Daily Lessons from Life 17 Feruary 2012 - Budget to build inclusive society, stronger Singapore

"Budget to build inclusive society, stronger Singapore - CNA 17 February 2012

SINGAPORE: Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam on Friday delivered Budget 2012 aimed to build an inclusive society and a stronger Singapore.

Among the significant moves were measures to cut Singapore's dependence on foreign workers, improve productivity and address the issue of income inequality.

There were also incentives for Singapore companies to hire older workers while the employers' contributions to the compulsory Central Provident Fund (CPF) for older workers would be raised.

Companies will be given until June 2014 to comply with the new Dependency Ratio Ceilings (DRC) or existing foreign workers.

Recognising that such a move will hit small and medium enterprises hard, the government will give employers special help in the form of a wage subsidy for hiring workers aged 50 and above. This wage subsidy is known as enhance Special Employment Credit.

Other measures include a one-off cash grant for small and medium enterprises pegged at 5 percent of a company's revenue for the Year of Assessment 2012.

On the social front, there will be more help for the elderly, disabled and lower income families as the government moves in to address the issue of income inequality.

One main strategy is to reward work. To help workers with their retirement savings, the CPF contribution rates for older Singaporeans will be raised.

To help the elderly unlock their assets, there will be a $20,000 Silver Housing Bonus for those who want to move to smaller public flats.

Healthcare expenditure will double from $4 billion to about $8 billion over the next 5 years. This will go into building better infrastructure from hospitals to home-based care.

For the disabled, there are more measures to support employment. The Special Employment Credit will be extended to employers who hire graduates from Special Education schools (SPED). To help workers earn more income, the Workfare Income Supplement Scheme will also be extended to all SPED graduates who work.

And signalling the government's long term commitment to help low income groups, a permanent feature called the Goods and Services Tax (GST) Voucher will be introduced. The GST Voucher will essentially give cash, top-ups to the Medisave of older Singaporeans and utility rebates for the lower income.

To deal with a key issue of improving the public transport system, the government will pump in $1.1 billion to ramp up bus capacity by adding 800 more buses on the roads by 2016.

Mr Tharman said the step-up in social programmes makes it critical that Singapore strikes the right balance in its public finances."

As observed in the 2012 Budget Forum immediately after the announcement by CNA on TV there are some concerns expressed amid the cheers.

Lessons for me are:

1. it is a budget that address the discontents and concerns expressed by many voters in the May GE about: high cost of living, high cost of health care, Singaporeans getting squeezed out of the market by uncontrolled import of Foreign Workers and Foreign Talents, the sardine-packed public transportation system and the recent unfortunate MRTs breakdown sagas, etc. It is timely though I WOULD NOT say that the government is pandering to the whims of the voters. Rather, the government WERE TOO SLOW to understand the grounds. It is right that the government is taking actions to make amend!;

2. despite the call to reduce over-dependence on FWs and FTs, some business people are still lamenting the doing away of such scheme. It is worrying as the TIDE WAITS for NO MAN. IF we don't raise our Productivities, we will continue to face the discontents and concerns expressed by the people. The business people is a minority, they don't win GE!! It is also shortsighted of the business people if they DO NOT jump on the bandwagon of taking advantages of ALL the government INCENTIVE schemes to help them hire older Singaproeans, increase productivities and innovation, etc. Without a STABLE social environment, there is NO business to talk about!! A mindset change is required. NO LESS. NO wasting time!!;

3. while it is good to see many helps to defray the cost of health care, I sensed hesitancy in some penalists on IF the execution will be done well. Well, it is going to be a challenge for sure. That is a given. No apology needed here. Instead we will do well if we keep the positive mindset and focus on executing. Take the Enhanced Productivity Innovation Credit (PIC), take the Older Workers Employment Credit, change MINDSET consciously, do it. Then we can evaluate the progress in 6 months time;

4. as for raising the job status of many of the services performed in the People Sector, it has to be an Indoctrination process starting from primary school! No amount of exhortation and paying lip service will get the people to change the perception of a service job if the press media showcases 'a successful person as one with big house, big car, big job, etc'! It has to be in-your-face with promoting respect for such jobs starting very young!

A budget with a different emphasis for sure. Definitely telling the voters that the government has taken an immediate interest in what they HAD TOLD it! As for the business folks, stay myopic and short term will bring ruin to they businesses. Recognize the changing of the tide. Ride the waves!