With the tranquil air of a man conscious of a job well done, Heng Swee Keat delivers his speech on the most important day of the year. In February, the Finance minister of Singapore, presented to parliament the budget in 2019, the city-State. For two hours, the positive announcements are ground up: public spending will only grow marginally compared to last year (17% of the GDP), the fiscal balance is ensured, large investments are planned in education and support for the elderly. For a spectator the French, accustomed to a public deficit is chronic, it is a wonder. The moment of glory seems assured for Heng Swee Keat, as many see in a future prime minister. But when the word is finally given to the speaker , it’s the surprise: deputies knock gently a armrest of their seats to applaud – it is the practice in the country – before returning quickly to the silence, waiting for the parliamentary debate following.
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is this a disclaimer? Not at all. To understand this apparent indifference, it must be borne in mind that in Singapore, the State budget is doing well since 1958, the date of the independence of the malay peninsula, where only eight Finance ministers are succeeded. The budget 2019 so has nothing of a miracle. For each vintage, the master of ceremony is content to follow the two leitmotifs invariant : doing the right things (choose the right missions), and doing things right (perform effectively). The only originality this year, a bonus of up to 300 singaporean dollars, or about 200 euros, will be paid to the population because of the surplus in public finance.
a balanced budget, a minimum required
Of the immutable rules underlying this discipline. Over the next five years, a balanced budget must be respected. If, exceptionally, in cases of economic crisis, the government voted a deficit, a saving clause requires first obtaining the approval ceremony of the european Parliament and the President. The latter has recourse to the advice of an economic Council, the custodian of the reserves accumulated by the State. As for the surplus, as described in the foundation iFRAP in a note published on his site, they are re-invested – the bonus of 2019 is a first – and the profits contribute to reduce the tax burden or social the following years, develop infrastructure, cope with crises (such as the SARS outbreak in 2003), or supply power to the powerful sovereign wealth funds, the Temas and Government of Singapore Investment Corporation.
The “fiscal prudence” was erected in dogma
The “fiscal prudence”, which is necessary to the economic vitality, is “at the heart of the philosophy of the Singapore government”, one can read in the official documents of the ministry of Finance. The rate of income tax varies from 0% to 22% for income beyond of 320,000 dollars a year. The sources of public revenue are relatively balanced : in 2018, the tax on corporate profits reported 16 billion singaporean dollars, and the income tax on nearly $ 12 billion, an amount equivalent to the VAT (11,29 billion).
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On the other hand, the policy of tax remains an instrument of control and guidance of the consumer, especially in regards to the automobile. The government wants to avoid the proliferation of private cars on the small area of Singapore. The purchase of a vehicle therefore requires a fee of approximately 30,000 euros, a levy that was reported last year, the higher amount of 2.88 billion singapore dollars.
A debt of 115% of GDP… but which corresponds to investments of Singaporeans
In the absence of prolonged deficit, the public debt, which is estimated to be 115% of the GDP, is not a debt in the sense that you hear in France and, more broadly, in the West. It corresponds in fact only to investments. These are made to develop certain markets, banking and finance, the Central Provident Fund , the funds devoted to the social policy. The latter focuses on the retirement and the life of the seniors, the big risk of health care and housing. The public debt of Singapore is made up of contributions that citizens make to the fund. The social system works, as described in the iFRAP, as a “capitalization of the public.” The funds are managed as private funds, which the Singaporeans are the direct shareholders. And the fee may be mandatory, it may withdraw deposits in the event of the renunciation of the nationality singaporean. The country therefore has no net debt, or external debt.
A powerful State and an administration that is accountable
However, despite its budget was deliberately limited, nothing would be more wrong than to accuse the singaporean State of low, or of the believing subject to any jungle capitalist. The government officials are respected, the public intervention in the economy is fundamental, the State has interests everywhere and does not hesitate to legislate on the areas of activity, depending on whether they seem righteous or risky.
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The public expenditures correspond to clearly defined objectives, mainly peerage. The first motto of the State is to “keep Singapore safe and secure.” The sovereignty of the country and the tranquility of the citizens are seen as a precondition for economic wealth. The country spends 22% of the public budget to the defence, and employs 70.000 military, a proportion that would be like having a million soldiers in France. Homeland security also works to the benefit of significant resources, who are certainly no strangers to the reputation of the country sanitized that sometimes Singapore. Then come the expenditure on education, in the “national development” (infrastructure), transportation, culture and youth, health (excluding contributions).
In regard to the organization of the State, each department is responsible for its balance sheet. As a corollary, the services manage their finances as they see fit, and may reallocate funds during the fiscal year. Traditionally, they manage to save 5% of their resources each year. The money saved is again put in reserve, or fund a fund inter-departmental to support public projects, innovative and cross-cutting. Finally, in all the tenders that allow it, the public and the private are indiscriminately placed in the competition.
Many of the gateways between public service and private employment
If each ministry is responsible for its management, the ministry of Finance keeps a predominant role, “ensuring the continued that the public sector is efficient and does not live beyond its means”. It produces public comment on the annual reports of performance in other departments. This is not to reduce arbitrarily the resources, but rather to confront the management. On the other hand, a program called “PS21” ( Public Service for the 21st Century , or “public service of the 21st century”), encourages jurisdictions to maintain a productivity comparable to the private sector, equal task.
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As regards the public service, the contractors are many, again allowing a return constant between public and private. The instructors, most often incumbents, are trained in a school of public management. For its senior officials, the government does not provide training, but identifies and funds each year 200 young Singaporeans, sent to foreign universities before being offered a commitment of six years. A special corps, the Administrative Service, brings together 230 members, who occupy the important positions in the ministries, and public investment funds. But then again, nothing is ever taken for granted: the membership of the body depends on results in mission, and even this level, recruitment is also done well in the public service than in the private. Finally, the officers salaries tied to the private sector, and ministers can earn the equivalent of more than a million euros, depending on their performance.
