Effective Budget Management, Singapore
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Transcript of Effective Budget Management, Singapore
EFFECTIVE BUDGET MANAGEMENT
DEVADAS KRISHNADAS
Copyrighted to Future-Moves Group Pte Ltd (Singapore). Not to be reproduced or referenced without permission.
Fiscal Leadership
Effective Budget
Management
Focus on the Long
Term
32
1
SCOPE
FISCAL POLICY IN SINGAPORE
FISCAL LEADERSHIP
FISCAL STORY GIVES
TO BUDGETS
PURPOSE AND MEANING
Effective Fiscal Leadership
GIVE DIRECTIONWhere should the country go?
1CLARIFY PRINCIPLESWhat are the guiding principles?
2
DECIDE ON PRIORITIESEssential over Important3
FOCUS ON THE FUTURELong-term
4
ENSURE SUSTAINABILITYAvoid kicking the can/Burying mines
5
PREPARE FOR CONTIGENCIESAvoid wishful thinking
6
BE COMMITTEDStaying the course
7
Fiscal Policy
BALANCED BUDGET
1
CUSHION ECONOMY (in downturn)
2CREATE
COMPETITIVE TAX ENVIRONMENT
3BUILD
LONG-TERM COMPETITIVENESS
4
PRO-COMMUNITY
(through social transfers)
5
(Invest in R&D, education,
Infrastructure)
(over medium term)
(Support jobs, businesses, investments)
EFFECTIVE BUDGET
MANAGEMENT
Ensuring Vertical and Horizontal CoordinationWHOLE-OF-GOVERNMENTSTRATEGIC OUTCOMES
Secure and
Influential Singapor
e
Strong Families, Cohesive Society
Robust Social
Security
SUSTAINABLE ECONOMIC GROWTH
World-Class Environment and Infrastructure
Effective Government
Sustainable Economic Growth
APR/JUN: Preparation
SEP-OCT:Administrative Timelines
DEC: Finalisation of Budget
JAN: Cabinet’s approval for the budget
FEB/MAR: Parliament and President’s approval for the budget
BUDGET
CYCLE
JUN-NOV:Engagement with Ministries/ Agencies
BUDGET CYCLE
Promoting AccountabilitySINGAPORE PUBLIC SECTOR OUTCOMES REVIEW (SPOR)
The biennial SPOR takes stock of how Singapore has fared in key areas of national interest
Building in FlexibilityBLOCK BUDGETING
MINISTRIES’ BUDGET
GROW BY A FACTOR
OF 40% THE sGDP GROWTH RATE
The Ministry of Finance and Individual Ministries agree to a 3-5 YEAR BLOCK OF FINANCING which
relates to priorities decided upon by Cabinet
MINISTRIES CAN MANAGE THEIR CASH FLOW BETTER BY:
1. Borrowing from future year(s)• Advances
2. Saving to subsequent year(s) • Carry Forward at
Total Budget Level• Rollover at
Operating Budget Level
Promoting Rolling Innovation
1% of Ministry
A’s Block
Budget
1% of Ministry
B’s Block
Budget
1% of Ministry
C’s Block
Budget COMPETITIVE BIDDING
CROSS AGENCY
COLLABORATION
INNOVATIONPRIORITY AREAS
REINVESTMENT FUNDManaged by the Ministry of Finance
REINVESTMENT FUND
Focusing on the Long Term
Investing in the Basics
2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
2
4
6
8
10
12
14
SINGAPORE’S EXPENDITURE
Education Health Public Housing
Year
Billi
on (s
gd)
Thinking Big, Taking RisksJURONG ISLAND1970s: Petroleum industry took off in Singapore
1980s: Industrial land became scarce
SOLUTION: Reclaim seven smaller islands to form one large island
TODAY: Jurong Island is at the heart of Singapore’s energy and chemicals industry. It is home to almost 100 leading global petroleum, petrochemicals and specialty chemicals companies
From an initial area of less than 10 square kilometers to today’s 32 square kilometers
MARINA BAY The Marina Bay area was reclaimed during the 1970s and 1980s in anticipation of the need to grow the city center in the future.
It allowed for the seamless extension of the central Business district and supports Singapore’s growth as a global business and financial hub.
Today, Marina Bay includes a variety of uses, including commercial, residential, hotel and entertainment. This ensures it remains a vibrant centerpiece of Singapore around the clock.
Long-term Challenges
• Immigration and strain on infrastructure
• Ageing population and the impact on health care and adequacy of retirement finances
• Widening income gap and the need to strengthen social safety net
• Maturing economy and lower growth trajectory
• Intensifying Economic Competition which impacts trade and economic growth
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014(P)
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Operating Revenue ($'m) Total Revenue ($'m)
Operating & Development Expenditure ($'m) Total Expenditure ($'m)
Overall revenue growth not likely to keep pace with expenditure growth
FISCAL PRUDENCE REMAINS
KEY
RISK OF DECREASING REVENUE
PRESSURE OF INCREASING EXPENDITURE