Monday, February 21, 2011

PM Lee: Not many can do Budget, S'pore style

Feb 21, 2011

Surpluses enable Govt to dish out goodies but economy must grow

By Elgin Toh & Rachel Chang

THE new Budget, with hongbao to help Singaporeans cope with the rising cost of living, took an approach that very few countries can, said Prime Minister Lee Hsien Loong yesterday.
Calling it 'pro-growth' and 'prudent', he said it also reflected how the Government intended to make life better for Singaporeans.
However, he cautioned: 'We can't do this every year but we had a good year last year.'
With expected higher inflation, 'it's right that we have a Budget a bit more generous than usual', he added.
His comments on Friday's Budget at an event in his Ang Mo Kio GRC set out the thinking behind the 'Grow and Share' package as well as the need for Singaporeans to stay united and work hard for an even better future.
At a separate community event, Senior Minister Goh Chok Tong described it as 'a Budget with a heart'.
One big feature of the $6.6 billion bonanza of goodies is the cash gift for all Singaporeans but many of the other hongbao are tilted more towards the elderly, the lower-income and middle-income families.
In explaining the Budget approach, PM Lee underlined the importance of allocating 'money in the right places so that we see results'.
'But the most important thing is that we work together to make the economy grow every year, so that... as Singapore gets more prosperous, we can have better environments, better towns and, from time to time, we hope, better Budgets.
'That is the way it has to be in Singapore,' he said.
As for the rising cost of living, he noted that it plagues many countries and cited how people in India worried about the shortage of onions - 'no onions you cannot cook curry' - and the Chinese about the drought in northern China affecting wheat and food prices.
But in Singapore, the Government is in a better position to help the people partly because of the Budget surpluses from past years, he noted. 'Very few countries can do like Singapore and say, don't worry, we can help you.'

[Many countries try to address inflation by subsidising rising costs or fixing prices. This distorts the market.]

But much of Singapore's prosperity hinges on a good government that also has the strong support of the people, he said and added: 'So please continue to support us.'
Mr Lee made the call in Cheng San-Seletar when he opened the Ang Mo Kio 3G Centre, a facility for senior citizens to stay active within their community and for intergenerational bonding, hence 3G.
He paid tribute to the late Senior Minister of State Balaji Sadasivan for the idea of building the centre, saying it was his relentless efforts that made it happen.
Dr Balaji, who was MP for the Cheng San-Seletar ward, had worked hard in getting government agencies to cooperate on the $4.2 million centre in his ward.
'Each time I met him, he told me his difficulties getting it through, but also his determination to make it happen. It has happened... And we are indebted and grateful to him,' he said before a 1,000-strong crowd that included Mrs Balaji.
SM Goh, speaking at a dinner of Marine Parade merchants, said the projected 4 per cent to 5 per cent inflation for the first six months is largely because of the rise in certificate of entitlement (COE) prices and imputed rental of homes.
But with most people owning their homes and not affected directly by COE prices unless buying a car, he said without these two, the core inflation would be lower, at 2 per cent to 3 per cent.
'But the more important part of this year's Budget are the measures to grow the economy, create jobs and wealth.
'Unless the economy grows, we're not going to have surpluses to share. We have to 'grow' first, before we can 'share',' not just for this Budget, but for the future,' he said.

No comments: