- The package aims to ward off the economic fallout from the Covid-19 outbreak while also looking forward to a general election expected to be called this year
The Singapore government has introduced its latest budget in the midst of the new coronavirus outbreak, and ahead of a general election expected to be called this year. Finance minister and deputy prime minister Heng Swee Keat has tried to address the first with the second in mind.
The result is a generous budget that puts the government on course for its biggest deficit since 1997 in a bid to ward off recession from the economic fallout of the Covid-19 outbreak.
While the budget has one eye on the election, it also targets sectors most in need with spending designed to save jobs and ensure people do not find themselves on the streets.
In that respect it is a much-needed confidence booster amid uncertainty. Not surprisingly, some relief measures mirror Hong Kong's priorities, with the health system at the forefront of handouts to frontline agencies, and special help for the tourism, aviation, retail and catering sectors.
Singapore's 2020 budget signals the PAP is ready for the polls
A highlight is a S$4 billion (US$2.9 billion) scheme to help companies pay workers' wages for the next three months. The government is to give employers 8 per cent of a worker's salary, capped at S$3,600 a month, to help them stay afloat for a while and avoid having to lay people off.
The scheme may be open to abuse by unscrupulous employees but remains a practical measure of support until the tide of events turns. A S$1.6 billion support package for families is to be means-tested and targeted at middle-income earners as well as the poor. Such inclusiveness of government caring will do no harm to the election prospects of the ruling People's Action Party.
If any further evidence was needed of electoral calculation it is to be found in the absence of any bitter medicine and the deflection of a potentially major political negative, the postponement of a planned rise in the goods and services tax from 7 to 9 per cent. And even then, it coated it with sweetener of a S$6 billion package to cushion the impact.
From boosting education to increasing welfare payments to the elderly poor and tackling climate change, there was something for nearly everyone in this budget. With nearly 100 cases of Covid-19 having been confirmed in the city state, officials will need to continue to respond quickly and efficiently to developments.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
