Singapore on a Budget

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FEBRUARY 24 — Earlier this week, on February 19 — the Singapore government delivered its annual Budget. 

The various figures with regards to government spending — S$15.5 billion (RM46.7 billion) on defence, a S$2.1 billion total budget surplus in 2018, S$200 worth of tax rebates to all citizens etc. — aren’t the stuff of gripping TV viewing but in the world of Singapore politics and business, this is a moment of high drama.

Minister of Finance Heng Swee Keat strode forth to deliver the Budget “live” to the nation.

While this is the fourth Budget Heng has presented, this year’s performance is significant as he is now the anointed successor to PM Lee Hsien Loong.

He is the man destined to be Singapore’s fourth prime minister.

Therefore, his pronouncements and priorities are even more significant as watchers will try to glean insights into his future premiership. 

Well, from this year’s performance — largely conservative with a renewed focus on healthcare — there really isn’t too much to glean.

Heng did not announce an island-wide Maglev train network or commence construction of a giant aircraft carrier, nor any other particularly gripping (but also irresponsible) new spending priorities.

Instead we got a slight rise in defence spending (sensible if you look at the wider world) and some extension of welfare benefits targeting low-income Singaporeans. 

He announced the Merdeka package which looks to provide benefits to Singaporeans born in the decade leading to independence (1950-1959).

These lucky people will receive, among other benefits, S$100 top ups to their passion cards (which allow access to public transport and public facilities) and permanent subsidies on their Medishield Life (state medical insurance scheme) payment.

Basic insurance, therefore, became cheaper for this entire cohort.  

There is also a bicentennial bonus (because Stamford Raffles formally founded the settlement/ colony of Singapore in 1819).

These benefits are available to all Singaporeans but target the lower income, for example there’s a S$300 cash payment to low- income workers and those with less than S$60,000 in their CPF (Provident Fund) will receive a one-off top up of S$1,000.

The list of individual payments and benefits is very long but overall there’s a clear emphasis on low-income support which gives you an idea of Heng and the government’s priorities. 

As wealth inequality has become a sore point on the island, there has been a consistent effort to expand the benefits received by low-income citizens — without creating a centralised welfare state, something the government of Singapore has long opposed.  

The question though is whether ad-hoc measures like these are enough. 

In 2015, the government rolled out the Silver Support Scheme which offered increased benefits to those born before 1950. 

But while we see a trend towards greater support, particularly for the low-income and the elderly, it’s not a comprehensive or predictable system.

What’s my generation’s (the 1980s) bonus going to be called — the Back to the Future bonus? — and what will we get and will it be the same as previous generations’? 

It would be nice if there was a consistent scheme so we could know what to expect. And why exactly does one generation get different benefits from another seems a little arbitrary. 

Even if it doesn’t take the form of a European welfare state, some sort of framework would be appreciated; we can’t just keep being a random bonus state, can we? 

The same criticism applies broadly to the rest of the Budget.

The calls on the big decisions just aren’t being made. While gradual reform has characterised Singapore’s government policy for decades (and it’s been largely a success), the world is changing. I

Increasing competition, geopolitical friction and slowing growth make it unclear if we can continue with gradual movements.  

From welfare and income support to encouragement for local SMEs going abroad and promises to cut the number of foreign workers in Singapore, we’ve seen all this before.

The government has hedged with regards to the number of foreign workers for years.

On one hand exploring the possibility of growing the island’s population to over seven million and on the other hand, giving in to public pressure and backing curbs on foreign workers. 

Again there are advantages and disadvantages on both sides; a greater Singapore with seven million people or a Singapore where the core population is protected at all costs.

Compromises are also possible but the time is coming for the government to actually make a call: how many residents are we looking at/targeting by the year 2025, 2035 etc and why?  

So while I welcome the attention to detail in this year’s Budget, next year with an election almost certainly looming I hope Heng shows us his real vision for Singapore and I hope it includes huge bonuses for the Back to the Future generation.

* This is the personal opinion of the columnist.

Singapore on a Budget