Singapore's 2017 Budget: Economist TakeawaysBy
Singapore’s Finance Minister Heng Swee Keat outlined plans in his budget speech on Monday to sustain economic growth in coming years. The government will enhance the rebate on corporate income tax and introduce a personal income tax rebate, help businesses in oil-services industries and accelerate infrastructure spending.
Below are some comments from budget watchers:
Brian Tan, Nomura Holdings Inc.
“The budget is very focused on implementing Committee on the Future Economy strategies as we expected. Short-term measures including cash handouts, tax rebates for households should help offset an uptick in unemployment, but focus stayed on medium-term measures looking to boost competitiveness and infrastructure. A small planned surplus means the government may run a small deficit over the next two years.”
Julian Wee, National Australia Bank Ltd.
“The main takeaway is that the government is being patient and pragmatic about the limitations in terms of near-term stimulus and is looking at the long term. It’s better to guide the economy in the right direction than having immediate large-scale policies.” He added that income from state investment companies and institutions like Temasek Holdings Pte, GIC Pte and the Monetary Authority of Singapore helps Singapore provide a small spending jolt to the economy, while staying in surplus.
Lawrence Loh, National University of Singapore
“This budget gives a bird’s-eye view of the economy. It covers all the critical bases.” An emphasis on environmental protection -- with the announcement of a carbon tax to be implemented from 2019 and a 30 percent increase in water prices from this year -- was a surprising feature of the budget speech. The measures are “very extensive,” and the carbon tax may lead to a 2 percent to 4 percent increase in electricity prices as power companies pass on costs to consumers, he said.