THE REPORTING on Budget 2018 in the mainstream media is a good example of why alternative media is essential in today’s media landscape.
You would be hard pressed to find any criticism of the Budget in the mainstream media. This is completely at odds with the complex, globalised and social media-driven world that we live in today where there is always a diversity of views.
In contrast, the alternative media has offered, and keeps offering, a wider range of views about the Budget announcement that makes the layman feel more involved in the process. This is because they can relate better to what their peers are saying on alternative media, compared to the mainstream messaging from politicians, economists, industry players and experts.
Piecing Together The Budget
Perhaps the recent Budget announcement is best understood if you see the perspective offered by the mainstream media as complementing those in the alternative media.
From what can be gathered from the mainstream and alternative media reports in the last few days, the Singapore government reported a Budget surplus of $9.6 billion last year. It attributed much of the extra money received to abnormal currency fluctuations.
The Straits Times reported $4.6 billion in contributions from statutory boards, mainly the Monetary Authority of Singapore (MAS). This far exceeded the $300 million predicted a year ago.
In terms of tax collections, the big contributor to the Budget surplus comprised higher stamp duty collections of $2 billion, helped by an uptick in the property market. This could increase in 2019 and beyond as, effective from February 20, the buyer’s stamp duty (BSD) has been increased for private residential properties from 3% to 4%. This applies to all properties with a value of more than $1 million. Some sort of wealth tax was expected by experts in this year’s Budget announcement, and a hike in the BSD is seen as easier to implement than a capital gains tax or estate duty.
It should be noted that a government’s budget surplus typically occurs when government tax receipts are higher than government expenditure.
The unusual thing in Singapore is now the government says that it needs more money to manage future expenditure. This is a bit difficult for the layman to grasp, especially after such a big Budget surplus was announced for 2017.
So, the government will raise taxes again. That could have been the plan, all along.
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The GST Budget Shuffle
The goods and services tax (GST) will be increased from 7% to 9% sometime between 2021 and 2025. This will put more pressure on businesses, industry and households. Although personal and corporate taxes are low in Singapore, there are many other taxes that can tear a hole in the pocket. Singaporeans know what these taxes are and grudgingly accept them as the cost of choosing to live in Singapore.
The collection of taxes essentially means that money that could potentially have been put into use to boost the economy is removed from companies and households.
The upshot is that a hike in GST will raise the cost of living in Singapore further. If you add inflationary pressures to the mix, it seems that there are a lot of price rises to come in Singapore. This is what the Budget announcement signalled.
Companies and households will feel the pressure down the line. They will be less inclined to spend which will hurt the broader economy going forward.
Meanwhile, Prime Minister Lee Hsien Loong weighed in on the Budget announcement by saying that is a strategic and integrated financial plan to build a “better future together”. What exactly does the future hold for Singaporeans, especially the younger generation that will have to bear an ever-growing responsibility for tax revenues due to the aging dynamic in Singapore?
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They may not know it yet, but their predecessors have contributed to chasing prices to the sky and the younger generation will have to pay for these excesses. In fact, Singaporeans have been borrowing from future generations of Singaporeans for quite some time.
This has resulted in many young Singaporeans not being able to buy a car or a house in Singapore, even if they are university graduates. They have to go deep into debt to afford such big-ticket items. This, in turn, creates another problem.
When someone is laden with debt, it is harder to be creative, or innovative, or rock the boat so that positive changes can be implemented.
There is always a high compliance to the status quo. Always having to worry about your next paycheck to keep the roof over your family’s head is a heavy burden to bear. Eventually you become a yes-man for everything. To be a debt slave for 30 years is not an ideal future for Singaporeans.
Perhaps government expenditure should be directed at how costs can be lowered so people can live richer lives that can have a positive impact on Singapore society.
Thus It Was Unboxed by One-Five-Four Analytics presents alternative angles to current events. Reach us at [email protected]
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