The Budget 2016 announcement last week was extremely forward looking, with a lot of very exciting goals and developments expected over the next several years. Minister of Finance Heng Swee Keat gave us a vision of a future economy, one that is more integrated and targeted.
Among other things, he announced a new development – the Jurong Innovation District and said he was also investing an additional $1 billion into the upcoming Changi Airport Terminal 5. It’s all part of a $4.5 billion initiative known as the Industry Transformation Programme.
It’s too early to tell if the hype for all these announcements will last, because there was only so much Mr Heng could say in his two-hour speech. So while we now know WHAT is going to happen – there aren’t that many details about HOW it’s going to happen. That where the Committee of Supply debates come in.
What happens at the Committee of Supply debates?
At the risk of oversimplifying the work of Parliament, here’s essentially what happens. Representatives from the government’s several Ministries, like the Minister, the Senior Minister of State, will come together to highlight the details on how they plan to use their allocated budget in the upcoming Financial Year.
There is then an opportunity for Members of Parliament to voice any disagreements with the programmes. This year, the Committee of Supply speeches begin on Monday, 4th April.
Okay, so what can we expect at this year’s Committee of Supply?
While all the Ministries will be presenting at the Committee of Supply, there are 3 issues in particular that Mr Heng raised during the Budget announcement. We hope to get details about these 3 issues in the coming days.
1. How exactly are families who are less well-off going to be helped?
I mentioned earlier this week that three new initiatives were being rolled out this year to help families with children in Singapore. The first of these, the First Step Grant of $3,000 into the Child Development Account (CDA), is apparently expected to help some 74% of CDA holders maximise the amount the Government will give them. Currently only 60% of CDA holders are able to maximise this amount, and 5% apparently aren’t even saving in their CDA.
This data is according to Ms Josephine Teo, who is the Senior Minister of State in charge of the National Population and Talent Division. Awkward title aside, she’s promised to reveal even more “good news” for families in the weeks to come. With the First Step Grant being accused of helping the haves more than the have-nots, will any of this “good news” help less well-off families?
In this year’s Budget announcement, families who are less well-off are expected to benefit from another new initiative – KidSTART. According to Mr Heng, about 1,000 children aged six years and below whose parents may need more support, are expected to benefit from $20 million worth of resources in the pilot run. That’s a very generous sum and it’s definitely going to go a long way to help these children.
The question is, though – who is this pilot initiative targeting? Are we talking about low-income parents? Parents of special needs children? Low-income parents with special needs children? The last group would need those resources the most, of course. We’ll have to wait for Minister of Social and Family Development Tan Chuan-Jin to reveal more details about KidSTART.
2. Will there be more SkillsFuture Credit top-ups? Or more ways to use SkillsFuture Credit?
Mr Heng assured us that SkillsFuture is here to stay, but did not really elaborate more than that. However, he did remind us that the government has committed over $1 billion per year into this initiative. That’s a lot of money.
We hope, in the weeks to come, that we’ll learn more about the future of SkillsFuture. For those of us who have already spent some or all of the $500 SkillsFuture Credit issued to us at the end of last year, we’ll be looking out for any hint about how much SkillsFuture Credit we’ll continue to receive and how often it’ll be topped up. Such information will definitely help those who are planning long-term skills upgrading, especially those of us who may feel like we need to switch industries altogether.
One industry we should strongly consider switching to is Information and Communication Technology or ICT, which was name-dropped multiple times by Mr Heng in his Budget speech. I look forward to the coming weeks, where we should hear more about the TechSkills Accelerator.
This new skills development and job placement hub for the ICT sector was announced by Mr Heng, but little else was said. It’s obvious that this TechSkills Accelerator will help undergrads and fresh grads learn skills that will make them more employable, but what about those looking to switch industries? Hopefully the Minister for Manpower, or the Ministers for Trade and Industry will elaborate more about how TechSkills Accelerator can help those looking for a mid-career switch.
3. Can you truly incentivise a caring society by throwing money at businesses?
The government seems to think that by giving tax reliefs to businesses, they will be more inclined to engage in Corporate Social Responsibility. Mr Heng announced that there would be a 250% tax deduction for businesses who volunteer and provide services to charities.
But that’s not all. To encourage more charitable donations, Mr Heng also announced dollar-for-dollar matching for donations by businesses above their contributions last year. While that’s an excellent initiative, Mr Heng also said that these matching funds can be used by businesses to organise Corporate Social Responsibility events and activities.
Maybe I’m just too cynical. I’m sure these initiatives will encourage businesses to increase their commitment to Corporate Social Responsibility. However, I’m also concerned that with many businesses, the purpose of Corporate Social Responsibility is not as pure as it should be. Corporate Social Responsibility isn’t about teambuilding, or advertising, or a matter of competition. Charities aren’t tools to help you build your brand.
Mr Heng says the Minister for Social and Family Development will elaborate on these initiatives in the coming weeks. I hope he recognises the potential for abuse, and ensures that there are limits to what defines a Corporate Social Responsibility activity.
Wait… there’s one more thing…
While the purpose of the Committee of Supply debates is to discuss how money that has been set aside will be used, the fact that we’re looking to spend $5 billion more than we did last year (the SG50 year, no less) is an interesting revelation and brings us to one last question.
4. Where is all the money coming from?
Interestingly enough, the footnotes in Mr Heng’s Budget speech indicate that we have more money to spend this year because of “vehicle-related revenues”. That means COEs, of course. But let’s be honest, there’s only so much an increase in the number of vehicles being registered can earn the country. The government is taking a gamble by spending so much on long-term goals.
Sure, it’s an educated, investment-focused gamble, that promises rich rewards and returns by 2020 and beyond, but it’s still a gamble nonetheless. And hopefully, the Committee of Supply debates that come next week are able to assure us that all this spending is worthwhile.
What are your thoughts about the Budget so far? We want to hear from you.