FISCAL POLICY OBJECTIVES

With the recession behind us and the economy buoyant, we are well placed for the 1990s. We have a strong balance sheet and sound reserves and we must maintain this position. Although our objective is to achieve a balanced budget over the long term, given the limitations of our natural resources and our heavy dependence on external trade, our aim must be to augment our reserves with surpluses from good years so that we will have the financial strength to see us through periodic downturns in the international business cycle.

We will continue to foster the growth of the private sector. On the revenue side, our taxation policy will be designed to encourage corporate and individual entrepreneurship. On the expenditure side, our policy will be to contain the share of the nation's resources consumed by the public sector so as to facilitate private sector growth. Improvements in work methods and productivity increases will ensure that the quality of public services is maintained while growth in recurrent expenditures is restrained.

On the other hand, we must continue to invest for the future. With the completion of major programmes in basic infrastruc- ture and public housing, more funds will be devoted to investments which will promote future growth and improve the quality of life in Singapore. The Minister for Education has already announced plans to improve, both qualitatively and quantitatively, our schools and tertiary institutions. We will be committing substantial new funds on research and development. Public housing estates will be upgraded and there will be major investments on facilities for arts, culture and recreation.