Addendum To The President's Address (Opening of 12th Parliament)

1         Our macro-economic policies aim to help Singapore achieve inclusive growth, an enhanced quality of life and better, sustainable social safety nets for our citizens.

2         The environment has shifted, compared to even five years ago. Domestically, tighter land and population constraints will shape future growth prospects.  Externally, slow growth in the developed economies, with periodic debt shocks and economic setbacks, may be the norm for several years to come.

3         We must steer a path that enables Singapore to respond to these challenges, transform the nation’s capabilities and help our citizens achieve higher standards of living.

Sound Fiscal System a Must

4         We must maintain a sound and sustainable fiscal system. Our plans to significantly enhance the transport infrastructure, quality and opportunities in education, healthcare and housing will lead to Government expenditure rising as a percentage of GDP in the next 5 years. We have put in place a resilient revenue structure to enable us to meet these higher spending needs. Nevertheless, the overall burden of taxes on Singaporeans remains low by international standards, and will remain so.

5         We will ensure that our fiscal system remains fair and equitable.  We have re-shaped our property tax and personal income tax schedules to make our tax system more progressive. Government transfers schemes will provide targeted and effective assistance to lower and middle- income households in need. They will also provide full incentive and support for individuals to work and upgrade in their jobs.

6         Our reserves provide Singapore the confidence to deal with crises. Under the Constitutional rules, they also provide a regular stream of income from investments, for spending on the Government Budget.  In a more volatile and challenging investment environment, we must hold to a framework that enables GIC and Temasek to focus on the long term and pursue investment strategies that generate sustainable portfolio returns.

7         We will play an active and constructive role in international fora such as the Group of 20 (G-20), the IMF and the World Bank, to promote a stable financial system and sustainable global growth.  We will also continue to work with our regional partners to advance schemes that enhance market-based financing for regional infrastructure needs and help to deepen regional capital markets.

Sustain Broad-based Income Growth by Transforming Our Capabilities

8         Our fundamental economic challenge is to improve productivity, as the way to increase Singaporeans’ incomes on a sustainable basis. We will support and catalyse efforts to raise skills and improve the quality of jobs in every sector. The Productivity and Innovation Credit that was introduced in 2010 and the $2 billion that we have set aside in the National Productivity Fund are major incentives for this upgrading.

9         We are working to enhance support for Singapore companies venturing into overseas markets, by improving the availability of long-term project finance and trade finance.

10       We will uphold Singapore's reputation as one of the world's most supportive business environments by simplifying tax administration and enhancing tax certainty. We are also strengthening Singapore as an international financial and business hub, including the development of our accountancy sector. The Companies Act and Business Registration Act will be updated to ensure that they remain relevant and conducive to both investors and operating businesses. We will also continue to facilitate trade by fostering international customs partnerships.

Strengthen Unity through an Inclusive and Caring Society

11      Greater resources will be invested into strengthening our social safety nets, in particular by helping lower and middle-income Singaporeans own homes and improving support for the healthcare of older Singaporeans.

12      We are encouraging charitable giving through significantly enhanced tax deductions and Government matching grants for donations to various schemes that improve citizens' welfare, including long-term care for the elderly and services for the disabled. The Singapore Totalisator Board will also be increasing its contributions to the community for worthy causes.

13      We are investing in a city where young and old feel at home. We are making major investments to enhance our transport capacity and reach. We will also bring greenery into the city, and nurture active sports and vibrant arts scenes.

14       As we face greater constraints in land, energy and carbon, we will optimise our resources through forward-looking planning and fiscal measures to encourage environment sustainability.

More Effective Government

15      We will catalyse the development of more e-services and delivery channels by the people and private sectors. We will also continue to promote collaboration among government agencies to work towards Whole-of-Government outcomes, and greater integration in the delivery of services to Singaporeans.