NSP Budget Response 2009 - Extensive But Not Comprehensive
4 Feb 2009
The “Resilience Package” of $20.5 billion unveiled in Parliament by Finance Minister Tharman Shanmugaratnam, is generally seen to be extensive, addressing the main problems of job loss, business cash flow and credit crunch.
However, while the direction and footing of the Budget are generally correct, its actual impact will be quite below public expectations, because its somewhat mediocre quantum may be inadequate in facing the tsunami-sized ground crisis. Indeed, the Government has itself admitted that the Package “will not be enough to haul the country out of recession….”
Firstly, the deficit of $4.9 billion to be drawn from the Nation’s Official Reserves, is very much less than the tens of billions in paper loss which the Government had incurred in trying to prop-up foreign banks, over the past six months. According to prominent economist Song Seng Wun (from CIMB-GK), it was estimated that the Government had accumulated some $60 billion (perhaps, including land sale income) over the past two years, since May 2006. This amount would be more than sufficient to “offset any fiscal stimulus package”.
Secondly, the Package did little to help the unemployed in particular, other than allowing them to pay their income tax instalments over two years. The increment of $30pm in Public Assistance is considered to be so miserly, that the poor recipient will have difficulties wondering whether to use it for salt or sugar!
Considering that unemployment may probably hit a new high of 6% this year, amidst the already sky-high inflation of 7.5%, the Authorities need to put in more efforts to help the unemployed, especially the bread-winners, to tide over this critical period. For extreme cases, the Authorities should allow defer payments for both public utilities (water, electricity, gas) and conservancy charges, for at least six months. In addition, there should be a “Subsistence Fund” to provide a nominal allowance tagged at 50% of the recipient’s last drawn salary with a cap of $1500 per month.
The National Solidarity Party (NSP) has gathered considerable feedbacks from its weekly direct interactions with the People. Many have requested for the abolition or reduction of several controversial domestic taxes. For instance, the Radio & TV licence fee is seen to duplicate charges payable to media owners. The Water Conservation Tax has outlived its relevance now that the island is quite self-sufficient in water, considering our many new reservoirs and the gracious abundance of rainfall. The Domestic Foreign Worker levy adds heavily to domestic maintenance costs. The levy is seen to be both opportunistic and punitive, especially when the maid is hired to care for children and the elderly sick, and thereby freeing scarce local manpower. In such cases, the Government should subsidize instead of levying additional charges!
The Government should look into more ways of lowering the health care costs, which had jumped by a massive 20%-30% during the last two years. It should refrain from interfering with the ability of local universities to increase their medical faculty intake each year. The current shortage of qualified medical practitioners has contributed to the escalating health care cost.
Its Jobs Credit scheme per se can be quite cumbersome to implement, and may be subject to abuses. A better alternative would be the conversion of the proposed 12% quarterly cash subsidy into a direct monthly transfer to the CPF Board under the Employer’s Contribution account. Apart from being comparatively safer, such a mechanism will also ease critical cash flow.
NSP calls on the Government to be more responsible to the People, by being more transparent especially where statistics are concerned. Mark Twain once observed that there are lies, damned lies and statistics.
Following the unveiling of the Budget, there has been an orchestrated hype glorifying the Establishment with glowing commentaries. Although such trends have become a tradition of sorts in Singapore, the Government would be seen to be more sincere if it should shun the temptation of politicizing every twist of event, for Singaporeans have now matured politically.
12th Central Executive Council
National Solidarity Party
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