Singapore Budget Reaction: Not quite a typical election budget but still, a generous one: OCBC

Angela Tan
Published Mon, Feb 23, 2015 · 12:58 PM
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Singapore Budget 2015 may not be a typical election budget in terms of cash handouts for all, but nevertheless, is a generous one that keeps an eye on the future, Selena Ling, Head of Treasury Research & Strategy at OCBC Bank said on Monday.

Ms Ling said this year's budget was "a crowd-pleaser" with a discernible softer touch for businesses, especially the small, medium-sized enterprises, and more help for the needy and elderly Singaporeans.

"The substantial surprise was the tweaking of the net investment returns (NIR) framework to allow spending based on expected long-term returns, including both realised and unrealised capital gains. While this gives the policy makers more policy headroom and flexibility to spend more (estimated at about 1% of GDP annually over the next five years), which is understandable in light of the ageing population and the economic restructuring pressures, but some clarity and maybe considered conservatism on the methodology of estimating unrealised capital gains may be wise,'' Ms Ling said.

She noted that there were some goodies for companies, but not all items in their wish list had been granted.

"But a sufficiently lighter touch with more carrots and less sticks approach. Enough to reflect that ground feedback has been factored in, but pushing on with certain "tough" measures aligned with economic restructuring and refinement of certain schemes to better target SMEs,'' she said. As for households, there were many fiscal goodies to look forward to.

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