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Thursday, March 5, 2015

Budget 2015

It is cough syrup. It feels sticky and cloying sweet on the tongue. Later, you will get groggy... before errr... you get well.

The sweets are there, to be sure:
(1) Silver Support Scheme
Elderly folks will have money to live on.

(2) Extra CPF interest
Working persons' retirement nest eggs will grow faster.

(3) Funding for Adult Education
People will be helped to stay employable through continually enhanced skills sets. Hopefully, the skills taught WILL have future demand.

(4) Funding for Innovation (Economic Restructuring) and Internationalisation
Our economy moves up the value chain to do smart work that earns more per unit of effort. Our reliance on low skilled foreign labour to grow our economy will listen. I don't envy those trying to turn the ship here. It is so extraordinarily difficult... and there is a chance that after throwing money at the problem, the ship has not turned.

(5) Healthcare subsidies and Child Education subsidies
Middle income families will have a little more leftover and saved up by the end of the month, provided they do save up the extras.

(6) Money from GIC, Temasek and MAS investments will be used for public spending
If SMRT makes money and Temasek pulls in the profits, the money will be ploughed back into public spending.

Then there is a hint of the bitter:
(6) Cars will be taxed more
How many more cars can this country take? There just isn't enough space. So yah... this is a good way to get revenue and reverse the trend of ever increasing car numbers.

(7) Personal Income Tax goes up
This doesn't affect a lotta people you know. Those who are rich have enough to spare. So spare and share.

See! It is like cough syrup... a lotta sweet to cover the hint of bitter. But oi... it is good for us. Cough syrup may not work to cure your flu because there are so many other things that play out when a body is ailing. Whether Budget 2015 will cure us and strengthen us remains to be seen. What if the economy stubbornly refuses to restructure? What people train and train and then they find that their new skills sets are obsoleted along with their jobs at the next retrenchment?

There are no perfect answers but at least Budget 2015 shows a government resolve to tackle decades old issues, that I have never seen in any prior budget.

Still, in a while, we will get groggy. The economic restructuring is gonna squeeze some sectors and force people out of work. Companies lower down the value chain will stop investing here. If our innovation and internationalisation efforts do not take off then well, people will be unemployed. There is also the risk that we are drawing down on too much of our resources.

Frankly, it is a scary budget but it has gotta be done. I think things will get a lot worse before they get better. But perhaps, that is just me.

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