Singapore wants to ensure that Singaporeans continue to have access to world class education and healthcare, affordable housing, good jobs, and peace of mind over retirement needs, said Finance Minister Lawrence Wong.
These plans require additional spending, as they reflect the need to respond to structural shifts in Singapore’s society as well as new social and environmental aspirations.
Reserves have to be kept for major crises
The Finance Minister added that the reserves have to be kept for use in major crises and emergencies, such as the Global Financial Crisis and the past two years of the pandemic.
By 2030, government expenditure is expected to increase to more than 20 per cent of gross domestic product (GDP). Most of this increase in spending will go to healthcare. He noted that on the revenue side, there will not be enough to cover additional spending needs.
Singapore’s slowing labour force growth and hence slower GDP growth compared with the last decade will constrain tax revenues, raising the need to make significant enhancements to Singapore’s tax system.
A comprehensive set of measures will cushion the impact and help Singaporeans adjust, to be mindful of the impact of tax increases on households and businesses.
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