Deputy PM to present 2021 budget to parliament
Singaporean Deputy Prime Minister Heng Swee Keat will today unveil the city-state’s 2021 budget.
Since February 2020, Heng has approached parliament six times for a total of $74 billion in stimulus spending, including $40 billion from Singapore’s vast reserves. Due to the statutory requirement for governments to have balanced budgets, Singapore generally runs a budget surplus, which has led it to amass a reserve fund of at least $850 billion. Governments have avoided tapping this fund, as existing non-currency reserves would allow the government to fill the current 25% revenue gap in the economy for just five years.
It is expected that today’s budget will not draw upon more reserves and will feature deficit spending between 2.1% to 6.5%. The government will attempt to target economic aid to citizens hit hardest by the COVID-19 pandemic and traditional Singaporean profit-centre industries such as airlines and hospitality that won’t regain full potential for some time. A well-structured budget means that economic expansion in 2021-2022 will allow for a balanced budget. For Heng, a successful recovery would position him as the implicit successor to Prime Minister Lee Hsien Loong, who will step down from the role in the next two years.
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