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Budget 2016 Quick Takes: StanChart says it is a balanced and prudent one
SINGAPORE'S Finance Minister Heng Swee Keat delivered in Parliament on Thursday the government's Budget Statement for the financial year 2016.
Here are some comments by Jeff Ng and Edward Lee, economists at Standard Chartered Bank in Singapore:
The Budget did address the points that we raised in our preview.
· While total spending is set to be raised 7.3 per cent compared to the previous year, Finance Minister Heng has said that it will be selective and targeted to boost short and medium term headwinds to growth.
· The Budget will be balanced and prudent. Even with the increased spending, the government aims for a fiscal surplus of 0.8 per cent of GDP, from a 1.2 per cent deficit a year ago.
· On skills and productivity, the budget attempts to address cyclical and structural challenges. Focus is on learning, with yearly spending on job-related measures set at S$1 billion per year to 2020. This is addressed through training (SkillsFuture), helping retrenched workers to find new work/career, and matching jobs to workers.
· We think that the Budget attempts to improve infrastructure through measures such as the S$1 billion budgeted for Changi Airport development and the S$450 million budgeted for the National Robotics Program.
· The Budget also aims to further improve medium term growth through focus on research and development. The Budget particularly focuses on automation. Measures include setting up National Trade Platform, the Jurong Innovation District, and the budgeted S$4 billion industry-research tie-up.
· The Budget attempts to address future social spending needs through measures such as the cap on personal income tax relief, estimated to raise revenue by S$100 million annually.