A ground level look at Budget 2013

In Money, News Reports, Politics on February 26, 2013 at 2:30 am

What’s there not to like about Budget 2013? That depends on what’s your instinctive reaction after hearing/reading DPM Tharman speech yesterday?

Aspiring first-time car owner: “What? Forty per cent cash down for a car? How can? Can those China-made cars please come back? Wait, the COE will be higher than the price of the car..’’

Rich guy: “How dare they tax my second home at the Sail, my third at Sentosa Cove and my fourth in Bukit Timah! Time to buy a building at Iskandar.’’

Befuddled economist/pseudo economist: “The government is paying employers to pay workers who get a pay rise? Why not just implement a minimum wage scheme?’’

Sandwiched class: “Damn! More income support for the lower-income. From MY taxpayer money. Why don’t just cut GST and everyone will be happy since it’s most regressive tax around and G made so much surplus already?’’

Big -flat homeowners: “Again five-roomers and executive flat people lose out. The Government think we all not poor just because we live in bigger places ah? Better downgrade and use the Silver Housing bonus – but I love my big place!’’

About-to-be bankrupted restaurant owner: “I will now close my restaurant. I can’t get foreign workers and the Government not even doing anything about my rent. At least can tahan if rent not so high.’’

Earning below $4,000: “My boss had better give me a pay rise now since the Government is subsiding 40 per cent. Actually it means my pay rise can be higher BY 40 per cent from whatever my boss thought. But I bet the stingy fella will just save the money for himself.’’

Panicked mother: “At least got more kindergartens than just the PAP and NTUC one. MOE also starting its own. I think everybody is going to go to the MOE one. Sure got standard, got subsidy. Better queue now while Ah Boy is six months old.’’

I don’t mean to pour cold water over the Budget which I think is pretty cool. This is a G with ideas taking a big picture look at the present and the future. The budget is characterised as a shifting of gears and I so agree. We’ve been in cruise-control for too long – or running ragged at top gear?

How people react will depend on what bit bit them most. Hard to look at the big picture when you see your new car disappearing into the distance. That promise to fix the transport infrastructure MUST come true! Hard to be happy when you are facing the prospect of closing down your business. I mean, which retailer or restauranteur will say: Actually, this isn’t for me. I should change lines. (And become a cigarette smuggler: sure got demand! Kidding ok…)

I liked that steps are being taken to address income inequality; whether they are bold enough is the question of course. But, at least, something is being done to raise their incomes while at the same time sustaining the smaller enterprises who scream about lack of foreign manpower.

My worry about such handouts have always been whether the enterprising enterprises will find a way to “game’’ the system, not just the Work Credits scheme but also Workfare Income Supplement and Productivity Innovation and Credits scheme. Big money is being paid out, what are the checks and balances and at the end of the day, how do we measure results?

  1. […] management is unchanged – Singapore Notes: The Appeasement Budget – Bertha Harian: A ground level look at Budget 2013 – sgthinker: PAP showing a lack of faith in the Singaporean consumer to spend […]

  2. if i had a choice to make the gahmen choose (with regards to tax), it is either cut GST rate or cut property tax for HDB owners.

    property tax on HDB flat owners never made sense to me because you are just leasing it from HDB for 99 years. you don’t even OWN the flat (in the freehold sense).

  3. A well written and considered response to the 2013 budget.

  4. 1. Re 100% vehicle loans, I found it amusing that MAS thought financial institutions would exercise prudence when this was introduced. Especially after the minibonds saga, surely even a layman will realize that financial institutions – like all commercial organizations – have a profit focus?

    2. When 7 rounds of property cooling measures have included measures to reduce the $ amount the buyer can borrow, its seems ridiculous that MAS took so much longer to rein in vehicle purchases. A property have a more than average chance of capital appreciation over the duration of its loan period. A vehicle will most likely depreciate to its OMV at the end of the 10year COE period.

    3. I’m confident that with various tax, legal & financial consultants available for a fee, rich individuals & bigger firms – especially those in industries the government wants to attract – will have no problems minimizing their tax liabilities (game the system as you put it). Tax holidays have been a standard feature used since the 1970s & will continue to prove popular.

    4. So it’s really the SMEs, middle & lower income individuals who will continue to lose out. Listening to some SME owners, it’s not the lack of schemes from the various government bodies that’s an issue. It’s the lack of clarity & help for SMEs to know which schemes are available for them, the multiple rounds of submission for each scheme that discourage many from applying.

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