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National budgets address the immediate and needs of societies and their peoples. They also have to look into the future and allocate funds for longer-term development. On these counts, Finance Minister Heng Swee Keat’s Budget 2016 does not quite do the job.
There are three major concerns that Singaporeans face. The first is the negative turn of economic conditions regionally and locally. The ratings of our local banks have just been downgraded from stable to negative because of concerns about asset quality and profitability.
The second is that many major retailers have closed because of their inability to survive the high cost environment in Singapore. Even major oil companies like McDermott, Technip, and Subsea 7 have relocated to Malaysia, citing high real estate costs. This has caused a steady increase in the number of layoffs of our workers.
The third is the inability of Singapore to increase its labour productivity levels and to upgrade our economy from one of dependence on cheap labour to one of ideas and innovation. The lack of a significant productivity increase is a worrying drag on the economy that will result in stagnant wages for Singaporean families.
To deal with these issues, the SDP proposes the following:
Scale back the Government’s involvement in business. The Government should not be taking the lead in business. Because of the PAP’s penchant to control the bulk of our economic and financial resources, for example, we have ended up being disproportionately and dangerously exposed to the Chinese economy which is undergoing a slowdown. We are China’s biggest foreign investor.
Lower land costs. The exodus of businesses from Singapore is alarming. The high cost of operating on the island, including high rentals, are making it extremely difficult for businesses, both local and international, to maintain a healthy balance sheet. The government is the largest landowner and landlord in Singapore and should explore ways of lowering land prices which will, in the longer run, translate into lower rentals for businesses.
Introduce retrenchment insurance. An immediate relief for workers laid-off in the current economic climate would be to put in place a national retrenchment insurance programme where retrenched workers receive temporary financial assistance while they look for another job. The SDP has proposed our RESTART (Re-Employment Scheme and Temporary Assistance for the ReTrenched) programme where workers receive a scaled-salary payout for 18 months.
Return freedom to the people. The government has in past years spent more than $20 billion on various schemes to try to jump-start labour productivity and innovation to no effect. Introducing a similar programme with a different name – SkillsFuture – is not going to help.
What is needed, among other measures to retool our economy, is political openness where Singaporeans are free to express themselves without fear of political retribution by the PAP. It has been well established that a fearful political climate does not conduce to creative thinking and innovation.
Singapore’s economy is in need of an overhaul. The old model of the PAP’s top-down approach is obsolete and cannot rejuvenate a highly stressed and anachronistic economic system. The longer we remain in such a mode, the more difficulties our nation will face.
The SDP offers a new model where Singaporeans take the lead in driving our economy and society. We believe that genuine political reform will allow the talented people of Singapore the freedom to explore, to innovate and to speak up. It is only through reform, that we can enjoy Singapore’s best days ahead of us.