Six questions on fiscal governance that need clarity at the upcoming DPM Heng’s address

Year: 2020

This post is written as a brief comment to Deputy Prime Minister Heng Swee Keat’s upcoming address on 5 October 2020.

“FMG recognises the government’s efforts to manage Covid in Singapore. Vast sums have been deployed both from current account and from past reserves. It is not possible to sustain this level of expenditure.

And while physical deaths have been low, ‘economic deaths’ have been rising in terms of firm failures and job losses.

Thus, we look forward to DPM Heng’s address today to provide clarity on pertinent issues.

First, will the government return the monies tapped from past reserves or consider them written off?

Second, how does it propose to ‘taper’ expenditures over the next 12 months?

Third, given that this is just the start of the new term of government, how does it intend to fund all continuing contingency and committed long tail CapEx costs?

Fourth, as the domestic economy represents just 25% of GDP, when, how and by how much will the export economy be opened up?

Fifth, what metrics for success is the government using, especially if it does the unthinkable and decides for the first time to borrow to fund expenditure?

Sixth, did the government balance the budget over the last term as Constitutionally required?

These questions of fiscal governance need answers so that the fiscal principles are made transparent. Are these temporary or permanent.”

– Devadas Krishnadas
CEO, FMG