How many of us can honestly put up our hands and confidently say we know how the nation’s budget is drawn up each year? Well, you’re not alone.
To sound a bit intelligent at the next kopitiam makan minum session, we thought we’d go and find out a few basic facts.
Facts that shape the budget
Fact 1: For starters, do you happen to know which period the budget covers? It starts from 1 April of every calendar year and ends on 31 March of the next calendar year.
Fact 2: Before the budget is drawn up, the Ministry of Finance conducts a public consultation exercise a few months ahead of Budget Day. This is to gather feedback for the next financial year’s budget. All suggestions are taken into account in the drawing up of the budget. The Government then finalises and approves it.
Fact 3: We have all heard of how some countries are in debt. Here’s something interesting about us – Singapore is required under the constitution to keep to a balanced budget over each term of Government. The city-state also does not borrow money to fund Government expenditure, and we are debt-free. How about that!
Fact 4: So, where does all the money come from? More than half of the Government’s operating revenue of around 16–17 per cent of GDP comes from corporate income tax, the personal income tax that you and I pay and the Goods & Services Tax. The Net Investment Returns Contribution adds to the revenues by another 3 per cent of GDP per year.*
Fact 5: Can you guess which sector takes the chunk of the Budget? The Government spends the most on social development!*
*(Based on estimated breakdown of Government operating revenues in 2017)
This is how things work for the budget to go into operation….
We’ve done what we can to give you a few basic facts you can use at the next chit-chat session. Something that really stands out for us is that Singapore is debt-free! Sigh, some of us wish we were personally debt-free too! Well, on to the next article to keep our job. 😊