Budget: Economy, Skills Upgrade Key Priority

17 Feb

SINGAPORE: Delivering this year’s Budget Speech, Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam said it is a budget for the future.

Themed “An Inclusive Society, A Stronger Singapore”, Mr Tharman said the Budget will address Singapore’s long-term challenges and is not primarily focused on providing a counter-cyclical boost to the economy.

A key priority is upgrading Singapore’s economy and developing deeper skills, so as to sustain growth and create better jobs for citizens.

There’ll also be measures to help children from lower-income families, help the elderly live well and more support for Singaporeans with disabilities.

On restructuring the economy, Mr Tharman said the government will take further measures to reduce the inflow of foreign workers, so as to spur productivity and encourage companies to upgrade and design better jobs.

Nevertheless, he said it will not be easy for companies who rely heavily on foreign workers.

Mr Tharman said: “While many of them may be able to adapt and grow in less labour-intensive ways, others choose to downsize, switch to new business lines or move abroad.

“We must allow market forces to restructure our economy, so that efficient enterprises have more room to grow. The government cannot decide which companies should succeed or phase out.”

However, Mr Tharman added there will be broad-based support to help as many businesses as possible to retain their roots in Singapore and help them grow.

In addition, the government will also help Singaporean workers — who may be displaced — find new jobs.

In particular, small and medium sized enterprises will receive special help to upgrade their operations and enable them to attract Singaporean workers.

Moving forward, Mr Tharman said productivity must continue to be the key driver of Singapore’s growth and to push up incomes of citizens.

Citing an example, he said the same value of output produced by 10 workers in Singapore takes only seven workers to produce in the US or six in Switzerland.

Mr Tharman said if Singapore succeeded in achieving productivity growth of two to three per cent a year over this decade, the country should be able to sustain economic growth at three to five per cent.

For the fiscal year 2011, Singapore enjoyed an overall budget surplus of about S$2.3 billion — equivalent to 0.7 per cent of the country’s Gross Domestic Product.

This is much higher than its initial estimate of an overall budget surplus of S$100 million.

The boost is attributed to stronger corporate profits, lower-than-expected claims for capital allowances as well as a sharp increase in stamp duties.

– CNA/wk

Channel News Asia

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