By now, you’ve probably read about some of the Singapore Budget 2019 announcements that made the biggest headlines, namely the Bicentennial Bonus and details of the Merdeka Generation Package.
At DollarsAndSense, we had the unique opportunity to liveblog the proceedings and write many articles over the years, exploring various needs that the Singapore Budget needs to balance.
Still, we continue to learn new things at each Singapore Budget session, and this are some of my key learnings after watching Finance Minister Heng Swee Keat’s Budget Statement for FY2019.
Singapore’s Expansionary Fiscal Policy
In the closing portion of Minister Heng’s Budget 2019 statement, he commented that this year’s budget ran a slight deficit of $3.485 billion, mainly due to one-off funding of long-term policies like the Merdeka Generation Package ($6.1 billion) and the smaller Bicentennial Bonus ($1.1 billion).
Minister Heng then said that the budget is expansionary, but did not necessitate a draw on past reserves, since there were surpluses built up earlier in this term of government.
As you know, an expansionary policy seeks to stimulate economic growth. In Singapore’s case, expansionary measures include increased government spending, tax reliefs, as well as transfers to the lower-income Singaporeans. The bulk of measures announced this year were meant to help support SMEs, other enterprises, as well as individual workers to retool and be best positioned to seize the opportunities created by the “Fourth Industrial Revolution”.
Singapore’s fiscal approach has always been that of extreme discipline. Thus, it was interesting to observe that the needs of the future were critical enough such that the government adopted an expansionary stance. In a way, Singapore is pre-emptively allocating resources to tackle the issues of tomorrow, rather than wait to react to problems only when they surface.
The Vital Role Of The Finance Minister Plays
Before the Budget 2019 statement, a video was put out to highlight the budget creation process.
Seeing Minister Heng on this journey was refreshing, since in the past, we had mostly text, infographics and our imagination to rely on.
It also brought home the vital role and immense responsibility that the Finance Minister carries in Singapore. It is not merely a paper exercise to shift numbers around a spreadsheet and allocate money to each ministry. Creating the Budget necessitated an understanding of the long-term needs and challenges that will confront Singapore, and work with stakeholders both in the public as well as private sector to craft policies that are synergistic and effective.
On a personal level, Singaporean families often joke that the wife controls the purse strings and is likened to the “Finance Minister of the Home”. Indeed. when it comes to our own personal finances, we can benefit by learning from Minister Heng.
We should look ahead to anticipate our needs ahead, and ensure we have adequate resources set aside today to meet those needs, rather than scramble and even resort to borrowing. This allows us to make smart choices, without the pressure or stress of time.
Like the nation, our resources are always finite and scarce. We need to think carefully about what is most essential, speaking with our family members to get their understanding and support. As Minister Heng had reminded us repeatedly, achieving Singapore’s goals require the people, private and public sectors to work hand in hand.
The practice of getting the buy-in and cooperation from the entire family is an important one worth applying. Sometimes, we might be able to make financial decisions or purchases ourselves, but Minister Heng has shown that to get the views and support of our loved ones and subject matter experts before committing is a better approach.
If you’d like, you can watch the full Budget 2019 statement below or read the full text transcript:
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