustain growth, boost resilience, and foster innovation for the region.
A Smart, Green, and Liveable City
5. We will continue to support Singapore’s development as a smart, green, and liveable city. The introduction of a carbon tax is part of an overall approach to improve Singapore’s energy efficiency and address our climate change commitments. Major investments will be made to rejuvenate ageing infrastructure, develop new districts and transport networks, and enhance our air, sea, and land links. We will invest in Strategic National Projects that lay the foundation for a Smart Nation, and strengthen our connectivity to the world.
A Caring, Cohesive, and Inclusive Society
6. The Government has substantially increased social spending in major areas including education, healthcare, housing, Workfare, and Silver Support. MOF will continue to support individuals and families, strengthen partnerships between the Government and the community, and encourage a spirit of giving through SG Cares.
7. We are investing heavily in preschool, education, and skills upgrading, to ensure that citizens have opportunities to develop their potential throughout life. We will support Singaporeans to stay healthy, make informed healthcare choices, and prepare for their healthcare needs in old age. We will also continue to expand our healthcare capacity and strengthen long-term care, while moderating the growth in healthcare costs. We will do more to strengthen our families and enable our seniors to stay active, contribute meaningfully, and age with confidence. We will promote sports, arts and heritage, philanthropy, and volunteerism, to build common interests for a stronger society.
A Fiscally Sustainable and Secure Future
8. Singapore is on a sound fiscal footing today, because we have always emphasised prudent spending and built resilient and broad-based revenue sources. We have also invested our resources wisely and used our investment returns in sustainable ways.
9. We must continue to maintain a sound and sustainable fiscal system, and ensure a balanced budget over the medium term. Our fiscal position is expected to tighten considerably in the coming years due to rising expenditures, especially in healthcare, infrastructure, and security. On the revenue side, we have to adjust to changes in the global environment that could impact our competitiveness. Several countries are moving to reduce their corporate income tax rates. There are also ongoing discussions to develop international tax rules under the Base Erosion and Profit Shifting project.
10. This is why we are taking steps to strengthen our revenue position, including through an increase in the Goods and Services Tax. As we build up our revenues, we will ensure that taxes remain competitive to encourage private enterprise and individual initiative. We will continue to keep our overall tax and transfer system equitable, fair, and progressive.
11. We will also continue to seek the best value for the money we spend.We will do this by managing our expenditure growth carefully, and continually seeking more cost-effective solutions in the public sector.
12. We will explore new funding approaches for large-scale infrastructure investments, particularly through borrowing by Statutory Boards and Government-owned companies. We will leverage the strength of our financial position to optimise our borrowing, and invest sustainably in longer-term infrastructure that will position Singapore well for the future.
13. We will continue to be good stewards of our reserves. Our reserves provide us with the means to weather shocks and crises, and strengthen investor and market confidence in Singapore. We will continue to uphold the framework that enables us to invest our reserves for long-term returns, and to use part of the returns to supplement our budgetary needs.
Taking Our Next Steps Together
14. We will harness our fiscal resources prudently and responsibly, so as to advance the well-being of all Singaporeans. We will do so in partnership with citizens and the community.
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