This year’s Budget will be unveiled today as Singapore continues to tackle the Covid-19 pandemic and its economic fallout.
Here are six things to look out for.
1 MORE TARGETED SUPPORT
This year’s Budget is expected to target sectors hit hardest by the pandemic, but overall spending will be reined in after the extensive support measures rolled out last year.
Mr Liang Eng Hwa, chairman of the Government Parliamentary Committee for Finance, Trade and Industry, told a pre-Budget round-table last month that he expected this year’s Budget “to be a lot more targeted and differentiated than before”, and that it will channel funds to businesses that need help.
Prime Minister Lee Hsien Loong said last week that most of Singapore’s economy should be able to bounce back this year, after having taken a heavy hit last year with the Covid-19 pandemic.
Such a rebound will, however, be uneven, and PM Lee cautioned that sectors like tourism, transport, aviation and construction will take longer to recover.
2 EXTENSION OF JOBS SUPPORT SCHEME?
Generous wage subsidies under the Jobs Support Scheme (JSS) will end next month, with the last payout scheduled for June.
The $26.9 billion JSS, which subsidised a portion of employee wages to help firms avoid having to lay off staff, is widely seen as being the biggest lifeline for businesses and workers amid the pandemic.
Observers noted that economic recovery is uneven across sectors and retrenchments are expected to continue.
Some have suggested an extension of the Jobs Growth Incentive to encourage employers to bring forward their hiring as part of a suite of measures that would be needed to reduce unemployment this year.
Others say incentives to help firms with training and retraining Singaporeans may be enhanced.
As at Dec 31, about 75,000 people had found jobs, traineeships, attachments or training places under the SGUnited Jobs and Skills Package.
3 STRONGER SOCIAL SAFETY NETS
The pandemic has hit low-income workers the hardest and any plan to strengthen the social safety nets has to involve improving their wages and employment conditions.
Many of the low-wage workers are in essential services like cleaning and transport, or are employed in the gig economy, experts noted.
The Progressive Wage Model (PWM) currently covers the security, cleaning and landscaping industries. It will soon also take effect in the lifts and escalator maintenance sector, and in waste management.
When it comes to raising the wages of low-income workers, Singapore Management University law don Eugene Tan feels that Singapore cannot just wait for the PWM to be rolled out to all the different sectors. He previously told The Straits Times: “The pandemic has shown the urgency and the heightened imperative to do more and to do so sooner.”
4 PROPERTY COOLING MEASURES?
Singapore’s property market has defied the pandemic-induced recession, leading to talk of another round of cooling measures, intensified by recent ministerial remarks.
Prices of non-landed condominiums and private apartments grew 2.5 per cent last year while Housing Board resale prices jumped 5 per cent – the steepest growth since 2012 – with more million-dollar flats sold.
Deputy Prime Minister and Finance Minister Heng Swee Keat said last month that the Government is paying “close attention” to the local real estate market “to ensure that it remains stable”.
Likewise, National Development Minister Desmond Lee separately urged developers to remain prudent in their land bidding, and households to exercise caution when purchasing property.
Observers said cooling measures could include further loan curbs for investors and a tweak in additional buyer stamp duties for investors and foreigners. Other suggestions include tightened mortgage terms and an increase in the average minimum home size for new developments.
5 SUPPORT TO GO GREEN
This month, Singapore unveiled a slew of sustainability initiatives.
The Singapore Green Plan 2030, which was released by five ministries, will help chart the country’s way towards a more sustainable future over the next decade.
The wide-ranging plan cuts across all sectors of society, ranging from infrastructural development and research and innovation to training programmes.
Under the Green Plan, at least 20 per cent of schools here will be carbon-neutral by 2030. People will also work in greener buildings, among other initiatives.
More details on the Green Plan will be given during the Budget, and in the subsequent Budget debates, said the ministries.
6 ALTERNATIVE WAYS TO RAISE REVENUE?
The country last year drew up to $52 billion from past reserves to fund its support measures and incurred a deficit of $74.2 billion – its biggest since independence in 1965.
Economists forecast a more modest deficit this financial year, ranging from about 2 per cent to 4 per cent of GDP, compared with more than 15 per cent in the last financial year.
While observers say an expansionary Budget is still much needed, some think it may not be necessary to touch the reserves. Experts say the Government can consider borrowing to fund some of its current expenditure, given the low interest rate environment.
Based on the strong global stock market performance, the contributions from investing Singapore’s reserves may also rise this year, meaning that the Net Investment Returns Contribution, already the largest component of revenue, may grow.
There is also the traditional way of raising revenue through taxes.