Thursday, January 29, 2009

Singapore Budget Discussion

BREAKING NEWS : Jan 30, 2009 SINGAPORE'S unemployment rate rose to a seasonally adjusted 2.6 per cent in the fourth quarter from 2.2 per cent in the third quarter as the economy weakened, the government said on Friday. It also said job growth slowed to 26,900 in October-December from 55,700 in July-September. -- THOMSON REUTERS

In Singapore when they discuss the budget, they gather people who have plenty of soft questions, show support and praise for what our govt has done. During the Istana Open House, the ChannelNewsAsia filmed a friendly President Nathan going around telling the visitors be appreciative of what the govt has done because it has gone "out of its way" to help Singaporeans this time.

The more I think about the budget, the more I begin to appreciate how interesting it is....when more people go through it, it is actually a budget of many interesting things.....

One of the unprecedented things the govt did this time was to tap the reserves. I think that was why President Nathan said the govt has gone all out to help Singaporeans this time. I thought the reserves belongs to Singaporeans so why is it a big deal to use it to help Singaporeans? But it does get more interesting if you think more about it. Under the current govt they actually had huge surpluses including the gigantic one due to the GST increase. If you do the sums (anyone come to a different conclusion, please post a comment), there is actually no need to dip into the reserves because the govt can spend this current surplus. This surplus thing gets more interesting because it does not include land sales which brought in billions during the property bubble. So the first interesting point is this, the govt has dipped into reserves when it didn't need to do so to fund this package...now you know why they have gone out of their way.

The 2nd interesting point is the biggest idea in the budget,the Jobs Credit, which is intended to help Singaporeans. It helps Singaporeans by giving companies a wage subsidy...i.e. it helps Singaporeans(+PR) by not helping Singaporeans directly. Heck this idea is really interesting because this Jobs Credit gives money to all companies...gee the govt even gives money to itself because it is the biggest employer in the country. This idea has been sold as a "jobs saver" by our newspapers for a few days. Companies are retrenching workers not because their wages are too high but because demand has fallen sharply. Look at it this way, they are losing jobs by the millions in China where wages are very low. ...in the current situation, we are not losing jobs to China or India due to higher wages, the current bout of retrenchments is caused by a fall in demand. The main goal of the budget is saving jobs, something that cannot be done effectively since the govt has created an economy that is largely dependent on external demand.

The next interesting point is what the budget did not do. The greatest fear for most Singaporeans being jobless. Unless you have been living in your closet, you should be able to figure out that thousands of Singaporeans will be jobless in the coming months. The budget does not address this huge problem that is coming. Interesting isn't it? A budget that goes "out of its way" to help Singaporeans but does not address the biggest problem that Singaporeans are facing. A related problem is the arrears for HDB flats....about 8% (probably more by now) have defaulted on their loan ....don't these people need help? The Jobs Credit will be giving money to companies such as Intel, Microsoft, SIA, SMRT...which are cash rich. Why not give money to the people who needed instead of companies that don't need it? Because of the high cost of living in recent years, Singapore families will be entering this recession with the worse household balance sheet ever, this makes it a double whammy. It is not the fault of families to be in such bad shape because everything from transport, medical to housing was hiked continuously during the good years making it hard for them to save.

It is very interesting to watch these discussions on TV and they can actually talk for 1-2 hours and miss out on all the key issues affecting Singaporeans most.








42 comments:

Anonymous said...

Very shallow. What type of a discussion is this ? More like propaganda

Anonymous said...

what kind of elites do we have in charge of this country? i'll tell you what kind, the kind of lizard brains that say things like “ in a tract, there is no room for debate at all. mere statements. a book, on the other hand, encompasses different points of view and arguments” and on that basis, we should charge the couple for distributing seditious publication because, there are bird brains out there who might misread road signs and get into accidents.

in fact, if the state wants to protect “virginal minds” from “ harmfool indoctrination”, they should be more concern of our educated class from accessing these outright offensive seditious materials readily available in all our libraries and bookshops because, intellectual idiocy is far more dangerous than intellectual deficiency.

seriously, what do you expect the young and immature to do who reads comics? lead a revolution?

fucking elites!

Anonymous said...

Discussion on CNA? I'll pass. Won't be missing much I'm sure.

Anonymous said...

The budget sucks.
Despite my dislike for PAP, I have plenty of respect for Tar-man and I can only imagine that he is preparing for off-budget measures.
Sooner or later he needs to provide more ntuc vouchers for the needy.

Cant believe we are spending more on defence :-S

Anonymous said...

joke

Anonymous said...

The "discussion" is as fake as the virtual studio backdrop behind the clowns.

Absolute WAYANG so typical of PAP.

ArtBoon said...

Try this

yamizi said...

Lucky,

This is what we call Uniquely Singapore mah!

You don't know meh?

Anonymous said...

I love the circular logic of Swee Say in ST today - where the job credit is to help the people and not the companies - it was such a spinning good yarn that I completely lost the plot.

Anonymous said...

I was wondering why put the $5.8 billion, to guarantee loans by banks, into the budget when it is unlikely to be utilised since banks are not yet willing to lend to SMEs.

And as pointed out, a huge chunk of the $5.1 billion for jobs credit eventually ends up subsidising GLCs, Stat Boards and Government-linked bodies. I think much of the $20 billion extraordinary budget is just padded up to make it look, well just extraordinary.

Lost Citizen

Anonymous said...

Hi Lucky, really appreciate your insight. You've dissected the issue very lucently and simply for people like me to understand.

I concur very much with you that this jobscredit scheme will not help much to prevent companies from keeping labour on payroll when there's no demand at all.

As such the Budget should be providing targeted help at the jobless and soon-to-be jobless strata of the population instead.

I wonder whether we will ever get to see the light at the end of this tunnel.

Anonymous said...

Hi Lucky, really appreciate your insight. You've dissected the issue very lucently and simply for people like me to understand.

I concur very much with you that this jobscredit scheme will not help much to prevent companies from keeping labour on payroll when there's no demand at all.

As such the Budget should be providing targeted help at the jobless and soon-to-be jobless strata of the population instead.

I wonder whether we will ever get to see the light at the end of this tunnel.

Anonymous said...

I watched the Budget Discussion on TV on Budget day. The panel included 2 employers, 1 NTUC rep, 1 CCC head and 1 economist. Of these 5, the one neutral participant is the the economist. I was sickened to my stomach to see the session turning into a thank-the minister one by the other 4 panelists. In particular the head of the Singapore Manufacturing Association was gleeing from ear to ear and almost on his knees thanking and praising the minister for the budget. The NTUC and CCC panelists didn't raise the plight of those workers retrenched and those to be retrenched and the inadequate help given to ease their cashflow problems while seeking re-employment. Only the poor economist tried to raise issues on the inadequacies of the budget but he was literally hushed off by the others. No one raised a question on why no means testing is in place for the Job Credit program so that well-to-do employers don't get ang-pows. It is wrong and unjustified that the people's reserves are used to fund this gift to companies instead of helping unfortunate citizens directly. Where they get help, they are subject to means testing, but not companies. Rotten.

It is clear that the govt. is more worried and mindful about mass corporate failures than individual insolvencies. The former gets more international attention and will be a slap in the face of its "miracle" economic model and reputation. People's financial problem is dosmetic and gets drown by macro data.

Anonymous said...

I thank the bloggers for countering and providing an alternative view to the other main media which, sickeningly, does not provide any indepth views or counterarguments of the companies.
However reading further, I believe the Job credit is not for Govt bodies or stat boards, so that point may be incorrect.

But I agree, where help is needed for the asset rich cash poor (eg in old terrace houses) to get C lass ward, there is means testing. But for Govt linked / Temasek held companies eg Singtel, SIA, DBS etc - all these just get a free lunch off the citizens of Singapore.

So while the poor dude who is retrenched, unable to pay HDB mortgages or electricity bills is left to fend for himself, all these money are to help the companies - rich companies with large cash hoard, without any means testing.
And we are to be thankful, so says Swee Says, that there is no CPF cuts. And the job credit is to help the people, not the companies - say what??!!

Anonymous said...

what is sick - imagine, DBS retrenched a few hundred workers already, the fewer workers left - their salaries are subsidised by me, the tax payers, so probably the profit reported next year will be less badly hurt and their Top Management continues to get top moolah - probably subsidised by our tax payer through the Job Credit scheme.

See How Obama slammed Wall Street for the high director's bonuses recently.

Anonymous said...

"In particular the head of the Singapore Manufacturing Association was gleeing from ear to ear and almost on his knees thanking and praising the minister for the budget."

his reaction is very telling who's the budget for and who, potentially, stand to benefit most.

the angmoh seems lost. the economist apt at throwing numbers. the lady asked a silly question which, in her position, could have figure it out. and the last one, restrained himself from offending the minister.

but the businessman dripping with drool all over the floor takes the cake. lol.

but seriously, if you can't track the dragon, there isn't much you can do.

Anonymous said...

Doesn't sound much different from what is happenning in USA, Government helping the rich bankers, car manufacturers, insurers, everyone except the citizens. I guess lesser mortals are dispensable whereas big corporations are 'too big to fail' so they deserve all the help.

Anonymous said...

Here is some perspective. These PAP clowns quibble and deliberate till no end about the SGD20 billion package of which 5 billion comes from the reserves. But no one mentioned about the USD24 billion extracted from the reserves to bailout western banks.

The PAP are right wing neo-cons, period.

Anonymous said...

1. Budget is good for businesses.
2. What is good for businesses is good for workers.
3. Hence, budget is good for workers.

Same logic as trickle-down economics.

tan said...

Well argued!

The reserve thing is interesting, to say the least!

You are spot on to say why there is a need to tap into reserve when we have surpluses this year!

There is a cynical plot, may be, to use this dipping into reserve to do some innovative accounting so that some of the losses in investment can be lumped into this exercise!

Anonymous said...

Hi anon 7.24pm, I agree with you that's what PAP are thinking & doing.

Hi anon 7.55pm, I think so too but I hope not coz if its real then that would be scary.

Thanks Lucky for highlighting why this is an anomaly budget. Sg has had surplusses for many years. Even last year was more than $10 billion. So what gives?

I just finish reading about Madoff today. I think it was Robert Schiller who said that a bubble is a natural ponzi scheme.

To give 4% p.a returns on $1million is easy.

To give 4% p.a returns on $200billion is a different game altogether.

Cheers

Economist with a Heart :)

Anonymous said...

Whether individuals can cope with recession and joblessness is not the main concern of the gahmen. Why so? Because people will still give their support to the gahmen. Remember the 2001 election in a recession year and where there were record walkovers and highest % overall score for the PAP for the contested ones?

The second thing is Singapore is a small country with a small population. Even if you give money to the folks, the impact on stimulating the economy is limited, unlike in bigger countries like Taiwan or Japan.

Thirdly the folks here are peace loving. No matter how painful their suffering, they will not protest in any way. So there won't be news headlines on riots or demo. Therefore everything appears OK.

That's why the Budget is designed the way it was.

If I were Tharman I would have done the same thing, given the above situation. Why not? Haha!

Anonymous said...

2nd anon from the top
Lucky's post is not abt the sedition case currently going on in the court, so I don't know why you want to anyhow jump to that topic. But since you want, here's my counter argument to your nonsense:

There's a world of difference between a book/tract in a bookshop/library versus a book/tract sent to a person's home! In the former, you have to consciously go visit the bookshop/library in order to consciously view the said book/tract. In the latter, it is sent to you without you wanting to read it!

I am an Atheist. I have lots of books on the folly of believing in God in my home library. You can choose to visit and read it, or not. And if you do, you can't blame me for any emotional distress you suffered as a result.

But, how would you like it, if I photocopy several pages on how your Christian God is non-existent, or if He exist, he is a violent, barbaric God under the erroneous delusion that He is the creator when he is not, that nobody should kowtow to His nonsense, and then sent it via postal mail to you and several hundred other Christian, without your permission, such that you would inadvertently have to read it, whether you like it or not? Would you be offended?

Wat you mean fucking elites? Fuck YOU!

same as above said...

2nd anon from top down,
The state is not trying to protect "virginal minds" as you alleged. It is trying to protect innocent citizens from being bullied by barbaric Christians who send offensive anti-Muslim postal mails to hundreds of Muslims!

If you find such a protection wrong, please provide me the names and postal address of 100 of you and your fellow Church Members. I will make sure they each receive in their mailbox a tract/book detailing how Jesus is a charlatan and a crook, who is delusional and mentally unstable, and therefore thought he was communicating with his father in heaven when he was actually talking to himself and hearing voices.

Would you like that, you lizard brain?

FYI, you may think you are glorifying your religion by doing what the 2 ass-hole who were charged in court did. I tell you: you are harming your religion! Day by day, I am getting more and more disgusted with Christianity and Christians, thanks to people like the 2 charged, and you!

FU!

Anonymous said...

I am just waiting for something to happen.

About 10 years ago, our government decided to incorporate the PR population into the employment figures just so that it can boast an increase in employment just before the elections.

Now that there might be an exodus of these "FT"s, it is only natural that the employment figures will be affected as well.

Unless, the government changes the criteria for measurement again this time round.

I am just waiting to see what the figures will be when MOM releases the data collected. This data will come just in time for the election in 2010.

hehe

Anonymous said...

I am a bit puzzle by this notion of "past reserve" raised by the Finance Minister. Really not sure what it means. Can someone please explain?

Does it mean:

(a) That money drawn down from investment that are performing well?

(b) Surplus from previous budget?

In the case of (a) would it not mean if you draw from good performing investment, and the government is now stuck with bad investment (UBS, CitiBank, etc)? So the portfolio left will be bunch of shitty ones?

In any case, if you draw from the investment, say MOF going to GIC and Temasake for money now, what money raised will be value at current price, so in which case the term "past reserve" is meaningless, if not misleading, isn't it? Some kind of spin maybe?

In case (b) if it surplus accrued from the realisation of last budget, then the government is not really "dipping" into the reserve at all. It is simply money that was not spent the last time that it is planning to spend in the year to come. So is the use of the term reserve meant to be some kind of spin?

Can someone please enlighten me?

Onlooker said...

Aren't I glad to wake up at 4am to attend to a job created by our infalliable Foreign Talents(thanks for creating this messy spaghetti code to unravel and trace THE PROBLEM AT 4 AM).
Now aren't I'm suppose to be glad that a few indifferent people talk in a show about how they want to spend my Tax money when one thing came to mind.

How much money can/will they collect from GST when the economy shrink?

Or should I put it bluntly.HOW MUCH MONEY IS RAKED IN FROM INFLATED RENT, TRANSPORTATION (ERP,PARKING FINE), ELECTRIC BILLS AND WELL BASICALLY ALL THE NECESSITY OF OPERATION COST.esp cost that were government related service.

Now the next crucial question is this scheme sustainable?
Why remove the estate tax?

BTW,This is Way worse than how an "Visionary idiot" solved the problem in 1985(which lead to the mushrooming of GLC where only a few benefitted). Way worse. That also lead to him stepping down to pass the baton /pass motion to the Wooden Goh.

IE PRO-GLC Budget.

Citi have some Senile Moron (or is it Moron Mentor) in it's board, no wonder it's going under.

Lesser Onlooker Bacter

Anonymous said...

you see, you guys are talking about the dragon. you want to know where it's coming from, where is it heading and who will get to ride on it etc.

well, the old man with the white hair has just turned up to give a glimpse of the future.

he's talking about tracking the dragon further.

now would it mean a further lost of privacy for everyone and the inevitable fulfillment of the prophecy?

the black power too has spoken and rebuked the greed from the top we too are guilty of. more regulations are expected to follow.

somehow, you get the feeling their priorities are still .....misplaced?

hmmm.....

Budgetman said...

Lousy budget is better than no budget.

Anonymous said...

Why the govt is willing to share risk with the banks who give loans to borrowers? If the loan is a good one, the banks make money. If the loan is a bad one, the banks transfer 80% bad debt to the govt. In summary, this is privatising profits and socialising losses. It is unfair to the tax payers who eventually foot the bill. The govt should take a cut of the money that the banks made from the good loan. Could there be any hiddent agenda? For example, could it be that the govt is hiding behind the banks to facilitate giving loans to contractors who help to build the IR project. No body knows and no one dare to ask??

Anonymous said...

What do you expect from a group of under 30yrs to make the policies affecting Singaporeans?

These under-30 have not gone through any job loss since they have an iron rice-bowl. Obviously, just another assignment passed to them without thinking the bigger picture.

This is really a golden period
when every singaporeans are going to be jobless.

More good years ahead!

Anonymous said...

What do you expect from a group of under 30yrs to make the policies affecting Singaporeans?

These under-30 have not gone through any job loss since they have an iron rice-bowl. Obviously, just another assignment passed to them without thinking the bigger picture.

This is really a golden period
when every singaporeans are going to be jobless.

More good years ahead!

Anonymous said...

SYDNEY - AUSTRALIA'S prime minister has called for a 'new world order' of government intervention and regulation, blaming capitalist GREED for the global economic crisis.
Kevin Rudd's administration came to power in November 2007, ending more than a decade of conservative, free-market rule, and has already launched a series of stimulus measures in response to the crisis.
'The time has come, off the back of the current crisis, to proclaim that the GREAT NEO-LIBERAL EXPERIMENT OF THE PAST 30 YEARS HAS FAILED; THAT THE EMPEROR HAS NO CLOTHES,' said Mr Rudd in an essay previewed here Saturday.
'Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than PERSONAL GREED DRESSED UP AS AN ECONOMIC PHILOSOPHY,' he wrote, in a 7,000-word essay to be published next week in The Monthly magazine.
Aligning his views with those of new US President Barack Obama, and drawing on the experiences of Depression-era US leader Franklin D Roosevelt, the centre-left leader called for a 'NEW CONTRACT FOR THE FUTURE THAT ESCHEWS THE EXTREMISM OF BOTH THE LEFT AND RIGHT'.
'Minor tweakings of long established orthodoxies WILL NOT DO,' Mr Rudd said, advocating instead a new era of 'social capitalism' INVOLVING THE REGULATION AND INTERVENTION OF AN "ACTIVIST STATE".
But he urged his democratic colleagues not to 'throw the baby out with the bathwater' by returning to a model of the all-providing state, and said there was a place for open competitive markets, both at home and abroad.
Mr Rudd is expected next week to announce a second major stimulus package in response to the global economic crisis, which has already slashed thousands of jobs in Australia and eroded billions from government revenues.
Measures launched so far include a one-off US$10.4 billion (S$15.7 billion) dollar cash injection aimed mainly at families and first-home buyers to boost consumer spending. -- AFP

Personal greed dressed up as an economic philosophy? Tsk Tsk Tsk.

Go tell it to the naked old man. LOL.

Anonymous said...

I remembered being told of the following (before we raised the salaries of our civil servants);

“Your apartment will be worth a fraction of what it is, your jobs will be in peril, your security will be at risk and our women will become maids in other people's countries.”

So what happened? Property prices has gone south, thousands have lost their jobs, and Mas Selamat is still at large.

Sigh...

Anonymous said...

This under-30 years report is really interesting.

Here,the world has been told,every now and then,beside being constantly reminded by 154th,that a 86 years old sick looking man has so much experience that he has got to be here,or else all or problems cant be solved.

Now,in this latest spin,we are made to believ that this group of 30 years made all the recommendation to tackle this huge problem,that appears only once in a century,and in reality it really took all the old hands,such as Paul Volcker in USA to tackle the problem in the states.

No wonder Sinkies are so bloody confused,if they still have a brian,that is,fortunately most of them haven't already!

Anonymous said...

That's why in Singapore there are only 2 ways to make big money.

1. Go into business and earn the big bucks yourself.

2. Get a scholarship and become a admin service officer with high pay at a young age. When you reach middle age, and due to cumulative effect will have enough to retire if you are not a spendthrift. Provided PAP is still in power and Singapore does not disappear into the sea.

Anonymous said...

this country is strange. someone tries to save you( the intend was just) and instead of declining the offer if you feel help was not needed or appreciated, you beat up the couple.


and you know what? the law supports the violent person.

how twisted can you get huh?

currypuff said...

My agreement with the above comments that say this is a really shallow 'discussion'.
I confessed that I didn't watch the entire clip, because the first parts already demonstrated how pointless this talk show is. With the exception of the Song guy (the economist) everyone else seem more concerned about showing how earnestly they support the budget than asking any probing questions.
I am no economist, but I can understand 'balls carrying' when I see it.
If this is the way the upper echelons of society work, any wonder why our ministers appear clueless to the plight of the lower classes, being surrounded, as they are, by all these yes-men and bootlickers only too eager to please.
But for them to do this so blatantly in front of the camera on national TV just leaves me flabbergasted.
And to hear the minister keep repeating, "That is a good question."
Shameful.

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yatesspain.blogspot.com said...

It can't actually work, I believe so.

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