MINISTRY OF FINANCE

The Government's financial policies will continue to promote economic growth.

Fiscal Policy

Our tax structure must remain fair and broad-based, and must adequately reward effort and enterprise. As tax practices evolve in other countries, we will revise our tax system to keep the fiscal climate competitive and hospitable to investors.

We will continue to carry out public sector development projects, including expenditures on research and development. We must invest for the future, and build up the nation's stock of capital.

Our policy is to maintain a balanced budget over the long term. Each generation should pay its own way, and not burden future generations with debts.

Public Sector Efficiency

We must not allow the public sector to consume an increasing share of national resources as the economy grows. Recurrent public sector expenditure must not grow faster than the GDP. The Government is the country's largest workforce. Ministries and statutory boards must constantly improve their productivity and efficiency. Waste must be abolished.

A management accounting system covering all Ministries will help managers to monitor the true costs of their operations, track performance against targets, and improve cost-effectiveness. The new block vote budget allocation and control system will help Ministries to operate more flexibly and effectively. Ministry of Finance will now have an objective basis for allocating funds and manpower, and Ministries will have full autonomy to manage their resources within approved budgets.

The Management Services Department and the National Computer Board will continue to assist Ministries to streamline organizations and procedures, and automate and computerize their operations.

Monetary Policy

We will continue to operate an open financial system, free of capital and exchange constraints. Monetary policy will primarily target for non-inflationary economic growth.

Finance and Banking

The supervisory authorities will oversee the financial institutions in Singapore closely but not rigidly. The financial community should operate with a minimum of regulatory control, yet maintain prudential standards to protect the integrity of the financial system and the interests of the public.

We will continue to develop Singapore as an international financial centre, based on a growing network of financial institutions providing diverse services in lending, capital markets, fund and risk management.

Privatization

The Government will continue to withdraw from mature sectors of the economy. However, we will still invest in and provide seed money for the development of new industries, both alone and in partnership with the private sector, at home and abroad.

Wherever possible, Ministries will contract out services which the private sector can provide more efficiently. This should encourage private sector initiative and entrepreneurship.

The Civil Service

To implement Government policies and programmes effectively, we need able and dedicated officers at all levels of the public service. Public servants will be trained and upgraded in order to serve the public better.

To attract and retain able officers, public sector remuneration and conditions of service must be competitive with the pri- vate sector. The flexible wage system already introduced will link public sector wages to national economic performance. The next step in public sector wage reform will be to revise salary and career structures to keep up with new conditions in the labour market.

DR RICHARD HU TSU TAU Minister for Finance