Skyscrapers in Singapore
The Singapore skyline

Case study: public expenditures in Singapore

What does the central government of Singapore spend their money on?

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 12.6% of GDP in 2012 (Source: The World Bank). 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.

So, where does the money go? The 2017 budget shows total public expenditures amount to about SGD (Singapore dollars) 75.1 billion (17.7% of GDP). The areas that attract most public spending include defence (SGD 14.2 billion), education (SGD 12.9 billion), transport (SGD 9.2 billion) and health (SGD 10.7 billion).

Singapore budget 207

Singapore budget 2017 (Click to expand)

You may also notice that the 2017 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