GOVERNMENT BUDGETING IN SINGAPORE

Abstract

This study analyses the evolution of Singapore's budgetary system since her independence in 1966. While the study covers both the expenditure and the revenue accounting systems, the focus is on the former because of its association with the PPBS. The evolution of Singapore's budgetary system is divided into three periods: (i) 1966 to 1977, when line item budgets were operated; (ii) 1978 to 1986; and (iii) the post 1986 period. The last two periods receive particular emphasis in this study. Limitations of the line item budget, namely lack of flexibility in budgeting during periods of changing priorities and its failure in not providing a mechanism for relating the means to the budgetary ends necessitated the introduction of the PPBS. The purpose is to allow policymakers to introduce techniques of rational economic analysis into budgetary decision making process. Among the five elements of the PPBS, it was found that emphasis has so far been on "Detailed listing of activities" and ''Program Accounting" while "Multiyear costing", "Zero-Base Budgeting" and "Cost Benefit Analysis" have been used sporadically and at times opportunistically. Even though the PPBS appears to have enhanced the quality of debates concerning budgetary issues, there is still ample room for improvements especially concerning the last three elements just mentioned. In light of this, the Finance Minister has revealed the Government's intention to introduce a Management Accounting system with the view towards reducing the per unit cost of providing various services and providing greater transparency in the budgets. As to whether the new system will address the various problems, it is still too early to say. Applying the criteria 01 comprehensiveness, consistency and transparency to the revenue accounting system, it was observed that, while considerable improvements have been made, there is still ample scope for making the system more consistent with the above three criteria. The revenue accounting system, therefore, should strive towards meeting more fully the above three criteria, though some difficult issues, such as the treatment of statutory boards, and whether to mix cash, accrual and opportunity cost elements, do need to be resolved.