A Budget to bring some cheer, and to secure Singapore

IN a year when it would scarcely have been criticised had it chosen to be exuberant in its gift-giving, the government has instead impressed with its prudence and restraint in keeping its one-off Budget goodies to a judicious level - focusing instead on the needed (though far less sexy) long-term efforts to build and grow the nation.

With 2019 being the 200th anniversary of Sir Stamford Raffles' landing on the island, Singapore is marking this as its bicentennial year, with celebrations lined up to commemorate that "key turning point in Singapore's development".

Coupled with the general election rumoured to be around the corner, the temptation to hand out a great many more sweeteners to the public would have been understandable (not to mention, expected).

And so, the relatively restrained stance adopted by the government in a year of celebration may not have lived up to some expectations when it comes to bicentennial bonus goodies such as the one-off personal income tax rebate and the Goods & Services Tax (GST) voucher.

But to focus on immediate gratification is exactly what this government has chosen not to do. Finance Minister Heng Swee Keat has instead chosen to "reflect on the twists and turns in our history" in this bicentennial year, to build "an even better future for our people".

That entails giving the economy, its businesses and manpower the wherewithal to thrive in the longer term, putting in place the infrastructure and support needed to help them survive and grow, and crafting a societal fabric tenacious enough to withstand multifold pressures.

Achieving the first goal, Mr Heng said, will come through building deep-enterprise capabilities, deep worker capabilities and encouraging strong partnerships within Singapore and across the world.

The initiatives have come in myriad forms. Briefly, schemes to build enterprise capabilities include those helping companies to scale up and innovate, creating additional forms and sources of funding, particularly for SMEs (small and medium-sized enterprises), and programmes to continue helping SMEs with the digital transformation.

This year's initiatives have the added boost of being more customised to the specific needs and stage of growth of their recipients.

As KPMG Singapore's head of Tax, Tay Hong Beng, puts it: "The government has recognised the need to provide and tailor-make support and assistance to businesses based on their differing stages of development and needs. This is a good departure from the traditional broad-brush approach, which may not meet the needs of businesses."

The labour force will be aided by new Professional Conversion Programmes (PCPs) relating to blockchain, embedded software and prefabrication, while mature and retrenched workers will be helped by an extension of the Career Support Programme, to name but two.

And, while there are some cost measures, such as a deferment of an earlier-announced increase in foreign worker levy rates in the troubled marine shipyard and process sectors, it's important to note that - taken alongside the government's other initiatives - the message is clear: the support is there for businesses to innovate and upscale, but the re-skilling and re-designing of the workforce is focused on Singaporeans, and away from a dependence on foreign labour.

It is also notable - and telling - that, of the S$4.6 billion that the government will spend over the next three years on these measures, S$3.6 billion will go towards helping workers, with the remaining S$1 billion going towards helping firms.

The Finance Minister said: "But let me emphasise that supporting companies and supporting workers are mutually reinforcing. Stronger companies provide better jobs and pay for workers, and highly-skilled workers make companies stronger."

Also of particular note in Budget 2019 is Singapore's continued focus on maintaining and building upon the security of the nation, especially in light of recent geopolitical events. Taking prominence in his Budget speech this year was Mr Heng's pronouncement of the need to keep Singapore safe and secure.

"Given its strategic significance, the government will continue to invest a significant share of our resources - about 30 per cent of our total expenditure this year - to support our defence, security and diplomacy efforts.

"This spending is significant, but indispensible. We will spend more, if the need arises, to protect the sovereignty of Singapore and the well-being of Singapore."

A secure Singapore enables the advancement of the third goal: building a caring and inclusive society, with help for Singaporeans from various walks of life, with better support in terms of education, support for lower-wage and older workers, better and more affordable healthcare, long-term assistance, and so on.

The initiatives were again notable for mostly being long-term in nature; the Merdeka Generation Package for those born between 1950 and 1959 is a case in point.

The benefits, in the form of top-ups and subsidies, for example, are geared towards helping this generation attain a better future by giving them greater assurance over their healthcare costs in their senior years, helping them save more for the future and stay active and healthy for longer.

Such spending, of course, has to be funded, but this year's Budget was notable for not including the expected tax increases hinted at before.

That's not to say they aren't forthcoming.

Deloitte Singapore and South-east Asia's tax partner and indirect tax leader, Richard Mackender, stated: "It is clear that the government remains committed to the (GST) rate increase after 2021."

But the timing of this year's Budget, ahead of the anticipated polls, probably had something to do with these tax increases being delayed.

Still, it is notable that the government held back from firing off even more temporary good cheer to lift the mood of the electorate for the months ahead, choosing instead to invest greater energies into developing a stronger economy, a healthier people and a safer country for the years ahead.