PSP on Budget 2020: Long term measures are always better than short-term goodies

The Progress Singapore Party (PSP) has issued a press release today (19 February) in response to the government’s 2020 budget that was announced by Minister of Finance Heng Swee Keat yesterday in Parliament.

“In our pre Budget statement, dated 12th of February 2020, Progress Singapore Party (PSP) called for an expansionary budget and therefore, we are aligned in principle. We would like to thank the government for taking into consideration feedback from voices like ours,” the Party stated.

PSP also commends the allocation of S$800 million for the healthcare system to combat the COVID-19 outbreak and future emergencies of such nature. PSP hopes that the front line medical professionals would benefit in terms of preparation, capacity building and infrastructure to affront the challenges.

However, the Party says that it would prefer to have a “more sizeable budget” allocated to households so they would be able to cope with the COVID-19 crises, as compared to current amount of only S$1.6 billion assigned for the people and household.

PSP’s Assistant Secretary-General Leong Mun Wai said: “We propose another one to two billion to be allocated to households to cope with COVID-19 crises and economic slowdown.”

Long-term measures better than short-term goodies

Besides this, the Party cites that long term measures would help the people and the economy more as opposed to short-term goodies as it allows them to plan for the future.

According to PSP, the "many short term goodies" listed in the budget does not really help in confidence building. It explained that the payout instances contained within the budget, at the moment, overshadows the capability of Singaporeans to grasp exactly the extent of what is being truly offered by the Budget.

As such, the Party notes that this has to be explained in a bigger picture so that individuals and enterprises can attune themselves to cast future projections.

Additionally, PSP also said that Singapore’s “over-reliance” on foreign employees is deemed as the main risk to the country’s economy, which can be witnessed with the latest coronavirus outbreak and the negative impact on the Republic’s economy and business.

“This is partly a result of our steadily declining total fertility rate (TFR) which has reached a historical low of 1.14 in 2018,” PSP said.

It added, “We should hence consider a thorough rethink on strong policies to increase our own Singaporean workforce through increasing our TFR.”

Don’t increase the GST rate

As for Goods & Services Tax (GST), PSP acknowledges the Government’s effort to not raise the rate for a year. To this, however, PSP strongly advocates against an increase in any kind on taxes or fees till 2025.

However, the Party questions the “rationale” for allocating S$6 billion Assurance Package by the Government in this year’s Budget, given that it cannot give an exact time on when the GST hike will happen.

Separately, the press statement also highlights that prior to the COVID-19 outbreak, the government had initially informed that there would be a 2% rise in GST. However, the government is now able to put that decision on hold amidst the challenges faced by the economy.

To top that, the government has allotted S$6.4 billion in terms of support packages to help support businesses, families and agencies impacted by the COVID-19, without having to withdraw it from the national reserves.

This, according to PSP, only shows the intended hike was not necessary and that the government can continue to fulfill its obligation without imposing the extra burden on people.

More attention must be given on effect of foreign workers in Singapore

On the decision to lessen the quota for S Pass workers, PSP is of the view that mid-level skilled foreigners only represent a fraction of the foreign workforce who compete with Singaporeans for Professional, Managers, Executives and Technicians (PMET) jobs.

Therefore, PSP believes that the government should pay more attention to the overall effect of having increasing number of foreign workers in our job market and society rather than reducing the S Pass sub-Dependency Ratio Ceiling (DRC) for selected industries.

Mr Heng announced for the Budget 2020 that there would be a reduction in the ratio of S Pass holders in construction, marine shipyard, and process sectors of 5%.

This reduction, said Mr Heng, will happen in two steps starting with a drop from 20 percent to 18 percent on 1 January 2020. The second drop to 15 percent will happen on 1 January 2023.

PSP explains in its statement that there are presently 359,000 Permanent Residents (PR) in the local labor force with 184,000 Employment Pass (EP) holders, alongside 201,600 S-Pass workers, who are competing for jobs with Singaporean PMETs.

Therefore, a permanent solution to overcome the PMET job discrepancy would be to effectively scrutinize and control the number of E-Pass holders and PRs in the job market, says PSP.