Singapore Budget 2015 – Balanced, Prioritised and slightly off the mark

Yesterday, DPM Tharman announced the Jubilee budget (Singapore’s 50th Anniversary budget) to the public and it was received with both excitement, disappointment and perhaps even a little confusion.

Deputy Prime Minister Tharman Shanmugaratnam


  1. Major reinvestment in our infrastructure
  2. CPF Interest rate increases (6% for first 30k, 5% for next 30k and 4% for everything else)
  3. Increase in the CPF salary ceiling
  4. SkillsFuture Credit (Recurring)
  5. Increases in Education and Training subsidies for people over the age of 40
  6. For business owners: Tax and other benefits to defray productivity costs. (Not Recurring)
  7. More transport subsidies for students (Recurring)
  8. Silver Support Scheme (this will appear twice) (Recurring)
  9. Increase in GST vouchers (Not Recurring)
  10. Increase in healthcare spending
  11. No real deficit spending
  12. Income Tax rebate capped at $1000.(Not Recurring)

Cheering at the National Stadium


  1. Increase in personal income tax (2% at the top most level, going from 20% to 22%) (Recurring)
  2. Increase in fuel tax (20cents for premium and 15cents for the next level)


Well to be honest there really wasn’t any proposal that was really confusing in the sense that people questioned the need to actually have it. Which is rather interesting as governments always tend to throw in a sweetener or two to key stakeholders or supporters to shore up their votes before a coming election. It was especially odd considering that a general election is expected in the coming year.


The government really hasn’t done anything terribly interesting in terms of policy decisions. It’s gone after critical issues that have been brought up over the last couple of years, (1) Healthcare costs, (2) Retirement Adequacy, (3) improving the existing social security system and finally (4) infrastructure development. It’s ramped up spending to address all of these issues, though there was little shared on the policies that would be effected to actually make a difference and move the dial in improving the delivery of public services. Admittedly delivery of public goods in Singapore has been consistently good, though there are from time to time lapses in either judgement or intention that can lead to bad outcomes.

Potential for additional improvements


  1. Better articulation on how #skillsfuture can be linked to Workfare and eventually the role of NTUC (the unions) in the implementation of training. Would there be a more proactive training and placement of employees in sunset industries?
  2. Better statistics on retirement adequacy. Indication how much the government is willing to spend on making sure retirement is comfortable from both a day to day expenditure to long-term medical expenditure of each aging individual. Ultimately it needs to stake out how far society is willing to help past generations and how much the current generations (their sons and daughters) should directly support them.
  3. Better articulation on the use of long-term net investment returns from the countries SWFs to fund some of these social programs. Since we are using the returns on fixed assets to pay for recurring costs, is there a possibility that such costs could eclipse those returns and eat into fixed assets (President complying of course).
  4. Better explaination on why income tax and sales tax is the favoured tax regime to raise government revenue over say investment income and capital gains taxation.
  5. Comprehensive plan on reducing the cost of land/housing/commercial/retail in Singapore. How do you create land devaluation without impacting the rest of the economy. Especially the banks whose loan books are largely filled with residential loans.
  6. Better articulation on the limit of the government’s intervention in the economy either through productivity intervention or even in innovation or value creation?

Time will tell whether the money we spend today will eventually accrue back to our society or will it end up leaching out of the economy and the country.