Singapore financial position will be weaker in coming years, but the Government will continue to find ways to manage this “difficult financial situation”, said Deputy Prime Minister Heng Swee Keat in an interview on Wednesday (May 27).
A total of S$52 billion will be drawn from past reserves this financial year to help Singapore as it battles the economic fallout from the COVID-19 pandemic.
“I will address the issue of how we are going to ensure that we continue to have the fiscal power to keep Singapore safe, not just in this one year, two years, but for the long term and I will address Parliament on this issue later,” said Mr Heng.
“But for now, let me say that we have a huge work ahead of us, which is to make the very best use of every dollar and cent that we have taken from the past reserves and make sure that we use it wisely and make sure that it counts. And if we can do that, that will allow us to bounce back better and allow us to protect Singaporeans better.”
The financial crisis was the only other time that Singapore had dipped into its reserves, when the Government drew S$4.9 billion to help workers stay employed and companies get credit.
The money was returned to the reserves in 2011 after the economy recovered.
Singapore financial position will be weaker in coming years
The Deputy Prime Minister said the Government will need to continue to find ways in which it can “manage this difficult financial situation”.
“But for now, I think the most important thing is, first, keep our people safe and second, let’s get the economy going again, as much as possible,” Mr Heng added.
“It will not be easy … if we put our minds to it, we can emerge stronger, and with that, I think we can begin to rebuild our resources over time.”
Singapore has been “very fortunate”, because it has sufficient reserves to tide it through a even “more prolonged difficult period”.
“But we have to be very careful in how we spend this and make sure that we use it wisely and use it well,” the Deputy Prime Minister said.
When asked if Singapore could see a fifth supplementary budget, Mr Heng said: “After presenting four Budgets within such a short period of time, I will say that ‘never say never’.”
The Fortitude Budget has been sized in such a way that it allows Singapore to respond should the situation deteriorate, he added.
He explained that Singapore has set aside a contingent sum of S$13 billion, up from the usual S$3 billion annually.
“That is why in this Budget I have a bigger contingent sum,” Mr Heng said. “So I hope that we do not need to have another Budget in order to respond because if the situation deteriorates, it is going to be very very fast.”
A key part of the Fortitude Budget is the SGUnited Jobs and Skills Package that will create close to 100,000 opportunities for workers, including jobs, as well as 25,000 traineeships and 30,000 skills training placements.
“It’s very important for us to provide a very focused support for our people who are seeking jobs – both those who have been retrenched as well as those new students, graduating students, from our ITEs, polytechnics and universities,” said Mr Heng.
“This SGUnited Jobs and Skills package has a very clear component to create jobs, as well as traineeships and company-level traineeships in order to ensure that everyone who wants to learn something, who wants to do something, is able to do so.”
When asked if the 100,000 figure was a reflection of the expected job losses that could arise from the COVID-19 pandemic, Mr Heng explained that it was based on a range of projected job losses and the number of new entrants into the labour market every year.
“This is how we’ve sized it. I believe that for now, that will be sufficient. But if there is need for us to do even more, we have the resources to do that.”
The Government is also taking more steps to put “a focused effort” on revamping the built environment sector to create better jobs for Singaporeans and to reduce “the manual portion” of the work.
“With the digitalisation trend, if we can be far more efficient, we would have to worry less about machines taking over man in the job market.
“For us, a combination of man and machines will be a very powerful one and therefore we must make the best use of how digitalisation can enable us to be more productive and more efficient,” said Mr Heng.
“But in other sectors, like for instance the built environment, people associate the built environment with just construction work and hard labour,” he added.
“But actually, the built environment is a pretty sophisticated one. You have many Singaporeans who are employed as architects, engineers, draftsmen, quantity surveyors and project managers. These are good high paying jobs.”
Mr Heng said he has discussed this with National Development Minister Lawrence Wong and Minister for Social and Family Development Desmond Lee.
“I must caution that there is a limit to how far we can go,” Mr Heng added.
“We will still need to rely on a significant proportion of foreign workers to do very difficult jobs for which many Singaporeans would not want to do.”