Economic restructuring, finding meaningful global partnerships, responding to healthcare and education issues, and defending the state from domestic agitators and foreign provocateurs are the major areas given prominence in Singapore’s 2019 Budget, says Finance Minister Heng Swee Keat.
The Finance Minister emphasised that while the government has made significant strides in providing healthcare and education for its citizens, the needs in those areas are growing. Further, it is imperative that the state is defended from all types of provocation, Mr. Heng said.
“At the same time, the need for better security and better ability to defend ourselves is also growing…Budget will focus on these very key areas — on our security, on taking care of our social needs especially in education and healthcare, and of course in transforming our economy,” Mr. Heng said in a statement.
According to Mr. Heng, it is vital to keep Singapore’s economy dynamic considering the major structural transformations taking place in the international market.
Responding to a question on Brexit, Mr. Heng reiterated Singapore’s stance on staying focused with economic reformation and finding significant collaborations around the world.
Impending General Elections
With the approaching election tentatively slated on April 2021, economics experts and political observers speculate that the 2019 Budget will contain perks like handouts and tax rebates, says Singapore Management University (SMU) Associate Professor of Law and political analyst Eugene Tan.
However, it is also hypothesised that regardless of the election, it is assumed to be expansionary, given Singapore’s current economic prospects and accrued surpluses. “Even if a GE does not take place in 2019, budget goodies in 2019 will help in getting the feel-good factor going for the PAP (People’s Action Party),” adds Prof Tan.
Probable rebates and grants
While similar rebates and grants to the 2015 Budget are expected this year, the 2019 budget may contain targeted help for the middle and lower-income, says Deloitte Singapore tax partner Liew Li Mei. Correspondingly, Deloitte Singapore global employer services leader Sabrina Sia hoists the proposal on broad-based measures, like increased earned income relief or tax relief for those who pay MediShield Life premiums for elderly parents and dependent children.
Ms. Liew told the media that the government “appears to be sharing fiscal surpluses with Singaporeans, in the form of one-off payouts, rebates or GST vouchers, regardless whether it is election season or otherwise.”
Mr Tay Hong Beng, Head of Tax, KPMG in Singapore gave the observation that the government has accrued surpluses of approximately S$15 billion from 2016 to 2018. Since these surpluses from one term of government cannot be carried over to the next, the government can opt to allocate the end-of-term surplus back to Singaporeans prior to subsequent election, Mr. Tay said in a statement.
As PwC Singapore tax leader Chris Woo stated, “Pre-election or otherwise, we expect that the strategic direction of this year’s budget will be little different from past years’, with a focus on sustainable growth and inclusiveness…. This could contain help for businesses to adopt technology, and measures to promote entrepreneurship and venture capital,” Woo elaborated.