
The annual Singapore Budget is just round the corner.
Just like how we plan to earn, spend and save for our own households, the Singapore government also needs to plan its current and future expenditure for the whole of Singapore.
To do so, the government identifies key priorities, engages Singaporeans and determines how best to allocate finite resources in a fair, sustainable and responsible way.
But for a ‘household’ as large and as diverse as Singapore, this process can take some time.
Work on the Singapore Budget starts months before the Budget Statement is delivered by the Minister for Finance in Parliament each year.
It begins with a series of closed-door and public engagements by the government to gather feedback from various stakeholders across sectors and backgrounds.
This is in addition to the regular engagement sessions and feedback that the government conducts and receives.
Taken together, the feedback that the government receives plays a crucial role in helping it decide on and plan for the priorities and expenditures for the upcoming financial year (FY) and the years ahead.
But what does the Singapore Budget mean for us?
Ahead of Budget
Ahead of the Budget, the government consults the public for their views and ideas based on a few key themes.
For example, for Budget 2025, the government called for suggestions on how we can strengthen our sense of solidarity and unity, develop a more vibrant business ecosystem, provide opportunities for skills upgrading and jobs, as well as better support Singaporeans across different life stages.
The feedback helps to shape the eventual Budget announcements.
Budget Day
On Budget Day, the Minister for Finance delivers the Budget Statement in Parliament.
This includes a review of Singapore’s economic performance, the government’s fiscal outlook, as well as significant policy announcements to address key concerns, such as those relating to cost of living, employment, the economy and social support.
Budget Debate
After Budget Day, the Supply Bill is introduced and debated in Parliament.
The Supply Bill is tabled by the government to seek the budget required for the year.
The debate concludes with a round-up speech by the Minister for Finance, after which, Members of Parliament (MPs) will vote to either support or reject the Budget Statement.
Committee of Supply Debates
The Committee of Supply debates begin right after the Budget Debate and round-up speech, and last about seven to 10 days.
It involves Parliament forming a Committee of Supply to consider and vote on each ministry’s request for funds.
MPs will propose nominal cuts of S$100 to each ministry’s estimates, which allows them to speak on the policies and programmes of that ministry.
Parliament votes on the Supply Bill
Parliament then votes on the estimates of expenditure and the Supply Bill.
Only after the president assents to the Bill does it become the Supply Act.
This authorises the government to withdraw monies from the Consolidated and Development Funds for use over the next FY, starting on Apr. 1.
The Consolidated and Development Funds act like Singapore’s bank accounts.
Government expenditures are paid out from these funds.
These expenditures could go towards various domains such as building infrastructure projects, promoting research and development, and growing key economic sectors.
The Supply Act also controls how much and the way the government can spend in the coming FY.
It’s all about balance
Balancing the books is part of the government’s responsibility, and each year’s budget may run a surplus or deficit.
Under Singapore’s Constitution, the government is required to keep a balanced budget over each term of government.
Where does the Singapore government get its money from?
For Singaporeans and businesses to continue thriving and growing, the government needs to ensure it has sufficient funds to spend on the necessary public goods and infrastructure.
A key source of funds is through the collection of taxes, which is an important part of the government’s revenue.
Taxes aside, the government’s revenue is supplemented with contributions from past reserves.
About one-fifth of the annual Budget is funded by the investment returns of our reserves through the Net Investment Returns Contribution (NIRC).
The NIRC comprises:
- Up to 50 percent of the Net Investment Returns on the net assets invested by GIC, MAS and Temasek; and
- Up to 50 percent of the Net Investment Income derived from past reserves from the remaining assets.
The investment returns from our reserves provide additional resources for government spending to benefit Singaporeans.
This includes government investments in education, healthcare, transport infrastructure, research and development, and other areas to improve our living environment and grow our economy.
Where does the Singapore government spend its money?
Over the years, the Singapore Budget has steadily increased.
Social spending has almost doubled over the last decade, largely due to increased funding towards improving the quality, accessibility and affordability of healthcare, as well as other moves to strengthen our social safety nets.
About half of the annual expenditure is typically on social spending, which amounted to S$53.1 billion in FY 2023/24.
For example, about 3 million Singaporeans received MediSave top-ups in 2024, which help to provide support for healthcare costs.
Other examples of social spending include education-related subsidies and grants for public housing.
Beyond social spending, expenditure also goes towards security and external relations (S$28.3 billion for FY 2023/24), economic development (S$21.8 billion for FY 2023/24) and government administration (S$3.7 billion for FY 2023/24).
Examples of spending in these domains include resourcing our home team, as well as schemes to support and help businesses grow.
Find out what’s in store for Budget 2025 on Feb. 18
The Budget 2025 Statement will be delivered on Feb. 18 this year.
Tune in at https://www.singaporebudget.gov.sg to find out more.
Top photo via MOF
MORE STORIES