Sponsored Ads

Search JC Economics Essays

Custom Search

A Summary: Singapore’s 2017 Budget Statement Aims to Build Singapore's Future Economy

This economics summary of Singapore's Budget 2017 is contributed by a former economics lecturer

What Happened? A Brief Summary of Budget 2017

In his 90-minute speech to Parliament on Monday, 20 February 2017, Singapore’s Minister for Finance, Mr. Heng Swee Keat, focused on future economic challenges facing Singapore.

With economic growth surpassing some economists’ expectations last year in 2016, Singapore's Budget 2017 looks to the future by earmarking S$2.4 billion to roll out multi-year economic schemes. 

These economic programmes are in addition to the industry-level transformation initiatives, totalling S$4.5 billion, rolled out in 2016’s budget.

But at a time of slowing economic growth in recent years, some S$1.4 billion is also set aside to help firms and workers, and provide additional economic support for individuals, households, and the disadvantaged, to help promote an inclusive society in Singapore. Even with economic support measures, the Singapore government still – nevertheless – wants to continue promoting a sense of self-reliance in companies, workers, and families, and encourage partnerships to drive the Singapore economy forward.

Some Economic Figures – Economic Stimulus

Broad economic stimulus measures were avoided, and instead the government aimed for targeted economic measures in 2017. As Minister Heng commented, "Budget 2017 is an investment in our economic transformation and social resilience." This is an important point. Budget 2017 is expansionary, with total expenditure coming to S$75.07 billion, some S$3.68 billion more than for FY2016.

The Singapore budget surplus, lifted by S$14.11 billion in net investment returns, is expected to be at S$1.91 billion, or 0.4 per cent of Gross Domestic Product (GDP). This is S$3.27 billion smaller than the FY2016 surplus. Nonetheless, Minister Heng reassured the House that "this budget position is prudent, while supporting firms and households in the midst of continued economic restructuring."

Singapore is Undergoing a Key Transition as Our Economy Matures

Budget 2017 comes at a time when Singapore is undergoing a "key transition" as the economy matures. Singapore’s open and trade-dependent economy reported 2 per cent growth for 2016, one of the slowest years since the 2008 global financial crisis. Structural economic shifts towards economic productivity are also weighing on companies and the labour market.

And the International Context is Changing and Evolving  

At the same time, deep economic shifts and economic uncertainties are happening rapidly and globally for trade and investments, businesses and jobs. In fact, Minister Heng commented that at the last Budget, issues like Brexit seemed remote and the US had just started the process of electing their new President. He further said that events since then were a stark reminder of how quick and unpredictable change could be.

Expand Overseas - Go, Go, Go 

Minister Heng unveiled a S$2.4 billion response, spread over four years, to execute the Committee of the Future Economy (CFE) recommendations. The report laid out economic strategies to help Singapore remain relevant amid a fast-changing world. Rejecting the inward-looking economic mood of some advanced economies, Mr Heng said that a key thrust is to help Singaporeans and companies tap overseas economic opportunities. In that vein, a S$600 million fund will be set up to support firms expanding overseas. Called the International Partnership Fund, it will co-invest with Singapore-based firms to help them scale up and internationalise.

Digital Economy – and Digital Economies

There will be economic help for small and medium enterprises to gain digital technological capabilities, and to use them effectively. Plans were also drawn up for research agencies like A*Star in Singapore to help companies tap innovation or co-develop intellectual property so that companies can grow.

But Singapore Will Support Firms and Workers in the Short Run

However, in a nod to the slow economic growth environment, Budget 2017 also responded to the near-term economic concerns of firms and workers. To tackle cyclical concerns, foreign worker levy increases for the marine and process sectors will be deferred by one more year, while S$700 million worth of public-sector infrastructure projects will be brought forward to support the construction sector. In addition, there will be enhanced corporate income tax rebates, while eligible businesses, especially smaller ones, will receive help in coping with higher wage costs. Some S$26 million per year will be set aside to help train workers looking to take new jobs or go for work attachments. Economic measures were also unveiled to support families, including more public housing grants and a personal income tax rebate of 20%, capped at $500, which is definitely a welcome measure in such tough economic times.

Sustainability – Spending Caps, Taxes, Carbon Taxes, and Water Taxes

With increasing spending demands, Budget 2017 put in place measures to ensure fiscal sustainability, while pointing to longer-term tax policy changes. For example, Minister Heng said that all ministries and organs of state will lower their budget caps by 2 per cent permanently. And a new carbon tax on emission of greenhouse gases was proposed, while water prices will be hiked by 30 per cent in two phases to reflect the increased cost of producing water, and to signal the importance of water to Singapore’s survival.

And What’s Next?

Singapore’s Parliament will convene on 28 February 2017 to debate the Budget, and then after the Budget Debates are concluded, the Committee of Supply 2017 debates will begin.

JC Economics Essays - Singapore Budget 2017 special. This short summary and opinion piece will help A level economics students understand the issues surrounding budget and the parliamentary process better. Thank you for reading and cheers! 

Sponsored Ads

Please do NOT Plagiarise or Copy Economics Essays

It is one thing to learn how to write good economics essays from sample or model economics essays, but another thing if you plagiarise or copy. Do not copy economics essays.

First, if you are handing in an assignment online, there are checkers online which track sources (such as turnitin). Please craft assignments yourself. Second, if you are handing in a handwritten essay, if you copy, you will not learn and will thus not benefit, nor earn good grades when the real economics examination rolls round. Third, you can always write better essays given time and improvement. Fourth, copying is illegal under most conditions. Do not copy economics essays.

This is an economics site for you to learn how to write good economics essays by reading a range of useful articles on writing, study essay responses and contributions and sample/ model economics essays from students, teachers, and editors. We hope you can learn useful and relevant writing skills in the field of economics from our economics site. Thank you for reading and cheers!