FY2000 EXPENDITURE ESTIMATES

Total Government expenditure for FY2000 is estimated at $29.0 billion or 17.5% of GDP, a rise of 12.5% over expenditure in FY99. Development expenditure is projected to grow 21.1% to reach $12.9 billion. Operating expenditure, on the other hand, is estimated to increase by 6.4% to $16.1 billion, a rate of increase that is lower than the nominal GDP growth rate. The lower rate of increase of operating expenditure, as compared to that for development expenditure, underlines Government's commitment to keep recurrent cost increases within sustainable limits. Operating and development expenditure account for 9.7% and 7.8% of GDP respectively.

Operating Expenditure

Operating expenditure in FY2000 is estimated at $16.1 billion or 9.7% of GDP, an increase of $969 million or 6.4% over FY99. 92% of operating expenditure is for ministries' running costs while the remaining 8% is for transfer payments to members of the public and outside organisations.

Total running costs are projected to increase by 6.9% to $14.8 billion because of higher manpower costs, increases in other operating expenditure, and larger grants to the statutory boards. Expenditure on Transfers is estimated at $1.3 billion, the main items being subventions to the restructured hospitals and town councils.

Manpower expenses are estimated at $3.3 billion, an increase of $323 million or 10.8%. The increase is due to restoration of the salary cut imposed service-wide in 1999, partial restoration in employers' rate of CPF contributions and normal salary increments. In addition, there is also a net increase of some 2,400 posts, mainly in MOE to cater for increased student intakes.

Other operating expenditure is expected to increase by 4.1% to $8.8 billion.

Grants-in-aid to statutory boards will increase by 12.1% to $2.7 billion, mainly because of larger grants to higher educational institutions and aided schools to cater to increased student intakes and restoration of salary cuts.

Development Expenditure

Development expenditure is projected at $12.9 billion or 7.8% of GDP, an increase of $2.2 billion. This includes a provision of $979 million for new priority projects that may materialise in the course of FY2000. Of this, $200 million is held centrally by MOF while the remaining $779 million is allocated out to ministries based on their projected needs.

The largest share of capital grants to statutory boards (excluding public housing subsidy) goes to the LTA for extension of the MRT system, construction of the North East Line, the Bukit Panjang and Sengkang LRT systems and road construction and improvement programmes. Other main recipients are educational institutions and aided schools for upgrading programmes and the National Science & Technology Board for financing and administering R&D projects.

Capital expenditure for Public Housing is projected at $2.2 billion or 1.3% of GDP. The bulk of the subsidy is for the HDB Upgrading Programmes, development of infrastructure within HDB New Towns and financing of HDB's bottom-line deficit.