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By Massita Ahmad
SINGAPORE, Feb 16 -- The Singapore government intends to issue new bonds under a proposed Significant Infrastructure Government Loan Act, or SINGA, to finance major, long-term infrastructure projects.
"This approach will allow us to spread out the lumpy costs of such infrastructure investments more equitably across generations," said the republic’s Deputy Prime Minister and Finance Minister Heng Swee Keat when tabling the annual budget in Parliament here, today.
Heng said, prior to this, the government had been issuing bonds to develop the domestic debt market and meet the investment needs of The Central Provident Fund (CPF) for Singaporeans’ retirement.
"These proceeds will be used to finance assets that are crucial to Singapore’s long-term development and sustainability that include new MRT (Mass Rapid Transit) lines, and infrastructure to protect ourselves against rising sea levels," he said.
As a safeguard, Heng said a limit of S$90 billion (S$1=RM3.04) will be set for borrowing under SINGA.
"This is based on the expected pipeline of major, long-term infrastructure projects over the next 15 years," he added.
Heng noted that the government will table a Bill in Parliament later this year.
According to Heng, for 2020 financial year, the republic expected an overall budget deficit of S$64.9 billion, or 13.9 per cent of Gross Domestic Product (GDP).
"This is the largest budget deficit since our nation’s independence. The deficit is driven by lower revenues due to dampened economic activity, and the significant expenditures needed to mount a decisive response to COVID-19," he said.
Meanwhile, for the current financial year, Heng said the budget position remained expansionary.
He noted that the plans to emerge stronger by pressing on with economic and workforce transformation, strengthening the social compact, and building a sustainable future for all, "will impart a considerable fiscal boost to the economy."
Thus, Heng said an overall deficit of S$11 billion, or 2.2 per cent of GDP is expected for the current financial year 2021.