Budget 2009

With Singapore facing a deep economic downturn, Finance Minister Tharman Shanmugaratnam's 2009 budget, presented to the House yesterday, needed to be bold, and was. It contained well-targeted measures, two of which were:

1. A doubling of the GST credits. This is a pay-out promised by the government in 2007 to offset the increase in the Goods and Services Tax from 5 to 7 percent [1]. There is a rather complex formula, which skews the benefits towards those with lower incomes. In addition, the government will also double the Senior Citizens' Bonus. [2]

2. A wage subsidy. Under the newly-announced Jobs Credit scheme, the government will bear 12 percent of the monthly salary of any Singapore citizen or Permanent Resident working in the private sector subject to a cap of S$300. This help scheme will remain in effect for one year.

Other large measures included an expanded risk-sharing scheme, under which the government will bear the risk of 80 percent of bridging loans that banks extend to private companies. This is to encourage banks to continue lending, and not squeeze the cashflow of businesses.

His focus is correct: to keep enough liquidity in the system, sustaining business, and to help companies absorb costs in a time of much reduced demand for their products and services.

Hopefully, with the wage subsidy, lay-offs to come will not be as severe as feared.

Yet, retrenchments there will be. When your workers have little to do because there are few orders, keeping them is still costly. The government may be subsidising 12 percent of your lower-wage workers under its Jobs Credit scheme, but you still have to pay 88 percent, plus Provident Fund contributions.

As for more highly-paid staff, the subsidy, capped at S$300 per employee per month, will not even be 12 percent.

This reveals the one missing element in the budget package: no social security for those laid off. Singapore does not have unemployment benefits, not even temporary ones. Like the Workfare scheme, which tops up the income of low-wage workers who work at least 6 months in a year, the Jobs Credit scheme does nothing for those with no jobs. We consciously choose to leave them out in the cold.

That said, one might take note of the subsidies that the government is prepared to dish out for retraining. Under the Skills Program for Upgrading and Resilience (SPUR), a 90 percent subsidy will be available for as many as 800 courses. [3]

I'm not familiar with how it's going to work, and what criteria will be applied against an application for a subsidy. It's a new scheme – only one month old. One has to hope it doesn't get bogged down in administrative complexity. But I noticed a sentence in the newspaper's report: "It gives employers more money to retrain, rather than retrench, workers," which suggests that the money will be channelled to employers. Does this mean once again that those still in work will benefit, those out of work (who do not have an employer to apply for them) will not?

The next sentence seems to suggest otherwise: "Jobless Singaporeans who attend training will also receive an allowance while on course." In other words, there will be options for the jobless to apply for grants. I certainly hope so. But for now, it appears quite confused.

As for the allowance, don't expect anything substantial.

What the above shows is that bit by bit, the government's determination not to provide anything more than the barest social welfare has been eroded. In fact, large dollops of money are being thrown about. Yet, everything comes out of temporary schemes that last a year or maybe a bit more. By the next budget session, they may all be cancelled.

The government will say this is how it should be. Circumstances change and help schemes must change. When times are good, they should be withdrawn.

Yet there is the counter argument: Precisely because everything is always new, makeshift and fiendishly complicated, few understand what schemes are available or how they work. Instead of feeling reassured, they continue to feel stressed out, unable to plan for the future.

There is a lot to be said for a simple-to-understand, permanent social safety net.

 
Amendments to the Films Act

"But the events being filmed must first be held in accordance with the law," said the Straits Times in reporting the government's proposed "liberalisation" of Section 33 of the Films Act [4]. That means that videos of any protest or street event that is not licensed by the government will still land the filmmaker in trouble. And as everyone knows, the way the government issues licences is extremely biased. Only their events get a go ahead. Therefore only their events will be legally allowed on film.

Section 33 makes it a crime to produce, distribute or exhibit a "party political film". It prescribes a maximum of two years' jail and a fine of S$100,000.

Instead of making media more balanced, such a change is going to make it even more pro-government, when one type of street activity can be represented, but activities the government dislikes cannot. At least under the old "everything cannot" rule, there was something superficially fair about it, even if it was in total violation of our right to freedom of expression..

What does this show about the People's Action Party? It really shows that they have no confidence that they can win people over in a fair and open debate. This very silly move undermines the legitimacy of their own election victories, begging questions as to why they think they cannot afford to act fairly.

It also shows how mean they are, and that there is nothing sincere in their words about opening up.

The newspaper also reported that two other categories will now be legalised: (1) Documentaries "made without any animation and composed wholly of an accurate account depicting actual events, persons and situations"; (2) Films made by political parties or election candidates of their manifesto and policies.

The first is going to be impossible to implement. What is "accurate"? In making any film or record, there is an editing process. Within the constraints of time or available material, a choice has to be made to include certain things and leave out others, just like in publishing a newspaper or writing a blog. You can argue until the cows come home whether a work is "accurate" or not but you will never arrive at any objective test.

So what will happen? Anything that is government-friendly will be "accurate". Anything that is not, will be deemed "inaccurate" and that's that. The filmmaker will face criminal charges, his film and recording equipment will be seized. Who is going take risks making films which you can never be sure in advance will not land you in jail?

The government goes on and on about promoting accountability in our use of the internet. This move alone is going to promote anonymity. People will want to upload stuff, but they will continue to do it anonymously. The internal contradictions in policy, motivated by white-faced fear now fully displayed by the government, is jaw-dropping.

© Yawning Bread