This post is part of the series Budget 2017
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TL;DR – There are easier ways to play politics.
Many people are disappointed with this year’s Budget. Not enough ang paos. As if that’s not bad enough, water prices will be increased. And all that against the backdrop of an economy that is sailing into headwinds and stormy weather. Why doesn’t the PAP government spend more to alleviate the short term pain that so many people must be feeling? Surely it is well within their power to do it, right?
But they’re not doing it. Instead, many would say that the PAP’s budget is rather conservative. They aren’t spending as much as many hope they would. Why not? NCMP Leon Perera suggested that this is because PAP is playing politics. He said that the PAP government has a tendency of:
“… racking up a surplus in the early part of the Parliamentary term and then incurring deficit spending towards the end of the term close to the General Election… Has the government held back on fiscal stimulus in 2017 so as to keep ammunition in reserve for closer to the election?”
That’s an interesting suggestion.
But honestly. Are Singaporeans really that daft and stupid? Will we so quickly forget the pain, if indeed there is, that we suffered while the PAP government is “racking up a surplus”, only to be bribed into submission by the “deficit spending” closer to the General Elections? I take offence that anyone would think that Singaporeans are that stupid.
There are easier ways to play politics
And if the PAP indeed wants to play politics with our Budget, would it not be far easier to spend more every year? Just keep giving people what they want. Want unemployment insurance? There you go. Want free health care? Alright! Want guaranteed retirement benefits? You can have it! Businesses want some support, tax cuts, grants, or whatever? Sure!
Now wouldn’t that make people a lot happier and likelier to vote for them? If the PAP really was using the Budget as a political tool, isn’t it far easier for them to just spend spend spend every year, rather than do what Mr Perera is alleging the PAP of doing?
So if the PAP was a smarter political party, knowing that they have such huge reserves to draw on, and that they have an absolute dominance in parliament, they would clear the way for them to spend as they please. And they should spend and spend to appease the electorate and not draw any criticism whatsoever. Wouldn’t that be the best way to ensure electoral victory?
But PAP too stupid to do those things
But it seems that the PAP isn’t doing that. Instead, it has been stupid by putting in a system that constraints its spending. As Minister Chan Chun Sing said:
“At the start of every term of Government, PAP or otherwise … We precisely designed the system such that no Government will come in and promise to spend before it has earned its keep. This is unlike other countries. This is the reason why we have been able to get one dollar out of every five to support our Budget”
And the PAP is being stupid by not using their dominance in Parliament to dismantle that system. Instead, it is really doing its best to build up a surplus for each term of government so that it can, as far as possible, not have to spend from past reserves. Minister Chan emphasises:
“So we rather err on the side of caution. This is why our forefathers have put in this system and this generation will continue to uphold this system.”
So the PAP appears to be a political party that tries to do (what it thinks is) the right thing, instead of being smart and secure the hearts and votes of the people. Yea, quite stupid from the point of view of a political party who ought to be more mindful of its own chances of winning the next election and of its survival as a political party.
Have to prioritise spending
Consequently, the government has to prioritise its spending. That means there will be some demands that it cannot meet. And it will have to put in some measures that will upset people (i.e. increase water prices). All that is purportedly to secure Singapore’s “collective future”.
That said, the Budget also tried to meet some of today’s needs and alleviate some of Singapore’s short term pains. Minister Chan pointed out:
“Is that so? If this is so, why did (Finance) Minister Heng Swee Keat announce targeted measures to help specific sectors like offshore and marine? Like the S$700 million we pushed into the construction sector? If this is so, why spend all that we spent for that increase in U-Save rebates, to make sure that even though prices may increase on average, we will take care of the lower-income first?”
What, then, are some of the things that the government IS doing?
To enable us to better weather the storms that we are heading into, this year’s Budget seems to be trying to upgrade Singapore from a small sampan into a trimaran sailboat. That is the analogy that Minister Chan used to describe the seven strategies of the Committee on the Future Economy (CFE).
Yes, we had to look up trimaran too, it’s a multi-hull sailboat. You’re welcome.
a) The energy to propel Singapore forwards will come from the two sails: SkillsFuture and EnterpriseFuture.
b) The three skiffs of City regeneration (urbanisation), Internationalisation, and Digitalisation, or CID in short, will provide greater stability even as the water gets rougher and these provide the growth strategies.
c) Two spars, the implementation of the Industry Transformation Maps (ITMs) and the Tripartite Partnership, will hold the three skiffs together.
Many have criticised the CFE, we too have our grouses with the overly complicated and underwhelming recommendations. But perhaps Minister Chan is right. He’d said,
“The challenge is not about who comes up with a better plan. The challenge is who can execute the plan well, who can execute the plan faster, and who can adapt when conditions change.”
What about the Labour Movement?
Putting on his labour chief hat, Minister Chan said that “in NTUC, we have three priorities this year: Jobs, Jobs, and Jobs.”
He’d said that NTUC will take active steps to drive SkillsFuture, which, by the way, is a lot more than just the $500 training credits that every Singaporean gets. It’s a national movement that aims at equipping Singaporeans with skills of the future, and the $500 is just a small part of it.
Beyond that, Minister Chan, who is also the Secretary-General of NTUC, said that the labour movement “will not come to this budget to ask MOM for more money per se.” Instead, NTUC will work with the government to ensure that there are good quality jobs for Singaporeans today, and in the future by achieving these four Ps:
- Placement –Strengthen job placement system
Between NTUC, WSG, EDB, all the government agencies, partners in SNEF, or even with parties like LinkedIn, a national jobs database should be formed so that no matter which career centre we go to, we have access to all jobs. The idea is to do the job placement well and faster.
- Progression – Tomorrow’s unemployed into tomorrow’s jobs
Other than placing today’s unemployed into today’s jobs; more importantly, we have to help tomorrow’s unemployed into tomorrow’s jobs. This is why NTUC is raising $200m on top of the NTUC Education and Training Fund (NETF) to work with Institutes of Higher Learning (IHLs). This is to help tomorrow’s unemployed into tomorrow’s jobs.
- Protection – New forms of employment
There are many new forms of employment models, such as freelancers and contract workers, and we want to help to protect the legal and financial rights of these workers, and also help them better plan for retirement.
- Productivity – ITMs are key
Jobs of tomorrow will require us to work very hard on productivity. Each and every business has to re-examine its business processes with management, with workers to raise productivity. This is where the 23 Industry Transformation Maps (ITMs) come in, they are an amalgamation of the effort of the tripartite partners.
Plans are cheap, execution is key
At the end of the day, will the Budget, and the strategies in the CFE really work for Singapore? Did the government get its priorities right? Are the trade-offs worth it? Maybe, maybe not. Maybe the government could have done more, changed the laws slightly so that they draw a greater proportion of the Net Investment Returns Contribution to fund the Budget and, perhaps, increase social spending.
That said, we shouldn’t just rely on the government or the strategies it comes up with. Plans and strategies are cheap. Execution is key. And in order for brilliant execution, what’s most important is that the team pulls together, staying sharp to the changing winds and waves.
And the team comprises the government, the opposition, and all Singaporeans.
So while we may disagree with some of the government’s policies, even if we think that the PAP is stupid, we must work as a cohesive team. Only then can we weather the storm, and sail towards a brighter future.
Continue reading this series:
Beyond the tears, Minister Lim Swee Say announced some really exciting things