Singapore's Budgets are typically an exercise in devising sustainable blueprints for the long term while focusing minds on what needs to be done here and now, so that the country collectively can survive the transition to the future. This philosophy underlies the Budget delivered by Finance Minister Heng Swee Keat yesterday. Marked by global uncertainty and the constant threat of disruptive technological change, these are particularly difficult times in which to be preparing for the future. Yet, despite the economic mood, Singapore needs to put viable policies in place today. Their ultimate wisdom will be proved by the extent to which they help companies, workers and citizens at large to overcome immediate challenges and emerge more robust in the process.
In that spirit, Mr Heng mentioned the need to implement a carbon tax on the emission of greenhouse gases. Although the tax rate he has in mind is between $10 and $20 per tonne of greenhouse gas emissions, it will have an effect on large industrial players, which will no doubt seek to pass on the cost to consumers. However, the measure is necessary to protect Singapore's environmental sustainability. The need to shore up the future is even more acute in the case of water, which is nothing less than a strategic resource, but which some consumers treat as a commodity which they can afford to waste. The increase in water prices should help to place its national importance in perspective, while offering relief to lower- and middle-income households affected by higher prices. Adjusting the goods and services tax system, and strengthening the revenue base, which Mr Heng alluded to, will enable a stronger fiscal framework for a slew of policies to help Singaporeans.
The Budget also seeks to help firms and sectors that are doing well to seize new opportunities, while introducing specific measures for sectors facing cyclical weaknesses. For workers, there is fresh emphasis on reskilling to find new jobs. Funding support is not wanting either, as for example with the $2.4 billion being put aside over the next four years to implement the strategies of the Committee on the Future Economy. That would be in addition to the $4.5 billion set aside last year for the Industry Transformation Programme. The increase in the CPF Housing Grant will help a swathe of Singaporeans, as will additional support to help with household expenses.
Along with the need to invest in critical infrastructure, such as Changi Airport Terminal 5, these measures will put pressure on national finances. It will have to be met with the fiscal discipline that has brought Singapore far enough to plan for better days in difficult times. Mr Heng is right to tackle the challenges of today and tomorrow head-on, rather than leave them for another day.