Getting into this box is what's best for both of us. During your time in the box, you will learn so much, and yet experience so little. It's a wild ride, my friend, one well worth the time spent...and let's face it, you don't have much to do these days anyway.

Monday, 25 February 2013

Quick thoughts on the Singapore 2013 budget.

Now, today the 25th of Feburary in this foul year of our Lord, is Budget Day for the Singaporean government. On this very wonderful, magical day the Singaporean government reviews its expenses for the previous year, and works on budgeting for the next.

You can check out the Singapore Budget for yourself if you'd like here. I've read the 30-page version, and if you're not so keen on reading lists and lists of numbers you can go and read the 10-page version that's full of colourful pictures for the ah..."low-information voters".

I'm not an economist like Cappy Cap, though, so I won't draw any detailed conclusions but focus more on the facts and what I, in my limited capacity, think of them. All numbers here are in Singapore dollars (SGD), and the current exchange rate is 1 USD to about 1.3 SGD. Do the math yourself.

Without any further ado, a few numbers:

  • Total revenue of 55.18 billion for 2012.
  • Total expenditure of 50 billion for 2012, slightly lower than the estimate and 14.6% of GDP.
  • This results in a surplus of 5 billion.
So far, we Singaporeans are still in the black. A brief breakdown on the ins and outs, in chart form.


And outs:

There's a slightly worrying trend here - social development, or in other words, paying for people's stuff. And it's an upward trend:

Here's the government's official explanation for the trend of increased social spending:
The Government’s revenues started to grow at a faster pace from FY2006 onwards as the economy recovered. The improvements in the Government’s fiscal position enabled us to step up our investments in the Social Development sector, such as healthcare infrastructure, and introduce new programmes like the Workfare Income Supplement Scheme. Consequently, social expenditure rose rapidly, by 76% between FY2006 and FY2012, from $13 billion to $23 billion. The share of social expenditure in total government expenditure (including government endowment fund expenditure) also rose from 43% in FY2006 to 45% in FY2012. On a per resident basis, social expenditure grew by 64% from $3,681 in FY2006 to $6,040 in FY2012. This works out to an annual growth of 7.0% in real terms.
Since 2006, it's been growing and seems set to grow even further considering the whining of Singaporeans that the government is stealing all their money and the ministers are giving themselves fat salaries. But what do I really expect, given the general sentiments amongst the people?

Here's a breakdown of the spending:

Defence is tops as always, and it looks like the cult of education is getting its regular tithe as well. Spending is set to increase across the board, especially in health, education and an oddball transport. I suppose they're planning for that 6.9 million population of theirs and are set to start building infrastructure.

Now that we've taken an overall look, let's go to the budget in brief to see in short how much government cheese is being doled out.

Some highlights:
To continue moderating the growth of the foreign workforce, we have to make further policy adjustments in different sectors to reflect the circumstances of each sector:
  • Raise foreign worker levies for all sectors
  • Further selective Dependency Ratio Ceiling cuts
  • Tighten eligibility requirements for S Pass and Employment Pass
A predictable response to the Feb 16 6.9 million protest - more selectivity as to foreign immigration. I doubt it's going to appease anyone, though.
The 3-Year Transition Support Package provides $5.3 billion worth of support to businesses. This will help them restructure and share productivity gains with their employees in the form of higher wages.

Under the Wage Credit Scheme (WCS), Government will co-fund 40% of wage increases for Singaporean employees over the next 3 years. This will help businesses raise the wages of their employees.

It will apply to wage increases for Singaporean employees earning up to a gross monthly wage of $4,000. The WCS will cost $3.6 billion over 3 years.

Increase WIS payouts
  • Monthly income ceiling will rise to $1,900 a month, which will benefit about 480,000 Singaporeans, or 30% of our citizen workforce
  • Maximum WIS payouts will rise by 25%-50%, or up to a maximum of $700 for workers aged 45 and above
  • Proportion of cash to CPF will increase to provide more help to workers with immediate expenses
  • Higher payments to CPF Medisave and Special Accounts to help boost healthcare and retirement savings of our older low-wage workers
 Not a bad idea, to be honest. As usual, I see the government is keeping to the compromise of "you want cheese? Run on the wheel a little first...
The Productivity and Innovation Credit (PIC) Bonus encourages more companies to take advantage of the PIC scheme to invest in productivity. Businesses that spend a minimum of $5,000 in PIC activities in a year will receive a dollar-for-dollar matching cash bonus. The bonus will be up to $15,000 over 3 Years of Assessment (YA2013 to YA2015). It will be paid over and above the existing PIC benefits, and is expected to cost $450 million over 3 years.
...And we'll make sure you can run on the wheel a little longer next time."
A Corporate Income Tax (CIT) Rebate of 30% of tax payable capped at $30,000 per Year of Assessment will be given to help companies cope with cost pressures. The rebate will be for 3 years (YA2013 to YA2015).
Smart move in my opinion, as opposed to the western world which appears hell-bent on giving breaks to cronies and taxing the hell out of everyone else.
We will develop capabilities that enable us to seize opportunities in Asia’s rapidly growing economies. We will support:
  • A Future of Manufacturing plan ($500 million over the next 5 years)
  • The emerging satellite industry ($90 million for the Satellite Industry Development fund)
I wanted to highlight this to point out that while Singapore is indeed economically free on the micro scale, on the macro scale it's always been planned by the government to some degree at least. The initial pushes at industrialisation were spot-on, but of late the state's planning has gotten shakier and shakier, especially with the new Biopolis now being viewed as over-hyped.

We will more than double our spending on the Pre-school sector over the next 5 years to more than $3 billion. This will allow Government to:
  • Expand capacity so that more pre-schools centres are closer to homes and workplaces 
  • Bring more operators onto the Anchor Operator scheme, providing 16,000 more places by 2017
  • Build up teacher quality with salary grants, scholarships and training grants
  • MOE to set up a few kindergartens to develop best practices
  • Establish an Early Childhood Development Agency to drive improvements across the entire sector
In short, more will be spent to get children out of the hands of parents and into the arms of the state at an earlier and earlier age.

And finally, just plain cheese:

Extra GST Voucher
Total payout of Cash, Medisave and U-Save benefits will be doubled this year

Personal Income Tax Rebate
  • For Year of Assessment 2013
  • 30% rebate, capped at $1,500 for resident taxpayers below 60 years old
  • 50%, capped at $1,500 for those aged 60 and above
Lower Concessionary Foreign Domestic Worker Levy
  • For families with young children, elderly dependents and persons with disabilities
  • Levy reduced from $170 per month to $120 per month
  • A family will save $600 a year from 1 March 2013
Ah, the joys of paying others to look after your family so you can go out to your miserable job and work. All in all, an elderly couple is expected to get $3000 in benefits, while a couple with two children will receive about $1500.

The impression I get from this year's budget is that the Singporean government is aware of the calls for more government cheese, but is holding its ground and trying to stretch the current "you don't work, you don't eat" paradigm as far as possible without breaking the budget. Good luck with that. They can't go back to the way things were socially in the 60's - that would break the whole paradigm that the country has been operating under since independence from Malaysia, so they're doubling down on their current policies and hoping the additional bread will shut up those peasant mouths.

Another silver lining to the cloud is that the government gave the local feminists the finger on their calls for childcare for stay-at-home parents, special dispensations for single mothers, and so forth. Then again, considering that they just gave China the finger, I think they can give anyone the finger.

Now, what's the word on the ground? Seems like Singaporeans are not satisfied with their increased allotment of government cheese:
Ever since the day I mixed with more friends of other countries like UK, Australia, USA etc. (Thanks to internet) I realised that what he is said is untrue bcos according to these friends of mine, not many people would like to abuse and stay at home doing nothing and that sensible person would want to work. And also that there are tight policies tied to it for claiming whatever social benefits not like what he said as if it is so easily can be abused !!

If those countries with sharing wealth (in term of paying high taxes) is not good, why are there still so many people till today want to migrate there !!
Really? Really? Not many people abuse welfare? My western brothers of the alt-right, do you really think that the case when Cappy Cap's already pointed out that 42% of the working population of the US is twiddling their thumbs? Tight policies for preventing abuse?

I think we all know the answers to these questions, don't we? And all those evil people hoarding their wealth from the common degenerates and they should pay their fair share!

Why are they also charging for elderly above 65 years old taking public transport buses and smrt ........ some countries there free transport services for elderly. singapore everything pay and pay until we go inside the grave next time they going to charge the relatives or the loved ones to pay tax for tomb stones in future

Do u know that, in Christchurch.. they don't pay for water & electricity, y.. Singapore don't follow that, only know.. how to increase the tariff charges, never think whether their netizens.. can afford or not?
They should have make it clear!!What I'm paying now for 2 helper is $340!!isn't it LPPL!!Unless the GOV further reduce if not talk also like no talk!Save the breathe
Why am I not surprised? Why do I only shake my head at this disgusting, degenerate rent-seeking behaviour from my countrymen? While railing against the government, they seek for government solutions instead of coming up with some themselves, and that is the greatest irony.

We're doomed.

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