Tuesday, February 26, 2013

The Appeasement Budget

It's no fun being Finance Minister when the Budget is being presented. Rich or poor, everybody has a gripe to justify taking pot shots at Tharman Shanmugaratnam.

The folks who gathered at Hong Lim Park made their views felt about the foreign hordes, but the businessmen will be casting the first stones. Overall, foreign workers now account for nearly 34 per cent of Singapore's total workforce. The cold turkey treatment will be rolled out to trim this presence.

In the construction and process sector, levies will be raised by $150 between July 2013 and July 2015. A higher levy of $300 will be imposed on workers hired outside a firm's Man-Year Entitlement (MYE). For the services sector, the overall Dependency Ratio Ceiling (DRC - maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire) will be cut from 45 per cent to 40 per cent.

For the lot whose salaries were depressed by them, the government will co-fund 40 per cent of wage increases for Singaporean workers earning up to a gross monthly wage of $4,000. To soothe the companies' ire, cash bonuses of up to $15,000 are available for investment in productivity. But the rich bosses will have more to moan about the higher property taxes and ARF hikes for their super duper cars.

The poor guys, as usual, are offered crumbs to soothe their pains. Another one time GST voucher to offset the on going regressive tax. The Government is planning to rake in $9.3 billion in 2013, more than the $8.8 billion collected in GST last year. Lower than corporate taxes ($12.9 bn), but more then personal income taxes ($7.6 bn). Retired, no fixed income? You die, your problem. The Government line, "a greater sense of security in their retirement years", is just another cruel joke.

Oh, Tharman said he personally topped up the Medifund capital sum by $1 billion. Thanks to Health Minister Gan Kim Yong's candour, we now know only the interest earned from this will be available for disbursement. The rest is reserved for god knows what.

But you can bet the $12.3 bn earmarked for Defence will be fully expended. We are not talking about free netbooks or iPads for NSmen during BMT, those folks are eyeing top of the range military toys like the controversial F-35 fighter jet (currently grounded after an engine crack was found). For all the talk about strengthening the Singapore core, Education is allotted only $11.6 bn, second largest slice of the $53.4 bn Budget 2013 pie. The three school-level initiatives (Early Childhood Development Agency, Opportunity Fund, Edusave Endowment Fund top up) will cost an additional S$120 million a year. The price tag of one F-35 is estimated at US$160 million.

Vaunted as "A Budget for Quality Growth", one suspects only the unhappiness index will be growing. Watch out for a reprise of Goh Chok Tong's "net happiness" argument.

23 comments:

  1. The best part of budget"But the rich bosses will have more to moan about the higher property taxes and ARF hikes for their super duper cars."

    ReplyDelete
    Replies
    1. This one better lah: Rich or poor, everybody has a gripe to justify taking pot shots at Tharman Shanmugaratnam.

      Everyone sure kao-peh one.

      Delete
  2. Why should taxpayers be funding part of the pay rise for workers? I find this particularly absurd. Aren't this equivalent to giving businesses handouts?

    ReplyDelete
    Replies
    1. Governemnt scare of businesses lah. They pull out, no bonus for ministers liou.

      Delete
    2. Perhaps the wage increases are funded by the extra levies imposed on foreign workers?

      Delete
  3. We have shades of AIM-inspired 3-year wage credit system to subsidize wage increases. So much for market driven economy and goverment non-interference. What happens after 2016 beomes political.......

    Workfare is now expanded to cover upto 480000 Yorkers. This welfare for underpaid employed and all Singaporeans. Is it not funded by FW levies? A case of exploitation without actually helping workers to be more productive? Is it a Singapore Shame? A Singapore Government 'working hard' to supplement your low wages? Are they targetting to reach 50% of all local workers?

    Wow.... progressive tax on cars and properties when it really means a little less regressive....... Phew, what a huge relief for the well heeled.

    faber

    ReplyDelete
    Replies
    1. You are right. I saw the charts on ST and did a comparison. The changes in tax percentage is actually miniscule. Yet the newspaper seems to suggest a big change and richer going to pay much more. In fact, it is actually more of the same thing. Less regressive.

      Delete
  4. Land is scarce in Singapore, so foreigners have to be discouraged from buying Singapore property by having to pay higher stamp duty. Why not higher property taxes too? Also, roads are also a scarce "commodity" in Singapore. Singaporeans defend Singapore land and roads. Foreigners don't have to. So, why don't the Govt require foreigners to pay special taxes or higher COEs, ARF, road taxes to buy and own cars? Now, rich Chinese, Indians, Russians, Indonesians and other riff raff foreigners will swamp the roads.

    ReplyDelete
    Replies
    1. why not a 50% higher COE for 2nd cars, 100% higher COE for third cars, and so on?

      If they really want to be nice to businesses, they can charge them much lower COE increases in delivery vehicles. that would ensure prices of goods don't rise too much.

      so you could have COEs at 10% higher after the first five delivery vehicles, but 100% higher for the chairman's Ferrari or merc.

      anyway at the rate the govt is going, businesses will pull out of this country simply becos it costs too much to operate here. then we'll perhaps see some real action!

      Delete
  5. /// C.6. However, we must now go through a new phase of transformation.

    C.7. First, we need to catch up from a decade of slow productivity growth. ///

    Wow, took them more than a decade to realize that the massive influx of foreigners had lowered productivity and depressed salaries. Did that slap by Workers' Party finally woke up the driver?

    ReplyDelete
  6. How come nothing is mentioned in the mainstream media about the Defence budget? Are the generals always given blank checks?

    ReplyDelete
    Replies
    1. the flow of generals into the ruling party is worrying. Who are they loyal to: the ruling party or Spore's national security? It is a dangerous thing to equate the well-being of a political party with the nation's interests.

      Delete
  7. Yes, top increase, 6.6% to .... Defense... , at over US$10b. You think Lockheed and Boeing would be the happiest? think again!

    India is probing the alleged kickback of the helicopter bought from UK, and their investigation on proof of the flow of the "sweetener" needed a face to face between M Singh and D Cameron. You know why? Because the accounts which received the kickback was in UK banks' offshore branches. Obviously the details cannot be released to Indian investigators without the UK PM's approval and even then... The Lockheeds Boeings and Raytheons of the world have perfected this "competitive edge" with backing from US lawmakers. Which is why no one will ever seriously talk about buying Eurofighters or Russian MIs around here, an F15 with 25 year-old technology vs today's Eurofighter would have been a brainless comparison right? But no one said advancement of technology was the key performance indicator right? Oh, someone asked about why NEL breaks down so often? And no need ever to guess which way, up or down, any future defense budgets will go ...

    ReplyDelete
  8. another wayang budget ...

    ReplyDelete
  9. post election budget?

    ReplyDelete
  10. what's your point?

    ReplyDelete
  11. i think they need to make companies pay a high levy even if they employed EP/SP holders not the work permits. These are jobs locals want to do and capable of doing. By getting in the EP/SP, it deprives the locals a chance to get train in that job and thus employment. THats why many ended up becoming taxi drives, estate agents or car agents.

    ReplyDelete
  12. The defence budget is a money making tool for many countries to their ruling familes.

    ReplyDelete
  13. Just Vote Opposition for a pro Singaporean budget ... with no strings attached.

    ReplyDelete
  14. Look how "shameless" Mindef is. Full blown advertisement campaign every year during budget time. Army, air force and navy are all on advertising frenzy to mitigate any outburst of public anger against their ridiculous budget. Defence is important but not with such largesse. How about improving Mindef's productivity by retrenching some jiat liao bee colonels and generals.

    ReplyDelete
  15. I dont want a army life...2/27/2013 9:22 AM

    The SAF is the testing ground for inexperienced elites to experiment their ideas within a controlled environment.

    No expense spared for them to learn:

    - how to procure /purchase new things
    - how to evaluate new things
    - how to develop new things
    - how to con men on why its good
    tats why our boys(men) are so bad with women..
    they dont have much exposure to women within this testing ground.



    ReplyDelete
  16. Tatler, I would humbly suggest that the youtube video segment in this post be removed for obvious reasons. Thanks.

    ReplyDelete
  17. Looks like a pro-ordinary Singaporeans budget but infact put Singaporeans in a very disadvantage when compete against foreigners.

    Also will result in even higher living cost.

    A unsustainable "beautiful" budget

    ReplyDelete