Key to use resources responsibly, without fiscal fantasies: Chee Hong Tat

After the war between Russia and Ukraine caused a surge in global inflation, the authorities in Singapore dealt with the impact by supporting firms undertaking restructuring efforts, as well as people in the lower- and middle-income groups, said Transport Minister Chee Hong Tat.

- Esther Loi

It was important to "do the right thing", and not pursue populist and short-term measures, said Mr Chee, who is also Second Finance Minister.

Speaking at the Economic Society of Singapore's annual dinner at Orchard Hotel on Aug 28, he noted that the Government could have taken the easier and more populist approach of fixing prices and giving out broad-based subsidies, instead of understanding the needs and production processes of each sector.

Instead, it worked to ensure that firms were more productive, workers became more skilled and adaptable, and real incomes can continue rising sustainably.

This will keep Singapore on track to emerge stronger in the longer term when the shock passes, Mr Chee added.

"This is also how we steward our resources responsibly, instead of indulging in 'fiscal fantasies' - that we can somehow keep spending more and more, and find the taxes or loans to support this increased expenditure down the road, without having to carefully assess the consequences upfront," he said.

"It is neither politically responsible nor economically sound for some parties to propose spending more on one hand, and then criticise the Government for raising taxes to ensure that the additional expenditure can be sustained over the longer term," he told an audience of more than 400 people, including policymakers, economists and business leaders.

"We need to be honest with the population that higher sustained spending can only be supported if we are prepared to foot the bill as a society, and not dabble in populist politics or fiscal fantasies by pretending that the additional spending can magically happen." Mr Chee said it is also disingenuous to suggest that drawing down from past reserves will not take resources away from future generations, and yet claim such moves are not a raid on past reserves.