Tag Archive | "singapore budget 2013"

10 commonly used terms in the Budget debate

10 commonly used terms in the Budget debate

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Sound like an expert in 60 seconds

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“We need to find a new social contract that achieves a better balance between growth and equity, and between individual responsibility and social insurance,” – Nominated MP Lawrence Lien

If “what the hell does that mean?” — was your first thought, you’ve come to the right place. Here at New Nation, we’re strong believers in writing in plain English.

Impress your friends, terrorise the trolls and arm yourself with these ten technical terms before entering any debate about this year’s budget.

#1 Inclusiveness
A term frequently used for its warm, fuzzy, connotations, “inclusiveness” describes policy that includes all groups and all members of society, as opposed to policies in the past that marginalised groups (ie. single-parent families, Malay people, low-income workers etc).

Example 1 – Restructuring on its own without inclusivity will drive up costs for businesses and Singaporeans already concerned about a high cost of living. – ST article March 5 2013

Example 2 – Community involvement is vital as it helps to build a sense of pride towards Singapore and fosters inclusiveness and a sense of shared ownership, said Prime Minister Lee Hsien Loong yesterday. This is why events like the Singapore HeritageFest are important. – ST article July 18 2011

#2 Labour force participation rate

The proportion of people working, compared to the actual number of people in the same age range in the country. One of the central tenets of the Workers’ Party’s alternative white paper, the WP is proposing that instead of hiring more foreign workers to make up for the shortfall of local labour, it is possible to increase the labour force participation rate by tapping on women and seniors. It says that the rate can be raised to 78.7% by 2025, from 66.6% last year, according to Sing Stats.

#3 Minimum wage

The lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Singapore has no minimum wage, which makes it possible for companies to hire workers (foreign and local) at wages below $1,000 a month. Minimum wage made the headlines last year when former National Wages Council (NWC) chairperson and economics professor Lim Chong Yah called for a “Shock Therapy” — implementing minimum wage, and a three-year freeze o the country’s highest salaries.

Minimum wage has been supported by some industry players, though critics say that the policy will lead to heightened inflation and increase the cost of business. The PAP is opposed to minimum wage and insists that Workfare — where low-income workers have their salary topped up by the government — works better.

#4 Progressive tax

A tax that takes a larger percentage from the income of high-income earners than it does from low-income individuals, Singapore already has a progressive tax system where workers earning less than $22,000 a year are not taxed, while those earning above $320,000 a year are taxed 20%.

Workers’ Party Chairman Sylvia Lim is pushing for a more progressive tax as the $320,000 bracket includes university professors earning six-figure sums, as well as bankers earning millions a year. She proposes putting a 24% tax for those earning between $700,000 and $1 million a year. No one seems to be opposing the idea.

#5 Equity
Synonymous with equality, equity does not refer to stocks. The 2013 budget allocates for more social spending to improve income inequality — a sore point for many middle class Singaporeans who feel displaced by the millionaires immigrating every year. A more progressive property tax will also create greater social equity.

In 2012, Singapore remained one of the most unequal countries in the developed world, with a Gini coefficient 0.459. It is also one of the top ten most expensive countries in the world to live in.

#6 Quality Growth
Essentially referring to economic growth beyond sheer GDP, quality growth factors in the increase in cost of living, decrease in social mobility, struggles faced by companies during economic restructuring, and other problems created in the course of rapid economic growth.

In other words, the government finally woke up its idea that if there is no economic redistribution, there will be no votes.

#7 Social mobility
The movement of individuals or groups in the social hierarchy, social mobility is the source of motivation for many poor families. As the Singapore dream goes: you could be a coolie from China working 12 hours a day shifting sacks of rice. But if you work hard, one day your children will graduate from university and you will be middle class.

Obviously now unless you can afford not to work after school, and to pay for tuition, there’s very little chance you will qualify for a top secondary school or junior college. And if you don’t meet middle class friends on their way to success, your network is severely limited, hampering your career choices and advancement.

Therefore, if you’re poor, there’s a very good chance you will be poor for the rest of your life. But hypothetically, if you receive the same high quality education as everyone else when you’re in pre-school and primary school, you might be able to escape this trap.

#8 Social recession
A new term coined by NMP Lawrence Lien, it refers to a low performance in the following indicators — individual well-being, family, income security, healthcare, and housing and transport. However, the analogy does not seem to be entirely accurate as social indicators don’t go through social booms and busts. Transport also seems to be a infrastructural, and not a social problem.

#9 Total fertility rate
The favoured word of the decade, TFR is the average number of children that would be born to a woman over her lifetime in a country. Singapore’s TFR stands at a dismal 1.15, in spite of the myriad of sex scandals hitting the headlines. All government policies now hinge on the assumption that the TFR will stay low forever, which is why we need more immigrants, to make up for the lack of labour on the island.

The counter-argument, of course, is that the sheer speed and quantity of immigration is decreasing the quality of life and depressing everyone’s wages. And because life sucks so bad, and is set to get worse, which parent in his/her right mind would want to bring up a child in these circumstances?

#10 Economic restructuring
An overhaul of the economic system that relies excessively on cheap foreign labour, excludes locals, and widens the class divide in Singapore. Economic restructuring entails changing the very foundations of society that Singapore holds dear. This includes changing the behaviour of the existing population — ie. we can effectively fire 90% of all hawker centre cleaners if people would stack their trays nicely in a designated area for the dishwasher to load up the machine.

The wage credit scheme and the Productivity and Innovation Credit (PIC) Bonus scheme are both crucial to bumping up productivity so employers can justify wage increases.

  • Wage credit scheme (WCS)A key pillar of the overall economic restructuring plan of the government, the WCS ensures that the Government will fund 40% of any pay raise for Singaporean employee earning a gross monthly salary of up to S$4,000. This is to co-share the firms’ burden of investing in their employees to increase productivity.
  • The Productivity and Innovation Credit (PIC) Bonus scheme: is expected to cost the government $450 million over three years. Firms which invest at least $5,000 to improve productivity in a year will receive a dollar-for-dollar matching cash bonus.The bonus is capped at S$15,000 over three years until 2015.

tl;dr — The 2013 budget is a response to the widespread unhappiness about social inequality and mass immigration. Though the budget has been set aside for various schemes, it remains to be seen if the plans can be implemented as intended.

Rich people can’t be bothered with Budget 2013 announcements

Rich people can’t be bothered with Budget 2013 announcements

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“None of what was announced has any bearing on me because I have liquid cash and assets.”

Too rich to care

Too rich to care

Since the Singapore Budget 2013 news and analyses began trending, low and middle income groups in Singapore have been lapping up the details to find out what’s going to affect them.

Except rich people in Singapore who are responding to the same budget announcements with a devil-may-care attitude, followed by a bit of nonchalant hand-waving.

Jeet Ba Ban, a millionaire on this sunny island set in the sea, said: “The government can raise car prices, up private property tax, increase income tax and incur more foreign worker levy. But who cares? I still got a lot of money.”

This sentiment is not unusual.

Another rich Singaporean, Huat Ka Seow, said: “None of what was announced has any bearing on me because I have liquid cash and assets.”

“The rich will always be immune to money problems.”

But it is not as if the rich are worry-free.

Tio Tua Cai, another millionaire, said: “I’m losing a bit of my appetite because I wonder if my lifestyle will be affected if my net worth falls from $3 million to $2.9 million.”

Poor people unable to buy cars in 2013 budget

Poor people unable to buy cars in 2013 budget

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Millionaires grateful for breathing room on the roads

traffic jam singaporeOnly rich people will be able to afford cars this year, according to Singapore’s 2013 budget which restricts car loans to 50% to 60% of the purchase price. Car buyers will also have to finish servicing the loan within five years.

This has gotten many Singaporeans upset as they will no longer be able to enjoy listening to Gold 90.5FM for hours on end, as they admire Orchard Road during the peak hour traffic jam.

Some even say that this was a ploy by the government to give more privileges to the rich by clearing out the roads.

“How am I going to fetch my ah girl to school every morning?” exclaimed Mdm Jin Kao Peh, who said that she was “devastated” that her family could not buy a second car.

“We used to have such great aspirations in the 1990s — car, condo, credit card, country club and cash. Now everything so expensive, even my credit line got limit, how to have motivation to work?” said the regular contributor to Temsek Review Emeritus, who is working on her debut monologue on the downfall of the middle class, titled “Say NO! to PAPpies”.

Many analysts are already predicting a dip in COE prices due to the decrease in demand for cars this year, which means that while the overall prices of cars might not change much, only those who have enough cash upfront will be able to afford them.

“The Singapore government has immense foresight,” said new immigrant Da Lu Ren, son of a high ranking Chinese official, who dropped out of school last week. “With fewer cars on the road, it is less likely that I will hit another taxi while cruising in my Ferrari at night.”

Another new citizen, a billionaire hailing from Silicon Valley agreed.

“Singapore women still tend to be impressed by guys with cars. Now that cars are less accessible, it’ll be easier for the ladies to differentiate the men with real money, and those living on credit,” he said.

But as the public infrastructure remains far from ready to cope with the influx of car-less citizens, school administrators and firms are also expecting a dip in attendance due to transportation problems.

“Want to drive, cannot. Want to take MRT, kenna breakdown. Want to take bus, too crowded because of the MRT breakdown,” said a frustrated student from the National University of Singapore.

“Want to ride bicycle to school, scared kenna knocked down. You tell me how? How leh?”