SDP’s Shadow Budget: What It Would Mean For You


Ryan Ong



Despite sounding like a training programme for anti-government hit squads, SDP’s shadow budget is fairly tame. As with 2011, the 2012 shadow budget is a response to the government’s existing budget plan; a “what-should-be” argument if you like. I call it tame because I was expecting bolder propositions, but maybe SDP intends all this as a start. In this article, I take a “what-if” position, and speculate on the probable outcome if SDP had their way:


The SDP Shadow Budget primarily seeks a more “people centred” approach, emphasizing political longevity over immediate economic gains. It’s also aimed at correcting foundational issues, such as education and NS pay matters. After careful speculation, this is how I think the shadow budget could affect you (were it implemented):

  • Increased emphasis on innovation
  • Less media control
  • Revised education for Singaporean students
  • Increased employee protection
  • Minimum Wage Problems


1. Increased Emphasis on Innovation


Science fair presentation
“When we realized they’re better than taxi drivers, we started the first driving school for the blind.”


The SDP proposes a Developmental and Exploratory Fund (DEF), which aims at increasing innovation and productivity in SMEs. The DEF looks like a stepped up version of the existing SEEDS effort. In addition to providing funding for innovation / productivity, the DEF includes:

  • Payment of ERP for corporate related travel
  • Corporate EzLink Cards
  • Variable rental subsidies, up to 50% for premises that account for more than 25% of business costs

The DEF also aims to open up avenues in third sector industries; examples include green energy, international media, and social services training.

Most Singaporean SMEs are output driven; they locate an existing market, then develop a product for it. The DEF seems to want to reverse the equation: We might see Singaporean SMEs that create new products, and then try to establish a market for it. Monetary gains aside, this would make us less reliant on foreign talent.

It sounds good on paper, but there’s a cultural barrier to be overcome. The SDP assumes Singaporeans can be inventive, and that we have the courage to act on our creativity. I don’t see the grounds for the assumption; but for the few creative souls out there, it would be good news.


2. Less Media Control


Camera man
“Someone fire bombed our factory. Take the picture in a way that makes it look cheerful though.”


The SDP wants to abolish the Ministry of Information, Communication, and the Arts. The communications portfolio will be shifted to a Ministry of Communications and Transport, while the arts portfolio will be shifted to a Ministry of Community and the Arts.

The SDP also proposes opening the country to international news media. This will create job opportunities, and give Singapore Press Holdings (SPH) some much needed competition. Now I’m not exactly a fan of Fox News, but the SDP raises a valid point here.

With news companies moving in, we’ll see greater job opportunities in the media sector. Which, at this point, seems to consist of people paid to crack “leopard preenz” jokes and discuss peeping toms in school toilets. This is what we get when SPH has a virtual monopoly.

Apart from news that’s, well, actually newsworthy, we might get stronger social critique of the government which…one second, my sense of self-preservation is tingling.

Nah, there’s nothing one-sided about current media coverage of the government. It’s entirely accurate, and there would be no difference even if foreign media covered it. True fact.


3. Revised Education for Singaporean Students


Singaporean students in a lecture hall
“This sucks. I actually have to think and stuff for this course.”


The SDP aims to reduce student to teacher ratios to 20:1, which should mean another recruitment drive by the Ministry of Education (MoE). In addition, their budget provides for:

  • Counsellors and psychologists for every school
  • A wider range of creative programs
  • Reduced tertiary education fees
  • Abolition of tuition grants for foreign students

This ties in with point 1. By emphasizing creative thinking early, we might see a tendency toward innovation later on.

School counsellors and psychologists will take pressure off working parents, and I mean that in a financial sense: A visit to a psychologist can cost up to $300 (initial consultation), and over $100 on each subsequent visit. Parents with a referral for their child can get a subsidised rate at IMH (around $75), but it’s still a serious strain on low income families.

And if you’ve never needed a psychologist before, let’s just say they’re as vital as a dentist after someone’s rammed a crowbar into your teeth. It’s not the sort of medical problem you can “tough out”.

Abolition of foreign tuition grants, combined with lower fees, will mean a wider talent pool. I don’t see a jump in the number of graduates; most Singaporeans will pay for education, subsidised or not. But the difference is, Singaporeans could be encouraged to study a wider range of subjects. After all, with lower fees, a second degree (one that’s interest based) becomes more viable.


4. Increased Employee Protection


Employee lounging on the chair
“This your chair huh boss? I remember when I could get fired for this.”


The SDP proposes a “Singapore First” policy, somewhat similar to the government policies applied in Australia and the UK. Employers looking for foreign talent are first required to prove that such talent cannot be found locally.

Without close examination of the process (how does a company conclusively “prove” the local talent doesn’t exist?) it’s hard to comment on this. But I think this policy contradicts point 1.

SMEs, particularly the innovative sort, rely more on foreign talent. For example: We may have a Singaporean who can draw. But we may not have a Singaporean who can draw as well as, say, Tim Bradstreet. If a start-up needs the best possible art for a product, this policy just gets in their way.

My guess is that the policy will increase employment, but at a potential cost of productivity.

The SDP also suggests the implementation of minimum wage, which leads me to conclude that we’ll have…


5. Minimum Wage Problems


Pasar Malam workers
“And also those Pasar Malam workers need a dental plan, and annual wage supplement, and…”


Minimum wage determines the minimum that employees can be paid. Again, this contradicts point 1: Anyone working for a start-up will recognize this for the nightmare it is.

Start-ups tend to operate on a shoestring budget. Employees are often believers, operating on faith and self-motivation. Their pay is unreliable, and often redefines “pathetic”. But that’s all some start-ups can manage. If it becomes illegal to go under minimum wage, several start-ups will have to let go of employees, or shut down.

Another problem involves employment during recession. During recessions, when companies are forced to lower costs, minimum wage could transform a pay cut into outright retrenchment. When it’s illegal to lower the wage to a manageable amount, the company’s only alternative is to retire the employee.

And if you ask anyone desperately looking for a job, they’ll tell you low wages are better than no wages.

Image Credits:
Hushpuppy07US Army Corp of Engineers Savannah District, garryknight, British Council Singapore, graham hills, koonisutra, NewNation.sg

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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.