How that Singapore Budget 2018 hongbao could mean more

ONCE I entered the workforce, the annual Chinese New Year red packet from my parents became less a cause for celebration and more a reason to feel paiseh (a richly nuanced Hokkien term for "being embarrassed").

I appreciated the sentiment, of course, but it wasn't as if I actually needed the money.

Besides, wouldn't the cash be better put towards household expenses - utility bills or groceries, say - rather than being given to their avocado-toast-eating, latte-drinking, spendthrift millennial child?

So I didn't exactly cheer the news of the SG Bonus hongbao promised to us in Monday's Budget speech.

Setting aside the flashbacks to election year growth dividends such as those of 2006 and 2011 (it's not time yet, is it?), such universal generosity seemed unnecessary.

Does every Singaporean aged 21 and above really need this gift?

Just a wild guess, of course, but I'd wager that those with over S$100,000 in assessable income last year - or more than one property - probably don't need the S$100 that they're set to receive.

I'm sure some might say that these high-rollers are the very ones who grease the wheels of Singapore's capitalism and that there's nothing wrong with recognising their efforts with this token sum.

But if I were them, I would feel more than a little paiseh taking it.

And rather than feeling a warm glow at being recognised as part of Singapore's quest for happiness, prosperity and progress, they might be more likely to regard the SG Bonus as something superfluous, or to induce goodwill .

What about those with S$28,001 to S$100,000 in assessable income, set to pocket S$200 each?

This wide swathe of society still contains many for whom S$200 would be a nice but wholly unnecessary bonus.

Perhaps, some of this money will find its way back into the local economy and boost consumption, or top up Tote Board coffers via Singapore Pools, though it could just as easily go into the pocket of some non-GST-paying foreign Taobao merchant.

But more to the point, it would have been useful to make a distinction between the S$90,000-earner to whom S$200 might represent a fun night out, and the S$30,000-earner trying to support a family of four.

The same hongbao is arguably wasted in the hands of the former, while more meaningful to the latter.

Even setting aside appeals to sentiment, purely from a standpoint of marginal efficiency, it would make sense for higher-earners to go without so that others could receive a bigger and more helpful hongbao.

Similarly, from a needs-based perspective, there is nothing objectionable about the S$300 handout for those with up to S$28,000 in assessable income last year - except perhaps that it could be higher.

Economic progress exacts a human toll, and it seems only compassionate and fair to share the fruits of growth with those arguably most likely to have lost out.

(Admittedly, harder-hearted critics might subscribe to the old orthodoxy against cash handouts, fearing that they will be frittered away. Instead of giving out this S$300 fish, the money could go towards fishing lessons - so goes the argument.

In other words, rather than letting the low-income decide how to spend this minor windfall, the funds could be allocated directly to some virtuous purpose such as worker training or healthcare. Instead of cash, the handout could go into one's Medisave account, for instance.)

Of course, the SG Bonus is more symbolic than instrumental: "It reflects the government's long-standing commitment to share the fruits of Singapore's development with Singaporeans," as the Budget statement put it.

So why not graciously accept the gesture, the same way one does not refuse the annual red packet from well-meaning parents?

Well, the difference is that the red packet certainly doesn't contain S$700 million - which is how much the SG Bonus will cost the government.

It's not an insignificant sum. Consider how it sits alongside other announcements in Budget 2018.

Higher Edusave contributions and tweaks to provide more support to students from lower- and middle-income families will cost about S$200 million a year.

For two programmes to strengthen Singapore's status as an air and sea hub, the government will put in up to S$500 million.

And S$800 million has been set aside over the next three years for three grant schemes to help firms.

Or consider existing programmes. The Workfare Income Supplement scheme, which tops up the wages of low-income workers, was expected to pay out S$770 million in 2017.

Symbolic gestures have their value but sometimes don't come cheap. Perhaps, they could be less symbolic and go further and pay for more helpful things.

One way to make sure the SG Bonus is not wasted, of course, is for high-earners to pass it on.

Back in 2006, in order to receive the Progress Package, Singaporeans had to sign up at ATMs, online or via hard-copy forms.

In the process, they could also choose to donate the sum to a charity of their choice.

When the 2011 Grow and Share Package came along, the option to donate the growth dividend remained - but many would have automatically received it if they had previously signed up for GST credits.

Fallible humans as we are, some people who might have made a donation would not have bothered to do so if the money were automatically credited to them.

When details of the SG Bonus payouts are released, I hope that a convenient donation option is announced as well.

But it might be better - both for individuals and the public servants who make these schemes work - if, instead of such universal largesse, the government considers a more targeted approach to future hongbao distribution.

For more Budget 2018 stories visit bt.sg/budget18