Budget impact
That $2.6B package
Singapore is tiny, can't put in this sort of money without some impact on the election - and the economy itself. By Seah Chiang Nee
Feb 18, 2006

Prime Minister Lee Hsien Loong announced a 'happy' bag of goodies that will probably wrestle back some support from Singapore's most disenchanted voters.

These are among the lowest-income groups, unskilled workers, the aged, who are left behind by Singapore's progress. During the past decade, globalisation had worsened their plights.

Whether it is the ruling People's Action Party's efforts to sweeten the election ground or not, these goodies are greatly needed by the people they're intended for.

There had been too many recent reports and photographs of homeless people, including whole families, living at void decks or the beach. I don't think anyone can complain about help given to them, whatever the motive.

If at all there is any complaint, it is the temporary nature of the cash awards. After the money is gone, what next?

Will it have any effect on the election? Yes. Singapore is a small place. You can't distribute S$2.6B without it affecting an impact on the way the beneficiaries will vote.

It will also impact the economy over time as this money will filter back into the local economy.

Benefits also cover first-time buyers of Housing Development Board flats, students, national servicemen and reservists as well as retirees.

The sums - $200 to $800 may not be much individually but added together, a family's total cash benefits will make a difference to people's lives.

Many of the the heartland's poorer residents were once the People's Action Party's staunchest supporters, but as the economy hit a stormy patch, their enthusiasm for the flash-and-circle had taken a blow.

Some of them had felt neglected, feeling their interests had been overlooked by the bigger goal of reducing business costs and the influx foreign workers. At the same time, housing values had declined and government services made more expensive.

Unlike the internet-savvy youths, these people are less articulate, suffering in silence and, it is feared, may express their unhappiness at the polling booths.

That the government is paying attention to relieve their plight and helping them has, I believe, gone to some extent to placate or even win them back.

It won't eradicate all anti-PAP unhappiness among the poor, but I think the PAP will benefit at the election from these measures. This could well have prevented any major upset for the government.

It couldn't have come sooner. Over the past few months, the opposition, especially the Workers Party, had taken the initiative, scoring some points.

Aided by many issues that upset public opinion, the opposition is now staging a strong challenge against PAP domination. The biggest involves bread-and-butter complaints.

A growing number of people also want a bigger opposition presence in Parliament to provide check-and-balance against possible excesses.

Adding to the uncertainty is that many stalwarts are leaving, replaced by a new team with little or no campaigning experience, their faces new to the electorate.

How many percentage points the goodies package will age to its tally remains to be seen.

In the last election, it won 75% of the election votes, but virtually no one whom I talked to expect this sort of response this time, despite the cheery budget.

Some people had talked of this being reduced to 62-65% this time with as many as 50-60 seats (2001: 29) being contested for the 84-seat Parliament.

It will take some time for the announcement to filter down to the people who benefit most, since they're less well-informed than the more educated Singaporeans.

The following points have emerged privately as discussions reverberate: -

* What the poorer will get the lion's share may evoke some discontent among those who do not benefit as much. But as a whole even the upper middle class will not complain about the more needy people being helped in this way.

* There is, however, some fears that it may be a give-today take-tomorrow strategy, meaning that charges and fees will go up after the election, and

* PM Lee said the budget deficit of $2.9B arising from these measures will come from reserves accumulated since 2001, the tenure of the present government. It is bound to instill concern that it may become a strategy for the future - four years of reserves accumulation to be given away on the fifth - i.e. election - year. The government needs to give an assurance it is not a deliberate policy.

For the record, goodies reported in The Straits Times:

· A new Workfare Bonus to reward workers for staying employed.
Here, Mr Lee, who is also Finance Minister, surprised by being more generous than a ministerial committee on low-wage workers had asked for.
The bonus will now go to the bottom 30 per cent of workers earning $1,500 a month or less, instead of only the bottom 20 per cent on incomes of $1,200 or less.
The bonus will also be bigger.
· A new Growth Dividend scheme that will put $800 into the hands of 45 per cent of the population. The $1.4-billion surplus-sharing scheme will distribute between $200 and $800 to all adult citizens.
Two key differences compared to previous Budget payouts: The giveaways will be in cash, not shares. The less well-off will also get more.
· Lower-income families will receive more help to buy their first homes with housing grants of between $5,000 and a hefty $20,000 for families on monthly incomes of $3,000 or less.
Someone receiving the full $20,000 could stand to have $60,000 in total from the Government to buy an HDB flat, including the $40,000 for those who buy resale flats near their parents.
The Housing Board will also build more two-room flats.
· Help for the over-50s comes in the form of Central Provident Fund top-ups to their retirement and Medisave accounts, ranging from $100 to $800.
· Schools will get $50 million to provide more opportunities to children from needy families.
· National servicemen will receive bonuses of $400 when they complete their training duty. (Straits Times)
By Seah Chiang Nee