The Budget was announced yesterday, and I think the Committee of Supply debates will begin next week, when our MPs will rise to question the respective Ministries on their spending allocation, programmes etc. This Budget is not a huge surprise – as I noted previously, the govt has always dispensed cash handouts prior to elections. Furthermore, with S’pore enjoying an economic boom last year, people expect the govt to throw money everywhere.
There are a couple of ‘Likes’ and ‘Dislikes’ I’ve in mind:
1) Increase in Foreign Worker Levy for Construction and Service industries – Like
Yes, the Bangla workers at the construction sites will be more expensive to hire. But this will provide a strong incentive for firms to increase productivity through automation and technology. Of course, some firms will try to pass the additional costs to consumers (see today’s The Straits Times, got one guy said so). We shall see how it goes.
Perhaps more importantly, the govt is sending a strong signal that the proportion of foreign workers in the workforce will stay within the one-third limit.
2) Special Employment Credit – Like
The govt is effectively subsidizing employers’ CPF contributions to older workers. Actually ah, for these older workers, employer CPF contribution is already not a lot. But I think it will at least minimize the cost for firms to keep their older and low-skilled workers.
This is a one-off scheme, but I see potential in its expansion. Remember that Workfare was also one-off, but it became a permanent scheme. This Special Employment Credit, together with Workfare, can significantly help older, low-skilled and low-income workers to keep their jobs.
3) Reduction of Personal Income Tax – Like…and Dislike
Good what, more money in the pockets of individuals. So they can spend…and revenue will be collected from GST lol.
Personally I’d like to see the tax rates for the highest income bracket to be raised. Not that I don’t like rich people, but with so many millionaires in S’pore, taxing them a little more won’t hurt, huh?
That’s all for now. When the CoS debates start next week, I shall comment more.