Ms Indranee acknowledged that when the surplus was first announced, some had questioned whether the government had been too conservative. But much has changed in the world since the Budget statement was delivered, she said.
Economic uncertainty due to US tariff developments, and strikes by the US and Israel against Iran, with Iran’s retaliation, have “added to the overall climate of uncertainty”, she said, with potential knock-on effects on trade, investment, energy prices and the cost of living.
“As a small and open economy, Singapore will feel the knock-on impact keenly,” said Ms Indranee.
Seen in that light, the surplus is “less about marksmanship and a whole lot more about assurance and quiet confidence”. “We have the ability to do more for Singaporeans with ballast and buffer against potential turbulence,” she said.
“Our approach of fiscal prudence has been validated time and time again.”
PREPARE FOR THE BEST, PLAN FOR THE WORST
Ms Indranee pointed to two recent episodes to illustrate why prudent budgeting matters even when times appear calm.
Budget 2020 was delivered when the global economy was stable and the outlook rosy, she said. Within a month, COVID-19 struck – forcing the government to deliver four supplementary budgets and draw down roughly S$40 billion from past reserves.
Two years later, as the economy was recovering, the Budget statement was followed just six days later by Russia’s invasion of Ukraine.
“In all our Budgets, we prepare for the best but we also plan in case of the worst. History is a hard taskmaster and we must not ignore its lessons,” Ms Indranee said.
“Our reserves, and our surpluses, are things to be grateful for.”