REVISED POSITION FOR FY2023
The expected FY2024 budget surplus will mark a reversal from a revised deficit of S$3.6 billion, or 0.5 per cent of GDP, in FY2023.
Mr Wong said revenue collections over the past year were “better than expected”, on the back of higher corporate income tax collections.
Corporate income tax is expected to come up to S$28.4 billion, S$4.1 billion or 17 per cent higher than the estimated figures.
Other taxes, such as personal income tax and vehicle quota premiums, also saw better takings due to the stronger-than-expected economic recovery in 2022.
“The additional revenue will allow us to pay for new spending, including the S$7.5 billion injection to the Majulah Package Fund,” said Mr Wong.
However, total expenditure also went up to S$106.9 billion, which is S$2.7 billion or 2.6 per cent higher than previously estimated.
This is due to higher-than-expected spending by various ministries, such as defence, health and transport. Higher operating expenditure came about due to the need to meet priority areas such as catching up of projects deferred by the COVID-19 pandemic, and elevated costs from higher inflation.
“Accounting for both our revenue upside and higher spending, we expect to end FY2023 with a deficit,” said Mr Wong.
FISCAL DISCIPLINE
Mr Wong also reiterated the need to “uphold the ethos of fiscal discipline and responsibility” and ensure the country’s fiscal position “always remains balanced, sound and sustainable.
He pointed to the Finance Ministry’s occasional paper released last year, which laid out projections of Singapore’s medium-term fiscal outlook.
The paper noted that government expenditure is expected to rise to about 19 per cent to 20 per cent of GDP between the financial years of 2026 to 2030, and possibly exceed 20 per cent by the end of the decade.
This remains the government’s assessment, said Mr Wong.
“Assuming we stay within this range of spending increase, we should have sufficient revenues to maintain a balanced budget over the coming years,” he added.