FISCAL POLICY OBJECTIVES

War in the Gulf, political unrest in the Soviet Union and the stalled GATT negotiations have created considerable uncertainty for the world economy. The United States is now in a recession. Germany, the rest of Europe and Japan are also expected to grow at a slower rate. The best way for us to deal with slower growth in our main markets is to trim our sails and remain internationally competitive.

The private sector must continue to play a leading role in our economic development. Government will provide a fiscal environment conducive for the growth of this sector. On the revenue side, our policy will be to raise sufficient revenue to finance expenditure while maintaining a competitive tax structure. On the expenditure side, the public sector will be kept lean and trim so as to contain its share of the nation's financial and manpower resources.

For this year's Budget, Government will concentrate on manpower and infrastructure development. Growth in operating expenditure will be restrained so that more funds can be channelled towards education, investments in infrastructure and improvements to the quality of life in Singapore.