Comment on Singapore budget

Recently, the government has announced the Budget for 2011. This budget includes various incentives for Singapore citizens. These incentives include tax rebates, subsidies for the lower income families and "Child Development Credit". The group which benefits the most from the Budget will be those low income households, and the Budget is also aimed at helping these households, who find it hard to catch up with the society financially.

Although the budget claims that it will help the needy and lighten their burden, I only agree with this statement to a certain extent. Much as the poor receives subsidies, this sum of money only helps them in the short-term, and they would still find themselves lagging behind the higher income groups by a huge gap.

For example, the budget included personal income tax rebate and Utilities-Save (U-Save) and Service and Conservancy Charges (S&CC) rebates. This is to close up the gap between those from the high-income group and those from the low-income group. Despite the fact that Singapore enjoyed high economic growth in last year, the average income of the poor has not increased significantly. Therefore, the poor might be unable to cope with the rise in standard of living if the rich continue to get richer. This is why the government has given high subsidies to the poor.

The government is also issuing child development credit to households who have children to help children pay for their expanses. The amount each household gets per child is either $300 or $400, depending on whether the annual value of home is more or less than $13000.

However, these measures only have short-term effects as the government is only giving these grants for a limited period of time. Although it does help the needy cope with the high costs of living by letting them save on taxes, it does not help them in the long run because the income gap between the poor and the average income is still wide.

The longer term policy would be the one that upgrades the skills of the worker. This will equip workers, especially those from the lower income group, with skills that they can use when they enter the workforce, enabling them to perform better in their jobs.