Budget to help in tackling global uncertainties: Indranee

Ms Indranee Rajah told radio station Money FM 89.3 that there are considerable challenges ahead, from global trade tensions to the slowing Chinese economy and the disruptive potential of technology.
Ms Indranee Rajah told radio station Money FM 89.3 that there are considerable challenges ahead, from global trade tensions to the slowing Chinese economy and the disruptive potential of technology.PHOTO: SCWO

The Budget will aim to help the economy navigate global uncertainties by boosting innovation, promoting internationalisation and improving worker skills.

The guidance came yesterday from Ms Indranee Rajah, Minister in the Prime Minister's Office and Second Minister for Finance and Education.

Ms Indranee told radio station Money FM 89.3 that there are considerable challenges ahead, from global trade tensions to the slowing Chinese economy and the disruptive potential of technology.

She also cited warnings from the International Monetary Fund and World Bank of "darker skies ahead".

"Budget 2019 is a continuation of our strategy to chart a steady course through this kind of economic uncertainty," she added.

Help for small and medium-sized enterprises (SMEs) is on the cards. She said: "The best assistance is really to help SMEs to be productive, to help them to see how to best scale up, how to partner with bigger entities to access opportunities."

The Budget announcement on Feb 18 will focus "quite a bit" on these areas, as well as moves to further encourage SMEs to band together - although such organisation is most naturally carried out by trade associations and chambers, Ms Indranee said.

 
 

The disruption caused by technological change can be tackled. "The key is helping people to be able to come to grips with it," she added.

On the SkillsFuture scheme, Ms Indranee said: "That will continue but we'll look at ways in which you can help people further."

Economic issues aside, the Budget will have a social focus on education and healthcare in particular, as Finance Minister Heng Swee Keat earlier mentioned, as well as measures to encourage volunteering.

Ms Indranee added that there will be a "special focus on the underprivileged".

She also addressed the perennial question of how to fund spending, noting that Singapore "cannot over-rely" on investment returns on the nation's reserves as the investment climate varies.

The upcoming hike in goods and services tax from 7 per cent to 9 per cent, due between 2021 and 2025, comes within this context and in view of the long-term needs of healthcare and an ageing population. The exact timing of the hike, however, will depend on the economic situation and circumstances in the next term of government, she added.

Ms Indranee also noted that the Government is "still working on" the e-commerce tax due in 2020 but would not be drawn into revealing more details. "Watch this space, but nothing to add on that particular topic for now," she said.

 
A version of this article appeared in the print edition of The Straits Times on February 02, 2019, with the headline 'Budget to help in tackling global uncertainties: Indranee'. Print Edition | Subscribe