Reason for Lower-than-projected Health Ministry Operating Expenditure in FY2025
Ministry of HealthSpeakers
Summary
This question concerns Member of Parliament Gerald Giam Yean Song’s inquiry regarding the $0.31 billion reduction in the Ministry of Health’s revised FY2025 operating expenditure and its reconciliation with increasing care demands. Minister of State Rahayu Mahzam explained the 1.6% variance resulted from lower-than-expected operating cost increases at public healthcare clusters and the timing of various projects. She clarified that expenditure maintains an upward trajectory, with the revised FY2025 estimate being 9.7% higher than actual FY2025 spending and FY2026 estimates reaching $20.04 billion. Minister of State Rahayu Mahzam assured the House that patient care was not compromised, as healthcare services remain a priority despite these operational budget adjustments. She noted that while specific operational details are non-public, the reduction is within an accepted budget variance margin and does not affect service quality.
Transcript
8 Mr Gerald Giam Yean Song asked the Coordinating Minister for Social Policies and Minister for Health (a) what specific factors led to the $0.31 billion projected reduction in the Ministry’s revised FY2025 operating expenditure compared to the initial estimates; and (b) how does the Ministry reconcile lower-than-projected funding needs for public healthcare institutions with the increased care demands of a rapidly ageing population.
The Minister of State for Health (Ms Rahayu Mahzam) (for the Coordinating Minister for Social Policies and Minister for Health): Mr Speaker, the reduction in the Ministry of Health's (MOH's) estimated financial year (FY) 2025 operating expenditure of $310 million is about 1.6% of the total initial estimate of $18.8 billion. It is mainly due to lower-than-expected increases in operating costs at the public healthcare clusters and is within an accepted margin of budget variance.
Overall, MOH's operating expenditure maintains an upward trajectory. The revised FY2025 estimate of $18.49 billion is $1.63 billion, or 9.7%, higher than the actual FY2025 operating expenditure. [Please refer to "Clarification by Minister of State for Health", Official Report, 4 March 2026, Vol 96, Issue 24, Correction By Written Statement section.]
The trend of increase will continue, as shown by the estimated FY2026 operating expenditure of $20.04 billion.
Mr Speaker: Mr Giam.
Mr Gerald Giam Yean Song (Aljunied): I thank the Minister of State for the reply. Can I get more clarity on what the operating costs that were lower than expected were?
Ms Rahayu Mahzam: Mr Speaker, the net decrease comprises many lines of reduction and these include the timing of some decisions. It is an operation, as the Member will know, so there are many different things that could happen. But actually, in total, it partially also offsets increases. So, there will be some decreases, some increases and largely because there are operational demands within the public healthcare institution.
Mr Speaker: Mr Giam. Mr Giam had another clarification.
Mr Gerald Giam Yean Song: Sir, I think I do want to request a bit more clarity on what are the operational costs that went down more than more than expected. Is it due to things like lower take-up rate of salary enhancement schemes or is it because of other aspects that might have led to longer waiting times for patients? Because we would have expected that because of an ageing population, operating costs should have gone up and if anything, it would have exceeded the expectations and the budgeted amounts rather than decrease. So, is patient care compromise in any way because of this?
Ms Rahayu Mahzam: I can appreciate the Member's concern, Mr Speaker. Some of the information are non-public information with regard to the operations. But Member can be assured that it was not an issue of compromising of care to patients. Largely, it related to the different projects and different decisions that were made on certain items, but healthcare services continued to be priority and continued to be delivered well to the patients.