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SG Budget Reactions: No fireworks but expansionary Budget, targeted in its support

Monday, February 20, 2017 - 19:23

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SINGAPORE'S Finance Minister, Heng Swee Keat, delivered on Monday his Budget speech, which outlined plans for Singapore's economic transformation journey.

SINGAPORE'S Finance Minister, Heng Swee Keat, delivered on Monday his Budget speech, which outlined plans for Singapore's economic transformation journey.

Budget 2017 included measures to strengthen corporate capabilities, particularly in promoting digitalisation with the new SME s Go Digital Programme. There are also measures to promote innovation and overseas expansion, to ensure a caring and inclusive society as well as to cut Singapore's carbon footprint.

Here are some expert comments:

Weiwen Ng, economist, Asean at ANZ Research:

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Market voices on:

"Budget 2017 remains expansionary, but targeted in its support.

"We highlight that without the contribution of net investment return.., Singapore would have registered a primary deficit of S$5.6 billion in FY2016, far larger than the S$2.3 billion deficit registered during the 2009 Global financial Crisis (GFC) and S$2.8 billion deficit in FY 2016.

"We revise our real GDP growth projection upwards to 2.4 per cent of GDP in 2017, as compared to growth of 2.0 per cent in 2016.

"While the fiscal impact on domestic activity should be positive , we are cautious that other headwinds on growth remain in place: potential protectionist measures that could weigh on external demand, an ongoing correction in the property market, as well as a subdued labour market.

"Expansionary fiscal stance implies lower odds of an April MAS move, especially with growth and inflation having evolved in line with MAS' expectations.

"More broadly, government spending has historically been highly counter-cyclical in Singapore. In this context, today's expansionary fiscal stance removes the immediate catalyst for monetary easing."

Ong Pang Thye, Managing Partner at KPMG in Singapore

"This year's Budget didn't deliver fireworks, but what's more important is that Minister Heng has brought fuel to the flame, and the fire is being stoked with measures supporting education, internationalisation and digitalisation, and a review of the tax system for the long term."

Toh Boon Ngee, Tax Partner at KPMG in Singapore

"The Budget has addressed targeted issues with very focused measures. For example, the plan to provide better support and care for the community is timely especially in view of the challenges brought about by the aging population."

Tan Chee Wei, Tax Partner at KPMG in Singapore

"By providing support to enable companies to grow, workers will ultimately be the beneficiaries as they become more productive. The initiatives targeted at the individual level, such as the Global Innovation Alliance and SkillsFuture Leadership Development Initiative, will help Singaporeans skill up to gain experience in a global world. These are in line with recommendations under the recent Committee for the Future Economy (CFE) Report."

Chung-Sim Siew Moon, Head of Tax Services, Ernst & Young Solutions LLP:

"Budget 2017 is one of the most comprehensive Budgets ever delivered, touching every aspect of Singapore and its people."

Russell Aubrey, Partner, Tax Services, Ernst & Young Solutions LLP:

"This Budget breathes life into many of the CFE recommendations. We see funds set aside to drive an uptick in innovation and the development of digital capabilities in corporates and individuals - which are urgent tasks at hand because these take time to bear fruit and are important to long-term competitiveness."

Adrian Ball, Partner, EY Asia-Pacific Indirect Tax Leader, Ernst & Solutions LLP:

"In a world where the mood is inward-looking in several of the most advanced economies, Singapore reaffirms its pro-globalization and international outlook, both economically and environmentally.

"Aiming to achieve 2-3 per cent quality GDP growth, Singapore is clearly investing in its people and businesses to take full advantage of the higher growth in overseas emerging markets."

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