A country’s yearly Budget is not only about giving one-off monetary hand-outs that last the year till the next year’s Budget. A country’s yearly Budget must be about how a Government apportions expenditure of tax-payers’ money in ways that address the country’s medium-to-longterm political, social, economic and other challenges.
In this year’s Budget, there are many “goodies” in terms of cash handouts of various forms. Whilst Singaporeans may rejoice in the immediate and short-term relief these bring, the larger question is whether these “goodies” actually lead to real and substantive positive and sustainable impact on long-term challenges.
Providing 50% personal income tax rebates (capped at $1,000), quarterly and one-off cash pay-outs to the low-income elderly, $500 SkillsFuture credit for further education, etc are all essentially cash “gifts” that may alleviate some pain this coming year, but does not automatically address long-term problems.
A more relevant Budget would be one that addresses creating higher-paying value-creating jobs for the middle-and-lower class and the elderly, bringing down the cost of public goods like public transportation, public healthcare, government housing service and conservancy charges, public utilities like water and electricity, and designing a budget that funds the financing needs of public goods without increasing the cost to the people. It does not help if cash handouts are given out on one hand, and on the other hand, taxes and other costs of public services start to increase.
The recent changes in CPF resulting from the CPF Review as well as the Budget, whilst laudable in many areas, still appear to the public as not sufficiently addressing their concerns of interest rate returns on their CPF savings compared to inflation rate and bank interest rates, of giving greater decision-making on withdrawals to the people themselves, and of where the investment profits being earned from the use of CPF funds are going to if not back to the people themselves.
A citizen who has been working from age 20 years old to 55 years old has 35 years of funds contribution to their CPF. Many think it time to give back to the working class their CPF monies, because when the CPF was introduced before Singapore became independent, the main objective is to fund their retirement after 55 years old. Many want to see CPF changes that allow them to withdraw their hard-earned CPF money.
The common impression that the people’s hard-earned CPF funds seem to be used as a source of cheap funds for Government and GLCs investments, at the expense of higher interest rate returns on their CPF funds, also need to be quickly and properly address, or it will be a ticking political time-bomb.
The Budget’s intention to help companies to innovate and expand overseas is well-placed, but again, the solution is through giving of grants, deferred tax/levys, etc. What the Budget really needs to address more directly, is the creation and supply of higher-quality local labour in value-creating jobs, a faster and more effective way of increasing productivity, and focusing on business where Singapore companies can have a clear competitive advantage in the region against global and regional competition. The areas of industry priorities outlined in the Budget are also not industries that can easily create many more new jobs or absorb lower-income workers quickly. This will likely rear its head again down the road.
We need each year’s Budget to build more and more longterm self-sustainable local businesses as they grow and expand overseas organically, and for this sustainability to in turn lead to longterm strategic self-sustainable economy in Singapore.
Higher taxes for top 5 percent income earners from 2017 does indeed give a “Robin Hood” flavour to the Budget. But the real question is, where and how will this increased tax revenue be distributed and spent on, and will it lead to a greater re-distribution of real financial wealth downwards to the middle and lower income groups?
Or will the funds go towards other government expenditures that end up benefiting the rich and upper-middle class, and end up squeezing the middle and lower class even more?
Apportioning annual budget to national infrastructure should always be a good thing, as it leads to increase in public good. However, this is true only if the infrastructure being built benefits the majority in society, especially the middle-to-lower income group. Such worthwhile infrastructure include public roads, public transportation systems, public hospitals, etc.
In this regard, increasing hospital beds and public MRT lines are steps in the right direction. But it is difficult for the middle-to-lower income group of people to see how a large Airport Terminal 5 or more nursing home capacity will benefit them directly where it counts, ie. the daily cost-of-living.
Any such investment in public infrastructure, should also not lead to increase in additional basic cost-of-living, like public transport cost, public healthcare cost, etc. Otherwise, such development expenditures end up increasing the daily ongoing financial burden of the common man even more.
All-in-all, we at the Democratic Progressive Party of Singapore, call for a Budget that:
– creates higher-value jobs for the middle-and-lower income, elderly and marginalised in society
– increases productivity, competitiveness and long-term self-sustainability of local SMEs, which in turn builds a long-term self-sustainable economy for Singapore
– greater investment in public goods, like public infrastructure, public transportation, public healthcare, etc that can be shared and benefitted by the majority in society (especially the middle-to-lower income groups), and lead to lowering not increasing of cost-of-public-goods to the common man
– a longer term sustainable national wealth re-distribution from the very rich down to the sandwiched middle-class and further down to the poor and marginalised. This should not be designed designed as annual-Budget-to-annual-Budget cash handouts and incentives, but as a self-sustaining, self-operating systemic wealth re-distribution set of policies in job creation, minimum wages, affordable public services, etc.
We encourage the Government to actively seek the feedback and suggestions of the community, various interest groups, and other political parties, and to openly and thoroughly discuss and review the Budget. We also call on Parliament to vote for any necessary tweaking for a revised budget that is more relevant to addressing key challenges of today as well as tomorrow in Singapore.