3 Ways Singapore Can Meet Higher Costs Without Taxing Citizens More

Options worth considering: relax the balanced budget rule, impose higher property taxes on foreign buyers and lower the GST threshold

- Vikram Khanna

Come Budget time, everybody seems to want more of everything.

Besides government pledges, if you comb through the wish lists put out by economists, consulting firms and the public, you will find a laundry list of items and schemes that need more funding:

For the population, there are demands for higher spending on healthcare and eldercare, education, community facilities, cost-of-living payouts including more CDC vouchers, wider social safety nets, baby bonuses and paid parental leave, to cite just a few.

For businesses, there are calls for additional subsidies for training, a variety of tax breaks, more financial support to develop capabilities in artificial intelligence and sustainability, and an expansion of schemes such as the Productivity Solutions Grant and the Enterprise Development Grant.

The economy at large needs upgraded infrastructure and more funding for greening and climate adaptation. And this election year, the cherry on top is special SG60 benefits. Something for everyone, in other words.

While all this may be justified, what is striking is the dearth of public discussion about how it should be paid for, both now and in the future. It is simply assumed that resources will always be readily available.

This assumption deserves a closer look, especially if we consider the needs over the medium term.

Take healthcare – it has overtaken education to be the biggest component of social expenditure, which has almost doubled from fiscal year (FY) 2014 to FY2023.

In Budget 2024, Finance Minister Lawrence Wong, who is now also Prime Minister, pointed out that the Ministry of Health's annual budget had tripled within the decade, adding that "with a rapidly ageing population, the fiscal pressures of healthcare will only grow".