Wednesday, February 11, 2009

Summarise and comment on our 2009 Budget

Singapore revealed its 2009 Budget in Parliament on 22 January 2009. We flexed our muscle by announcing a $20.5 billion Resilience Package as Singapore faces its worst-ever recession. The Package aims to save jobs in the recession, and to help viable companies stay afloat.

It also introduces new measures that will prepare Singapore for recovery, and enhance Singapore’s capabilities and competitiveness for the long term. Some key initiatives includes:

1) Keeping Jobs for Singaporeans
Jobs Credit – employers receive 12% cash grant on the first $2,500 of each month’s wages for each employee on their CPF payroll
SPURS Enhancement – increase in course fee subsidies for PMET (professionals, managers, executives and technicians) level courses
Workfare Income Supplement Special Payment – special payment given to low-income workers and relaxation of work eligibility criteria

2) Supporting Families
* Personal income tax rebate of 20% (capped at $2,000) for tax residents for YA 2009
* Doubling of GST credits and Senior Citizens’ Bonus
* Additional months of service and conservancy rebates
* 40% property tax rebate for owner-occupied residential properties for 2009
* Increased tax deduction and additional grant for Government Funded Voluntary Welfare Organisations

3) Motor Vehicle Taxes / Rebates
Series of measure such as
* 30% road tax rebate for goods vehicles, buses and taxis for one year wef 1 July 2009.
* Various rebates on Green Vehicles and CNG Vehicles, etc

The other measures are for companies to stay competitive. Purpose is to
4) Stimulate Bank Lending
5) Enhance Business Cashflow and Competitiveness such as reducing tax from 18% to 17% and several tax rebates to businesses, etc
6) Build a home for the future by expanding and accelerating public sector, infrastructure spendings, rejuvenating neighbourhoods, spending more on education and healthcare, etc...

For our coffeeshop talk...

1) Its not a peoples budget. Most of us don't seems to get any money from the government despite being the largest budget ever announced. The main purpose is to delay companies retrenching people. Our government aims to keep job losses below 29,000 which is the figure seen in the 1998 Asia Financial Crisis.

2) Are we giving to those who are not in need? Some companies still make a lot of money in this downturn. Singtel still makes $800million in 3 months. SIA still make billion of dollars, etc... How much are we paying such profit making companies?

3) MTI forecasted -5% to -2% growth for 2009. Manufacturing is the first to be hit which are expected by the service and hotel sector. Are we doing enough to diversify our job sectors?

4) Our government still have a lot of leeway with its fat reserves. Are they going to be more pro-people? I really can't see money coming into my pocket for this 2009 budget...
a) GIVE US MORE MONEY!!! Maybe through coupons or CPF top-up, etc
b) Temporarily cutting GST to boost internal spendings
c) Weakening our currency to boost export, etc...

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