SINGAPORE – Deputy Prime Minister Heng Swee Keat said on Friday (Feb 28) that he would seek the President’s approval to draw on Singapore’s past reserves if the coronavirus situation deteriorates significantly and calls for it.
Responding to MPs who had asked about the use of the reserves, he noted that the Government had not needed to tap the reserves for the Budget’s support packages to stabilise the economy amid the uncertainties caused by the Covid-19 outbreak.
Some $5.6 billion was set aside for the Stabilisation and Support Package and Care and Support Package that help businesses as well as workers and households.
Even then, some MPs asked during the debate on the Budget statement if more could be done to help businesses.
Mr Heng, who is also Finance Minister, said: “If the outbreak becomes a worldwide pandemic, and the global economic impact is deeper and longer, we have the fiscal resources to do so, and the will to act. “
“But if the situation deteriorates significantly and calls for us to tap our past reserves, I will make a case to the President to seek her approval to do so.”
During the Global Financial Crisis that started in 2008, the Government had sought approval from then President S R Nathan to commit $150 billion from the past reserves to guarantee bank deposits and prevent bank runs from October 2008 to December 2010.
Recounting this, Mr Heng said the $150 billion remained untouched in the end, and “Singaporeans’ money was safe”.
In 2009, Mr Nathan had also approved a draw of $4.9 billion from the past reserves to help protect jobs and support companies amid the crisis.
When the economy rebounded sharply a year later, the Government returned the money to the past reserves.
Mr Heng said: “It did not have to, but did so, to maintain the discipline that has allowed this unusual move in the first place.”
“This year, we have not had to tap our past reserves. But it was the same spirit of prudence that allowed us to have enough surplus this term to provide the fiscal support for our economy and our people.”
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