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The Singapore skyline

Case study: public expenditures in Singapore

Since gaining independence from the Federation of Malaysia in 1965, Singapore has been managing its own budget. Its central government has remained relatively small with respect to those of most industrialised countries, with total public expenditures about 14.32% of GDP in 2019 (Source: Statista). The size of the public sector, however, is bigger, particularly when we count the Central Provident Fund, a comprehensive social security system that includes pension schemes, sickness benefits, family protection and other welfare programmes. On the top of this, an important role in Singapore’s economy is played by state-owned enterprises.

So, where does the money go? The 2018-19 budget shows total public expenditures amount to about SGD (Singapore dollars) 78,990 million. The budget is divided into four main sections: social development, security and external relations, economic development, and government administration. The areas that attract most public spending include defence (SGD 14,762), education (SGD 13,090), transport (SGD 11,748) and health (SGD 10,632). The expenditures incurred for the prime minister’s office are relatively small, as they account for about 1.1% of the budget. You can see the detailed figures in the table below.

Singapore budget 2018-19

Breakdown of total expenditure by sector

You may also notice that the 2018-19 budget breaks down expenditures in each area into two components: operating expenditures and development expenditures. These are accounting categories that refer, respectively, to the expenditures that are incurred to keep running the present public programmes and to those that are sustained to increase the capacity or the efficiency of public programmes in the future. Development expenditures can be understood as investments, for example, building new schools and developing new IT infrastructure.

What do you think of Singapore’s budget? Would you say this looks like a ‘healthy’ budget? What does it tell you about the kind of development that the government wants for the country?

Most countries provide similar information about their budget that is made available online. Try and search for the latest budget figures of the government of your country of origin, or of the local council of your borough or town. Then, ask yourself: what is the government spending money on, and how does this help development where you are?

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This article is from the free online course:

Understanding Public Financial Management: How Is Your Money Spent?

SOAS University of London