With a massive overall Budget surplus of $6.45 billion, the government was in a generous mood this year - although its giveaways came with hard-headed strategic intent.

The surplus came after a period when the Budget was in deficit three out of four years. Indeed, a deficit of $700 million was projected this year, but a booming economy and property market swelled government coffers.

The mood was reminiscent of the 1990 years of plenty, when billion-dollar surpluses were common.

Despite it not being an election year, an impressive $865 million in 'Growth Dividends' will be given to all Singaporeans, with more rightly going to the lower-income worst hit by rising costs.

The figure is about 62 per cent of the $1.4 billion increased revenue from the hike in Goods and Services Tax - which means that through the Growth Dividend, the government is giving back to the man-in-the-street 60 cents of every extra dollar it collected from the GST hike.

The man-in-the-Nissan-Sunny will welcome the income tax rebate of 20 per cent.

This benefits the 25 per cent of Singaporeans who pay income tax. Capping the rebate at $2,000 means the mid to low-tier of taxpayers benefit proportionately more, a smart way to allocate tax savings so the millionaires don't get whopping gains.

There will be grumbles that the government didn't meet expectations by cutting the top personal income tax rate of 20 per cent to match the corporate rate of 18 per cent.

But with a global economy slowing down, and overflowing tax receipts by no means assured, Finance Minister Tharman Shanmugaratnam rightly preferred to keep some bullets in his gun.

In any case, the tax rebate amounts to a substantial sum in taxpayers' pockets to fight inflation.

The man-in-the-BMW will approve the death of estate duty - a move that hardly affects anyone else, although Mr Shanmugaratnam tried to argue that this benefits society as a whole by attracting rich people to move their assets here.

Apart from the tax rebate and Growth Dividend, which are fairly blunt instruments to give back money, most of the other measures were smartly targeted.

Take education giveaways. Instead of indiscriminate gifts, the government will top up students' post-secondary education accounts, and raise bursaries for tertiary education. These are investments in students' future.

Significantly, more bursaries and loans will be available to the middle-income, with the cut-off for bursaries, for example, tweaked so that two-thirds of households can qualify for bursaries, up from half.

Also promised is more spending on the other end of the education spectrum - pre-school. More details will be forthcoming.

Read the full report in Saturday's edition of The Straits Times.