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19 Feb 2019
Ministry of Finance
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Budget 2019 - my initial thoughts

Life is boring in Singapore. We are not encouraged to talk about or to criticize government policies. If we do, we have to be careful. If we are not careful, we can be sued for defamation or charged for criminal defamation.

Most citizens look towards the Budget Statement presented to Parliament to learn about the fiscal plans of the government and to comment on these plans.

The Budget Statement for this year is of special interest because it is the bicentennial of the colonialization of Singapore. I wonder if any other country in the world celebrates its control by an imperial power.

Never mind.

The citizens look forward in anticipation of the good news that the government will be presenting in the budget. The cynical ones say that this is to buy votes for the general election that is expected this year.

Budget time is usually good news, because it is usually bad news during the rest of the year – with increases in fees, taxes, government charges and consumer prices.

So what is the good news?

The highlight must be the Merdeka Generation Package. It is not a surprise. It has been highly anticipated.

The finance minister announced a sum of $8 billion that has been set aside to finance the benefits for 500,000 beneficiaries of this package.

$8 billion is a lot of money. But this is not a sum that is spent in 1 year. It is the sum that is set aside to fund the MDP benefits over the lifetime of the recipients.

If we assume an average of 20 years for the future lifespan, the annual amount is $400 million a year, or $800 per recipient. $800 a year seems to be a lot. It is certainly better than nothing.

But we need to ask the question – is it enough, when the health care cost keeps increasing.

A better question is – do you prefer to receive this benefit, or for the government to keep the cost of health care down to an affordable level?

We have heard about the case of the high cost of health care. The cost of dealing with cataract for both eyes is more than $10,000 a year. Even with subsidy, the cost is more than $5,000. In a recent case, the patient has to bear most of this sum out of pocket, as only a small part is covered by insurance.

Recently, an elderly woman had a heart attack and was sent to a private hospital. She stayed in intensive care for 5 days and passed on. The total bill was about $150,000. Even if she was treated in a public hospital, the cost is likely to more than $50,000.

The end of life treatment is very expensive. Should we find some way to deal with it?

I am not saying that every patient will have to bear an expensive cataract operation or end of life treatment. But the uncertainty in the cost is worrisome for many patients.


The finance minister announced that a sum of $1.1 billion is set aside to provide the generous package for the bicentennial.

An estimated 4 million beneficiaries will benefit from this package. The average benefit is likely to be less than $300 a person. 

This is the average sum. Some will get more and some will get less. The benefits come in different forms – as a tax rebate, as GST vouchers and as top-up. Nobody knows for sure about what is the amount that he is expected to get.

Nobody knows if they are given the right sum. We have seen the recent case where the CHAS subsidies are computed wrongly. If the formulas are complicated, it is difficult for anyone to know.

Worse, we do not know if the developers who write the programs are honest. It is possible for some money to be siphoned off to their personal accounts.

The question is – do you prefer to have a benefit of $300 or to have effective ways to reduce the cost of living? 
I am not impressed with the approach taken by the finance minister in this budget. I prefer that the budget deal with the long term challenges facing the economy and the livelihood of the people. 

I will deal with this matter in a separate post.

Tan Kin Lian


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