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Raymond Foo

5 biggest wishes for Singapore Budget 2014

BY RAYMOND FOO

As the Budget for 2014 will be announced in February 2014, it might be worthwhile for us to take stock of Singapore’s development for the past year and take a look at our progress. The national budget is often highly anticipated with different factions of the society having their individual wishes.

5 possible wishes are as below.

Education

It is likely that pre-school education is still a top concern for many parents. The perceived differences in quality of pre-school education among different education centres evoke intense debate especially so for the younger families.

The government reassurance in furthering tangible investment in pre-school education would be likely. This means building onto previous year initiative or enhancing the support scheme to nurture quality pre-school teachers while ensuring the cost of pre-school education remains accessible to all income groups.

A diversity of education path is seen as an important development for Singapore. This will ensure that the country continues to have multiple peaks of talent, not restricting to academic achievement.

Particularly, the commitment to further increase the vacancy of university education places is a factor to be watched.

Cost of Living

One is unlikely to miss out the possibility of having another round of “ang bao” by the government. The debate on the high cost of living remains in the heart of the population especially among the middle and lower income household.

Therefore, a likely wish is for the government to award another one-time GST voucher rebate for the citizens. Another plausible wish is for the government to extend Service and Conservancy Charges (S&CC) Rebates to households. This can potentially lighten the overall cost of living in Singapore.

In addition, housing issues is also a “hotcake” topic among young couples that may have planned to purchase a nest of their own to start a family. The rising but moderating cost of living is set to deter couples from having children.

Over the past years, various financial schemes and facilities have been built to create a friendly environment to support the growth of families with the hope of boosting the fertility rate. One may wish to see further updates on housing scheme support so as to be assured that the government continues to focus on affordable housing for all Singaporeans.

Transportation

The woes of transportation system continue to dominate major news in Singapore. The recent announcement of bus and train fare hikes has reignited the debate on nationalizing and privatization of public transport.

The misalignment in the expectation of public transport services and price hike may render citizens in seeking a much slower rate of price hike for the future. Lower income household may wish for a higher level of supporting then the current enhanced financial support.

One may also be keen to understand the progress of transport facilities support such as co-sharing the cost of purchasing additional buses, which the government has rendered the support to transport operators.

Small and Medium Enterprises (SMEs)

It has become common for us to read about SMEs seeking greater allowance in hiring of foreign labor. Indeed, labor shortages have dramatically increase the cost of doing business in Singapore.

Even with the existing schemes to alleviate such cost pressure face by SMEs, the understanding and application of such incentives may continue to be a barrier for some SMEs. Furthermore, the Food and Beverage (F&B) industry continues to face manpower crunch that affect their expansion plan.

The concern for SMEs is to expand and retain their talent. To further reduce the cost pressure for retaining staffs through higher compensation, SMEs may wish for a more generous Wage Credit Scheme (WCS).

This can help SMEs to retain talent in this tough transition process.

Indeed, SMEs can continue to pursue greater level of productivity gain. Nevertheless, this is not an easy task to be accomplished.

SMEs are faced with tremendous pressure to cope with a more competitive business terrain than before. As proposed by several consulting firms, productivity gain through innovation incentive is an alternative path for SMEs.

This also hints the possible wish list of SMEs in seeking an extension or more generous Productivity and Innovation Credits (PIC) scheme in this budget.

An inclusive society

Indeed, the goal of any national budget should be towards the building of an inclusive society; however, this cannot be done at the expense of maintaining a tax competitive environment. One may wish to see a more progressive tax structure in Singapore.

As highlighted, this should not be done at the expense of hurting the incentive for people to strive and work hard in Singapore. Instead, it should be a focus on creating equal opportunities for all Singaporeans and accepting that it may not equate to equal outcomes, as everyone is innately different with diverse talents.

Singapore has achieved decades of well-balanced budget and is fiscally strong. In pursue of a more comprehensive welfare support for Singaporeans, it is likely to come with a hefty price tag.

The reality is that addition welfare support requires funding from a source. A more progressive tax structure is only one of the means to remain fiscally balanced. 

There must also be community support from the ground level to complement government effort so as to build a strong social fabric and reduce the welfare burden on the country.

Singapore has developed a well thought approach in maintaining fiscal prudency while meeting the welfare needs of the country. We should not fall into the pitfall of going into debt financing for our national programs.

The recent economic crisis has portrayed a painful lesson for many debt-ridden developed economies that Singaporeans should be keenly aware of.

The reality is that only a vibrant and economically stable country can attract foreign direct investment, which in turn provide the necessary resources to support our country’s economic development and assist our fellow Singaporeans through various financial support schemes.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.

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Raymond Foo

Raymond Foo

Raymond Foo is currently holding the position of Franchise Manager and Learning & Development at Evorich Holdings, assisting the organisation to develop new business model and overseas venture program. With a passion for business, he started his first education business at the age of 21. During the course of entrepreneurship, he has developed deep interest in writing. The topics of interest are economics, finance, business development, and education.

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