Singapore Budget 2019 Commentary

The Finance Minister, Mr Heng Swee Keat, delivered his fourth Budget speech on 18 February 2019. The focus on driving innovation and growth among enterprises; increasing productivity of Singaporean workers; and strengthening the social framework; encapsulates the Budget 2019’s strategic plan of “building a strong, united Singapore”.

The number “4” seems to play a significant importance in Budget 2019. In the earlier part of his speech, the Minister identified the fourth major force that is gaining traction in the global environment; the decline in support for globalisation. This is on top of the 3 major shifts mentioned previously in Budget 2018, namely a tilt towards Asia, rapid technological advancements and changing demographics. The 4 forces identified are intertwined and have their upsides and downsides at global and regional levels. Domestically, Singapore remains committed to addressing long-term challenges of ageing, social mobility, economic transformation, and climate change as we chart our path forward.

Notably, to support the start-ups ecosystem, there is a clear focus on support schemes, which are non-tax related, such as providing customised assistance, better financing options and supporting technology adoption. The Government continues to recognise the importance of start-ups and the roles they play, or will play, in Singapore’s economy. Several changes were made to ensure easy facilitation to such schemes.

The introduction of the Merdeka Generation Package, which will benefit half a million Singaporeans, ensures that “no one gets left behind” even as the country prospers. With the advent of the Pioneer Generation Package, the benefits under the Merdeka Generation Package bear similar features as its predecessor. It is a form of gratitude for the cohort who has valiantly lived through the independence struggle and played a critical role in our nation’s development.

This is also a year of celebration as Singapore marks her bicentennial since the arrival of Sir Stamford Raffles in Singapore. One of the initiatives announced, to commemorate this milestone, is the introduction of a Bicentennial Bonus. This is consistent with the Government’s policy of sharing fiscal surpluses with Singaporeans. There are various components under this Bicentennial Bonus to cater for every Singaporean, in particular, lower-income Singaporeans.

Importantly, in the Budget 2019 speech, the Minister has reiterated Singapore’s commitment to keep the overall tax burden low despite the need to raise revenues in the future to fund increasing expenditure. The Government recognises that a competitive tax regime is a key anchor to our economic growth. Tax has always been one of the cornerstones of Singapore’s fiscal policies to attract and retain foreign investments. This underpins Singapore’s intention to encourage foreign companies to anchor their operations in Singapore, thereby creating economic spin-off benefits, such as jobs and revenue.

Lastly, Singapore continues to chart her course forward towards a sustainable future with the Budget 2019 announcements. The Government’s approach remains consistent with the previous Budgets–it continues to tackle long-term challenges by planning ahead and ensuring fiscal surpluses are shared with Singaporeans.