Replenishing Reserves Drawn During COVID-19 Crisis and Impact on Taxes Imposed on Singaporeans
Ministry of FinanceSpeakers
Summary
This question concerns plans to restore the $40 billion drawn from Singapore's Past Reserves during the COVID-19 pandemic and the potential impact on taxes and public services. Mr Lee Hong Chuang asked for the expected timeframe for replenishment and whether this process would involve tax increases or reduced essential services for Singaporeans. Prime Minister and Minister for Finance Mr Lawrence Wong clarified that the Government does not expect to put back the specific amount drawn between Financial Year 2020 and Financial Year 2022. He explained that fiscal resources will instead be deployed to meet increasing future expenditure while keeping within means to maintain a balanced budget over the medium term. Consequently, the Minister noted that the issues of replenishment timelines and tax adjustments do not arise, though any end-of-term surpluses will continue to be protected as Past Reserves.
Transcript
3 Mr Lee Hong Chuang asked the Prime Minister and Minister for Finance (a) what plans are in place to restore the Reserves drawn down during the COVID-19 crisis amid the ongoing global uncertainties; (b) what is the expected timeframe for replenishment of the Reserves drawn; and (c) whether this process will involve any increase in taxes or reduced essential public services for Singaporeans.
Mr Lawrence Wong: Between Financial Year 2020 and Financial Year 2022, Singapore drew about $40 billion from the Past Reserves to support COVID-19 measures to safeguard Singaporeans' lives and livelihoods during the crisis.
We do not expect to be able to put back the amount drawn from the Past Reserves during COVID-19. As previously explained by the Prime Minister in the debate on the Budget Statement 2025 in response to a similar query by Ms Tin Pei Ling (then the Member of Parliament for MacPherson), this is because we expect our spending to increase in the coming years, and we will have to deploy our fiscal resources to meet this increased expenditure in order to keep within our means and maintain a balanced Budget over the medium term. [Please refer to "Debate on Annual Budget Statement", Official Report, 28 February 2025, Vol 95, Issue 155, Budget section.]
We will nevertheless continue to be responsible and prudent with our finances, and any surpluses accumulated at the end of the term of Government will be protected as Past Reserves.
In light of the foregoing, the matters in paras (b) and (c) of the Member’s query do not arise for answer.