SINGAPORE — While the global economy is more uncertain and downside risks to growth have risen, Deputy Prime Minister Heng Swee Keat said he does not foresee the need for an “extraordinary” Budget for now.

The Government, nevertheless, stands ready to step in where needed, Mr Heng said in an interview with radio station CNA938 on Friday morning (Sept 27).

Disruptions to global supply chains arising from trade tensions between the United States and China will have a significant impact not only on Singapore but across the world, said Mr Heng, who is also Finance Minister.

“How the whole economy will pan out by the end of the year is something that we are watching very closely and we are prepared to take action when needed,” he said.

Aside from the Government’s annual Budget Statement, which will be delivered in a few months, Mr Heng said rolling out structural policies was of greater importance.

He noted that “important” structural changes are taking place in the global economy.

“China is a very good example of this. When our trading partners change the structure of the economy when they upgrade, we, too, must upgrade. Otherwise, we will be left behind,” Mr Heng said.

Asked about plans to help workers deal with the economic winds of change, Mr Heng urged Singaporeans to learn continuously, which he described as a “no-regrets measure”.

“We have to keep learning… whether it’s hard skills or soft skills, and go into areas for which there are new demands.

“At the same time, employers will also need to change their practices and to rethink how they are going to hire,” he said.

In Thursday’s wide-ranging interview with presenters Arnold Gay and Yasmin Jonkers, Mr Heng took questions about the US-China trade dispute, the impending hike in Singapore’s Goods and Services Tax (GST), the timing of the country’s next General Election (GE), and a possible Cabinet reshuffle.

TRADE WAR

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  Mr Heng noted that disruption to global supply chains resulting from the US-China trade conflict was a focus of those who attended the recently concluded Singapore Summit, a yearly forum bringing together leaders from across the globe to discuss trends in business, finance and geopolitics.

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  Business leaders, Mr Heng said, advocate that supply chains should not be disrupted, but are also exploring other possibilities. He noted that a multilateral approach allows for the best integration in assembling electronic components, for instance.

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  “Having said that, we should also be prepared that if there are bigger changes that are coming, we should be ready to create new trading links (and) new systems of reaping this advantage of specialisation,” he said.

GST HIKE

Singapore is set to increase its GST from 7 to 9 per cent sometime between 2021 and 2025. Amid fears of a recession and concerns over the cost of living, Mr Heng was asked how the Government would reconcile these worries with the need to raise revenues to support rising expenditure, and how it would determine the right time for the GST hike.

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  The timing of the increase, Mr Heng said, depends on “how our expenses go up and how our incomes are changing”.

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  He reiterated that investment returns from Singapore’s reserves — known as the Net Investment Returns Contributions — form the single-largest source of government revenue. This was made possible by a prudent government in the earlier years of Singapore’s development. “If we had not had this, I would not be talking about GST increasing from 7 to 9 per cent; it means that even if I double it to 14, 15 (per cent), it would still not be enough, or increasing corporate tax and doubling (it), or increasing personal income tax and doubling it, and it is still not enough.”

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  The main reason for raising the GST is to cater for an increasingly ageing population and the higher attendant healthcare expenditures, for instance. It is important, Mr Heng said, for Singaporeans to think not just about the present but future generations.

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  Mr Heng gave the assurance that he would announce details of a “significant offset package” when the GST goes up. He pointed out that help and subsidies have already been beefed up in healthcare, education and housing.

WHEN IS THE NEXT GE?

Singapore is headed for a GE, which is due by April 2021. Mr Heng, who is widely expected to succeed Prime Minister Lee Hsien Loong if the ruling party prevails at the polls, was asked if a date has been set and about the qualities he is seeking in the fourth-generation leadership.

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  Mr Heng, borrowing the words of Mr Lee, replied that the GE was “coming nearer each day”.

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  Notwithstanding the date of the polls, Mr Heng said the most important task remains dealing with the issues that Singaporeans want tackled in the coming years, and devising a strategy to take Singapore forward.

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  Mr Heng said a “very good team” was already in place, but he hoped for more people to join the group. The qualities sought include a commitment to Singapore and a breadth of experience in government, business or the social sector.

CABINET RESHUFFLE

Another Cabinet reshuffle could be on the cards next year.

Asked how a reshuffle could play out, Mr Heng said he and Mr Lee have been discussing some of these matters.

“I must say that it is progressing well,” said Mr Heng, noting that Mr Lee will make a decision when the time comes.

HIS FAVOURITE SONG

On a more lighthearted note, Mr Heng said he played American singer Barbra Streisand’s Evergreen (1976) “a lot” in his dormitory when he was courting his now-wife Chang Hwee Nee, who is chief executive officer of the National Heritage Board.

They tied the knot in 1989.

At the close of Thursday’s interview, Mr Heng unveiled a plaque to officially launch CNA938. The station, which replaced its forerunner 938Now, went live in early June.