By: Ravi Philemon
There were many highlights in Budget 2011. For one, I think it was funny that the MPs almost fell over backwards cheering the abolishment of radio and TV license. It was long overdue in my opinion – at least a decade overdue. Why were the MPs not calling for this in parliament earlier? The other highlight was the $600 – $800 the government was giving in cash to all Singaporeans by 1 May 2011, which made me make an educated guess that the General Election will be called 2 – 3 weeks from this disbursement.
Budget 2011 is definitely a populist budget, perhaps prepped for the General Election to give a feel good effect to the voters as they go to the polls. But it is a populist budget which has fallen short; at least in my opinion.
For one, the Budget did not address the suffering retail sector which has not fully recovered from the last recession. The Department of Statistics Singapore indicated that compared to December 2009, retail sales increased by 8.6% (excluding motor vehicles). But this is a poor comparison as 2009 was a recession year and people will naturally tighten their belts in a recession year.
There is intense competition among the retailers in Singapore partly because the ratio of retail space to population size is much higher than in neighbouring countries such as Hong Kong. The cost of doing business is high (mainly due to spiraling rents), but productivity is low. Even though the consumers have become increasingly sophisticated and demanding the service quality of retail industry is low. There is also intense competition from overseas retailers.
Against this backdrop, the Budget could have done a little bit more for the retail sector in Singapore. I would propose that the government consider a rebate system where the retailers could give 5 per cent of the GST back to the consumer as a rebate in the form of shopping vouchers. Such a scheme will entice the consumer to keep the retail scene in Singapore more vibrant.
By reducing the marginal tax rates for the first $120,000 of chargeable income, the government has significantly reduced taxes for upper-middle income families. I am worried that such reductions will leave the government unable to play its essential role of promoting the common good of essential community services/support.
Although such tax cuts may help in attracting in more foreign talents into Singapore, it would also mean that the tax cuts may provide an excuse for the government to raise the Goods and Services Tax (GST) further for public assistance, when GST for providing public assistance should actually be pared down.
Singapore continues to spend less than 4 per cent of its GDP on healthcare, which is unrealistic. Even the Health Minister agrees that it is unrealistic to expect national spending on healthcare not to increase to below 10 per cent of GDP. Against this setting, it is disheartening to note that the Budget had allocated a much smaller percentage to healthcare when compared to other developing countries (it is ok that the comparison is not with developed countries as the FM had indicated that his target is to be a first rate developed country is only in 10 years time).
As studies have shown that two-thirds of seniors over the age of 65, who receive long-term care rely exclusively on family, friends and other informal caregivers for helps including everything from shopping, to cleaning to taking medication, to getting to doctors’ appointments and even financial helps, the Budget should have considered the following for those who are in the for the middle-income tier:
- Remove the Domestic Foreign Worker levy for qualified foreign workers who are brought in to care for the elderly, so that the elderly could be provided appropriate care at home (where possible) without the need step-down care at nursing home.
- Provide Elder Care Tax Credit for qualified elder care expenses. As caregivers make heavy financial sacrifices in spending a large amount of money each year on expenses for aging relatives, including cost of providing food and transportation and paying for medical expenses, such a tax credit would be an added incentive and encouragement for caregivers to provide appropriate care for the elderly in their own homes.
- Create a Programme and Registry of Certified Geriatric Caregivers. There is a need to create a programme to train Certified Geriatric Caregivers, who are not full-fledged nurses, as there is no need for all the caregivers for the elderly to be registered nurses. Creating such a programme and a registry for properly certified and licensed caregivers, will ensure the availability of qualified caregivers for the elderly and it will also reduce the high manpower costs involved with hiring registered nurses.
- Create Retirement Communities which is a community-based model for aging in place which experts say is an alternative to nursing homes and assisted living centers run by large service providers. Such a community of subscribed members, allows the elderly to stay in their own community as they age, by organizing and delivering programs and services that allow them to lead safe, healthy productive lives in their own homes.
Budget allocation for such initiatives would make significant difference in a greying society like Singapore and Budget 2011 should have considered these.
I like how the FM concluded his speech by saying:
“But whichever way the Government intervenes, we will only succeed if we preserve and strengthen the things that Singaporeans value most – family; everyone aspiring for a better life and feeling they can get there by working hard; and a sense of community.”
The key words there being “feeling they can get there by working hard”; because to ‘get there’ by sheer hard work is going to be an illusion for many.
A survey in 1953-54 found 19 per cent of all households in Singapore to be in absolute poverty. A similar survey in 1982-83, found 0.3 per cent to be in absolute poverty. Much of the alleviation of poverty and income inequality in Singapore happened in the 1970s and the 1980s. Towards the end of 1980s, surveys show that most Singaporeans described themselves as middle-class.
That was possible because upward social mobility through hard work was possible for the majority in the 70s and the 80s. Since the mid 1990s though, there has been less intergenerational income-based social mobility. And it will be even more difficult from the 2010s onwards. This is because education, training and the availability of appropriate opportunities in this decade gives the upper-middle and the upper income families an advantage in manoeuvring through the system, while modernisation of the economy, depression of wages brought on by foreign workers and increasing government regulation has made it more difficult for the poor to get a head-start.
Budget 2011 is not comprehensively designed to give the less advantaged this head-start. It cannot be comprehensive because the policies are designed with fear; fear that policies will be abused, fear that work ethics will erode, etc.
Against this background, it is more important for ordinary Singaporeans to only ‘feel that they can get there by working hard’. So, even though comprehensiveness has been compromised to placing a few hundred dollars of hard cash in your hands (probably just in time before the General Election); and even though in all probability Grow and Share concept may mean that the million-dollars salaried Ministers get a bigger share of the GDP pie than the average Singaporean; I will take it as I probably will not be able to change anything else.
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The entire concept of getting there by working hard has been effectively muted by the Government’s (admitted) open door policy. While maybe 20-30K well qualified new PRs a year would be great to keep Singapore’s economy buzzing. In Singapore this number has been 60-100k for the years before 2010. This massive influx obviously made working HARD insufficient for the average Singaporean. So the wealthy are quick to jump ship (emigrate), the middle income use temporary status symbols to comfort themselves and the lower income, who have already been working hard to ascend the status ladder, lose a little hope every day.
Most folks these days work hard. But we are jaded by stagnant salaries and having to put in more effort so we don’t get fired. Bosses (not all though) berating their employees for not working harder, staying later, making more sales etc. And we effectively have a larger portion of the middle class feeling increasingly indifferent. Will hard work really pay off? Am I qualified enough? Smart enough even?
The truth is that most of us do work hard. We just need a more equitable system where we can appreciate and be motivated by the fruits of our labour. The negative motivation of fearing we will be replaced by an outsider, who may be here to earn some money before moving on someplace else, can only push someone to work that little bit harder. It is not going to boost productivity long term.
Make no mistake though, this is not a whiny post laden with self-pity. Almost every person in any country in the world would feel this if it happened in their own country. (Most would probably protest at the smallest sign of inequality actually. LOL) Something I think folks from other countries working here should think about.
I don’t see them talking about lowering GST that affects all classes of Singaporeans, I do not see them talking about lowering Minsters pay which is too high and ridiculous.
$800 cash out can last us how long? 2 months with the increasing food prices and groceries price? If you have a child $400 extra which is also not enough to buy 5 cans of milk powder.
Are these people that blind or they will just blame us citizens that we do not work hard enough to earn like them?
All I see the budget is benefiting the Government and not us citizens. Are we not the very people paying you your millions?
There were so much talk abt fertility rates but I see minimum effort in tis year’s budget to boost fertility rates! Some minister quoted changing mindsets for child rearing but how to change mindsets when you foreseen the torture of having to cope with the mountainous expenses that the new baby brings along?
get there by working hard? save up?
wrongo.
the decision has been made to inflate wages 30% over 10 years, in order to chase up inflation.
what this essentially says is:
ALL MONEY will be smaller by 30% in 10 years, the government is reassuring us. this is because they have decided to redefine the Singapore dollar with respect to the exchange rate mechanism.
this is because they don’t know of a better way to tackle inflation.
it is not that you will get richer by 30% in 10 years. it is just that all your bank savings will be shrunken by 30% in 10 years. your salary number will be higher, but you can only buy the same things with it.
in fact, if Mah Bow Tan gets his way, you will end up buying LESS HDB flats with your 30% more money, because he plans to inflate HDB flats faster than 30% in 10 years.
now sit back, relook at this 30% figure, and think what is this very talented government doing to us.
After collecting the radio and tv licences for more than a decade PAP had accumulated vast sum of money. Even paying in cash $600 to 800 is too little to compensate for the many years of paying the licences. PAP got the cheek not to refund back the years of collections. Shame on you PAP!
the way to a more ‘balanced’ BUDGET is to ALLOT more to jobless and poor and needy singaporeans AND allot less to those who already have,for eample,we caould consider CUTTING MINISTERS AND TOP CIVIL SERVANTS’ SALARIES and RELLOCATE THE SAVINGS TO JOBLESS CITIZENS.
there are so many combinations to re-dsitribute the income from our HIGH GDP,not necessarily to KEEP REWARDING our already highly-paid ministers,don’t our ministers agree?
Actually the quota for the male:female ratio in medical school was scrapped from around the time i was a student.
My class had more ladies than guys.
I fail to see how this is relevant to the Budget.
Apart from that i strongly agree that we need to spend more on healthcare.
“It was long overdue in my opinion – at least a decade overdue. Why were the MPs not calling for this in parliament earlier?”
Yes, it was overdue. When we subscribe the SCV programs, they do include common Channels such as 5,8…etc as part of their offer. Indeed, we paid ‘double’ in fees….
When the withdrawal of fee was announced by the Minister, I wondered what those MPs clapped their hands for? Their ignorance? or stupidity?
Hi V:
Thank you for pointing it out. I checked and you are right. The quota on the female medical students was abolished in Dec 2002. (Link: http://www.moh.gov.sg/mohcorp/pressreleases.aspx?id=1076). I have requested the editors to delete that line. I appreciate the lifting of this quota system which discriminated against the women.
end of the day…no point complaining so much…of course, voicing out is good…BUT, do we have the “balls” to cast our votes on the other side? that’s the bottomline…
Face it…
NOthing is ever going to change…
Singaporeans are only good for whinning and complaining…
None will have the balls to make any change…
All will just vote for PAP and HOPE that things will get better.
Im sick and tired of this Fup country and the cowards that populates it.
To Anguish:
I voted for the opposition in the last election, but PAP still won by their GRC system. Since then, Singapore has gone downwards and so I quit Singapore instead of waiting for the next election.
I agree. I will vote for any ant as well.
I was working as a vendor in the public Uni. Regardless of how many time I whistle blow to the management that some group in the public Uni misuse their right by producing sub quality work and coming late to work but leaving early. Worst, having long lunch break.
Yet, we give out scholarship so easily to trash that liar viv@n mentioned will help bring us jobs.
This is NOT TRUE. These immigrants are draining off our money to purchase lots of houses back in their home town.
Worst, the local are left with peanuts.
I am sick n tired. I will definitely vote for ant as long as NOT Prostitute Action Party.
I served NS, tried very hard to move forward and upward. Gotten laid off in 1986 and could not make ends meet. No help from the PAP Government. I quit and emigrated to the United States 22 years ago. Enough is enough! I thought by now, Singaporeans should have known and gotten wiser! Still gullible and trapped by the dangling short-termed carrot! Amazing!
I can’t believe how short sighted these guys in govt are, or perhaps without a conrete plan at all.
At one point the PM comes about and tells people that we need about 80,000 FTs.
The next min. The Finance Minister comes about to increase the levy.
Shouldn’t an organised govt make it clear to businesses that taking in FTs are going to cost more via levies. Insted of saying we need more FTs or the economy will over heat.
Now we consumers are going to bear the brunt, the businesses are going to charge higher prices and we pay.
Lost completely lost….on economics.
Its gonna come back tenfolds now, since trouble is brewing everywhere in the world.
Mr. Lee’s Fairy Tales
http://theowlcritic.blogspot.com/2011/02/mrlees-false-fairy-tale.html
An Irishman abroad tells it like it is !! :-)
http://www.youtube.com/watch?v=koY6kXhQDQo
in today’s Business Times:
Inflation is blasting a hole in savings as depositors face negative interest rates but there’s nowhere to hide either in an increasingly risky environment.
A $1 million fixed deposit placed in the bank 12 months ago is today worth $956,685, a $43,315 paper loss caused by the double whammy of historic low interest rates and runaway inflation.
This hole will only get bigger as inflation races to 5-6 per cent in the first half of this year.
Inflation in Singapore surged to a two-year high, rising to 4.6 per cent in December from a year ago, and up from 3.8 per cent in November.
so while your money is shrinking, your initial $1 million which might have bought 4 punggol HDB flats in the past, can hardly by 3 now, because it has shrunk to $956k and also because HDB inflated the flat prices by pegging it to flat rental rates for renting to foreigners.
Dear fellow readers,
‘Working hard…’??? Is he saying that we need to work even harder? Personally, i would say that Singaporeans are already among the hardest-working people in the world (except, I would say, the Civil Service!) Since this government is always singing the same song about productivity, i would suggest that the government leads by example and give details of how productive each government department is. All of us know that the Civil Service is the place to go to for a 9 to 5 job, with iron rice bowls, whereas the real world has people working extra hours with no or little extra pay, and where you may lose your job at any moment, due to restructuring, buyouts, liquidations, etc.
So don’t preach to us what you don’t practise in your own departments!
The day had come. We must vote out the Papayas. Imagine for the last 10 years 100,000 of PRs a year to take away all Singaporean jobs. Remember the good old days where income grew 5 to 10% and inflation is less than 2%. Now inflation is 5 to 6 % but income is still 10 years ago.
Where is the switerland standard living by GCT?
With the short leg Papayas, HDB and Cars go beyond my reach and they are now for the PRs only.
Why send civic servant overseas to bring in “talent” , give them scholarship freely, good jobs and take away singaporeans jobs?
All Singaporeans, it this the GOV you want to vote again?
FAT HOPE! THE HARDER WE TRY THE HIGHER THE COST IT IS ALMOST IMPOSSIBLE FOR MAJORITY OF SINGAPOREAN TO REACH THE PINNICLE…..
Maybe this is the intented political agenda….is it easier to control the top 10% or the entire country? Think about it
The truth is that in this high-speed treadmill country like ours, only the top 10% of the society live their life to the fullest, the next 70% are simply here to facilitate and the bottom 20%…….live their life as “new-age slaves”
To help level the playing field read on………..
The biggest and long lasting domino effect to improve quality of life – PROPERTY PRICE – the biggest single committment of majority of singaporean
Most of us ultilised at least 25% of our income to sevice our housing loan.
Well we are already hurt and destined to work at least 40yrs to service this loan
Do you expect our children to go through the same stress level and poor living quality like us?????
Therefore I will keep hubbing my view until the >75% of singaporean who own just 1 property get my message to unite and demand the followings:
1. DRASTICALLY INCREASE THE ANNUAL PROPERTY TAX FOR 2ND PROPERTY AND ABOVE
2. FOREIGNERS AND PRs CAN ONLY PURCHASE LIVE-IN PROPERTY, ie NO RENTAL OR SUB-LETTING ALLOWED
To all singaporean – 1st property is not be taken as an Investment but Necessity!
Our land is finite and fast diminishing we must discourage property as a form of investment in land-finite Singapore
If we don’t preserve this sacred cow the end results can be disastrous for our younger generations
Don’t be too happy if you are staying in a big posh house now, if you have more than one kid, good luck to them…they may need to fight over your property when you pass-on
I’m sincerely concerned about we singaporean going forward especially the younger generations…….how can our children ever live a good quality life if they have to be on this high-speed threadmill their entire life just to afford a roof over their head!
Other cities are just cities within a BIG country they can simply move outskirt, do you expect our children to squeeze or move outskirt to Malaysia or Indonesia????
Good luck fellow singaporean, it is your choice to decide on your children’s future
You are so right about that it is an illusion that we can get there by sheer hard work. I know in my lifetime that once I fell out of the rat race, I can never get back there , no matter how hard I try.
last time they the idiots gave me cash…i voted them…this time i received the cash again but hell no im not going to make the same silly mistakes again..cos i dont want to be an idiots like them…i took their money and i will vote for opp. party. at least if the idiots won i still feel good cos i cheated them out of their *****ing money…or should i say our money which they stole..at least i will feel some consolation…poor us really..
at changi many man or women working damn hard at night…they get whack every night n every corner…but still their life is still the same…lol…1st brought china people here then myanmar then vietnam..ccb!!!!!!!!! our auntie want to work at macdonald olso now cant cos started to hire malaysian…when the sars hit us way years back…all staff got salary deduction…from general manager to cleaner..but now the government!!!!!!!!!!! haiz someone who shouldnt get any salary still got one… i wonder what will he buy cos hes dying soon anyway…if it passed to his generation…its good you old man!!!!! cos you plan ahead..well done but what about us???? arent we also called your children cos you use to call yourself our father remember???? if you dont its ok life is a full circle sum1 out there will come close to your family and snatch all the wealth and donate to the one needed them most!!!!!we count on you robin hood…haiz singapore is the ???best??? country..