The government stewards the country’s economy with a clear mandate – to steer the economy to grow at a predictable and sustainable momentum, while keeping inflation in check.
Beyond short-term economic stabilisation, policymakers use Fiscal Policy to help improve human capital, provide a social safety net, deal with climate change, or build food security for longer-term economic resilience.
Singapore Covid-19 Fiscal Policy Measures
To cushion the impact of the Covid-19 outbreak on businesses and individuals, here are some examples of fiscal measures that the Singapore Government has put in place.
Note: Information presented is non-exhaustive.
Source: KPMG International.
How Fiscal Policies work
Fiscal policies work through multiple channels:
- Changes in tax rates can alter the savings, investment, and spending pattern of the public and companies.
- Direct cash support schemes help boost consumer demand for goods and services.
- Job programmes support employment.
- Public sector infrastructure projects boost the economy’s efficiency and the potential to innovate and grow.
Conversely, the government may raise taxes – a contractionary measure, to tamper down unsustainable growth to prevent economic bubbles from occuring.
Key pitfalls of Fiscal Policies
The policy’s effectiveness could potentially be compromised when:
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| There is a policy lag – the interval from its implementation to the realisation of its impact. | The intended outcome failed to move the economy in the desired direction. | Policymakers are not able to accurately determine the size and composition of the measures. |
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Disclaimers and Important Notice
This article is for information only and should not be relied upon as financial advice. Any views, opinions or recommendation expressed in this article does not take into account the specific investment objectives, financial situation or particular needs of any particular person. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability. This article is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation.
