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Spike in transportation spending; proposal to tap bond market sparks excitement

Michelle Teo
Michelle Teo2/26/2018 8:0 AM GMT+08  • 7 min read
Spike in transportation spending; proposal to tap bond market sparks excitement
SINGAPORE (Feb 26): The government’s spending on healthcare and education is in a steep secular uptrend as it copes with an ageing society and technological disruption. But its spending on transport is set to leapfrog ahead of both these expenditure ite
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SINGAPORE (Feb 26): The government’s spending on healthcare and education is in a steep secular uptrend as it copes with an ageing society and technological disruption. But its spending on transport is set to leapfrog ahead of both these expenditure items in fiscal year (FY) 2018 as plans to expand Singapore’s airport and build new rail links to Malaysia are unfurled.

Meanwhile, the government is proposing that the statutory boards and government-owned companies that will be involved in developing and building the new transport infrastructure tap the bond market to fund these rising costs. “This will help spread the cost of certain large investments over more years,” Finance Minister Heng Swee Keat said in his speech on Feb 19.

For FY2018, the government is budgeting for a 52.6% rise in spending on transport to $13.7 billion. That will put transport spending ahead of spending on education, which is set to rise 0.8% to $12.8 billion, and spending on healthcare, which is budgeted to decline 3% to $10.2 billion. The only expenditure item that will be larger than transport is defence, which will rise 4.2% to $14.8 billion.

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