SINGAPORE: The Government could fund the S$100 billion cost of climate change protection measures using a combination of borrowing, reserves and ministry budgets, Second Minister for Finance Lawrence Wong told Parliament on Tuesday (Sep 3).
This comes after Prime Minister Lee Hsien Loong announced in his National Day Rally speech on Aug 18 that Singapore would probably need to spend S$100 billion over 100 years to tackle climate change and rising sea levels.
AdvertisementAdvertisement[h=3]READ: NDR 2019: It could cost S$100 billion or more to protect Singapore against rising sea levels, PM Lee says[/h]Measures include building an additional pump house at Marina Barrage, creating polders and reclaiming offshore islands on the eastern coast of Singapore.
"We will need a combination of funding methods to finance the various climate change adaptation measures," Mr Wong said.
"Smaller-scale infrastructure such as localised flood barriers for public assets, such as hospitals and bus depots, can be funded from the budgets of ministries.
AdvertisementAdvertisement"For long-lived major infrastructure such as sea walls, the Government will look to the option of borrowing to spread the cost across the generations which will benefit.
"Where the measures include land reclamation, the land reclamation costs can already be met from past reserves."
[h=3]READ: NDR 2019: Climate change one of the 'gravest challenges facing mankind', impact on Singapore to worsen, says PM Lee[/h]Mr Wong, who is also National Development Minister, was responding to a question by Nominated Member of Parliament Walter Theseira on how much of the reserves will be used to fund the measures.
The minister explained that the use of past reserves to fund reclamation costs is in accordance with the Reserves Protection Framework, which is agreed between the President and Government.
"The land created through reclamation will be protected as part of past reserves, and when such land is subsequently sold, the proceeds accrue fully to past reserves," he said.
"So the reclamation of land is in essence a conversion of past reserves – from financial assets to state land, and the use is not a draw on past reserves."
[h=3]READ: Commentary: Climate change in Singapore and what the future brings[/h]Under the Supply Bill that Parliament debates and approves each year, Mr Wong said the Government will seek approval for development expenditure, which includes land reclamation costs.
The Government also provides the President with a statement on land-related expenditures annually, he said.
"The Ministry of Finance will continue to study equitable and sustainable ways to finance the full suite of climate adaptation measures we need to protect our island," he added.
Associate Professor Theseira then asked if it was the commitment that "in all such cases the cost of land reclamation will be coming from past reserves without the draw down or requirement to raise taxes currently" or if it will be flexible, based on the finance minister at that time.
"As I've said just now, the Reserves Protection Framework already allows the Government to use the past reserves for all land reclamation projects," Mr Wong replied.
"That is already the case today, and that is the basis for which we operate currently."
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