SG Bonus: $700 million to be paid out to 2.8 million Singaporeans by December 2018

One-off payout of up to $300 per adult comes amid overall budget surplus being markedly higher than forecast
By Ng Huiwen, The Straits Times, 29 Sep 2018

Adult Singaporeans who are eligible for a one-off SG Bonus of up to $300 will be informed of their payout amount in a letter from Tuesday.

The Government will disburse $700 million to the 2.8 million eligible Singaporeans by December, the Ministry of Finance (MOF) said in a statement yesterday.

Citizens can use their SingPass to view their SG Bonus benefit on the SG Bonus website, which will be accessible from Tuesday, October 2.

Those who have registered their mobile numbers with SingPass will also receive SMS notifications.

Finance Minister Heng Swee Keat said in this year's Budget speech that the bonus comes with an expected overall Budget surplus of $9.6 billion, or 2.1 per cent of gross domestic product, for the 2017 financial year.

The surplus was markedly higher than the $1.9 billion forecast a year ago, mainly because of exceptional statutory board contributions of $4.6 billion.



The SG Bonus will be given on top of the Goods and Services Tax Voucher scheme, and service and conservancy charges rebate for eligible Singaporeans.

This reflects the Government's longstanding commitment to share the fruits of the country's development with Singaporeans, said MOF.

Those who are 21 years old and above on Dec 31 will receive up to $300, depending on their income.

Those with an assessable income of $28,000 and below for the 2017 year of assessment will get $300; $200 goes to people earning $28,001 to $100,000; and $100 for those earning more than $100,000 or who own more than one property.

Most Singaporeans will automatically get their SG Bonus if they have previously signed up for other payout schemes, such as the growth dividends and GST Voucher.

Singaporeans who have not signed up will be informed of how to do so in their letters.

They will have until March 31 next year to sign up online, or through a hard-copy form available at community clubs and Central Provident Fund Board service centres.

Those who sign up by Nov 7 will receive their SG Bonus by December.

Singaporeans will also have the option of receiving the payout via PayNow. This will allow them to receive the money in their bank accounts using their NRIC or mobile number without having to disclose their bank account details.

The Government will be using PayNow as the payment mode for citizens who register their NRIC on PayNow by Nov 7. They will receive their SG Bonus by Nov 30 instead of December.

Those who choose not to register their NRIC on PayNow will receive their SG Bonus via direct bank crediting or cheques.

MOF said it has received some feedback from Singaporeans who want to donate their SG Bonus to needy citizens. They will now be able to do so via the SG Bonus website or the SG Cares mobile application.

GST Voucher 2018: 1.6 million Singaporeans set to receive GSTV - Cash and MediSave benefits worth a total of $1 billion

By Jasia Shamdasani, The Straits Times, 29 Jun 2018

Madam Sulami Hassan retired as a gardener two years ago after suffering a stroke, and now lives with her daughter.

Looking after her 71-year-old mother has been tough emotionally and financially for Ms Noor Sheela Sani, who supports both of them by working as a school administration clerk.

However, Madam Sulami is one of 1.6 million Singaporeans set to receive goods and services tax (GST) benefits and Medisave top-ups - worth a total of $1 billion - which were announced yesterday by the Ministry of Finance.

Eligible Singaporeans will receive text messages or letters by July 6 to tell them what they are due to receive under the GST Voucher (GSTV) scheme, which was introduced in 2012 to help lower-and middle-income Singaporeans offset some of their GST expenses. The criteria for eligible Singaporeans include age and annual home value.

As announced in Budget 2018, a one-off SG Bonus of up to $300 will be given at the end of the year to Singaporeans aged 21 and above in 2018. A one-off service and conservancy charges rebate will also be given to provide additional support to households.

The money will come as a timely boost for Ms Noor Sheela.

"When my mother had a stroke, it was really hard for me," said the 24-year-old. "We didn't have the money to afford medical bills and stuff like that. The GST vouchers will really help to lighten our financial burden. I am very thankful. The money will be saved to be used during an emergency.

"The Medisave top-ups will also be used to offset some of the medical bills as my mother has to take a lot of medication for diabetes, high blood pressure, cholesterol and more."

Citizens can use their SingPass to view their GSTV-Cash and Medisave benefits online at www.gstvoucher.gov.sg

Ministers, please speak plainly to the people

Plain speech also about telling the hard truth

Editor-at-large Han Fook Kwang is correct (Ministers, please speak plainly to the people; June 3): Ministers should, indeed, speak plainly to the people.

This does not only mean using simple language that people understand. It also means telling people the truth.

This is what the PAP government has been doing for close to 60 years. Ministers and MPs spend considerable time on the ground hearing from citizens, answering their questions and explaining policies.

And as Mr Han knows well, this Government has never flinched from telling people “hard truths to keep Singapore going”. He once helped edit a book with that title.

The most recent example is the Budget speech, where Finance Minister Heng Swee Keat announced that it will be necessary to raise the Goods and Services Tax in the next term of Government, and explained clearly why.

Unfortunately, some opposition MPs sought to avoid debating this issue in Parliament, preferring to wait till the heat of the hustings, when emotions, rather than reason, rule.

The injunction to "speak plainly" applies to journalists and commentators too.

Mr Han begins by urging ministers to speak plainly - to use simple language. His column then morphs into a dare to ministers to make sweeping promises.

For example, he wants ministers to assure people that if they had "a full working life in Singapore, in any job... when you retire at 65, you will have enough to live a good and decent life".

"We will make sure it happens," Mr Han urges ministers to say, "don't worry about the details or how we will do it."

But plain speaking about adequate retirement would also entail telling people some "hard truths".

For example, the Central Provident Fund scheme is adequate for most Singaporeans, and Silver Support will help top up for those who did not earn much while working.

However, as people live longer, their needs in old age will go up. Then, we will have to work longer, save more while working, or have less to spend in retirement.

Voters in many countries, developed and developing, have learnt through bitter experience what happens when unrealistic election promises are broken.

Politicians and journalists who advocate simplistic policies lose credibility, faith in democracy is undermined, and ultimately, voters or their children bear the cost.

The easiest five words to utter in politics are: "I promise you free lunches." But that's not plain speech. That's pandering and populism.

Lim Yuin Chien
Press Secretary to the Minister for Finance
ST Forum, 5 Jun 2018

Government has to make good case for GST hike and ensure lower-income given support: PM Lee Hsien Loong

Government will ensure those affected by GST hike get help they need: PM Lee
By Zakir Hussain, Foreign Editor, The Sunday Times, 20 May 2018

PUTRAJAYA • In implementing a future GST hike, Singapore's Government will have to work very hard to not just win over voters, but also ensure that those who will be affected significantly get the help they need, Prime Minister Lee Hsien Loong said yesterday.

"We have given a lot of notice. There is time to explain, and there is time to work out how exactly we will make sure that Singaporeans are given the right support in order to be able to live with a new tax," he said. "It is something which we are taking very seriously indeed."



PM Lee was speaking to Singapore reporters in Malaysia's administrative capital after separate meetings with Malaysian Prime Minister Mahathir Mohamad as well as Pakatan Harapan de facto leader Anwar Ibrahim and his wife, Deputy Prime Minister Wan Azizah Wan Ismail.



In one of its first decisions, Malaysia's new government will slash its goods and services tax (GST) - which was introduced in 2015 - from 6 per cent to zero per cent from June 1, in keeping with a campaign promise by the Pakatan Harapan coalition.

It has, however, said it will reintroduce the sales and service tax and is taking other major steps, such as stamping out wasteful projects, to plug the shortfall.

PM Lee was asked by Singapore reporters whether this development would make it harder for the Singapore Government to sell the GST hike to Singaporeans.

Singapore had in February announced plans to raise the GST from 7 per cent to 9 per cent some time between 2021 and 2025.

PM Lee had in Parliament last Wednesday cited how Malaysia's experience with the GST highlighted trust as a crucial factor in determining whether citizens will accept or reject an unpopular policy.

Yesterday, he said: "Raising a tax is never an easy thing to do... Each case is different, the circumstances in every country is different, but every time you want to raise a tax, it is never a light matter. It is never an easy decision to make.

"You have to work very hard to make sure you have a very good case to be able to explain to voters why you are doing this, what you are using the money for, and to persuade them that you know what you are doing and they can trust you.

Balancing social spending with financial prudence

By David Tay, The Straits Times, 30 Apr 2018

Amid growing income inequality and the erosion of job security as a result of disruptions, countries have to grapple increasingly with how to help citizens who are left behind, in an effective and financially prudent way.

For instance, Finland, a welfare state, started a two-year trial in January last year to provide 2,000 randomly chosen unemployed citizens with a basic monthly income of €560 (S$900) in an experiment to remove the disincentive to work.

For these recipients can still receive the payment even if they find work, unlike the usual case with unemployment benefits.

While Finland has not announced the results of the €20 million programme, it was reported last week that it will not extend it.

In Singapore, the issue of how to help the needy was also a focus during this year's Budget debate.

Finance Minister Heng Swee Keat announced an impending rise in social spending on healthcare and the need for an increase in goods and services tax (GST) to help finance the increased expenditure.

The Straits Times takes a closer look at social spending.

Higher pay for social workers from April 2018

Higher wages kick in for staff in social service sector
By Theresa Tan, Senior Social Affairs Correspondent, The Straits Times, 5 Apr 2018

Staff in the social service sector can expect to see their wages increase again, following new pay guidelines posted on the National Council of Social Service's (NCSS) website last Thursday.

The changes kicked in on Sunday. Social workers who are fresh out of university - including those with a degree in social work from the Singapore University of Social Sciences or a bachelor of social sciences with a major in social work from the National University of Singapore - will now earn $3,400 a month, up 4 per cent from $3,270.

Those with a degree in physiotherapy or speech and language therapy can expect a starting salary of $3,550 a month, up 6 per cent from $3,350.

As for special education teachers who work with children with disabilities, university graduates will command a starting salary of $3,620 a month, up from $3,570. These teachers also hold a diploma in special education from the National Institute of Education (NIE).

The latest pay guidelines cover a host of workers in the sector, from social workers to therapists and executives, across varying levels of seniority.

These staff are not hired by the Ministry of Social and Family Development (MSF) but by social service organisations, such as family service centres and children's homes, which run programmes funded by the ministry.

The increments were first announced last month during the ministry's Budget debate, which said the salary guidelines for staff working in MSF-funded programmes would increase by up to 12 per cent from its last financial year, which ended in March.

Minister for Social and Family Development Desmond Lee said in Parliament during the debate: "Many of those who work in the social service sector do not do it for the remuneration. They see it as a calling. Nonetheless, they deserve to receive a fair and competitive wage and have their contributions recognised."

Test balloons on GST tax hike claim; Parliamentary Privilege: When is it abuse?

Robust debates in the House: How far is too far?
Parliamentary privilege allows MPs to speak without fear of being sued. But when does this cross into abuse of power?
By Ng Jun Sen, Political Correspondent, The Sunday Times, 11 Mar 2018

The Budget 2018 debate may be over, but one aspect still sticks in people's minds: the exchanges between Workers' Party (WP) leaders and several People's Action Party (PAP) ministers.

During the Budget round-up debate on March 1, WP chairman Sylvia Lim voiced her suspicion that the Government had intended to raise the goods and services tax (GST) immediately but that it backtracked after negative public reaction. While later acknowledging that her suspicion "may have been wrong", Ms Lim refused to withdraw her comment and apologise for it.

Her rationale: Her "honest suspicion" was based on a sequence of events - including the Government's non-denial of public chatter that a GST hike was imminent. In articulating it, she was doing her "duty as an MP to convey ground concerns, reactions and confusion". No one knew the truth of the GST hike except for the Cabinet, she added.

In response, Leader of the House Grace Fu said that in refusing to retract the comment and apologise, Ms Lim's conduct fell short of the standard of integrity and honour expected of members.

The Aljunied GRC MP had suggested that the Government was dishonest, and had tarnished the reputations of leaders who had earlier made it clear that tax revenues needed to be raised in the long run, said Ms Fu.

"I must put the honourable member on notice, and the rest of the House too, that if she repeats such dishonourable conduct and abuse parliamentary privilege, I'll refer the matter to the Committee of Privileges," said the minister in charge of order and procedure in Parliament.

A spokesman for Ms Fu said yesterday that the Government had sought the advice of the Attorney-General's Chambers (AGC) on the matter.

She said Ms Fu had made her statement in Parliament last Tuesday - asking Ms Lim to withdraw her comments and apologise - "after taking AGC's advice". She did not say what advice the AGC gave.

The Committee of Privileges looks into alleged breaches of parliamentary privilege. Being referred to it is no small deal - punishment ranges from, at the very least, a reprimand or admonishment by the Speaker, to being fined up to $50,000, to being suspended and even jailed during the duration of a parliamentary session.

Insight looks at what parliamentary privilege is, and where the line is drawn between allowing MPs to raise suspicions in a relatively unfettered way and abuse of that privilege.

2018 Committee of Supply Debate Highlights: MCCY, MOH, MOT, MSF, MND, MEWR, MCI, MOF

MPs debated budgets over 52 hours - the longest in five years

By Joanna Seow, Manpower Correspondent, The Straits Times, 9 Mar 2018

As the eight-day debate on the Government's spending plans for the coming financial year drew to a close, history of sorts was made.

The 530 questions prepared by MPs were allocated 52 hours in all, the longest in the past five years.

The achievement underscores the "breadth and gravity" of the issues that Singapore faces, Leader of the House Grace Fu said yesterday in her speech wrapping up the marathon session.

Job security remained a hot topic even as economic growth made a recovery last year, but this year's debates also saw a keen focus on social inequality and fostering a more caring society.

For instance, a recent Institute of Policy Studies survey, which showed a concentration of social networks around class differentiators like housing type and schools attended, as well as sociologist Teo You Yenn's book on inequality, were cited several times.

"As we embrace globalisation and technology to expand opportunities for our businesses, to transform industries and build deep capabilities, how do we ensure that we move forward together and leave no one behind?" said Ms Fu, who is also Minister for Culture, Community and Youth.



She noted that a lot of time was spent debating the budgets of the Manpower, Trade and Industry, and Culture, Community and Youth ministries.

Parliament spent 21/2 days debating the national Budget, and the rest of the time on the 16 ministries' budget debates.

Questions raised included how to support more vulnerable segments of the workforce, how to help enterprises stay competitive and create good jobs for locals, and how to strengthen social cohesion across race, religion and class lines.

MPs also asked about dealing with external threats, such as extremism and and cyber-security issues, as well as domestic challenges such as housing for young couples and regulating personal mobility devices, said Ms Fu.



She highlighted how Nominated MP Kuik Shiao-Yin and Mr Murali Pillai (Bukit Batok) had spoken about the need for both pragmatism and ideals to take Singapore forward.

Agreeing, she said: "To tackle the problems of today and prepare ourselves for tomorrow, we must be bold and embrace change. We must have that grit and bias for action that makes us an exceptional nation. This would not be the case if we had no ideals."

Calling on Singaporeans to help build the "ideal Singapore", Ms Fu said that while the Government plays the role of an enabler through the Budget, success depends more on individuals taking ownership of the nation's future, amid the challenges of income inequality, disruptive technology and an ageing society.

The support of Singaporeans of all ages will be needed to nurture a strong society which dares to be entrepreneurial - "a smart nation with a heart", she said.

New Integrated Shield Plan riders must incorporate a co-payment of 5%

New policyholders will eventually have to pay at least 5% of bill, but amount will be capped
By Salma Khalik, Senior Health Correspondent, The Straits Times, 8 Mar 2018

You can no longer go to an insurer and buy riders that pay your entire hospital bill, as the Government is rolling back a regime that threatens to make health insurance unsustainable.

Anyone buying a new rider from today will need to eventually pay at least 5 per cent of his hospital bill. But the total amount a policyholder has to pay can be capped at $3,000 a year, although insurers are free to set a higher threshold. This is to give people the peace of mind that they will not have to dig too deeply into their pockets, whatever the size of their hospital bill.

However, the $3,000 cap applies only if patients are treated by doctors on the insurer's approved panel, or if they had received prior approval from the insurer. Otherwise, they have to pay the 5 per cent, with no cap on their share.

These measures were announced in Parliament yesterday - the same day that The Straits Times reported that insurers had asked the Ministry of Health (MOH) to get people to pay at least part of the bill.

MOH has agreed to this for new riders. However, it has not mandated any change for the 1.1 million people who already have full riders for their Integrated Shield Plans (IPs) - which means they pay nothing for hospital bills.

MOH is giving insurers until April 1 next year to come up with new riders that include the co-payment and cap. At that point, no full riders for IPs can be sold.

Meanwhile, anyone buying a rider from today has to switch to the new scheme by April 1, 2021, at the latest.



Elaborating on the scheme, Senior Minister of State for Health Chee Hong Tat said: "Any pre-existing conditions that are covered prior to the switch will not be excluded."

This should also apply to people with full riders who want to switch to the new scheme. Mr Chee said: "We expect the new riders to have lower premiums than full riders, so the switch will result in premium savings for policyholders."

As for those who already have riders, Mr Chee said: "We recognise that existing rider policies are commercial contracts between insurers and their policyholders.

"If insurers intend to make changes to their existing policies, they should consider the interest and well-being of all policyholders, as they seek to keep premiums affordable for everyone in the longer term."

Health Minister Gan Kim Yong told Parliament that co-payment is an integral part of healthcare schemes as zero payment "dilutes the personal responsibility to choose appropriate and necessary care".

It would "encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders, but for all of us", he said.

Committee of Supply 2018 Debate Highlights: MOM, MOE, MHA, MINDEF, MFA, MTI, MinLaw, PMO

Tighter rules to support Singaporeans and raise quality of foreign workforce
Rules on employing foreigners to be tightened
More opportunities for locals on Jobs Bank; qualifying salary for S Pass to be raised
By Joanna Seow, Manpower Correspondent, The Straits Times, 6 Mar 2018

Rules on the hiring of foreigners are being tightened, in a move to give Singaporeans a fair shot at more and better jobs.

More companies will have to give locals a chance to apply for higher-paying jobs by advertising them on the national Jobs Bank for at least 14 days before they can hire a foreigner for the role.

This rule will be extended from July 1 to cover firms with at least 10 workers and for jobs paying under $15,000 a month, Manpower Minister Lim Swee Say said yesterday. Currently, it applies only to firms with at least 26 workers and for jobs paying under $12,000 a month.

The ministry did not provide the share of jobs posted on the Bank that eventually went to locals, but noted that the local share of net growth in professional, managerial, executive and technician employment has increased - to 78 per cent on average from 2015 to last year, up from 68 per cent on average in the previous three years.

Meanwhile, companies will have to pay semi-skilled foreigners more for them to come to Singapore under the S Pass scheme. For the first time in five years, the minimum qualifying salary will be raised. It will go up from $2,200 to $2,400, with the hike taking place over two tranches, on Jan 1 next year and one year after.

The moves are part of efforts to raise the quality - and productivity - of foreign manpower in Singapore while ensuring locals get access to good jobs, said Mr Lim.

This is especially critical as Singapore's manpower growth slows. From 2015 to last year, net job growth was under 10,000 a year on average, down from over 100,000 a year in the previous three years.

"Probably one of the most critical challenges is to ensure that slower growth of our Singapore workforce will not become the bottleneck in the future growth of our Singapore economy," Mr Lim said during the debate on his ministry's budget.

He outlined how it navigates the tightrope in considering the competing demands of companies and Singaporeans. "Employers say they cannot find enough locals who have the skills and are willing to do the jobs," he recounted. "To them, MOM is not pro-business enough.

"But on the other hand, we hear (on the) ground feedback that there are still too many foreigners, too much competition here for jobs."

Foreigners, numbering 1.1 million, make up about a third of Singapore's workforce of 3.4 million.

Mr Lim said foreign manpower policies have to be open enough to support business growth, yet tight enough to enhance local employment growth. "We are pro-business, but only to those who are pro-worker."

For instance, the ministry has over the past two years placed 500 companies that unfairly favour foreigners in hiring on its watchlist. Such firms have a harder time getting Employment Pass (EP) applications approved.

Prepare for public housing supply avalanche as ageing HDB flat owners die

By Ku Swee Yong, Published The Straits Times, 5 Mar 2018

Our rapidly ageing population is very much in the news, with the ongoing debate in Parliament on the Budget and the impact of an ageing society on public finances.

Singapore reaches a population milestone in 2018: The total number of senior citizens at 65 years and older equals the number of young people at 15 years and younger.

Singaporeans are not merely ageing fast. The number of deaths each year is expected to increase rapidly as baby boomers advance into their 80s. By the year 2030, the total number of citizen deaths per year is likely to exceed the number of births.

The large cohort of baby boomers, defined as those born in the post-World War II economic boom period of 1945 to 1964, coupled with steadily falling birth rates in more recent decades, has resulted in an inverted population pyramid. Today, that generation of baby boomers is aged between 54 and 73.

Assuming that both the fertility rate and the mortality rates of the various age categories of Singaporeans remain constant, we will reach a milestone where deaths exceed births in the year 2030.

So far, the discussion on an ageing population has largely been focused on the costs of healthcare and social support. It is time to consider the impact on another area - public housing. The increasing deaths and a reducing base of young people have huge implications for public housing.



SUPPLY OF RESALE HDB FLATS INCREASES

To understand the impact of the ageing population on public housing, some background is important. The Housing Board's housing programme was ramped up quickly in the 1970s and 1980s to supply more than 550,000 flats over these two decades to meet the needs of a million baby boomers who were setting up families.

By the 1990s, the percentage of Singaporean families living in HDB flats shot up to 87 per cent, from 35 per cent in 1970s. Private residences, though slower off the mark, were developed rapidly from the 1990s.

Today, about 80 per cent of Singaporeans live in HDB flats and 90 per cent of households own the homes they live in. A large proportion of baby boomers own and live in HDB flats that are 30 years or older. When they die, their flats may be inherited by their beneficiaries or resold on the open market.

However, with 90 per cent home ownership, most of the beneficiaries would already be HDB flat owners. Under current HDB rules, they are not allowed to inherit the flat from their deceased parents. In cases where there are multiple beneficiaries, they might opt to sell the flat and distribute their inheritance as cash.

Hence, the number of flats put up for resale will likely escalate as cohorts of baby boomers age and die. Estimates from the latest population data and mortality rates show that the number of senior residents dying will exceed 30,000 per year by 2030, about 21/2 times the number in 2016.

While the number of new flats released by the HDB can be controlled, the supply of resale flats is something that policymakers have little control over. By 2030, flats made available for resale due to the deaths of the owners may make up more than 8,000 units.

That is equivalent to about 40 per cent of the number of resale transactions per year in 2016 and in 2017.

BUT FEWER YOUNG AND NEW FAMILIES ARE BUYING FLATS

The increased supply of resale HDB flats faces another challenge: slowing demand from young couples. Birth rates have trended down since 1998.

The Singapore way of calculating budget balances

Instead of one operating balance sheet, Singapore's prudent approach breaks the Budget into three chunks: the primary balance, the basic balance and the overall balance.
By Chia Ngee Choon, Published The Straits Times, 3 Mar 2018

Budget 2018 is consistent with the "Singapore way", namely being sustainable, pro-active and forward looking.

The "Singapore way" to ensure fiscal sustainability is to monitor our finances over both the near term and long term. This departs from conventional budgetary accounting laid out in the International Monetary Fund's (IMF) Government Finance Statistics, a point picked up by some on social media.

In the IMF's accounting standards, emphasis is placed on a single headline fiscal indicator - "gross operating surplus". This surplus is obtained by taking total revenue minus total expenditure and reflects the total change in government net worth in a year.

The total revenue includes all government receipts, tax and non-tax revenue and capital receipts. In Singapore's context, the latter would have included sales of land and the returns and earnings of investments from Singapore's reserves.

Under Singapore's Constitution, the Singapore Budget Statement shows only revenues that the Government is allowed to spend. Land sales revenue is thus excluded in the Budget Statement. Land sales revenues that are invested together with other returns and earnings from reserves are reflected in the Budget Statement as Net Investment Returns Contribution.

Instead of the IMF standard of calculating surplus, Singapore uses three different measures of fiscal balances: the primary budget balance, basic budget balance and overall budget balance. This is a uniquely Singapore way to track fiscal positions to meet its near-term and long-term needs.

Singapore's defence spending: A case of too much or not enough?

By Graham Ong-Webb, Published The Straits Times, 3 Mar 2018

Singapore's public spending is under increasing pressure as its population and infrastructure age. An ageing society means higher health and social spending, while infrastructure needs require the nation to set aside vast sums to maintain and upgrade old systems and build new ones.

Naturally, other sectors of the national Budget will come under increasing scrutiny. One such sector is defence.

In some quarters, there is a nascent perception that Singapore's defence spending - in the current absence of external military aggression - has not only ballooned, but is also excessive. The rising query has become, "Are we spending too much on our defence?"

Interestingly, as a proportion of total government expenditure, defence spending is going down, not up. At its height around the mid-to late 2000s, spending by the Ministry of Defence accounted for nearly a third of total government expenditure.

With the modernisation of the Singapore Armed Forces (SAF), defence spending as a proportion of government spending has fallen to around 19 per cent from 2015 to last year.

At the same time, social spending increased from 35 per cent of total government expenditure in 2006 to 40 per cent in 2016.

Questioning if too much is spent on defence is not unique to Singapore. European countries belonging to Nato caved in to public pressure to slash defence spending in the 1990s, after the demise of the Soviet Union that threatened them with military aggression. It is only very recently that European countries such as Germany, facing rising threats including an increasingly belligerent Russia, are increasing spending to meet their defence and security requirements.

The evolving threat landscape also requires countries to devote more to defence. Traditionally, countries have militaries to protect their countries' sovereignty and territorial integrity. Today, militaries are increasingly called upon to deal with "non-traditional" threats such as terrorism, cyber security, counter-proliferation, biological pandemics and natural disasters. Taking on more of these additional missions raises operational costs for the military, but their contributions to security are significant.

For example, the SAF Army boosts the coverage of the Home Team's ground patrols by deploying soldiers alongside our police officers. More costs are incurred to train soldiers to respond to terror threats, and to procure equipment to deal specifically with terrorism incidents (rather than conventional warfare).



In addition to terrorism, the SAF must deter and respond to cyber threats that may be posed against it. The SAF depends on computer networks to perform its operations, without which it is unable to defend Singapore. Protecting these networks requires additional resources and skills that will cost more money.

As threats evolve, defence spending has to keep up with needs. In any case, spending on national defence is essential to create a stable social and economic environment for economic development.

Singapore's tiny geographic size means that deterrence is its best defence. The most credible deterrence requires strong military capabilities. Ironically, the outcome of credible deterrence is that a country will have a military force that is very unlikely to be deployed in traditional hostile action.

Thus, observers who ask why Singapore acquires significant numbers of advanced tanks, ships and aircraft - when there are no wars to fight - are missing the plot. In a deterrence context, an adequate acquisition of arms is actually inversely proportional to their use.

Budget 2018 debate in Parliament

Singapore Budget 2018 approved by Parliament, with Workers' Party MPs voting against it

GST hike responsible way to fund spending needs: Finance Minister Heng Swee Keat
WP votes against Budget, the first time in three decades, following heated debate
By Yasmine Yahya, Senior Political Correspondent, The Straits Times, 2 Mar 2018

Windfalls and one-off gains - like the ones that led to the unexpected Budget surplus of $9.6 billion in the last financial year - cannot form the basis of prudent fiscal policy, Finance Minister Heng Swee Keat said yesterday.

That is why the goods and services tax (GST), a broad-based tax, has to be raised - to fund expenses in healthcare, education and security long into the future, he said. Given Singapore's ageing population and the need to counter the terror threat, this spending is likely to recur year after year.



"The responsible way for us to fund such spending is to raise taxes. As Dr Lee Bee Wah pithily reminded us, you don't fund recurrent spending needs by hoping to strike 4D," said Mr Heng.

But the GST issue provided unexpected drama, with the Workers' Party (WP) saying it could not support a future hike without more information. For the first time in three decades, it cast its votes against the national Budget.

This came after WP chairman Sylvia Lim (Aljunied GRC) initially said the party intended to support the Budget when the vote was called, but not the announcement of a GST hike to take place some time between 2021 and 2025.

But Mr Heng made it clear that the Budget presented the Government's overall financial policy - both spending and financing options, including the GST increase.



He called on the WP to "square" its position. Mr Heng said: "Do you support all those increased spending? Or are you contradicting all your MPs' position yesterday where everyone spoke about doing more? Where is the money going to come from, and would a 2 percentage point increase help us in some ways?"

Ms Lim responded tersely: "To make it clear, we are unable to support the announcement on the GST hike."

The eight WP MPs present yesterday proceeded to vote "no" when a division - a formal recording of votes - was called.

To MPs who questioned the need for a GST hike despite the large Budget surplus, Mr Heng said it was largely due to one-off, exceptional factors. "We cannot fund our plans to secure Singapore's future on the basis of episodic windfalls," he said.

Instead, the only sustainable way to finance this was to raise taxes, he said. And a broad-based tax like the GST was deemed the most suitable.

Mr Heng reiterated that this hike would not cover expenditure needs, but would only make the fiscal gap more manageable.

On other financing options, he said the wealthy are already being taxed more, as are buyers of more expensive property.

Drawing on the reserves would not be responsible, he said, as these are needed to help Singapore weather economic storms. That left borrowing as a viable option for long-term infrastructure projects, and GST to meet recurrent needs.

Things began heating up in the House when Ms Lim voiced her suspicion that the GST hike might have been among this year's measures if the public had not reacted so negatively when the idea was floated.

"And I rather suspect myself that the Government is stuck with that announcement. Otherwise, perhaps we would be debating a GST hike today," she said.



This triggered a rebuttal from Law and Home Affairs Minister K. Shanmugam, who said Ms Lim was "basically making an accusation that the Government is behaving willy-nilly, dishonestly".

Ms Lim said she did not make any such accusation and was merely raising an "honest suspicion".

To this, Mr Shanmugam said: "Does Ms Lim agree it doesn't accord with the standards of a First World Parliament and honest debate for someone to come here and start talking about (how) 'this is my suspicion. I cannot back it back'?"

Mr Heng stepped back into the debate, noting he and Ms Lim were both former police officers. "Now, I want to present myself as your witness because I have been working on this ever since I became Finance Minister," he said, adding that the GST hike was based on an honest assessment of Singapore's fiscal position.



In a Facebook post last night, Prime Minister Lee Hsien Loong said that with the passing of the Budget, the Government has laid out its mid-to long-term plans clearly.

Travellers using Changi Airport to pay higher fees and charges from 1 July 2018 to help fund major expansion plans

Higher fees for airport users to fund Changi's expansion
New rates kick in on July 1; funds collected to help pay for growth, which includes Terminal 5
By Karamjit Kaur, Senior Aviation Correspondent, The Straits Times, 1 Mar 2018

Passengers and airlines using Changi Airport will have to partly fund its major expansion plans by paying higher fees from July 1.

The Government sees the massive investment in the airport as key to cementing Singapore's status as an aviation hub. However, industry players such as the International Air Transport Association (IATA) yesterday again opposed the model of getting users to pre-fund facilities before they utilise them.

From July 1, passengers who now pay $34 to fly out of Changi will have to fork out an extra $13.30.

Transit passengers will have to pay $3 more for each flight, with all hikes to be included in their fares.

Airlines will also have to pay more in aircraft parking and landing fees, the Ministry of Transport, Civil Aviation Authority of Singapore (CAAS) and Changi Airport Group (CAG) said yesterday.

The fees will rise each year until 2024, the authorities said. By April 1, 2024, the total departure fee for passengers departing from Changi Airport will climb to $62.30.

The total bill for the Changi East development, which includes Terminal 5, is expected to run into tens of billions, the Government said. Even the possibility of borrowing from the capital markets for such projects has been flagged. So far, the Government has committed more than $9 billion to the project, and CAG another $3.6 billion.

The extra fees to be collected from airlines and passengers from July are expected to yield more than $4 billion.

One flute, three kids - Who do you give it to?: Singapore Budget 2018

The moral choices behind our Budget allocation speak volumes about who we are as a society
By Adrian W.J. Kuah, Published The Straits Times, 28 Feb 2018

Much of the commentary on Budget 2018 has focused on measures such as the impending hike in Goods and Services Tax, raising the top marginal Buyer's Stamp Duty and, of course, the one-off SG Bonus arising from the $9.6 billion budget surplus.

But Budget 2018 has also been notable for its silence on several issues. Commentators have lamented that more could be done to address inequality and poverty, as well as to support families having to care for the elderly.

One line of argument came from Associate Professor Donald Low, associate dean of the Lee Kuan Yew School of Public Policy, in his commentary ("To justify GST hike, emphasise universal benefits"; Feb 21). He wrote: "Perhaps most significantly, the Budget speech did not articulate a social policy vision, or a new social compact, that would persuade the majority of Singaporeans to accept a tax increase."

Well, yes and no.

Prof Low is right to say that no new social compact was articulated. But, through the various continuities and the reinforcement of key fiscal principles, one can clearly see a social policy vision - albeit one that has remained largely unchanged for a long time.



How best to understand "social policy vision"? Perhaps a thought experiment by economist and philosopher Amartya Sen, in his book The Idea of Justice, can help us flesh out this abstract concept.

This is the scenario:

You are the authority figure and you come across three children - A, B and C - fighting over a flute. They cannot decide who gets the flute and so they want you to decide for them. One by one, they make their respective cases to you.

Child A says: "I should get the flute. I'm the only one here who can play it. And after all, the point of the flute is to make music. The other two can't play, so why should they get it?"

Then, Child B says: " I made the flute. I provided the materials for it. I spent time and effort making it. It is the fruit of my labour. How could you possibly take this from me and give it to someone else?"

Finally, Child C says: "Of the three of us, I am the poorest. I have nothing in this world. Even though I don't play the flute and I didn't make it, you should give me the flute. Because, then, you would have improved my lot in life immeasurably."

Which child you give the flute to, and the reasons and qualifications behind your decision, says a lot about how you define social justice and fairness.

(It goes without saying that you can assign the flute only to a single child. Sharing the flute is not an option, nor is selling it and splitting the proceeds.)