Ministry of Finance

The Deputy Prime Minister and Minister for Finance (Mr Lawrence Wong): The Ministry of Finance (MOF) seeks to advance the well-being and development of Singapore through sustainable and forward-looking fiscal policies. We aim to enable an innovative, resilient and efficient Government that delivers strong outcomes and value for money for Singaporeans.

MOF will work with Government agencies to deploy resources in support of our national priorities, including initiatives being developed in the Forward Singapore exercise.

We will allocate our resources in a prudent and responsible manner and continue to adjust our fiscal strategies to support the aspirations of present and future generations of Singaporeans.

We will continue to steward our reserves as a crisis fund and an endowment fund, to take care of present and future generations. We will also continue to ensure good governance and accountability in the use of public funds.

Our fiscal space is now tighter than before. Looking to the medium-term, we expect annual Government spending to increase to around 19% – 20% of GDP in Financial Year (FY)2026 – FY2030, and possibly exceed 20% of GDP by FY2030. The key drivers of growing expenditure are healthcare and social spending, such as moves to uplift lower-wage workers and strengthen early childhood education.

To close the funding gap, MOF has taken steps to strengthen our revenue position at Budget 2022 and Budget 2023, so that rising Government spending can be balanced by total revenue in the coming years. We have also enhanced the progressivity of our system of taxes and transfers.

Beyond what we have factored into our projections, the Government may need to spend more, for example, to enhance Singapore’s economic competitiveness, social inclusion and mobility, or national resilience. If this were to happen, we would require more revenue, or a reallocation of existing funds to the new priority areas.

MOF will continue to ensure sound and stable public finances for Singapore, through a sustainable mix of taxes on income, consumption and assets. We will uphold a fiscal system that is fair and progressive, where everyone contributes, but those who are better off will contribute more; where everyone benefits from Government spending, and those with greater needs will benefit more.

MOF will also ensure that public sector manpower grows in a disciplined manner, to avoid taking up an out-sized share of the resident labour force at the expense of the private sector. As our resident labour force growth continues to slow, MOF will put in place additional measures to manage and reallocate limited manpower resources to meet future needs.

MOF will continue with efforts to ensure good governance and enable a high-performing Government, to meet the needs and expectations of Singaporeans.

MOF will work closely with Government agencies to ensure the effectiveness of Government spending. Our Government procurement will continue to be open and competitive, to achieve value-for-money and cost-effective outcomes. We will work with businesses, especially small-medium enterprises, to improve access to procurement opportunities, and to ensure a healthy pipeline of suppliers that are competitive, innovative and capable of meeting our future needs.

MOF will work with Ministries to implement structured frameworks for programme evaluation and strengthen evaluation capabilities in support of better decision-making and resource allocation. This will be accompanied by efforts in enterprise risk management and internal audit to strengthen our system of governance. MOF will continue to publish the Singapore Public Sector Outcomes Review biennially.

MOF will press on with digital transformation efforts. This includes integrating budgeting, procurement and payment systems for better whole-of-Government financial management. We will step up the use of data analytics to monitor resource utilisation, track spending outcomes and shape policy development. Digitalisation will also simplify Government processes and lower costs for businesses when they transact with the Government. Examples include the adoption of e-guarantees to replace paper guarantees, and direct e-invoice submissions through InvoiceNow to eliminate the need for manual processing.

MOF will support public sector manpower capability development, by raising competencies in finance, procurement, internal audit, grants governance and the deployment of shared services.

MOF will harness our fiscal resources prudently and responsibly, working closely with Government agencies and partners from the industry and community, so that we can move forward together with confidence and strength.