PSP’s Alternative Budget proposal reveals excess fiscal resources to spend on Singaporeans, contrary to government claims

PSP’s Alternative Budget proposal reveals excess fiscal resources to spend on Singaporeans, contrary to government claims

SINGAPORE — The Progress Singapore Party (PSP) has presented an Alternative Budget proposal for 2023 that includes long-term programs designed to “give Singaporeans comfort over their current and future financial positions,” according to Mr Leong Mun Wai, the party’s Non-Constituency Member of Parliament.

Delivering the proposal in Singapore’s Parliament on Wednesday (22 Feb), Mr Leong argued that there were excess fiscal resources to spend on Singaporeans, contrary to what the Government has been saying. He claimed that the Government’s recent short-term financial assistance measures, such as the CDC vouchers and Cost of Living Special Payment, were more likely to breed dependency than to strengthen resilience.

While welcoming the financial assistance announced by Deputy Prime Minister and Finance Minister Lawrence Wong in Budget 2023, Mr Leong argued that more long-term programs were necessary.

“We need long-term programmes to give Singaporeans comfort over their current and future financial positions before they can concentrate on becoming innovative workers and enterprising risk-takers to build Singapore into a competitive information economy,” he said.

He argued that Singapore had sufficient fiscal resources to fund such programs without drawing on the national reserves.

Mr Leong claimed that the Government’s estimates showed Singapore had excess fiscal resources, and that the country’s strong fiscal position was demonstrated by the Government’s ability to commit to a S$100 billion Covid-response package, which was equal to more than 20% of Singapore’s Gross Domestic Product  (GDP) in 2019.

According to Mr Leong, the Government only needed to draw S$40 billion from the reserves for the package because it had found S$32 billion of excess fiscal resources in the budgets of 2020 and 2022 to fund the balance. Additionally, he noted that in the same three years, the Government had set aside S$24 billion from the budgets to top up various endowment and trust funds whose spending is for future years.

“This translates into an annualized amount of about S$18.7 billion. This amount is roughly equal to the Net Investment Return Contribution (NIRC) allocated to the budget each year. This is proof that the NIRC has always been a slack in the budget which is normally not used to benefit Singaporeans in the year that it was allocated,” said Mr Leong.

Mr. Leong also noted that the Government had argued that the NIRC was pooled with the rest of the budgetary resources and used for all purposes, but by setting aside a sum of money almost equal to the NIRC in trust funds and endowment funds, it was equivalent to not spending the NIRC in the current year.

While the Government argued that there was a looming current and future budget deficit, Mr Leong maintained that in fact, there were excess fiscal resources in the Budget that could be deployed better.

“However, even ignoring the potential spending cuts, it is quite safe to say that we have excess fiscal resources each year, mainly from the NIRC, which can be deployed more proactively for the benefit of low-income and middle-income Singaporeans. In 2023, the NIRC has reached a new record of $23.5 billion, ” said Mr Leong.

He proposed several programs to demonstrate how the budget could be restructured to deploy these resources, including the Affordable Homes Scheme and Millennial Apartments Scheme to reset the public housing policy.

Mr Leong also argued that the middle-class is already over-taxed relative to their income, and proposed that some of the tax increases of Budget 2022 and 2023 should be reversed. The Goods and Services Tax (GST) would be reverted to 7%, and property tax increases for owner-occupied properties would be restricted to those with an Annual Value of more than S$50,000.

The Alternative Budget also proposed the limitation of stamp duty increase to properties worth more than S$3 million, and the Additional Registration Fee (ARF) increase would be limited to cars with Open Market Value (OMV) of more than S$60,000.

Additionally, the PSP would budget $4 billion for the nationalization of the MediShield and CareShield schemes, which will relieve middle-class Singaporeans of the anxiety over ever-rising healthcare insurance premiums.

Mr Leong also proposed measures to enhance job security for Singaporeans, such as introducing a S$1,200 monthly levy on Employment Pass (EP) holders to level the playing field between Singaporean and foreign employees. He argued that Singaporeans are disadvantaged when competing with EP holders who are exempted from Central Provident Fund (CPF) contributions.

He emphasized the need for compassionate spending to support low-skilled workers and disadvantaged segments of society. To that end, he proposed budgeting S$3 billion for a living wage that guarantees a minimum monthly take-home pay of S$1,800 for all Singaporean workers, which he had previously recommended during Budget 2021. The living wage would allow all Singaporean workers to attain a minimum standard of living, while the Progressive Wage Model would remain in place to help workers achieve a higher wage level.

Additionally, Mr Leong proposed budgeting S$1 billion to help the disadvantaged segments of society by doubling the ComCare pay-out for the poor and providing an allowance for caregivers and stay-at-home parents in recognition of their sacrifices and contribution to society.

All in all, PSP’s Alternative Budget, with a proposed net spending increase of about $8 billion which Mr Leong says is only a fraction of the excess resources available.

He concluded by inviting Singaporeans to be the judge of the merits of the proposals in the Alternative Budget, adding, “Singaporeans deserve better.”

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