The fiscal boost was due to the unexpected two-year suspension of the Kuala Lumpur- Singapore High-Speed Rail (HSR) project and higher-than-expected stamp duty collections.
A $2.1bn surplus is equivalent to about 0.4% of Singapore’s gross domestic product. It is much lower than the $10.86bn achieved in the 2017 financial year.
If the Government’s top-ups to endowment and trust funds and the Net Investment Returns Contribution are excluded, a basic deficit of $7bn is expected for 2018.
The 2018 budget was expansionary, stated Finance Minister Heng Swee Keat in Parliament on Monday.
Revenue is expected to come in at $73.7bn, marking it a $1bn increase over earlier budgeted estimates.
This is mainly due to higher collections from statutory boards’ contributions, corporate income tax, stamp duties and other taxes, but the increase was partially offset by decreases in vehicle quota premiums, and customs and excise fees.
Owing to lower-than-projected certificate of entitlement (COE) prices and higher disbursements of COE rebates, revenues from vehicle quota premiums are estimated to decrease by $2.3bn to $3.3bn – a 41.4% fall.
Total expenditure for the 2018 financial year ending March 31 2019, is revised downwards by $1bn to $79bn. This exceeds the actual expenditure the year before by $5.4bn, owing to more being spent in defence, home affairs, transport plus trade and industry, among others.
While operating expenditure was revised upwards by $1bn, development spending is expected to be lower, by $2bn, against an earlier estimated sum .
The main factor is the suspension of the HSR project and rescheduling of works for some public housing projects. Partially offsetting it is the higher requirements for the Research, Innovation and Enterprise 2015 Plan, and the Economic Development Assistance Scheme.
The Net Investment Returns Contribution is projected to be $16.4bn.
The latest 2019 Budget remains expansionary, with the basic deficit forecast to reach $7.1bn.
Ministries’ total expenditures are projected to be $80.3bn, 1.6% up on 2018.
Higher spending in healthcare, defence, and the environment and water resources will be offset by lower transport expenditure, owing to factors that include the suspension of the HSR project.
The Government is also setting aside funds to meet long-term needs, including $6.1bn for the Merdeka Generation Package and $5.1bn for long-term care support. On the whole, an overall deficit of $3.5 bn is projected for the 2019 financial year.
“We have sufficient fiscal surplus accumulated over this term of government to fund the overall deficit in 2019. There is no draw on past reserves,” Mr Heng stated.