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Govt will take more steps to help families, businesses if external situation worsens: Lawrence Wong

SINGAPORE — The Government will not hesitate to take additional steps to help families and businesses here if the external situation worsens, Finance Minister Lawrence Wong said on Wednesday (March 2).

Finance Minister Lawrence Wong delivering his round-up speech at the end of a three-day debate on Budget 2022.
Finance Minister Lawrence Wong delivering his round-up speech at the end of a three-day debate on Budget 2022.
  • Budget 2022 takes into account external developments such as the Ukraine-Russia conflict and its impact on Singapore's economic outlook, Finance Minister Lawrence Wong said
  • He said the Republic has "pressing revenue needs", which do not allow for the Goods and Services Tax increase to be pushed back further
  • Mr Wong gave the assurance that the Government will "not hesitate to take further actions" to protect jobs and help families and businesses if global headwinds persist

SINGAPORE — The Government will not hesitate to take additional steps to help families and businesses here if the external situation worsens, Finance Minister Lawrence Wong said on Wednesday (March 2).

Rounding up a three-day debate on Budget 2022, Mr Wong said that the Government is fully aware of the concerns faced on the ground with regard to inflation and rising costs, which are compounded by recent global developments that have occurred since he delivered the Budget on Feb 18.

When he delivered his maiden Budget speech then, Mr Wong had highlighted the brewing tension in Eastern Europe and the risks that it bears on the economic outlook. Since then, the situation has escalated rapidly with Russia’s invasion of Ukraine.

On Monday, Trade and Industry Minister Gan Kim Yong said that the conflict has clouded Singapore's economic outlook and will lead to rising energy costs, as the Republic imports most of its energy needs and sanctions on Russia have disrupted global supplies.

Referring to these developments as he began his wrap-up speech on Wednesday, Mr Wong said that the Government is taking actions to enhance the resilience of Singapore’s energy supplies.

He also drew attention to various steps announced during the Budget to help households cope with rising costs, as well as the support given to assist businesses and workers.

Mr Wong added that the Monetary Authority of Singapore (MAS) had taken a pre-emptive step to tighten monetary policy in January, which would moderate the impact of higher global inflation.

“MAS will continue to assess the appropriate steps to ensure medium-term stability,” he said.

The Government is also closely monitoring the external situation and the risks for Singapore’s economy, in terms of both growth and inflation, he added.

“If the situation worsens, we will not hesitate to take further actions to protect jobs and to help households and businesses deal with increased costs."

In his speech, Mr Wong said that the conflict in Ukraine is a reminder that “we are living in an increasingly divided and troubled world” that “will be less hospitable for small countries”, adding that Singapore will always be at the mercy of such external forces.

Thus, it is important that the Republic has sufficient resources to defend and protect itself, he said.

Mr Wong also addressed concerns surrounding the impending hike in Goods and Services Tax (GST) — a lightning rod issue among a slew of tax changes introduced in this Budget. 

The GST increase will be executed in two steps, going up to 8 per cent in 2023 and again to 9 per cent with effect from 2024.

Mr Wong said he fully understands the concerns on the ground, and acknowledged views that called for the GST hike implementation to be delayed until inflation subsides.

However, he added that the Government cannot keep delaying the increase, in light of the “pressing revenue needs” that Singapore has.

Here, he repeated his assurance that the Government will take further actions if inflation persists beyond its projection.

“If inflation turns out to be persistent and higher than expected, we will deal with this separately through other tools,” he said.

Related topics

Budget 2022 GST Lawrence Wong Russia Ukraine

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