To answer that we need to do a simple breakdown of all the total fiscal resources available to the Government for FY2021 and compared it to the total expenditures.

Most important to know is that there are three components which is the same as in previous years:

Firstly, the Operating Revenues collected through taxes and charges which amount to about $77 billion.

Secondly, Land Sales Receipts from the sales of the earmarked land parcels which amount to $12 billion.

Thirdly, the Net Investment Return of $39 billion earned from the $1.35 trillion of total financial assets we own.

After summing up the three components, our total fiscal resources for FY2021 add up to $𝟭𝟮𝟴 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 which would be available for Government deployment and allocation. The Government’s position, however, is that the Land Sales Receipts of $12 billion and half of the Net Investment Return of $19 billion (the second and third components of the fiscal resources available) cannot be counted in the Budget, so the fiscal revenue reported is only $𝟵𝟲 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 (77 plus 19).

Compare this to our total fiscal expenditure for FY2021 of $𝟭𝟬𝟳 𝗯𝗶𝗹𝗹𝗶𝗼𝗻. If all the $128 billion is included in the Budget, we will get a surplus of $21 billion (128 minus 107) but if we take the Government’s $96 billion, then we get a deficit of $11 billion (96 minus 107). So that is how the Government turns a surplus into a deficit.

We think that how the Government chooses to present the fiscal resources available to it (only Operating Revenue and half of Net Investment Returns) is separate from the fiscal resources actually available (all three components), which includes the aforementioned surplus. Hence my assertion in Parliament that I don't see any shortage of fiscal resources in the foreseeable future.

The Government can choose to keep the surpluses if there is no need to raise taxes. If the Government want to raise taxes while keeping the surplus, then they have a lot of explanation to do.

#SGBudget2021 (Note: all the above figures are taken from The Revenue and Expenditure Estimates for FY2021 published by MOF)

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