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This year’s budget

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This year’s budget, like last year’s, have schemes to bailout businesses.

A portion of both budgets goes towards paying the wage bill of businesses (Job Support Scheme), although that is not the only bailout scheme.

One can look at the schemes as supporting jobs or one can look at them as bailing out businesses – on the one hand, without state support, some of these firms will fold and employees will be laid off, on the other, the capitalist and investors ought to take business losses as they take profits. It is not fair for the state to help pay the wage bill when the dice doesn’t roll in the business owner’s favour.

As a result of the bailouts as well as schemes to mitigate Covid-19, more than $50B of our reserves have been used and the government will want to recoup whatever it can.

In announcing this year’s budget, DPM Heng says GST increase will be “sooner rather than later”. Also, low value goods, which were previously exempt, will now be subjected to GST. Petrol duties have also been raised with immediate effect.

These are all regressive taxes that affect the poor more than the rich. As it is, Singapore is already a rather unequal society, which if left unchecked, can render societies dysfunctional.

Why doesn’t Mr Heng implement progressive taxes that affect the rich, rather than the poor, like capital gains tax, inheritance tax, or simply increasing the corporate tax rate as well as the tax rate for high income earners?

Those who have benefited unfairly from the bailouts are the rich shareholders, big business owners and investment funds. This is because many big corporations, including GLCs, are deemed too big to fail. In bailing them out, the government is also bailing out the business owners and rich shareholders. Yet, when it comes to recouping some of the money, the rich shoulder only a fraction of the burden while the ordinary and poorer folks shoulder the bulk.

The G is quick to point out that social transfer from the rich to the poor help to mitigate inequality. Examples include GST vouchers and Workfare. But in this case, the social transfer is the other way round and will exacerbate inequality. Doesn’t seem right to me.

 

Foong Swee Fong

 

 

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16 Responses to “This year’s budget”

  • WakeupSG:

    The GST is a regressive Goondu Stupid Tax from the pappy stupid govt that burdens the poor & has minimal impact on the rich which should be scrapped! By making parents pay for the baby milk & diapers etc with GST is STUPID! By making the families of dead pay for the coffin & cremation etc with GST is STUPID! etc etc.

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  • TEMUSIK PATRIOT:

    How MUCH can you tax the 2%???…50% increase in tax for them and it will trickle DOWN to the 98%…

    So??? spin the narrative of Investor CONfidence and what shit that says we need Billionaires to Park their Wanton monies here…

    98% only 1-2% increase leh!!! transport only 2-5 cts increase leh!!!

    They the ArseHole has Mastered the Art of “How to collect More MONEY”

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  • opposition dude:

    Ha ha ha GST vouchers and Workfare indeed. How many GST vouchers does the average household receive a year and how quickly is it used? Likewise for Workfare, how much is received by the recipient monthly and how much of it conveniently goes to CPF which the recipient cannot spend it?

    Rather than have these silly schemes it would be far better if NTUC actually reduced the prices of their products during this recession and CPF top ups for,say,those who are 50 and above having less than 100k in their accounts.

    We are in a recession now but not surprisingly our kopi is still something like $1.20 and chicken rice $3.50. Rents aren’t coming down because greedy reits and PAP are unwilling to lower them. If the cost of living actually came down we wouldn’t need so much government assistance.

    But just wait for PAP to come out with all sorts of excuses about why they aren’t doing anything to reduce the high cost of living.

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  • opposition dude:
    We are in a recession now but not surprisingly our kopi is still something like $1.20 and chicken rice $3.50.Rents aren’t coming down because greedy reits and PAP are unwilling to lower them.If the cost of living actually came down we wouldn’t need so much government assistance.

    But just wait for PAP to come out with all sorts of excuses about why they aren’t doing anything to reduce the high cost of living.

    In China during teh C19 pandemic, the Chinese authorities took lead and private businesses followed suit. Commercial rents were reduced or voided as much as 50% and banks took the lead also to allow their debtors to restructure their mortgages, loans, etc.

    I remembered even Ant Finance delayed repayment for up to 3 months and alongside other finance companies, voided interest/delayed repayment for all frontline workers, especially medical workers.

    Not sure if Sinkieland did this, most probably not since doing so would mean no million-dollar year-end bonus liao.

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  • left behind:

    Well written article.
    To add, the budget spending of 107 billions dollar is inefficient and ineffective. Spending on areas like failed business that do not generate money and GDP growth. Remember last year they also also spend on free bailout for business but the GDP is negative. 100 billions dollars consist of about one third of GDP, suppose to generate positive GDP but negative is the result. Now if the economy is so lousy over decades of building that even inject of 100 billions dollar cannot generate positive growth; then what will happen if no fund injected, negative one third GDP? The budget is a waste of public fund all these years with lots of wasteful spending in the big name like green, innovation and defence where fund are inefficiently and ineffectively used, creating a zombie economy.

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  • xoxo:

    As yet again,*WHATS WRONG WITH COLLECTING MORE MONEY * from daft peasants?
    They cant wait to vote for us?

    H$K learns fast how to screw sgs as dafts seem to enjoy the $crewing GE after GE?

    Why worry?
    Take another $100 Billion and just plug the hole$ with money collected from daft sgs.
    So simple…hahaha!
    I am the most well-paid Finance Minister with the easiest job!

    All thanks to daft voters.

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  • WakeupSinkies:

    WakeupSG:
    The GST is a regressive Goondu Stupid Tax from the pappy stupid govt that burdens the poor & has minimal impact on the rich which should be scrapped! By making parents pay for the baby milk & diapers etc with GST is STUPID! By making the families of dead pay for the coffin & cremation etc with GST is STUPID! etc etc.

    The real stupid ones are those who voted pap & kpkb – https://theindependent.sg/delivery-and-ride-hailing-drivers-call-petrol-duty-increase-really-unfair/.

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  • PAP is Finished:

    Interesting to see the kind of businesses they bail out. th govt linked ones or the small mum and pop shops?

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  • Harder Truths:

    Firstly – the 61% have already decided for the rest of us that $G citizens must foot the bill for all the businesses and FT affected by the downturn. No point saying anything further. This is what it is.

    Second point – this is going to be a LONG Economic Winter. The US is in a Great Depression and their economy will take decades to reverse its current course. The stock market means nothing when it is artificially being bloated by Federal Reserve bailouts.

    Once the US is in trouble, so is everyone else for that matter. China is a producer, not a consumer nation. The EU is also being bailed out by the ECB. Japan has been in a Depression for the last 30 years and with two lost generations unable to afford a decent standard of living.

    What happens to the US and EU happens to us. We will experience the same type of Depression for a long long time.

    The regime’s response is to pretend everything will be ok in a year or two. What are they going to do when the economy does not improve for a longer time? They have no idea.

    The regime is unable to Make $G Work Again. So be prepared for that.

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  • DPM Heng talking cock AGAIN:

    Strait Times: Singapore hopes to balance its Budget as economy picks up: DPM Heng

    More PAP bullshit. The Budget does not really need “balancing” because it is ALWAYS more than balanced if the self-funding stat boards (do not depend on Budget for financing) like LTA, SLA (sells ZERO cost state land to other stat baords like HDB, JTC, etc.), CAAS, URA, etc. are taken into account. These stat boards together makes BILLIONS annually AND are holding BILLIONS MORE as “hidden reserves” for the government. They very seldom return money to MOF because of perennial Budget surpluses. Public sector accounting is cash instead of accrual based so the massive profits made by the above stat boards are not included in the Budget.

    “Balancing” the Budget is the cover story for the implementing asap the GST increase to 9% announced before the elections last year. The PAP needs to replenish its “war chest” for elections (aka Government reserves) because it had to spend billions for tackling the pandemic at foreign workers dorms. PAP’s stupidity and incompetence in ignoring the public health risk posed by the over-crowded, dirty dorms cost Singaporean taxpayers billions.

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  • xoxo:

    H$K says * THE PAP G “wants” to BALANCE THE BUDGET and INTEND TO RAI$E G$T sooner than later….?.?..???!

    Walans,so GARANG!
    So,you take Our Money,give to NON-sg FTs and spitefully throw sgs $600 out of a per capita of $23K and now ,instead of BALANCING WITH INCOME TAX($100 TO SAVE JOBS),YOU want to $uck Blood money from those receive pittance out of $100 Billion?

    This is not only REGRE$$IVE,IT IS UNFAIR N ERRANT GOVT CONDUCT!

    ROB FROM SGS RESERVES TO SAVE JOB$ FOR ALIEN$ (WHO WERE HELPED TO steal our jobs) and then PLUG THE HOLE$ BY TAKING FROM THOSE WHOM YOU REFUSE TO HELP AND THEY ARE NEEDY SGS???

    GO FLY A KITE,H$K.
    YOU DONT UNDERSTAND BASIC CONCEPT OF BALANCING SOCIAL COSTS WITH THE RIGHT SOCIAL BENEFITS!

    BETTER GO BACK TO ECONS 101!
    AND,YOU HAVE MULTIPLE DEGREES?

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  • WOWO:

    Nothing about ministers pay cut to jointly shoulder the burden to be in solidarity with the people!

    Really washout govt!

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  • Soccerbetting2:

    This budget implement so many unnecessary taxes to feed the e*** backside of the whole e*** women wing until Shin Min just reported that a single mother need to pay over $3000+ for changing out a water heater during Chinese New Year period ! All the cost had skyrocketed unnecessary ! Just ask why Heng Swee Keat need to increase unnecessary all those nurses hospital staff salaries during the pandemic period when nursing staff are really over welfare and over paid in salary and bonuses ! Still want to increase GST,implement online GST,and carbon tax ! Singapore second minister of Finance b**$* e*** woman Indranee Rajah doesn’t know that just increase one small tax will cause the whole chain of line to skyrock all items .Even petrol price want to increase ! If Indranee Rajah don’t shoot down Heng Swee Keat and Heng Swee Keat don’t shoot down Indranee Rajah ,then who is there to voice out all the unnecessary increase in tax by the government e*** women wing ? Pui !

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  • Hillion:

    Pap so established and yet like so novice.head got wind.

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  • PAP is Finished:

    Regressive tax benefit who?

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  • PAP cannot justify $100 B:

    PSP’s Poa”

    “MAS also estimated that the measures saved or created 155,000 jobs. To put the numbers in perspective, if we were to pay 155,000 people $4,000 per month, it would cost us $7.4bn per year.”

    Why PAP so so ineffective and inefficient. Spent / waste $100 B for something that is valued at less than $7 B?

    If this gov had simply distributed $23,000 per citizen, the economy would be blooming and booming. Instead, they wasted billions and billions on profitable companies.

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