SINGAPORE - Expect social spending in the wake of the People's Action Party's victory in the Sept 11 General Election, economists say, but no immediate changes to the property cooling measures.
Economists note that the party's overwhelming win can be interpreted as an endorsement from voters of the Government's "shift to the left" in recent years.
The results show "some recognition that policies are moving in the right direction", said OCBC economist Selena Ling.
The Government is expected to continue spending more on key initiatives such as tackling bread-and- butter issues for the ageing population and developing and deepening Singaporeans' skills, she added.
CIMB Private Bank economist Song Seng Wun said voters were responding to the perception of a government that is "still fairly pragmatic and prudent, but willing to open its purse strings more".
NEED FOR FOREIGN WORKERS
People are beginning to realise that we do need foreign workers - transient workers who take up jobs that Singaporeans shun, as well as skilled immigrants who sink roots here. The last thing you want is to be perceived as a xenophobic society.
MR IRVIN SEAH, DBS economist
"It has already set the direction with policy shifts in recent years. In the coming years, we can expect a leaning towards more wealth taxes, and having wealthier people contribute more."
However, this does not mean the Government will adopt a more populist approach, said DBS economist Irvin Seah. Rather, it means that the composition of government spending will be tilted towards addressing social issues rather than towards ramping up economic growth.
"Social expenditure will rise but won't reach a point where it becomes unmanageable. There will still be a guiding principle of maintaining prudent fiscal policy."
Ms Ling noted that strong wins in key constituencies - such as in Jurong GRC, where a team led by Deputy Prime Minister Tharman Shanmugaratnam won 79.28 per cent of the votes - pointed to a "clear understanding" among voters that even with more social safety nets in place, government spending must remain sustainable.
"People are quite level-headed; they know we have to remain fiscally prudent," she said.
As far as property cooling measures go, analysts said the Government is unlikely to be in a hurry to lift them, preferring to see how much more prices will fall. By the second quarter of this year, they had declined 6.7 per cent since the peak in 2013.
The Government will be mindful of when the United States raises interest rates as well.
The electorate also responded to recent policy shifts on hot-button issues such as housing and foreign manpower, analysts said.
While moves to tighten the inflow of foreign workers have resonated with voters over the past few years, it remains to be seen if the Government will maintain the status quo or further fine-tune manpower policies, said UOB economist Francis Tan.
Given slowing local resident employment growth, there is a limit to how much more policymakers will be able to tighten the tap on foreign manpower without worsening the labour shortage and negatively affecting the economy, he noted.
There may, instead, be a move towards more sector-specific or job-specific manpower policies, to give certain companies more leeway to hire foreign workers when they struggle to find Singaporeans.
DBS' Mr Seah said the election results reflect a more nuanced understanding of immigration and labour issues among Singaporeans.
"People are beginning to realise that we do need foreign workers - transient workers who take up jobs that Singaporeans shun, as well as skilled immigrants who sink roots here," he said.
"The last thing you want is to be perceived as a xenophobic society. The election results show that Singaporeans are pragmatic and rational people who take a long-term view on many issues."
Economists also said that the Government is unlikely to raise the goods and services tax in the near future.
"It will come, of course, but not before bread-and-butter issues such as healthcare costs and infrastructure are addressed more thoroughly," said CIMB's Mr Song.