A consolidation of my views on Budget 2009

February 5, 2009 by · 5 Comments
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Written by Ng E-Jay
05 Feb 2009

This is a consolidation of my views on Budget 2009. Most of the material in this article can also be found in the following posts which are written by me:

Singapore’s economy: Has the Government been caught with its pants down? (01 Feb 2009)

Will our business-centric budget benefit GLCs and big businesses more than consumers and working class citizens? (26 Jan 2009)

Will the use of past reserves set a precedent for future drawdowns? (23 Jan 2009)

My take on the key highlights of Budget 2009 (23 Jan 2009)

1. The main thrust of Budget 2009: Saving jobs by aiding businesses

Budget 2009, touted by the mainstream press to be “generous”, “decisive”, “bold”, and “scoring on superlatives”, is designed to benefit businesses first and foremost, in the hope that by helping companies cut staff costs and gain easier access to credit, jobs can be saved.

But will jobs really be saved by such measures? The current sharp downturn in the global economy has been accompanied by a collapse in global demand. Given that our economy is still very much export oriented, helping businesses cut costs and gain access to credit would not necessarily translate into job gains because companies have no reason to expand but every reason to scale down to survive. If no one out there is buying your goods and services, the cheapest labour in the world or the easiest source of credit is not going to help your company stay afloat.

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