Budget Speech day is the most important day in the Singapore fiscal calendar, one that will chart the financial year ahead.
One thing is for certain: Just don’t expect any big bang announcements. If nothing else, this year’s Budget is designed to help companies navigate the global economic slowdown.
Finance Minister Heng Swee Keat, who will be presenting his maiden Budget speech in Parliament on Thursday (Mar 24), has hinted that the economy will be the focus this year. He is the eighth Finance Minister since Independence to deliver the Budget statement.
As Rajiv Biswas, IHS Global Insight’s chief economist for Asia-Pacific, told Channel News Asia recently: “The upcoming Budget will be cautious, with the focus likely to be on building fiscal reserves to provide some fiscal buffer in case of external economic shocks over the medium-term outlook.”
In the same article, Heng was quoted as saying that the measures to be announced in the upcoming Budget will not just help firms cope with immediate challenges, but at finding medium-term growth opportunities too.
He said this while on a tour of the Tuas facility of Singaporean logistics company, Pan Asia Logistics Holdings on Mar 4, 2016.
What the economy needs
The focus this year on economic recovery. What this also means is that we can expect a Budget speech that harks back to the early days when pioneer ministers crafted a plan geared to what the economy needs.
Apart from managing the Government’s purse strings, the main aim of the Budget is to also drive economic development. Funds were also set aside to build Singapore icons.
In 1972, the Finance Minister Hon Sui Sen set aside $10 million to develop Sentosa as a tourist attraction.
Seven years later, the 1979 Budget allocated $393 million to develop, amongst other things, Changi Airport.
Recent Budget announcements have also taken a softer approach to help ordinary Singaporeans. In Budget 2013 for example, funding for pre-school education was increased, while Singapore’s health and long-term care infrastructure was extended.
Meanwhile, financial help was also given to middle-income households who were previously excluded from most means-tested benefits.
Response from backbenchers was positive.
People’s Action Party (PAP) MP Denise Phua has said that the initiatives announced that year was “the coming of age of a government that used to be wary of measures that smack of welfarism.”
The Government has also invested more on the public transport and housing.
The concerns of the ageing population were also addressed. In 2014, the $8 billion Pioneer Generation Package was launched to help the elderly pay for the cost of their health care.
Low-income elderly folk got another boost in Budget 2015 with the Silver Support Scheme, which provides a supplement of $300 to $750 every quarter for eligible seniors. The scheme aims to support the bottom 20 per cent of Singaporeans aged 65 and above.
This year, measures could be introduced to help small-and-medium term enterprises (SMEs) and local workers.
However, OCBC economist Selena Ling also believes that the social safety nets introduced in the last few years won’t be completely ignored.
In an interview with CNBC, she said: "Given sustained high cost of living concerns, a further enhancement of Workfare Income Supplement may be on the cards given the last enhancement was in 2013. In particular, the government could further incentivise the employment of elderly Singaporean workers given the demographic ageing."