Singapore has a strong record of sound finances: Indranee to WP’s Low Thia Khiang

SINGAPORE — Senior Minister of State Indranee Rajah rejected Mr Low Thia Khiang’s (MP for Aljunied GRC) suggestion to set up an oversight office similar to the UK’s Office for Budget Responsibility during parliament yesterday.

The context for introducing the OBR in 2010 was huge deficits and unreliable budgeting, which is not the case here in Singapore, said Ms Indranee. “Our situation is very different. Our government has a strong track record of sound finances,” she said. Her remarks were made during the Committee of Supply debate for the Ministry of Finance’s budget.

“While many other countries are in a net debt position, we have consistently spent within our means and achieved a balanced budget in each successive term of government. A good example is the Pioneer Generation Package, announced in Budget 2014. We set aside $8 billion dollars from current reserves to help fund this,” she said.

Meanwhile, to ensure the long term sustainability of our expenditures, the government has consistently also taken the approach of preparing ahead for spending needs, Ms Indranee noted. She gave the example of the Budget which highlighted the longer term increase in healthcare and infrastructure needs and the government’s signal that Singapore will be reviewing its revenue measures to meet this expenditure.

Singapore also has in place a strong system of fiscal rules and safeguards to ensure fiscal sustainability. The government is required to seek parliament’s approval for its expenditures during each year’s Budget. Also, the elected president, advised by the Council of Presidential Advisers, holds the second key to Singapore’s reserves. This effectively instils discipline for the government to achieve a balanced budget over each term of office, she said.

“Markets have confidence in our system. This can also be seen from the fact that we are among the few countries today that continue to enjoy AAA credit rating,” Ms Indranee said.

Mr Low further questioned if Singapore should wait until the international markets lose confidence in the Republic before an office of oversight is created. Ms Indranee responded saying that the correct approach to take is to make sure international markets do not lose confidence in the first place.

“We must make sure never to get to that situation,” she said.