Defence Spending

Steady and prudent approach

Most Singaporeans agree that our defence spending is necessary because of Singapore's strategic vulnerabilities. To build a strong and capable defence force, we will need to invest wisely to build up the necessary capabilities to defend our country against external threats.

Building effective defence capabilities takes many years. Given that defence programmes have long gestation periods, we need to plan and invest for the long term. A steady investment approach avoids the disruptive changes arising from fluctuations in the expenditure from year to year. It also allows us to make opportunity buys to build up our strategic assets, and optimise our training systems. This steady approach to defence spending also reflects the Government's commitment to ensuring Singapore’s peace and security.

MINDEF/SAFs long-term and multi-year acquisition programmes are premised on our defence and security budget plans, which are discussed and approved in Parliament during each year's Committee of Supply session. When planning for our defence budget allocation, MINDEF asks for only what is needed each year. Our approach is to have a defence budget that grows steadily, and to manage it carefully.

MINDEF has projected that our defence budget can be maintained on the current trajectory of 3 to 4% growth each year, which would allow us to at least keep pace with inflation. We adopt three principles in managing the defence budget:

• First, we ensure prudent use of the defence budget. MINDEF buys only what we need. All available options are carefully scrutinised for the most cost-effective solution. Rigorous checks are also put in place to ensure that monies allocated to MINDEF are well spent. Our preference is to upgrade existing platforms to extend their lifespan and enhance their fighting capabilities instead of purchasing new ones, unless the new equipment provides clearly superior and needed capabilities. A number of our major platforms were purchased second-hand and refurbished to suit our needs - such as the Archer-class submarines and the Leopard 2A4 Main Battle Tanks. Where it is more cost-effective to do so, MINDEF works with the local defence industry to build our own unique solutions, which was the case for the Terrex Infantry Carrier Vehicle and the Littoral Mission Vessel.

• Second, we promote a strong culture of cost consciousness. MINDEF strives to continually review our operations, processes and requirements to identify areas for cost savings and prevent wastage. This will enable us to improve our resource management and plough back the savings to develop other areas of defence. MINDEF/SAF establishes cost savings targets and reviews cost savings ideas each year, as well as encourages productivity improvements by our servicemen, through the PRIDE¹ programme, which in 2015 reaped about S$164 million in cost savings.

• Third, we ensure the long-term sustainability of the Defence Budget. We are mindful of the need to look beyond our day-to-day demands and take a longer-term view of our defence needs and force planning. Long-term force development plans are drawn up to match and optimize requirements to available resources.

Categories of defence expenditure

Defence expenditure includes:

• Investments in human capital for the development of well-trained personnel in MINDEF/SAF, which include our soldiers, sailors and airmen, both regulars and national servicemen.

• Operating and development expenditure for the SAF to maintain its high state of readiness and carry out operations, both locally and in support of our international deployments, as well as for building up the supporting infrastructure.

• Investments in new capabilities to equip our servicemen with the most appropriate equipment and maintain the fighting edge of the SAF. This allows them to carry out their mission with confidence and success. We also invest in defence research & development, as well as experimentation of new operational concepts, to build up capabilities to meet our unique requirements.

Defence budget oversight

Singapore has always maintained strong legislative oversight and executive controls in our systems, including our Budget process.

The Singapore Budget is prepared for each Financial Year (FY), which begins on 1 April of every calendar year and ends on 31 March of the next calendar year. All Government expenditures, including military expenditure, are budgeted for and submitted to the Cabinet for approval each year. During the preparation of the Defence Budget for the coming FY,  information on proposed defence expenditures, current MINDEF/SAF developments and issues of interest are provided to the members of the Government Parliamentary Committee (GPC) on Defence and Foreign Affairs (GPC-DFA)² in a timely manner, for their scrutiny, before they are submitted for Parliament's approval. In this regard, the GPC-DFA members frequently file Parliamentary Questions querying the Minister on various aspects of defence policy, ranging from costs, personnel policies, foreign partnerships, national service, among others.

The Minister for Finance will subsequently present the Cabinet-endorsed Government’s budget (including the Defence Budget) to the Parliament. This is typically done in February each year.

Following that, the Budget Debate and Committee of Supply sessions for the respective ministries will take place, typically in March, where all Members of Parliament can question the Minister of Defence on the defence expenditure in the previous FY, as well as move cuts to the proposed Defence Budget for the next FY. Parliament has the power not to approve the Defence Budget for a FY.

After Parliament passes the Supply Bill, thus giving its approval for the Budget, the President needs to give his assent to the bill before it can be enacted as law through the Supply Act. The Act will then control the amount of money that the Government may spend in the coming FY and the purposes (including the Defence Budget) in the coming FY, and for what purposes this money can be spent on.

Throughout the FY, members of the GPC-DFA scrutinise the legislation, policies and programmes of MINDEF. In this regard, the Committee acts as an independent feedback mechanism for defence-related policies and programmes, and is consulted by the Ministry on issues of public interest.

The GPC-DFA also visits various defence facilities yearly to inspect and be briefed on the various aspects such as operational capabilities, activities and related costs of MINDEF/SAF. All Members of Parliament may also file Parliamentary Questions on various aspects of defence policy, including defence expenditures. MINDEF's replies to Parliamentary Questions, as well as to forum letters and media query, are available to the public.

Parliament also appoints a Select Committee, the Public Accounts Committee (PAC), to work closely with the Auditor-General’s Office (AGO) to conduct regular scrutiny of the Government’s expenditure and accounts, including MINDEF’s defence budget. These annual findings are made publicly available on the AGO website.

For more details on the Singapore Government and MINDEF's budget and expenditure, please visit the Singapore Budget archives website.

¹ Started since 1981, MINDEF's PRIDE (Productivity and Innovation in Daily Efforts) movement serves as an important platform to promote a culture of innovation and excellence within MINDEF and the SAF. Servicemen are encouraged to strive for cost-effectiveness and constantly think of ways to improve their daily work processes.

² Government Parliamentary Committees (GPCs) are set up by the governing party to scrutinise the legislation and programmes of ministries.