Why is the presentation format of the Government Budget different from the government finance data reported in the Yearbook of Statistics?
The Overall Budget Balance that is published by MOF and presented to Parliament is based on revenues that the Government of the day can spend under Constitutional principles. The Constitution was amended in 1991 to incorporate a Reserves Protection Framework (see http://www.mof.gov.sg/Policies/Our-Nations-Reserves/Section-II-What-is-the-Presidents-role-in-safeguarding-the-reserves of Our Nation's Reserves for more information).
The Overall Budget Balance therefore excludes revenues that have to be protected as part of Past Reserves. In particular:
The Overall Budget Balance excludes proceeds derived from the sale of land, as these are not available for spending and are part of Past Reserves. This is because the sale of land converts a land asset into a financial asset, with both comprising part of Past Reserves. To spend the financial proceeds from land sales will mean drawing down Past Reserves.
The Overall Budget Balance also does not include all of the investment income from the reserves. Under the Constitution, only up to 50% of net investment returns on a real basis can be included in the Budget for spending by the Government (see http://www.mof.gov.sg/Policies/Our-Nations-Reserves/Section-II-What-is-the-Presidents-role-in-safeguarding-the-reserves of Our Nation's Reserves for more information).
The Net Investment Returns Contribution (NIRC) reported in the Budget reflects the amount of net investment returns that is taken into the Budget for spending over the financial year.
While receipts that are not available for spending by the Government are not reflected in the Overall Budget Balance, the information can be found in the Revenue and Expenditure Estimates that is presented annually to Parliament.
A copy of this document is available online at http://www.singaporebudget.gov.sg/budget_2014/revenueandexpenditure/RevenueandExpenditureEstimates.aspx.
The Department of Statistics regularly publishes government finance data that follows the IMF presentation format in the Yearbook of Statistics. Singapore subscribes to this IMF format for the purpose of international data reporting.
The IMF presentation format includes all receipts, including land sales proceeds, and total investment income.
However, some of these items are not available for spending by the Government under the Reserves Protection Framework in the Singapore Constitution as explained above. They are hence not included in the Government Budget, which portrays the fiscal resources available to the Government for the financial year.
Thus, while the IMF presentation format allows for data to be presented in a common international template, it does not cater to Singapores Constitutional provisions that seek to ensure the sustainability of government finances for future generations.
To summarise, the presentation of the Government Budget reflects the fiscal rules prescribed in our Constitution. This set of fiscal rules has served Singapore well, and underpins the sustainability of our public finances. In particular, by preserving Past Reserves, it ensures that NIRC will be available for future generations and not progressively diminished.
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