EXPENDITURE POLICY

Government expenditure will continue to focus on areas that support and promote economic growth for Singapore. We must avoid the pitfalls of welfarism which, as the experience of socialist and western democratic governments have shown, sooner or later leads to dependency and destruction of the work ethic. We prefer to spend in ways which build national resilience and promote enterprise, hard work and prudence. Government's role is to put in place the necessary infrastructure, provide a clean and safe environment, and train our people to the best of their potential. The FY94 Budget reflects these long term priorities: an emphasis on education, sound economic infrastructure, affordable health care, good public housing and national security. At the same time, we will increase funding for the arts, sports and recreational activities to satisfy the broadening aspirations of Singaporeans, to advance social cohesion and to improve the quality of life of Singaporeans.

A strong and dynamic private sector must remain the engine of growth in Singapore. The size of the public sector will therefore be controlled so as to release more manpower to the private sector. At the same time, the public sector will continue to make improvements in the management of its financial and human resources.

Since recovery from the recession in 1987, revenue growth and careful control over expenditures have allowed us to generate budget surpluses every year. This has been achieved without dampening economic growth or holding back any productive investments. As a result we have been able to set aside substantial sums each year to reserves.

At this point it is worth repeating that in the special circumstances of Singapore, it is essential that in good years we accumulate surpluses to reserves of Government. Singapore has little land and no natural resources to fall back on. Our financial reserves are therefore of crucial importance, not only to see us through times of crisis but also for securing investor confidence in our future.

Our budgetary surpluses also allow us to build up the assets of Singaporeans through grants to buy quality assets, like Telecom shares. It also enables us to embark on programmes like Edusave and Medifund. Government has in the last two years channelled a large part of our budget surpluses into Edusave and Medifund. I announced in the last Budget Speech that Government would inject $500 million into Edusave in FY93. In view of Singapore's strong economic performance and healthy budget balance, I have decided that Government's contribution to the Edusave fund for FY93 should be increased to $1 billion. Supplementary Estimates to effect this will be tabled in Parliament next week. For FY94, another $500 million will be channelled to Edusave and $100 million to the Medifund from the projected surplus.