Counter-cyclical & considered

FINANCE Minister Heng Swee Keat's maiden Budget managed to stay true to the spirit of being "prudent" without disregarding a counter-cyclical expansionary stance required to buffer - or at least avoid unnecessary collateral damage from - global economic headwinds.

At the same time, the Budget was considered enough to stay committed to longer-term productivity goals, continually pursue restructuring and re-invention of industries to ensure sustainable economic success, and position for an inevitable demographic drag from an ageing population. In sum, it was a well-balanced and acutely targeted Budget that stretched the dollar to build on the strength of existing initiatives, and establish measures for posterity.

To be sure, GDP (gross domestic product) arithmetic dictates that swinging to a surplus of S$3.4 billion (0.8% of GDP) from an uncharacteristic (but reduced) S$4.9 billion (1.2% of GDP) deficit estimated for last year's "SG50 Budget" entails net government spending turning sharply negative. And a straight and narrow analysis of the shift in fiscal situation suggests fiscal tightening on the surface. That is, fiscal policy that results in dampening economic growth.