A Budget Too Good To Be True

Singapore’s budget for FY2011/2012 recently released by Finance Minister Tharman is said to be the biggest bounty ever by the government with a large portion of it allocated to the Lower and Middle Income families.

Singapore 2011 Budget

Singapore 2011 Budget

From the outlook of the packages mentioned, the budget this year sure does look very appetizing.

$1.5 billion in Growth Dividends to 2.5 million citizens

$580 million in Personal Income tax rebates

$224 million in Workfare Special Bonus payout to 400,000 older, low-wage workers

$100 million++ Child Development Credit and subsidies for families with younger children.

$3.4 billion for longer-term social investments with the bulk going to endowment funds to support the elderly and needy, and measures to keep education affordable to the poor.

“We must continue to grow Singaporeans’ incomes, so that even after taking into account inflation, their real purchasing power increases”

“We want to grow Singaporeans’ incomes significantly, by transforming productivity”

“But whichever way the government intervenes, we will only succeed if we preserve and strengthen the things that Singaporeans value most – family; everyone aspiring for a better life and feeling they can get there by working hard; and a sense of community. These are the values that will keep our society dynamic, and will allow us to achieve our next transformation as a nation.”

The above are statements by Finance Minister, Tharman Shanmugaratnam.

Growth Dividends:

The payout will be made on 1st May 2011 and this will be only payout. For anyone who’s receiving the full amount of $800, that will work out to be $66.67 a month or about $2.22 a day.

Henceforth, whilst that $800 might be able to address immediate issues such as mounting debts and bills faced by the lower income and poor families, it won’t address the bigger issue of inflation projected at 3-4% increase.

$2.22 a day isn’t even sufficient to cover the cost of transportation and food in a day.

U-Save and S&CC Rebates:

Focusing mainly on the families staying in 1-room flats, they’ll stand to receive $360 for Utilities rebates spread over 3 months and 3 month rebate off from their Service & Conservancy Charges.

$360 for Utilities would mean that a household would receive assistance amounting to $30 per month. Based on the papers’ interview with an individual living in a 1-room flat, his monthly utility stands between $180 to $200 a month who lives with his wife and 5 children. He earns $900 a month.

With such an earning with a family of 7, having taken into account the utilities he pays, he only has $500 left for his family. Assuming that all his children go to school and are on the student concession pass with an amount of $50 per month, he’ll be left with just $250.

That $250 will then need to be further segregated for groceries and pocket money amongst others. Should each child receive $1 for pocket money per day, that will work out to $25 worth of pocket money per week for all 5 children. In a month, that amount is $100.

$150 for groceries in Singapore for a family of 7?

I don’t think that’s sufficient. $30 of additional spare cash per month to float around is barely enough in a family of 7.

So what now?

Well, I’m sorry Finance Minister, but I don’t think the amount disbursed, even though it is the largest ever is sufficient to help offset the impending inflation.

The reality is that, even if individuals work longer hours and are much more productive, unfortunately, wages aren’t pegged to productivity levels. If wages are pegged to productivity levels, I’m sure everyone will be compensated accordingly and fairly.

What is really needed is for our Ministers to have their wages slashed to be slightly above par from the Super Scale 1 employees in the Civil Service sector. They are after all, Civil Servants.

The remaining portions of their wages can then be further disbursed to help the poor, the low and middle income. If the purpose of paying our Ministers million dollar salaries is to prevent corruption, shouldn’t all Civil Servants be paid the same because corruption doesn’t just occur to the higher echelons, no one is susceptible to corruption and only the best of moral values will stop one from commiting such an act.

Seriously, the budget is truly an election budget, a dangling carrot for Singaporeans to be bought into.

The breakdown I made above is perhaps one of the best ways for anyone to judge if the payouts is really sufficient. Huge numbers on television, not much when you break it down into smaller numbers.

 

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