While discussing the ‘Fortitude Budget’ in the parliament, Singapore’s Deputy Prime Minister Heng Swee Keat on Friday said that unlike other countries, Singapore can depend on its national reserves and did not have to borrow or take on debt to fund its coronavirus stimulus packages.
The MPs noted that Singapore was fortunate to be able to tap on the savings of past governments, built up since independence, to boost its Covid-19 war chest. But they also asked how long it would take to restore the sum.
Vikram Nair (Sembawang GRC) likened the reserves to a “golden goose” to be protected, warning that the more it is drawn on, the less there will be for future generations to depend on.
Tin Pei Ling (Macpherson) and Murali Pillai (Bukit Batok), meanwhile, said it has given Singapore a key strategic advantage in the current environment marked by great uncertainty.
Agreeing, Heng said the reserves are Singapore’s “rainy day fund” and have allowed the country to deal with the crisis from a position of strength.
“It not only assures Singaporeans that the country has the means to navigate the challenges ahead, but also fosters confidence in global investors, and protects the economy from detractors and speculators who may otherwise try to take advantage of this period of flux to attack the Singapore dollar,” he said.
Heng pointed to the vigorous debates in Parliament on whether the Government should spend more freely from the kitty instead of running Budget surpluses, saying: “Even as recently as January this year, before the Unity Budget was unveiled, many commentators inside and outside of this House speculated on how large our accumulated surplus would be.”
“Yet, it took us just three months into FY2020 to use up the accumulated surplus that we had built up over the current term of government,” he added.
Heng further said that a draw of $52 billion from the reserves is not a trivial matter, and urged Singaporeans not to take the limited resource for “granted”.