More Bull...
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Chua Mui Hoong, Senior Writer
Tue, Feb 26, 2008
The Straits Times
The Finance Minister is not the God of Fortune
MOST governments and citizens would be happy to have a national Budget that yielded a surplus of $6.4 billion.But in Singapore, the size of the surplus has become an item the Finance Minister has to account for.
Indeed, a few MPs and commentators have said it was 'embarrassing' to have such a huge surplus, when a deficit of $0.7 billion had been projected.
As the surplus came on the back of a 2 percentage point hike in the goods and services tax (GST) to 7 per cent, it is understandable that people are asking if the Government was being hasty, or worse, exploitative, in raising the GST in a year when global forces already led to high inflation in Singapore.
The point was made yesterday when the House sat to debate this year's Budget, presented by Finance Minister Tharman Shanmugaratnam on Feb 15.
Two non-PAP MPs - NMP Gautam Banerjee and opposition MP Low Thia Khiang - wanted the hike reversed.
Other MPs, such as Mr Seng Han Thong and Dr Amy Khor, thought surpluses were to be celebrated, not apologised over.
After all, if the Government had projected a deficit, but the economy rebounded and its coffers overflow: that is good news.
And if the state shares its surplus in a smart way with more going to the needy, that is a win-win-win outcome, since citizens, businesses and the state all benefit.
As Dr Khor noted, some Singaporeans think the Government is being kiam siap (Hokkien for tight-fisted) in sharing $1.8 billion of a $6.4 billion surplus.
But then, this sum does not include another $1.6 billion to top up endowment funds for workers, the poor and the elderly: $800 million to the Lifelong Learning Fund, $400 million to the Eldercare Fund and $200 million each to MediFund and the ComCare Fund.
As for the argument that the Government should refine its forecasting methods, let us just remember that a forecast is just plain guesswork based on the state of knowledge at any one time.
A year ago, the property market was in the doldrums. No one could have predicted its dramatic recovery. And who can say what the market will be like 12 months hence?
The fiscal conservative in me often gets an airing this time of the year, with the need to counter the rising wave of expectation of greater bounty from the state.
In fact, as MP Baey Yam Keng noted, the timing of the Budget near the Chinese New Year may have created an expectation that the Budget equals hongbao-giving time.
On this, Mr Seng Han Thong had the response I found most sensible: If surpluses accrue, hongbao should be given out, but only to those who need them.
He cited the old Chinese saying that wealth does not last three generations. It is worth noting that this Government is being led by the third generation of leaders.
Can Singapore become poor again, one student asked at a dialogue session on the Budget.
With its hundreds of billions in reserves and investments and a PAP Government that keeps tight control on spending, it may be hard to fathom such an eventuality.
But the political pressure to over-spend cannot be underestimated.
MP Sam Tan warned of the political power of the 'grey' lobby, citing the case of Israel, where the Pensioners Party won broad-based support on the back of pension promises.
There are also soft-hearted (or soft-headed depending on your point of view) liberals on both sides of the political fence in Singapore.
Many Singaporeans support the increases in spending on the bottom 20 per cent in the last five years.
But others favour increased spending on all social services. Yet others, including PAP MPs, want subsidies for the middle-income.
One MP yesterday argued that even the high-income deserved subsidised housing.
MP Christopher de Souza, 32, spoke up for young couples when he argued for a rise in the income ceiling to buy subsidised Housing Board flats, to accommodate young couples whose hard work and rapid promotions put their incomes just beyond $8,000 a month.
They needed subsidised HDB flats as they could not afford 'pricey' resale flats or private condominiums, he said.
Two counters to this argument: First, $8,000 a month puts such couples in the top tier of their age group.
Second, it is fallacious to say they cannot afford resale flats. A loan of $300,000 will buy them a four-room flat in most estates. Repayment over 25 years at 3.5 per cent is $1,500, less than their combined Central Provident Fund contributions.
It is a sad day when bright young professionals develop a sour-grapes mentality to subsidies and demand a share of state funds they do not need.
That, to me, is an argument to tighten subsidies so that only the needy get them, not an argument to liberalise them further.
I would prefer subsidies to go to those such as MP Indranee Rajah's Henderson constituents. One lives in a bin centre, where dustbins are stored. Another family was split up, children farmed out to different relatives, because they had lost their family home.
Her plea: Raise the supply of subsidised HDB rental flats for the low-income.
As Parliament debates the Budget over the next two weeks, more MPs will call for increased government spending on pet projects: on health care, for the needy, for the disabled, for the old, for the young, for the arts, or to promote family ties.
It is timely to recall that the Finance Minister is not the God of Fortune and that not all calls for spending have merit. Even if there is a $6.4 billion surplus.
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MP Low queries gap between expected budget deficit and final surplus
By Chio Su Mei, Channel NewsAsia | Posted: 25 February 2008 2110 hrs
SINGAPORE: Opposition MP Low Thia Khiang questioned the gap between the initial projection of a budget deficit of S$0.7 billion and the final reported surplus of S$6.4 billion in Parliament on Monday.Speaking in Mandarin, the MP for Hougang said this reflects the government's inability to project the nation's financial status accurately, which he said is a cause for concern.
But now that there is a surplus, Mr Low argued that the government should use the funds to counter rising costs, and also lower the GST to help the lower income group.
bull - >> Responding to Mr Low, the MP for Yio Chu Kang, Seng Han Thong, said the government has always exercised prudence, and any budget surplus, is always good news.
Mr Seng rebutted Mr Low's view that not enough has been done to help the needy.
bull - >> He pointed out that a low-income family could receive as much as S$3,200 in subsidies under the 2008 Budget. - CNA/vm
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The poodles all need to go back to school for maths.
One dog already made a boo boo about how much a taxi driver made per month.
Another dog still dare to come out and bs about the subsidies.
He is forgetting that the amount is paid ONE time and not every month.
Taking the ridiculous inflation that is happening and not in check, the amount would not even be enough to pay the bloodsuckers that gave the penny.
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You know what, if you wanna use poor people as a case, why don't you look around here?
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MP Christopher de Souza, 32, spoke up for young couples when he argued for a rise in the income ceiling to buy subsidised Housing Board flats, to accommodate young couples whose hard work and rapid promotions put their incomes just beyond $8,000 a month.
They needed subsidised HDB flats as they could not afford 'pricey' resale flats or private condominiums, he said.
Two counters to this argument: First, $8,000 a month puts such couples in the top tier of their age group.
Second, it is fallacious to say they cannot afford resale flats. A loan of $300,000 will buy them a four-room flat in most estates. Repayment over 25 years at 3.5 per cent is $1,500, less than their combined Central Provident Fund contributions.
I would like to argue on this point.
The government has claimed that average household income has rose over the last few years. This factor alone will make more couples not eligible for the subsidy. So where do the extra money go to now? Our budget surplus? In my opinion, the ceiling should be pegged to a percentage of the average household income.
In addition, inflation has also been constantly around, and rose till 6.6% in the previous month. The spending power of money has thus been constantly on the decrease. With this in mind, shouldn't the $8k ceiling be raised since $8k a few years ago is worth more than $8k in 2008? Not raising this ceiling will only make the real income ceiling to be dropping year after year due to inflation.