Singapore Budget 2014 seen as "budget of social transformation"

Less focus on taxes, more on people.

The recently unveiled Singapore budget for 2014 was proclaimed by PwC analysts as a "budget of social transformation" for its focus on shaping and steering the populace to a new era.

Chris Woo, Partner, PwC Singapore, said the Singapore Budget 2014 is: "A budget of social transformation: Change habits & social practices to elevate our productivity. It demonstrates our embrace of the tight labour market. Witnessing greater shifts of help to our pioneers, better education for all, affordable healthcare and needs of the disabled. This is the start of the reinvention of Singapore. A great start as we turn 50."

Meanwhile, Abhijit Ghosh, Partner, PwC Singapore, added that it is: "A rainbow budget - spreading colour across social and economic horizon by providing more support for raising productivity, enhancing social equity and achieving quality growth."

Here are the rest of the reactions from PwC partners on various segments of the Singapore Budget 2014, from healthcare to COE:

Productivity & Innovation:

The extension of the PIC for another three years and the introduction of the PIC + package is not surprising given this morning's news of MTI data showing zero growth in productivity last year.
The announcement of the Cash Seniors Bonus and the U-Save Special Payment continues the government's use of the GST voucher scheme to deliver funds to the lower income group to help them cope with higher healthcare and living costs.

What is surprising about this year's Budget is the lack of any new 'wealth taxes' given recent renewed interest in the topic. What is not surprising is that the Budget is becoming more and more a social statement and less about tax changes.

-Koh Soo How, Partner, PwC Singapore

Encouraging a self-service culture (e.g. self-checkout at the supermarket) through investment in innovation in the service industry - is this social engineering, Singapore style?

- Yip Yoke Har, Partner, PwC Singapore

As we continue the journey to restructure Singapore's economy, Singapore businesses will applaud the extension of the PIC Scheme and introduction of the PIC Plus Scheme. These changes will help Singapore business level up our game to improve productivity and increase GDP growth.

-Lim Maan Huey, Partner, PwC Singapore

I would give my 'Like' in this year's budget to the people and productivity initiatives. In particular, the introduction of the Pioneer Generation honours our commitment of the pioneer generation contributions. The extension of PIC scheme and PIC+ scheme will help support job growth and GDP growth.

-Lim Maan Huey, Partner, PwC Singapore

In asking all Singaporeans to innovate and drive productivity across the economy, the Government has led by example and introduced innovative measures designed to encourage quality growth.

-Liam Collins, Partner, PwC Singapore

With the extension of PIC and a newly introduced PIC+ for SMEs, coupled with other initiatives targeted at helping SMEs to grow and internationalise, there is now no excuse for SMEs to pursue productivity and innovation, and to compete internationally.

- Lennon Lee, Partner, PwC Singapore

It is heartening to know that the Singapore Government introduced a PIC+ targeted only to Singapore SMEs who are the one that needed help to transform and to increase productivity. I hope that the definition of SMEs for this new PIC+ would be inclusive to include even the micro SMEs.

-Lennon Lee, Partner, PwC Singapore

While we are pleased with the extension of 50% additional tax deduction for another 10 years, the benign issues remain that the qualifying R&D expenditure and what is regarded to be R&D activity are restrictive. Many local companies would not be able to enjoy the scheme.

-Lennon Lee, Partner, PwC Singapore

Message to businesses loud & clear – innovate, share resources and enhance productivity.

- Sunil Agarwal, Partner, PwC Singapore

It should come as no surprise to the construction industry that the proposed measures should provide both the carrot and stick for the industry to embrace productivity initiatives and wean itself off over-reliance on foreign labour. The tax benefit of the enhanced PIC incentive should go some way in relieving the industry of these transition pains although more sustained measures would be welcomed as this industry transformation process will not be achieved in the short term.

-Tan Tay Lek, Partner, PwC Singapore

Measures to extend PIC, R&D and IP tax deductions are welcomed; however, more could have been done to achieve Singapore's ambition towards a Global IP hub?

-Sunil Agarwal, Partner, PwC Singapore

Finance Minister not in favour of long hours and instead emphasised the need to increase the productivity but extends the incentives like PIC, to give further boost to productivity.

-Mahip Gupta, Director, Energy Tax, PwC Singapore

Healthcare:

Affordable and Accessible Healthcare is top of mind to a growing population at older Singaporeans. The long-term commitment by the government to set aside sufficient funds to provide for the full costs of the Pioneer Generation Package, should provide assurance to our senior citizens that their healthcare needs will be met.

-David Mckeering, South East Asia Consulting Healthcare Leader, PwC South East Asia Consulting

The 2014 Budget has highlighted a focus on enhancing healthcare affordability for ALL Singaporeans. Managing healthcare costs by rebalancing the system to be less reliant on our hospitals and utilising more home care options, increasing outpatient clinic subsidies for lower and middle incomes and increasing CPF contributions.

-David McKeering, South East Asia Consulting Healthcare Leader, PwC South East Asia Consulting

Pioneer Generation Package:

A caring budget using the surplus with some smart initiatives. The Pioneer Generation Package to subsidise outpatient specialist treatment will hopefully help to reduce the demand to access subsidised hospital beds and give the authorities more time to address our current capacity constraint.

-Abhijit Ghosh, Partner, PwC Singapore

The approach to provide full provision for Pioneer Generation Package in 2014 itself is a very mature approach as it provides much needed 'assurance' (on top of insurance) to old Singaporeans that they will continue to receive benefits irrespective of cyclical changes in the economy. There is no better time than now to take this approach to save for the 'rainy days' which are looking more likely to come for Singapore in the area of healthcare as the population age and healthcare costs are expected to rise.

-Ajay Sanganeria, Director, Healthcare & Pharmaceutical, PwC Singapore

Of late, the element of surprise on budget day has been low due to the government releasing announcements ahead of Budget on honouring pioneer generation, need for incentivising quality growth and innovation, managing healthcare costs, etc.

-Ho Mui Peng, Partner, PwC Singapore

A Plethora of handouts: ranging from encouraging productivity and innovation, supporting the less privileged, and paying tribute to our pioneer generation.

-Anita Louis, Director, PwC Singapore

CPF:

Zero sum game. The SMEs and local businesses who employed a significant portion of Singaporeans and PRs are bearing the costs for healthcare through a 1% increase in Employers' CPF contributions on top of rising industrial rentals and wages due to tightening of foreign labour policy and higher foreign labour levies.

-Lennon Lee, Partner, PwC Singapore

1% CPF increase equates to a maximum incremental cost for employers of $50 per employee with 50% coming back in the form of an Employment Credit but in year one only.

-James Clemence, Partner, PwC Singapore

SMEs:

Though targeted at SMEs, the productivity incentives will be equally welcomed by Multinationals and bigger local companies.

- Yip Yoke Har, Partner, PwC Singapore

The introduction of enhanced bonus COE period for replacement of old commercial diesel vehicles is welcomed. It is very common to find commercial vehicles spewing black fumes on our roads - the haze is bad enough and returning soon. Hopefully old diesel taxis are covered under this scheme as well

-Ho Mui Peng, Partner, PwC Singapore

Alcohol Taxes:

How to damage an already overpriced F&B industry: Raise alcohol excise duties by 25% when you look at the economic benefits bestowed on Hong Kong by the abolition of drinks or wine, this is a baffling move.

-David Sandison, Partner, PwC Singapore