Budget 2020: Silver Lining in the Stormy Clouds

On 17 February, the day before Deputy Prime Minister and Finance Minister, Heng Swee Keat delivered the Budget Statement, it was reported that Singapore’s economic growth for 2020 would be revised downwards (between -0.5% and 1.5%)[1]. Synchronously, the number of COVID-19 cases in Singapore continued to increase as the days went by. Naturally, Singaporeans were rendered trepidatious as 2020 seemed to be a year marked by ambiguity and apprehension. On 18 February, the Finance Minister presented Budget 2020 to Parliament. Mr Heng systematically detailed programmes to assure Singaporeans that they were not alone as the government would be there to support them every step of the way. On this note, Budget 2020 is paramount as the government sought to allay widespread fears of uncertainty amongst the citizenry.

Budget 2020 is not only a sensibly generous budget, but also one that is grounded in the urgent need to provide Singaporeans with the much-needed impetus to look forward to the future sanguinely. In spite of its formidable foundations, the Singapore economy in 2020 is projected to slow down as the world economy continues to face grave uncertainties stemming from the resurrection of trade protectionism and incessant US-China trade wrangling. As an export-reliant economy, threats of continuing commercial war between the two largest economic titans will only serve to render growth lacklustre and undercut employment opportunities for Singaporeans. With this in mind, the Finance Minister has put forward an expansionary fiscal plan that provides financial, as well as psychological stability to both Singaporean workers and firms as they brave through this protracted phase of gripping nervousness. To demonstrate the government’s resolve to spread hope over fear, a $4 billion package[2] was announced to ensure that workers across an assortment of industries would stay employed and businesses remain afloat.

As part of this Stabilisation and Support Package, a temporary Jobs Support Scheme would be inaugurated to support firms in retaining local workers. This assistance scheme would be in the form of offset wages – for Singapore Citizens or Permanent Residents in the labour force, the government will offset eight per cent of their wages, up to a monthly cap of $3,600 for three months[3]. It is forecasted that approximately 1.9 million local employees stand to benefit from this programme and firms will get significant tax breaks as they cope with plummeting revenues given a sluggish economy[4]. To stress the centrality of continual skills upgrading, a one-off $500 SkillsFuture top-up will be made available for every Singaporean aged 25 and above[5] as part of the government’s endeavour to support workers to learn new skills amidst a dynamic economy.

Critically, I argue that Budget 2020 offers optimism to a society overwhelmed by fear of COVID-19, as the latter not only weakens economic prosperity but also the psychological fortitude of Singaporeans. In view of this, the Finance Minister swiftly allocated an additional $800 million to this Budget to support the frontline agencies fighting to arrest the outbreak[6]. The stimulus package along with additional funds set aside to combat the permeation of the infectious virus,

I contend, is notable as it proves the government’s flexibility and pragmatism when formulating budgetary provisions. For far too long, this government has been critiqued for its neoliberal and pro-business economic policies, but this budget only serves to accentuate the government’s willingness to gravitate to the left according to the exigencies of Singapore’s socio-economic milieu.

Through its ideologically malleable policies, the government underscores the dictum — ‘there is a time for everything’— depending on the context of the time.

Henceforth, in times of mounting anxiety, a budget brimming with hope is undoubtedly the right antidote, as societies do not get resilient through fear, but by remaining optimistic even in the darkest hour.

Whilst commentators and economists continue to be enraptured by the details of the 2020 Budget, it is equally noteworthy to peruse the political implications that the budgetary allocations may have as the People’s Action Party (PAP) readies its political machinery for the next general election. Prior to the surge of COVID-19 cases in Singapore, pundits had prophesied that the 2020 Budget would be the last before the Parliament’s dissolution. However, since national attention was shifted to efforts battling the virus, such claims understandably waned. I argue that Budget 2020 may very well be the final one before the PAP goes to the polls. Even if it is not the ultimate Budget before the polls, its programmes will continue to undergird and colour the PAP’s political discourse in the next general election.

Essentially, Budget 2020 underlines PAP’s central role as the prime sentinel of the Singaporean working class. To illustrate, a $1.6 billion Care and Support Package for households was rolled out to help them with expenses and the planned increase in goods and services tax (GST) from 7% to 9% in 2021 was suspended[7]. Moreover, the government will provide an assurance package when the GST rate is raised — a $6 billion package for Singaporeans to cushion the increase.

Majority of Singaporean households will receive an offset to cover at least 5 years’ worth of additional GST expenses incurred[8]. On the whole, a young family can expect to receive about $1,300 from the package, while a three-generation family may receive about $1,800[9].

By scrutinising the programmes detailed under this Budget, one can plausibly surmise the discernible shift in the government’s approach towards social spending, from the customary centre-right to the economic left. This move would only have been possible if the government had been fiscally prudent over the past decades. Having said that, the increase in social spending is laudable and a politically astute move as the PAP is now in a leading position to outmanoeuvre the bevy of centre-left opposition parties, which recurrently harp on the incumbent’s seemingly pro-business orientation. Through the benevolent nature of Budget 2020 and the government’s resolve to ameliorate economic inequalities affecting all, the PAP is likely to galvanise Singaporeans from a panoply of constituencies to give it a strong mandate in the next election. Evidently, Budget 2020 pursues to appease a litany of materialist and non-materialist needs of the people: economic steadiness, job creation, and climate change alleviation. Presented with an ample range of sustainable benefits and support programmes under a competent government, it is unlikely that Singaporeans will want to forfeit stability and progress for an uncertain future.

Moving forward, the fourth generation PAP leaders must remain sensitively attuned to the morphing needs of the Singapore society. Also, people are bound to make comparisons between the present leaders and the old guard, but this should not enfeeble their doggedness to bring Singapore to greater heights.

Pivotally, the government has to approach the people with a listening heart because gone are the days where the heavy-handed and iron-fisted method of implementing policies was effective. Singaporeans today value non-paternalistic and constructive engagement with political representatives where their views are earnestly taken into consideration before as well as after policy formulation. As the Singapore economy restructures, our workers must be given substantial support to boost their wages and help them stay employed. In ensuing budgets, more protection should be accorded to our low-income workers and those who are involved in the gig economy as Singapore embraces the Fourth Industrial Revolution. Finally, privileged Singaporeans must be willing to contribute more in the amelioration of income inequalities as the government aims to enhance the progressive workings of our taxation system. Surely, Singapore will continue to prosper if only our most vulnerable are well taken care of, as no society is able to enjoy uninterrupted stability if the governing establishment solely safeguards the parochial interests of the top one per cent. We all must bear in mind that it is the industriousness and tenacity of Singaporeans which keep this nation perpetually spirited. Ultimately, Budget 2020 augurs a future teeming with optimism as Singaporeans, with the support of the government, continue to seize opportunities and persist even in the face of insuperable adversity. ⬛

1 Ovais, S. and Sue-Ann, T. Singapore Downgrades 2020 Economic Growth Forecast to between -0.5 and 1.5% on Coronavirus Impact. The Straits Times, February 17, 2020.
2 See Kit, T. Businesses Welcome S$4 Billion Package As Timely Relief, But Some Say More Help Needed. CNA, February 19, 2020. Available at: https://www.channelnewsasia.com/news/singapore/4-billion-support-package-timely-relief-businesses-more-help-12447786.
3 Singapore Budget 2020 Full Coverage: Covid-Hit Sectors to Get $4b and Gst Hike Moved to 2025. Singapore Business Review. Accessed February 25, 2020. https://sbr.com.sg/economy/in-focus/singapore-budget-2020-full-coverage-covid-hit-sectors-get-4b-and-gst-hike-moved-202.
4 Johannes, T. Budget 2020: 5 Things to Know about Measures to Help Singapore Households with Living Costs. CNA, February 21, 2020. Available at: https://www.channelnewsasia.com/news/singapore/budget-2020-care-support-package-5-things-to-know-12446486.
5 Amelia, T. Singapore Budget 2020: $500 SkillsFuture Credit Top-Up for Singaporeans Aged 25 and Above. The Straits Times, February 18, 2020. Available at: https://www.straitstimes.com/singapore/singapore-budget-2020-skillsfuture-credit-top-up-of-500-for-singaporeans-aged-25-and-above.
6 Grace, H. Singapore’s Deep Reserves Allow It to Quickly Roll Out Budget Measures to Tackle Coronavirus Outbreak, Says DPM Heng Swee Keat. The Straits Times, February 17, 2020.
7 Linette, L. Singapore Budget 2020: GST Hike Will Not Take Place in 2021; $6b Assurance Package to Cushion Impact of Hike. The Straits Times, February 18, 2020.
8 Fiona, L. Budget 2020: S$6b Package To Cushion Impact of Upcoming GST Increase. The Business Times, February 18, 2020.
9 C. Caring For Singaporeans, Building an Inclusive Home. Singapore Budget 2020. Accessed February 25, 2020. https://www.singaporebudget.gov.sg/budget_2020/budget-speech/c-caring-for-singaporeans-building-an-inclusive-home.


Firdaus Hair graduated from the National University of Singapore with a Bachelor of Social Services (Honours) in Political Science, and he is now pursuing his Masters of Science in Asian Studies at the S. Rajaratnam School of International Studies at Nanyang Technological University.

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