Prudently calibrated, soberly argued and highly inclusive

THE thrust of the 2016 Singapore Budget is to help businesses, especially small and medium enterprises (SMEs), to prepare for potential challenges due to economic slowdown and company restructuring. This Budget represents a more integrated and targeted effort to transform the economy so as to secure optimal medium-term growth opportunities, leaving the longer-term economic orientation and strategies to the Committee for Future Economy. The Budget further carries through the inclusive effort of recent Budgets to lend support to resource-poor individuals and an ageing population.

With a maturing electorate, and having achieved a strong mandate in the 2015 general election, the government has in recent years moved from general cash handouts in the Budget to more prudently calibrated assistance to mitigate income disparity. This takes the form of transfers to individuals, as well as financial resources allocated for specific policy initiatives such as SkillsFuture to spur lifelong learning. As Finance Minister Heng Swee Keat soberly argued, we must spend when it is needed and where it best achieves our social and economic objectives.

The government ought to convince the public that low growth should not be Singapore's new economic normal. With the strong facilitating role of the government, Singapore can deviate from textbook cases to continue to achieve robust economic progress on average over the business cycles, notwithstanding the highly open economy. In order that government efforts to mitigate economic hardship for individuals and businesses are sustainable, the strategy must be to first create wealth and then to redistribute it - and not vice versa!