SINGAPORE: Singapore will set up a new Rail Infrastructure Fund worth S$5bil this year for major rail lines ahead, said Finance Minister Heng Swee Keat.
“This can be topped up in future years when our fiscal position allows,” he said when tabling the republic 2018 Budget in Parliament here.
Heng said for Singapore infrastructure investments, “the key challenge is that certain expenditures can be very lumpy, with hefty upfront investments.”
“Yet, the benefits are enjoyed many years down the road,” he said.
Land Transport Authority will also look at borrowing for upcoming projects such as the Kuala Lumpur-Singapore High-Speed Rail and the Johor Bahru-Singapore Rapid Transit System Link, said the minister.
To strengthen its revenue, Singapore plans to raise Goods and Services Tax (GST) by two percentage points, from 7% to 9%, sometime from 2021 to 2025.
“The exact timing will depend on the state of the economy, how much our expenditures grow, and how buoyant our existing taxes are,” said Heng.
But Heng said he expected that Singapore would need to do so earlier rather than later in the period.
“This GST increase is necessary because even after exploring various options to manage our future expenditures through prudent spending, savings and borrowing for infrastructure, there is still a gap.
“Increasing GST by two percentage points will provide us with revenue of almost 0.7% of Gross Domestic Product (GDP) per year,” he added.
For Singapore 2018’s budget position, it will remain expansionary, said Heng.
He said ministries’ total expenditures were expected to be S$80bil or 8.3% higher than in 2017.
“On the whole, we expect a slight overall budget deficit of S$0.6bil, or 0.1% of GDP,” said the minister. — Bernama