Its seems like most years, there is only bad news when it comes to the Singapore budget.
For the past few years, there seemed to be a little positive direction in the budget in having more social spending, and I would have thought that the same would happen this year.
Sadly, it seems like the government is unable to deviate from its expansionary budget. I would say, the government collects record amounts of funds every year, from taxes, land sales and investments, building up funds to be used "on a rainy day"
With the doom and gloom in the horizon, lower investments entering the country, stagnation of industries, residential housing bust, etc, I expected perhaps the government would find ways to spend funds to stimulate the economy.
I was wrong.
Days after declaring the increase of service and conservation fees, the government decides to increase the cost of water by 30% (without any real reason given).
There are new ERP charges on Adam Road, and the motorcycle taxes will increase.
It seems to go in line with the unpopular white paper to increase the population to 6.9 million people when these charges are in place to put in more infrastructure, and control the vehicle population, etc, however, with increase cost and increase population in a time where the country is not doing so well, it just seems to create a negative cycle.
Inflation with a stagnating economy.
There is a lack of innovation and risk taking by the policy makers and by favoring one industry -- finance industry -- REITS has made it much harder for businesses to afford rents.
In my opinion, this budget does nothing much to revive the economy. The increase costs will make life more difficult for many and not really affect much the rich as there is no capital gains tax and inheritance tax in Singapore.
I feel that in our long term planning to move the country forward, nothing has changed and it reinforces the mindset that everyone needs to look out for themselves and the government does not spend much on social spending. There is not much social spending to alleviate poverty and yet we are continuing the surplus for more reserves.
In many developed economies, social spending is up and public investment in social security, poverty alleviation, education and healthcare usually raises the bottom up and reduces inequality. In Singapore, this continues to be absent as these spending is low according to OECD standards.
In terms of innovation, Singapore seems to want to go in the right direction, but once something happens, it shrinks back to its shell.
Testing Self driving cars, nuTonomy got into an accident last year and all tests have halted. Cars are grounded and no further tests allowed. Instead of looking at how laws can be setup along with insurance policies that would cover driverless cars, innovation cease when a minor accident happens.
If surplus budget is to store for a "Rainy Day", I would like to ask how does a "Rainy Day" look like, and would the Gini coefficient need to be, before the government takes action to solve income inequality?