There have been materials circulated online that misunderstood the difference between the Government’s cash receipt and revenue, leading to incorrect conclusions about our fiscal position and the need to raise GST.

For example, a March 2020 social media post queried the need to raise GST, alleging that the Government had more money at its disposal than what it had said, based on data published on the Department of Statistics (DOS)'s website.

The cited cash surpluses were taken from DOS, but wrong conclusions were made on budget deficits, surpluses, and the Government’s overall fiscal position. Under our budgeting rules, there is a distinction between (a) cash receipts and (b) revenue that is available for spending. Cash receipts reflect all the cash that comes in, but not all the cash that comes in constitutes revenue for expenditure.

Our budgeting rules reflect policy choices that the Government has made to safeguard the long-term interests of our citizens and future generations. These rules are enshrined in Singapore’s Constitution, to require each term of Government to accumulate sufficient revenue to fund its expenditure.

Cash receipts that are not considered revenue are not made available for direct Government spending, and instead are channeled to our Past Reserves and invested. It is misleading to point to such cash receipts to claim that the Government has more revenue than it presents in the Budget Statement.

Monies from the sale of state land are not part of revenue

The largest of such cash receipts is the monies from the sale of state land. Land is a scarce and finite asset in Singapore and forms part of our reserves. Selling land does not increase revenue. Instead, land sales convert physical assets into financial assets. The Government then invests these financial assets to generate a sustainable stream of investment returns over the long term[1], or use it for other land-related expenditure.

For example, if a family sells a house and uses the proceeds for day-to-day expenditure, it will soon have nothing left. However, if the family invests the proceeds of the sale wisely, it would still have the original sale proceeds, plus a constant stream of income from those proceeds. This income can then be used partially for expenditure and partially reinvested to help sustain both present and future members of the family.

We take the same sustainable approach to land sales. Land sales proceeds are not part of our revenue and cannot be directly used for expenditure. Instead they are invested, and we use part of the investment returns to support the spending needs of Singaporeans.

Net Investment Returns Contribution (NIRC)

In fact, the contributions from investment returns (known as the Net Investment Returns Contribution) has already become the largest single source of Government revenue, higher than the amount of GST, Personal Income Tax, or Corporate Income Tax collected in each year since 2018.

This big contribution from investment returns supports about one-fifth of our spending needs. This is only possible because we have been disciplined in building and protecting both our land and financial reserves.

A sustainable and forward-looking budgeting system

Tapping on monies from land sales directly for spending today will change Singapore’s sound orientation of saving and building for the future, to one of living for today and wishing that tomorrow would look after itself.

Relying directly on land sales for revenue for immediate spending is also not sound fiscal policy. The property market goes through up and down cycles, and is not a stable or predictable source of income in particular years. We must also avoid selling land purely for the Government’s spending needs, rather than the long-term development plans that will benefit generations of Singaporeans.

The total cash receipts published by DOS include such land sales receipts, and do not represent what is available for the Government to spend under our budgeting rules.[2]

DOS’s data are published in line with the IMF’s guidelines, which are designed to provide a standardised way to report on the cash position of different countries of different sizes, systems of government, and levels of development. Such guidelines do not capture different budgeting rules and policy choices that countries and societies make for their own contexts. Using IMF’s guidelines to calculate the resources available for spending is inaccurate, as these do not accurately reflect Singapore’s fiscal position as defined by our own policy choices and context.

Singapore has put in place a set of budgeting rules that reflect our values of prudence and stewardship. Our way of budgeting is guided by the aim to build a sustainable and forward-looking system that benefits Singaporeans, both present and future generations, for many years to come.

How we present our Budget Statement reflects these values and aspirations.


[1] Monies from land sales form part of our Past Reserves. Up to 50% of the net real investment returns on our Reserves can be included in the Budget for spending. This amount is reflected in the Budget Statement as Net Investment Returns Contribution (NIRC).

[2] The key differences between the Government “Cash Surplus/Deficit” published in line with IMF’s Government Financial Statistics Manual and our fiscal presentation in the Budget Statement are:

  1. Inclusion of Capital Receipts (e.g. monies from land sales);
  2. Inclusion of Investment and Interest Income net of Expenses on Investments. This refers to dividends and interest income. These are likewise channelled to Singapore’s Past Reserves and invested.
  3. Exclusion of Net Investment Returns Contribution. Up to 50% of the net real investment returns on our Reserves can be included in the Budget for spending. IMF excludes this as it is not a cashflow but a fiscal rule.
  4. Exclusion of monies committed to Government Funds (e.g. Pioneer Generation Fund, GST Voucher Fund); and
  5. Exclusion of monies that Statutory Boards spend on building infrastructure and other assets, such as the MRT network.