Budget 2021: Government to issue up to S$90b in new bonds to finance infrastructure, Government & Economy - THE BUSINESS TIMES

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Budget 2021: Government to issue up to S$90b in new bonds to finance infrastructure

THE Singapore government plans to issue new bonds under a proposed Significant Infrastructure Government Loan Act (SINGA).

As a safeguard, it will set a limit of S$90 billion for borrowing under SINGA. This is based on the expected pipeline of major long-term infrastructure projects over the next 15 years.

The new bonds will allow for a fair and efficient way of distributing the fiscal responsibility in financing infrastructure, said Deputy Prime Minister and Finance Minister Heng Swee Keat.

Mr Heng had said in previous Budgets last year that the government was exploring the use of borrowing to fund major, long-term infrastructure that will benefit current and future generations.

"This approach will allow us to spread out the lumpy costs of such infrastructure investments more equitably across generations," he said on Tuesday afternoon while unveiling Budget 2021.

The government will table a Bill in Parliament later this year for SINGA and provide more details at that time.

Prior to the proposed law, the government has been issuing bonds to develop the domestic debt market and meet the investment needs of the Central Provident Fund for Singaporeans' retirement.

With SINGA, the government will issue bonds for an additional purpose of financing major, long-term infrastructure, Mr Heng noted. It will use SINGA borrowing proceeds "in a prudent and transparent manner", he added.

They will go into financing assets that are crucial to Singapore's long-term development and sustainability. These include new MRT lines, and infrastructure to protect against rising sea levels.

Aside from the S$90 billion borrowing limit, there will be other safeguards included in the legislation, which will be open to parliamentary and public scrutiny.

President Halimah Yacob has given her in-principle support for the use of government borrowing to finance major long-term infrastructure, Mr Heng said.

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