THE generous goodies given out last Friday are the result of a bumper Budget surplus that cannot be expected every year, Senior Minister Goh Chok Tong warned yesterday.
The surplus was driven by ‘exceptional’ economic growth of 7.7 per cent last year that may not be repeated, he said.
And the other conditions that led to such a big surplus – such as fast-rising property prices – may not even necessarily be desirable.
On Friday, the Government announced a huge Budget surplus of $6.4 billion, as well as $1.8 billion in benefits in the form of Growth Dividends, income tax rebates and health care and education related top-ups.
Urging people to have realistic expectations and not to keep asking for more, SM Goh said: ‘What I find missing is a little bit of reflection. That is, people asking themselves how this Budget is possible.
‘You got to understand that the surpluses came about because of the exceptional economic performance. We cannot grow by 7.7 per cent every year.’
He also noted that a key factor behind this year’s surplus was the strong growth of the property market.
It led to the Government collecting $4.1 billion in stamp duties paid on property purchases last year, a 211 per cent increase over the previous year.
But continued growth of the property sector at such a pace is neither possible nor desirable, SM Goh said, because it may lead to an oversupply of property or an overheating of the economy.
SM Goh was speaking to reporters yesterday at a Chinese New Year lunch at the Singapore Expo for about 1,000 elderly people from Marine Parade GRC.
He said that when he looked around at the silver-haired attendees, one question in his mind was how Singapore will look after them in the future.
‘So, therefore in our budgeting, we always have an eye on the future,’ he said.
For this reason, it is important for the Government not to give out too much of the surplus, Mr Goh added.
Rather, the Government must keep aside a sum to increase the size of Singapore’s reserves, which will come in handy in the future.
Singapore’s long-term well-being was also the focus of Education and Finance Minister Tharman Shanmugaratnam’s first public comments since delivering the Budget statement on Friday.
‘We have got to turn our minds away from the immediate benefits that are being handed out…Far more important is what we are doing for our children, our youth, particularly those who are going to post-secondary education.’
A slew of incentives in the area of education was announced as part of the Budget. They included subsidies for part-time degree courses, an $800 million boost for the lifelong learning fund, enhanced aid for needy university and polytechnic students, and more top-ups to student education accounts.
Mr Tharman also encouraged local businesses to pursue innovation in order to compete against those from China, India and Western countries.
He said: ‘They must invest in some R&D, some innovation…try to improve, do something special, different.
This is most important for us in the future.’
Commenting on concerns about rising inflation, Mr Tharman said Singapore is well poised to cope with this short-term problem.
He said: ‘Inflation is not a problem for us in Singapore because we can help those who are directly affected, make sure that their families can continue to get by, continue to afford their food, and also encourage everyone to get a job. This is a Budget principally about preparing for the future.’
Source: The Straits Times 18 Feb 08