MINISTRY OF FINANCE

DR RICHARD HU Minister for Finance

Fiscal Policy

Government's fiscal policies will continue to support the private sector as the engine of growth. The public sector will be kept lean and trim to free more manpower and financial resources for the private sector.

2. Expenditure priorities will be to invest in areas which yield lasting returns, e.g. education, infrastructure and housing. More emphasis will be given to the arts, sport, recreation and programmes to protect the environment and to improve the quality of life.

3. On the revenue side, factors of production will be taxed as lightly as possible. The Government will maintain a balanced budget, accumulating surpluses in good years as a bulwark against periods of economic downturn.

Taxation Policy

4. The personal tax system will remain broad-based and equitable, in order to reward hard work and enterprise. Tax administration will be simplified and streamlined.

5. The corporate tax rate will be kept internationally competitive. We will continue to use tax incentives to promote investments into selected areas with growth potential.

6. We are finalising the White Paper on proposals for a comprehensive consumption tax, and will publish the Paper when it is ready.

7. We will continue to widen our network of double taxation agreements, and improve existing agreements to help companies expand overseas.

Monetary Policy

8. Monetary and exchange rate policies will aim to contain inflation, and maintain price stability and export competitiveness. Singapore enjoys the lowest inflation rate among the regional economies and NIEs.

Regulatory Framework

9. Recent problems in international banking and financial circles have re-emphasised the need for adequate regulation in the financial sector. Singapore was spared these problems through vigilance in supervising and regulating our banks and financial institutions. We will maintain prudential standards to protect the soundness and integrity of our financial markets.

10. The financial sector must be innovative and flexible to be competitive. Financial sector legislation will be reviewed in line with market developments. MAS will encourage banks and financial institutions to upgrade their operations and play a bigger regional role.

Privatisation Programme

11. Government will continue to privatise mature government-linked companies to broaden the stock market, allow greater private sector participation in the economy and enable ordinary Singaporeans to share in the successes of these enterprises. The Public Service

12. The present centralised arrangements for recruiting, promoting, and managing personnel will be restructured, to make the public sector a more responsive and competitive employer, without compromising the integrity and impartiality of the civil service and statutory boards.

13. The Inland Revenue Department will be converted into a statutory board, to give it greater flexibility in managing its manpower.

14. The public sector will exploit advances in information technology to upgrade productivity and efficiency. Computerised management accounting systems will be operational in all ministries by mid-1993. These systems will allow ministries and statutory boards to track accurately the costs of their services, and help identify poor performance and waste.

15. The computerised Central Personnel Information System will be fully operational by 1993. Its 10 core applications will be on-line in all ministries by this year. 10 more applications will be added during the next two years.

16. A pilot programme to promote health and fitness at the workplace will be carried out in a few ministries and statutory boards this year. Based on this experience, the programme will be extended to the rest of the public sector later.

17. We will review service terms and conditions this year to keep them in tune with changing circumstances.

18. The civil service is considering a Civil Service Staff College for senior administrators. It will be the institutional focal point for the Civil Service to train and build esprit de corps among senior officers.

19. The Civil Service Institute (CSI) will continue to train civil servants at all levels. Following the establishment of the Service Improvement Unit (SIU), the CSI will train 600 Division One Quality Facilitators this year to help their Quality Service Managers upgrade the quality of their organisations' service to the public.

Social Development

20. We will continue to encourage single graduates to marry one another. A special effort will be made to encourage work-oriented singles, especially new graduates from NUS and NTU, to view marriage as a desirable goal in life.