What is Fiscal Policy?
Fiscal policy involves the utilisation of government expenditures and tax strategies to impact the overall economic situation, particularly broader factors like total demand for goods and services (GST), job availability, inflation, and economic expansion.
In times of economic downturn, the government might reduce tax percentages or enhance spending to stimulate demand and foster economic motion.
On the contrary, during instances of rising prices, it could heighten tax rates or decrease spending to moderate the pace of economic growth.
How does the Fiscal Policy work in Singapore?
In Singapore, the ongoing aims of fiscal policy include:
- Nurturing and supporting steady economic growth without triggering inflation.
- Keeping a balanced budget, which means funding all types of expenses – both day-to-day and developmental – with the money earned throughout different economic phases.
- Directing government spending toward providing important public services and goods, like education, healthcare, infrastructure, housing, and projects dedicated to protecting the environment.
These goals are supported by recognising the influence of market trends on the economy, a dedication to careful money management, and a strong emphasis on investing in people and the fundamental structures of society.
