Singapore Budget 2021: For Recovery And Innovation

All eyes were on Finance Minister Heng Swee Keat as he unveiled Singapore’s Budget for 2021.

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As widely expected, the Budget pivots from providing broad-based emergency support to more targeted forms of assistance, from job retention to job creation, from counter-cyclical fiscal policy in the face of a sharp GDP contraction to measures to equip companies and workers to survive and thrive in the emerging post-pandemic economy. Themed ‘Emerging Stronger Together’ the Budget’s priority is to help workers and businesses to adapt, innovate and grow. Deputy Prime Minister and Finance Minister Heng Swee Keat said in his Budget speech, “To secure our future, we must build new capabilities in our people and businesses, and find new ways to work together effectively. Within and across industries, and beyond our shores.”

DIPPING INTO THE PIGGY BANK

In 2020, the Singapore Government passed an unprecedented five budgets to tackle the economic slowdown caused by COVID-19. The Government had proposed a draw of up to S$52 billion on the reserves, but used only S$42.7 billion.

For 2021, Singapore will dip into its savings for a further S$1.7 billion. The amount will be combined with the S$9.3 billion that was drawn last year but not used, with all S$11 billion going towards funding the COVID-19 Resilience Package.

Singapore is expected to record a deficit of S$11 billion, or 2.2 per cent of GDP this year, with a considerable fiscal boost coming from economic and workforce transformation measures.

This compares to an overall deficit of S$64.9 billion, or 13.9 per cent of GDP last year, the largest since independence.

Explaining the decision to tap the All eyes were on Finance Minister Heng Swee Keat as he unveiled Singapore’s Budget for 2021.