EFFECTIVE BUDGET MANAGEMENT

DEVADAS KRISHNADAS

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Fiscal Leadership

Effective Budget

Management

Focus on the Long

Term

32

1

SCOPE

FISCAL POLICY IN SINGAPORE

FISCAL LEADERSHIP

FISCAL STORY GIVES

TO BUDGETS

PURPOSE AND MEANING

Effective Fiscal Leadership

GIVE DIRECTIONWhere should the country go?

1CLARIFY PRINCIPLESWhat are the guiding principles?

2

DECIDE ON PRIORITIESEssential over Important3

FOCUS ON THE FUTURELong-term

4

ENSURE SUSTAINABILITYAvoid kicking the can/Burying mines

5

PREPARE FOR CONTIGENCIESAvoid wishful thinking

6

BE COMMITTEDStaying the course

7

Fiscal Policy

BALANCED BUDGET

1

CUSHION ECONOMY (in downturn)

2CREATE

COMPETITIVE TAX ENVIRONMENT

3BUILD

LONG-TERM COMPETITIVENESS

4

PRO-COMMUNITY

(through social transfers)

5

(Invest in R&D, education,

Infrastructure)

(over medium term)

(Support jobs, businesses, investments)

EFFECTIVE BUDGET

MANAGEMENT

Ensuring Vertical and Horizontal CoordinationWHOLE-OF-GOVERNMENTSTRATEGIC OUTCOMES

Secure and

Influential Singapor

e

Strong Families, Cohesive Society

Robust Social

Security

SUSTAINABLE ECONOMIC GROWTH

World-Class Environment and Infrastructure

Effective Government

Sustainable Economic Growth

APR/JUN: Preparation

SEP-OCT:Administrative Timelines

DEC: Finalisation of Budget

JAN: Cabinet’s approval for the budget

FEB/MAR: Parliament and President’s approval for the budget

BUDGET

CYCLE

JUN-NOV:Engagement with Ministries/ Agencies

BUDGET CYCLE

Promoting AccountabilitySINGAPORE PUBLIC SECTOR OUTCOMES REVIEW (SPOR)

The biennial SPOR takes stock of how Singapore has fared in key areas of national interest

Building in FlexibilityBLOCK BUDGETING

MINISTRIES’ BUDGET

GROW BY A FACTOR

OF 40% THE sGDP GROWTH RATE

The Ministry of Finance and Individual Ministries agree to a 3-5 YEAR BLOCK OF FINANCING which

relates to priorities decided upon by Cabinet

MINISTRIES CAN MANAGE THEIR CASH FLOW BETTER BY:

1. Borrowing from future year(s)• Advances

2. Saving to subsequent year(s) • Carry Forward at

Total Budget Level• Rollover at

Operating Budget Level

Promoting Rolling Innovation

1% of Ministry

A’s Block

Budget

1% of Ministry

B’s Block

Budget

1% of Ministry

C’s Block

Budget COMPETITIVE BIDDING

CROSS AGENCY

COLLABORATION

INNOVATIONPRIORITY AREAS

REINVESTMENT FUNDManaged by the Ministry of Finance

REINVESTMENT FUND

Focusing on the Long Term

Investing in the Basics

2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

2

4

6

8

10

12

14

SINGAPORE’S EXPENDITURE

Education Health Public Housing

Year

Billi

on (s

gd)

Thinking Big, Taking RisksJURONG ISLAND1970s: Petroleum industry took off in Singapore

1980s: Industrial land became scarce

SOLUTION: Reclaim seven smaller islands to form one large island

TODAY: Jurong Island is at the heart of Singapore’s energy and chemicals industry. It is home to almost 100 leading global petroleum, petrochemicals and specialty chemicals companies

From an initial area of less than 10 square kilometers to today’s 32 square kilometers

MARINA BAY The Marina Bay area was reclaimed during the 1970s and 1980s in anticipation of the need to grow the city center in the future.

It allowed for the seamless extension of the central Business district and supports Singapore’s growth as a global business and financial hub.

Today, Marina Bay includes a variety of uses, including commercial, residential, hotel and entertainment. This ensures it remains a vibrant centerpiece of Singapore around the clock.

Long-term Challenges

• Immigration and strain on infrastructure

• Ageing population and the impact on health care and adequacy of retirement finances

• Widening income gap and the need to strengthen social safety net

• Maturing economy and lower growth trajectory

• Intensifying Economic Competition which impacts trade and economic growth

FY2000

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

FY2012

FY2013

FY2014(P)

FY2015

FY2016

FY2017

FY2018

FY2019

FY2020

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Operating Revenue ($'m) Total Revenue ($'m)

Operating & Development Expenditure ($'m) Total Expenditure ($'m)

Overall revenue growth not likely to keep pace with expenditure growth

FISCAL PRUDENCE REMAINS

KEY

RISK OF DECREASING REVENUE

PRESSURE OF INCREASING EXPENDITURE