Singapore will likely see a Budget deficit next year: PM Lee
SINGAPORE - Singapore is unlikely to see a Budget surplus next February given the ongoing economic crisis, and even a balanced Budget will be very hard to achieve, said Prime Minister Lee Hsien Loong on Tuesday (Nov 17).
In fact, it may take some time for Singapore to return to "prudence and balanced budgets", he added.
"You have to spend money on Covid and the economy is down. Just from a counter-cyclical point of view, you do not want to have a negative fiscal impulse," Mr Lee said. "You must keep the economy on an even keel and people as far as possible in jobs, or if not in jobs, some help is rendered so that they are able to get past this difficult period."
He was responding to Bloomberg News editor-in-chief John Micklethwait, who had asked if the Government will run a Budget deficit for some time, given that Singapore has drawn $52 billion from its reserves to see the country through the crisis.
"I hope that we will be able to come back to prudence and balanced budgets, but it may take a while," Mr Lee said. The mindset that Singaporeans have to earn their keep, and that reserves are not bottomless, has to be deeply ingrained in the population, he added.
"It is not easy because the Opposition will say, 'Well how much do you have? Let me have a look. Why not take a little bit more? We are not broke yet.'"
At present, some sectors of the economy - such as aviation, tourism and entertainment - are in suspended animation, the Prime Minister added.
"It is better for me to take care of them and keep these sectors in suspended animation, then to risk reviving them before we are ready to deal with the consequences, and then we have another major Covid outbreak."
Singapore has to deal with the immediate and medium-term public health and economic requirements, he said.
"But one day this too will pass, and when it does, we must make sure that we can get back to the habit of balancing our budgets."
Asked about leadership succession, Mr Lee also reiterated his pledge to see Singapore through the Covid-19 pandemic before stepping down as Prime Minister.
The country is in the middle of a crisis which, he said, is a huge challenge for Singapore and is indeed existential - both economically and from a public health point of view.
"It is my responsibility to see us through this crisis before I hand it over in good shape into good hands," he said. "I hope that will be before too long."