Expectations for Budget Singapore 2012

16.02.2012

Singapore

Singapore will be announcing its budget on Friday and analysts are not expecting many big surprises.
The government has said that the focus of the budget will be on boosting long term competitiveness of the country and helping citizens cope with rising costs.
Despite the challenging economic environment last year, economists said Singapore is likely to record a healthy fiscal surplus at about S$3 billion to S$4 billion for Fiscal Year 2011.
This is mainly due to better than expected collections from corporate and personal income taxes, stamp duties from the buoyant property market as well as gaming taxes from the two integrated resorts.
Experts said a good part of the new budget will likely go towards helping Singaporeans but they do not foresee any overly generous "handouts".
Irvin Seah, economist at DBS Bank, said: "The focus will be to help the low to middle income group tide over this increase in cost of living as well as to enhance their employability. This will come in the form of more skills upgrading and training schemes, as well as an increased focus on education."

Meanwhile, Singapore companies are also looking for some help from the government to offset rising business costs.
Labour cost is a key issue, and there are concerns over possible changes in rules governing the hiring of foreign workers.
According to the Manpower Ministry, foreign employment grew by 79,800 last year, after increasing by 54,400 in 2010.
Professor Annie Koh, Dean, Executive Education, Singapore Management University: "That pain will continue as far as foreign worker levies go. Otherwise we won't change, we will keep using low cost labour. They might come in with schemes that say if you are willing to invest in your human capital locally, we let you do an equivalent top-up in the form of one more foreign labour."
Also on the wishlist of business leaders - measures to help companies expand abroad such as cross-border financing schemes or an export-import bank.
Teo Siong Seng, president of the Singapore Chinese Chamber of Commerce & Industry, said: "Many of their projects cannot get financing because they don't have a track record, and they don't have a strong balance sheet."
Tai Hui, regional head of research, South-East Asia, Standard Chartered Bank: "Singapore is placed in an advantageous position, crossroad between South Asia, India, North East Asia, China and ASEAN. The government's intention, at least the business directive ought to be how to tap the growth of these areas, which we think are going to be very positive for the next five to 10 years, maybe longer."
Observers said while the budget will focus on longer term developments, the Singapore government will also keep an eye on uncertainties in the global economy. These include a potential recession in Europe as well as further moderation in US growth this year.