Due to Terminal 5, Tuas Mega Port and other undisclosed billion-dollar projects, Finance Minister Heng Swee Keat now confirmed that the government is now in debt and will need to borrow money to refinance:
“New funding ideas for mega infrastructure projects are also on the cards, particularly through borrowing arrangements by statutory boards and government-owned companies. We will leverage the strength of our financial position to optimise our borrowing…”
Speaking in Parliament today (May 9), the PAP Minister said the government is also looking to raise taxes like the GST:
“Given the inevitable rise in public spending, especially in areas like healthcare, infrastructure and security, Singapore’s fiscal position is expected to tighten considerably in the coming years. On the revenue end, Singapore has to adjust to changes in the global environment that could impact its competitiveness, including the reduction of corporate tax rates by several countries. But even as the Government raises revenue to meet growing expenditure needs, such as through the planned increase in the Goods and Services Tax (GST), taxes will stay competitive to encourage private enterprise and individual initiative.”
The news came after Prime Minister Lee Hsien Loong and his wife Ho Ching lost undisclosed tens of billions in overseas investments in recent years. In July 2017, the GIC – where Lee Hsien Loong is Chairman – lost at least an estimated S$43 billion. Temasek Holdings in recent months were also hit by a number of bad investments, including the S$643 million losses from ComfortDelgro after Uber played it out, a S$62 million write-off after a subsidiary declared bankruptcy in China, and in 2016 the sovereign wealth fund company lost S$24 billion in a single year.
Pressure for retirement payout has been increasing due to the retirement of the baby boomers, who are now in their late 50s and reaching the age of 63. The Singapore government is however delaying the payout by increasing the Minimum Sum, which doubled from 2003’s S$80,000 to the present S$181,000.