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Full S$8b for Pioneer Generation Package to be set aside in Budget

SINGAPORE — With funds for the Pioneer Generation Package coming out of this year’s Budget, along with other measures, Singapore is expected to run a budget deficit of S$1.2 billion for FY2014.

SINGAPORE — With funds for the Pioneer Generation Package coming out of this year’s Budget, along with other measures, Singapore is expected to run a budget deficit of S$1.2 billion for FY2014.

This is after the Republic recorded a higher-than-expected budget surplus of S$3.9 billion last year, as government spending on some public infrastructure projects was delayed while revenues from stamp duty and vehicle quota premium exceeded expectations.

The S$8 billion set aside for the Pioneer Generation Package, with accumulated interest over time, will meet its full projected cost of S$9 billion, including a buffer for inflation, said Finance Minister Tharman Shanmugaratnam as he laid out the Government’s fiscal position for the year.

“It is right and prudent to set aside monies today to pay for the Pioneer Generation Package, while we have sufficient resources to do so,” he said. “With this Fund, we assure the Pioneer Generation that Singapore will honour our commitment to them, regardless of future economic circumstances.”

Setting up the fund also means the Budgets in the following years can focus on future needs. Singapore’s spending needs will grow significantly in the next 10 to 15 years, among them investments in infrastructure, such as Housing and Development Board estate renewal, MRT expansion, and healthcare, Mr Tharman said.

The Pioneer Generation Fund, he noted, is not intended to cover the underlying healthcare subsidies for all Singaporeans. “These will continue to be funded from future annual budgets. For example, the enhanced SOC (specialist outpatient clinic) subsidies in this year’s Budget are part of our future budgetary spending and we have planned for them on that basis.”

Referring to the deficit projected for this year, he said: “This is close to a balanced Budget and will not draw on past reserves, as we have sufficient surpluses from the last few years.”

Last year’s surplus was mainly due to cyclical factors that will not last and Singapore should see a tighter budget position in the coming years, he added.

Overall, the Government collected S$57.15 billion in operating revenue last year, about S$2.1 billion more than expected. Of this, S$4.05 billion was collected in stamp duty instead of the forecast S$3.1 billion.

Vehicle quota premiums totalled S$2.76 billion — largely unchanged from 2012 — instead of the S$2.4 billion projected, boosted by the higher-than-expected number of vehicle de-registrations and more replacement Certificates of Entitlement being issued, as well as more commercial vehicles being renewed. Lin Yanqin

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