Budget 2020: Politically suicidal questions
By Bertha Henson
ILLUSTRATION: LORAINE LEE
I wonder if any MP will stick his neck out today and ask if Budget 2020 was a wee bit too generous? Or will he be courting political suicide given that the Budget announced by Deputy Prime Minister Heng Swee Keat is receiving effusive praise. In fact, some people, particularly in business, even say it might not be enough. Most of the measures are one-off and last for about three months, they grumbled.
The fact is that the size of the package to help everyone tide over the impact of the Covid-19 virus took everybody by surprise. No one has suggested anything larger than $1billion in the run-up to the Budget Statement on Feb 18. Analysts took their cue from the Sars relief package in 2003 which amounted to $230 million.
In all probability, they were second-guessing what a government that prides itself on prudent spending would be comfortable to hand out. Now, pundits are making the right noises even if they were wrong. That is, they are saying the government did the right thing in being generous.
How generous? Mr Heng announced a smorgasboard of cash, tax rebates, subsidies, credits, grocery vouchers and even top-ups to PAssion cards that amounted to $5.8 billion. The only thing he left out was the kitchen sink.
And that’s just thanks to the Covid-19 virus. There’s another $8.4 billion to “transform and grow’’ industries. I wonder if this would have been the final figure for the Budget if the virus hadn’t appeared.
I wrote before there’s nothing not to like about the Budget. In fact, it looks like an Election Budget masquerading as a relief package.
Rather than targeted relief to industries most hit by the virus as was the case in 2003, there was something for every business and everyone - whether they need it or not.
Businesses, for example, get 8 per cent salary support for local workers, up to a monthly cap of $3,600, for three months. Should it matter if the business is doing well - or not? Or whether they have enough reserves (like the State does) to ride out the virus outbreak without depending on State funds or taxpayer money? Are we assuming that every sector is affected, and just that some sectors, like aviation and hospitality, are affected more than others? (The aviation folks got a $112 million package, significantly larger than the $45 million disbursed in 2003.)
I know that I sound like a party-pooper. Whatever Ah Kong gives, we should just take and not look a gift horse in the mouth. But I have been bred for too long on being financially prudent and resilient when it comes to spending, whether personally or nationally.
You can spin a story any which way. For example, the Stabilisation and Support package is not just about helping businesses, but saving jobs. That’s something which every government facing a general election soon should be concerned about. So for three months, we should expect businesses to keep their workers on the payroll because $1.3 billion is being expended on this effort.
We’ll have to assume that the virus has either been licked locally and globally, and that the economy has started repairing itself by end of May. If not, then what? The Government says it has the resources to give more should the need arise, and I can’t help but think this is an open invitation to anyone who wants a handout to complain loud, loud. I mean, do we really have so much money stashed away for use? Can Mr Heng please elaborate?
Then, under the Care and Support Package, everyone gets $100, $200 or $300 in 2020, depending on his income in 2019 and home ownership. Parents with one or more Singaporean children aged 20 and younger in 2020 will each also get an extra $100 in cash.
Again, does everyone really need the money? According to criteria laid out by the Finance ministry, those earning over $100,000 in assessable income or who own more than one property will get $100. Seriously? Will this make a difference to their living expenses?
When a country is facing trying times, I would think that citizens would be glad to know that the most vulnerable are taken care of. I might be wrong but I don’t think rich people would complain if that $100 goes to someone more deserving.
I recall that last year, such cash payouts were packaged as GST vouchers under the Bicentennial Bonus. This year, there’s not even an attempt to put a moniker on it. Mr Heng didn’t say how much this cash payout amounts to in the $1.6 billion package.
Again, I want to ask: Do we really have so much money? Aren’t we worried about creating a culture of dependency? Or are we simply fortunate that to have reached close to the end of the term of Parliament (polls must be held by April 2021) and the accumulated surpluses haven’t been locked up yet. If a crisis (touch wood) hits us just after a new Parliament is sworn in, won’t businesses and the people be let down by much smaller package - or would we have to dig into the reserves?
After so many years of emphasising prudence and how there’s no such thing as a free lunch, I can’t help but think that cash (with no strings attached) is increasingly being given away too freely.
Does any MP feel the same? And if so, will he or she brave the flak that will come if such questions are raised?