The Secret Ingredient of Singapore’s 2021 Budget Plan
Singapore budget is announced each year with the financial year starting from the 1st of April of every year to the 31st of March of the next calendar year. The budget normally includes revised government revenue and expenditure projections for the current year as well as a planned government revenue and expenditure for the coming financial year. Before announcing the budget; the minister of finance carries out consultation to help gather feedback for the next financial year’s budget.
The feedback process takes about two months and all the suggestions and views gathered gets submitted during the set period and are taken into consideration when designing the budget. Once the designing of the budget is done, it gets presented before the cabinet for approval. Just like the budget that people set aside for their own personal expenditures; Singapore budget is normally planned with the aim of enabling Singaporeans to spend wisely.
The measures that were announced in Singapore budget 2021 are meant to help the country press on with economic and workforce transformation while strengthening the social compact and building a future for all in a way that’s sustainable. While budget 2020 was tilted towards the delivery of emergency support in a broad-based way, budget 2021 focuses on accelerating structural adaptations. Last year, apart from the usual spending; the government also committed about S$100 billion through the five budgets to support Singaporeans and also help businesses to stay strong during the pandemic.
One of the secret ingredients of Singapore’s 2021 budget is the fact that it puts in place structural economic policies to help equip businesses and workers with deep and future-ready capabilities. In order to fund the budget, Singapore will draw from its past reserves for the second year in a row and the budget is expected to post a deficit of S$11 billion or an equivalent of 2.2 percent of gross domestic product (GDP). The budget is such a balanced one as it addresses the immediate needs by supporting some of the worst-hit sectors in a way that’s targeted.
The budget focuses on the environmental and fiscal perspective while still supporting the medium to long-term needs of digital transformation, sustainability and upskilling of workers. The key ingredient of Singapore budget 2021 is the push for transformation.
The government outlined S$24 billion that’s to be spent over the next three years to help workers and companies emerge stronger in the push for transformation. The funds are designed to be used in building the ecosystem for innovation, digitalize businesses, create a vibrant business sector and strengthen the workforce. The new budget measures such as the emerging technology program and the digital leaders program further helps in strengthening the range of measures that companies can tap on for increased competitiveness and position for growth post Covid.
Large local enterprises
The government also set aside S$500 million to be in a local enterprises funding platform to be commercially managed. The platform is to invest in non-control equity and mezzanine debt of the selected LLEs which are committed to work with the fund manager in pursuit of the next phases of growth.