Budget: Tighten purse strings
I refer to the article “Tighter purse strings needed as revenues fall” (Straits Times, Apr 5).
$6.3b Special Transfers
It states that “Special transfers, which included a $1.1 billion top-up to the Special Employment Credit Fund – a wage subsidy – and a $1.5 billion top-up to the National Research Fund, amounted to close to $6.27 billion. This is about 40 per cent lower than the $10.54 billion shelled out during Budget 2015.”
High Special Transfers increase Budget deficits?
Arguably, one of the reasons why we had a Budget deficit for the last two years may be the huge top-ups to endowment and trust funds, such as the “Government’s $8 billion Pioneer Generation Package, rolled out in 2014, was paid for upfront by surpluses generated by the Government”.
Under IMF fiscal reporting guideines, such transfers may not be charged as one-time expenditures.
Also, the projected Budget surplus for the next financial year is $3.4 billion. So, arguably we are already quite prudent.
Cash Surplus vs Overall Budget Surplus?
In this connection, according to the Department of Statistics’ Yearbook of Statistics 2015 – the Cash Surplus was $31.0, 31.2, 31.9 and 24.4 billion in FY2013, 2012, 2011 and 2010 respectively, against the Overall Budget Surplus of $5.0, 5.8, 4.0, 0.98 billion respectively.
(Note for the Cash Surplus – “Does not reflect the fiscal position of the current term of government, as it takes into account land sales and capital receipts (which accrue primarily to past reserves) in addition to taxes and other revenues, as well as land-related expenditure”)
Leong Sze Hian
