Fortitude Budget: Singapore to tap $31b more from reserves to fund support measures

It will fund fourth package of measures to help people, economy amid pandemic

Singapore will draw another $31 billion from its reserves to fund a fourth package of measures to cushion people and the economy from the coronavirus pandemic.

The second draw in the span of two months reflects the impact Covid-19 has had on Singapore's open economy as businesses grind to a halt all over the world. It brings to $52 billion the amount of past savings tapped this financial year.

Explaining the decision to dip into the reserves again, Deputy Prime Minister and Finance Minister Heng Swee Keat told Parliament yesterday it is "necessitated by the very exceptional nature of the Covid-19 crisis".

To fund the three budgets earlier this year, the Government had used up almost all of its accumulated surpluses from its current term, he said.

"But what we need to deal effectively with Covid-19 has grown so much that we have no choice but to draw on our past reserves."

The Government's current five-year-term will end by April 14, 2021.

Mr Heng said he had thought hard about the move and had gone through rounds of deliberations with Finance Ministry staff and his Cabinet colleagues before seeking President Halimah Yacob's approval.

She has given her in-principle approval in consultation with the Council of Presidential Advisers.

Already, an unprecedented move was made earlier this year to dip into the past accumulated savings to the tune of $21 billion.

Mr Heng said the sum has gone towards saving jobs, keeping the economy going and giving direct aid to Singaporeans during this period.

Since then, the impact of the pandemic has deepened, with the number of virus cases worldwide exceeding five million, and the death toll rising to more than 340,000.

The number of cases in Singapore has crossed 30,000, with 23 dead, as the country prepares to lift restrictions on movements and business activities that kicked in 51 days ago.

"Lives and livelihoods are at stake, and we are moving to secure our future," said Mr Heng.

"After a challenging circuit breaker period, we are now preparing to reopen our economy. To do so in a safe and calibrated manner, and to continue to support our people, we are proposing a further draw on our past reserves."

He pledged to spend the money decisively.

Mr Heng said: "Every dollar that we have saved has been saved by careful counting over the years. In spending this national savings now, we must make every dollar spent count."