Government to give $3b worth of handouts in 2008 – My take

April 27, 2008 by admin
Filed under: Current Affairs, Financial Matters 

Today I received a flyer from my town council in my mailbox, stating the Government will give slightly over $3b worth of handouts in 2008. In particular, there will be:

  • $865 million of Growth Dividends
  • $300 million of Workfare Income Supplement
  • $560 million of GST Credits and Senior Citizens’ Bonus
  • $200 million of U-Save, S&CC and rental rebates
  • $100 million of property tax rebates
  • $226 million of medisave top-ups
  • $380 million of income tax rebates
  • $500 million of Post-Secondary Education Account (PSEA) top-ups

In addition, at the back of the flyer, there were two examples given showing how much typical households might receive. A family of 3 with household monthly income of $1,000 living in a 3-room HDB flat would receive around $4,934 in total for 2008. A family of 5 inclusive of an NS-man and two young children with household monthly income of $4,800 living in a 5-room HDB flat would receive around $4,812 in total for 2008.

One thing comes to mind when I see the second example above. The $4,812 received by the family of 5 includes $1,500 going into the Post-Secondary Education Account (PSEA) of the two children. That is money that cannot be used for day-to-day expenses. If we remove that PSEA top-up from consideration, we find that what is left is $3,312 for daily needs (including the $350 Medisave top-up which can only be used for medical needs). Perhaps the family of 5 may not feel as advantaged by the budget handouts as the example would suggest.

Another thing that comes to mind is the issue of inflation. The inflation rate hit an annualized 6.6% rate in January this year, and a 28-year high of 6.7% in March. If this trend of high inflation continues, it will certainly create more hardships for the lower income class. Our budget handouts are not in any way pegged to inflation, so handouts in subsequent years might become considerably less on an inflation-adjusted basis.

Hong Kong also had a massive budget surplus last year, of around HK$115.6b. Their “goodies package” for 2008 is around HK$40b, or around 35% of the budget surplus.

Our budget surplus last year was around $6.4b, and our “goodies package” for 2008 is around $3.1b, or around 48% of the budget surplus.

This might make us look more generous than Hong Kong, but don’t forget, Hong Kong still has no GST, while for us, we have 7% GST. Hong Kong’s corporate and personal income tax rates are also marginally lower than ours, even though our income tax rates are already considered amongst the most competitive in the world.

On the flip side, Hong Kong is doing much worse on the inflation front (over 10% annualized inflation was recorded in Feb 08), especially because of their de-facto peg to the US dollar. Singapore has been combating inflation by allowing a faster appreciation of the Singapore dollar against those of its major trading partners. A strong Sing Dollar helps offset costlier imports such as rice and fuel.

In my opinion, more can be done to help the poor and lower income families deal with GST as well as the rising cost of living, such as:

  • Removing GST on essential items such as food
  • Taking the number of dependents (children and aged parents) into account when distributing budget handouts such as the GST Offset package and the Growth Dividends. Those with more dependents should get a much larger amount of Growth Dividends compared to those with no dependents.

Tags:

Comments

5 Comments on Government to give $3b worth of handouts in 2008 – My take

  1. Taxpayer on Mon, 28th Apr 2008 1:38 am

    2. That is meaningless to me because I get nothing out of the nice-to-look-at scums.
    Not even a tiny bit of crump comes my way.

    I question I like to ask is what happens to the billions of dollars lost in the purchase of
    UBS, Citigroup, Shin Corpse, Merrill-Lynched, etc.?

    I begin to think that all these shows are meant to appease the unhappiness of people
    who keep seeing the taxpayers money and CPF funds being thrown away in the guise
    of “long-term” investments, with self-praises spams thrown into our faces day after day
    in the States Times.

    Fed up. Enough!

  2. Daily SG: 28 Apr 2008 « The Singapore Daily on Mon, 28th Apr 2008 11:26 am

    3. [...] are fed, up with progress! – Sgpolitics.net: Government to give $3b worth of handouts in 2008 – My take – Wake Up Your Idea: When Cost Goes Up, Wages Don’t Need To? – My Sketchbook: It just gets [...]

  3. Dont bullshit me on Mon, 28th Apr 2008 1:00 pm

    4. Dont forget!

    This 3 billion dollar pie came for OUR $6.4 billion BUDGET SURPLUS last year.

    Where did the other $3.4 billion go to?

  4. SGDaily Roundup: Week 17 « The Singapore Daily on Sat, 3rd May 2008 3:05 pm

    5. [...] are fed, up with progress! – Sgpolitics.net: Government to give $3b worth of handouts in 2008 – My take – Wake Up Your Idea: When Cost Goes Up, Wages Don’t Need To? – My Sketchbook: It just gets [...]

  5. Lucky Tan on Sun, 4th May 2008 9:16 am

    6. Please lah, the govt give $3B also complain, don’t give also complain. Why don’t you go and eat your crab with the free money once your stomach is full maybe your mouth will stay close.

    Please don’t compare with HK, they have the who PRC army behind them and don’t have to spend a cent on defense.

    You know why you opposition guys lose all the time. You say you’re fighting for the poor. Do you see any of our poor folks complaining about the freebies they just received? Get real okay!

    The PAP are great timers – there will be pain and there will be relief. Relief always comes after the pain and often close to elections. That is the winning way. The half life of the memory of a Singaporean is about 3 years by the time the next election comes around, a great amount of relief will be handed out and all will be forgotten. The other trick is to have pain but no trauma – they always puts to the point of pain but never beyond that. People get upset but it is never allow to snowball into hatred for the PAP.

    People generally don’t hate the PAP and one of the mistakes the opposition makes is to assume they do. That is the whole idea of arresting the opposition, repressing them so they hate the PAP. …and think the rest of Singapore think like them.

    One day they will arrest you Ng E J and transform you into one of those angry ones to scare the electorate into voting for the PAP. See what they did to Chee, the man does not know how to smile anymore…..

Tell me what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!