Singapore Budget 2015 not a 'Robin Hood Budget', but still left-of-centre: Economists

Economists say that this year's Budget, which introduced a Silver Support Scheme to help the bottom 30 per cent of Singaporeans in their later years as well as a more progressive income tax, signals a "left-of-centre" shift in national policy. -- BT
Economists say that this year's Budget, which introduced a Silver Support Scheme to help the bottom 30 per cent of Singaporeans in their later years as well as a more progressive income tax, signals a "left-of-centre" shift in national policy. -- BT PHOTO: YEN MENG JIIN

SINGAPORE - Economists say that this year's Budget, which introduced a more progressive income tax and a Silver Support Scheme to help the bottom 30 per cent of Singaporeans in their later years, signals a "left-of-centre" shift in national policy.

The Silver Support Scheme, as described in Monday's Budget, will give quarterly cash payouts averaging $600 to the poorest seniors. It is a permanent scheme, conditional on need rather than work, and has a wider reach than the Public Assistance safety net because eligible seniors will be enrolled automatically without having to apply for the scheme, said Nanyang Technological University economist Giovanni Ko.

"The amounts here are far from what other developed economies have, but this goes quite some way towards implementing a basic pension," said Dr Ko.

"It's a huge step forward in terms of inclusiveness and collective responsibility."

Dr Ko was one of a panel of five industry observers from the Economic Society of Singapore (ESS) who spoke at a post-Budget forum held at the Grand Hyatt Singapore on Wednesday.

In his Budget speech on Monday, Deputy Prime Minister Tharman Shanmugaratnam spoke of "collective responsibility", and of "strengthen(ing) the Government's redistributive role... to benefit lower- and middle-income Singaporeans".

OCBC economist Selena Ling also called the Silver Support Scheme "a further step to the left", though she added that Singapore's model of social security is unlikely to go down the path of Western welfare models.

"Over the last five years, the Government has taken steps that ideologically would have been taken as sacred cows," said Ms Ling, naming schemes such as Workfare and the Wage Credit Scheme which top up the incomes of lower-wage workers.

But Ms Ling disagreed that the Budget was a "Robin Hood budget", as some had called it, because it benefits not just the poor but the middle class as well. Moreover, the special transfers made to businesses were "still much bigger" than to households.

CIMB economist Song Seng Wun said that Singapore could sustain further leftward moves in national policy, "primarily because Singapore remains quite an attractive place to do business in".