Debating Budget 2016: Is money going into a black hole?
by Bertha Henson
I SUPPOSE it would be too much to expect that any Member of Parliament (MP) would stick his neck out in Parliament to ask if any incentive or support scheme should be terminated because of a lack of results. After all, businesses would be after their throats if they did and individuals would say that they were not sympathetic to their plight.
So what we’ve been hearing has been plenty of lip service about the idea of being financially prudent and to calculate the worth of every dollar spent. No one wants to cut or stop anything.
The furthest that some MPs got was to warn of a crutch mentality instilled in businesses who expect more and more support, or who would chaff at the curtailment of any schemes. That would be true even for households who suddenly find that service and conservancy fee rebates and Goods and Services Tax (GST) vouchers aren’t facts of life.
So what did some of them say?
Mr Alex Yam (MP for Marsiling-Yew Tee GRC), for example, referred to the Wage Credit Scheme (WCS) which he described as “very much favoured by employers because it extends a lifeline to their businesses, and also helps them retain and train their staff.
“But my concern is, if and when WCS is discontinued, will these businesses, dependent on this scheme therefore fold? Should not there be some enterprise on the part of our enterprises to ensure their future survival without just (being) dependent on schemes and innovations? I hope proper auditing is carried out to ensure that the money ploughed into this scheme is wisely used for the purposes intended.’’
This scheme co-funds employers’ wage increases to Singapore workers with a gross monthly wage of $4,000 and below, and was supposed to be implemented from 2013 to 2015. It was extended for two more years in the Budget last year, to 2017, albeit with a lower level of support.
Likewise, Mr Yam highlighted the Special Employment Credit – which has been extended till 2019. When the G announced this scheme in 2012, it was supposed to expire at the end of this year.
“Again, it would be helpful for us to have a better in-depth view of how it has been benefiting companies and employees”, he said.
Ms Foo Mee Har, (MP for West Coast GRC) also called for measures to track key performance indicators and outcomes on big-ticket investments such as the $4.5 billion Industry Transformation Programme and SkillsFuture.
She said: “This is to ensure that these multi-year schemes achieve policy intent and deliver the expected outcome, namely the boost that’s needed to our capabilities and competitiveness.
“What lessons have we drawn from our experience of years past, where well-intentioned productivity schemes, costing billions of dollars, ultimately failed to lift productivity levels? We have been on this restructuring journey for some time now and with each passing year, the urgency to show results grows whilst our margin for error shrinks.’’
The opposition MPs have weighed in too. Workers’ Party’s non-constituency MP Leon Perera suggested a benchmarking system for companies to measure productivity. This would show which companies are making the effort to raise productivity as well as help G agencies decide on those worth helping out..
This is all good. Even as MPs praise schemes, they should be calling for results or suggesting ways to measure performance.
No doubt, the G would say that some “results’’ would be intangible, such as “shifting mindsets’’ and “promoting a culture of (you can fill in the blanks)’’. But if the G was the private sector, you can be quite sure that its shareholders on the board would be asking for some concrete numbers on returns on investment, or at least a tracking method. Money shouldn’t go into a black hole.
Let’s come then to the Productivity and Innovation Credit (PIC) which so many people now say, like an echo of Finance Minister Heng Swee Keat, was too broad-based to be of much use in lifting productivity numbers. Mr Heng seems adamant that there will be no extension of the expiry date this time.
Started in 2011, it gives eligible companies tax deductions for productivity investments and even gives back some cash to them. It lapses in 2018, and Mr Heng announced that lower cash payouts will kick in for the scheme which is a scammer’s dream.
What has been deemed “transitional’’ should remain “transitional’’.
Labour chief Chan Chun Sing put it another way. That success shouldn’t be measured by how big and fast companies expand but how quickly help and support measures can be wound down.
In fact, you sort of ask: Will it ever? Well, one PIC offshoot that died was the PIC Bonus, which was a dollar-for-dollar matching cash bonus and capped at $15,000 in total from 2013 to 2015. There was plenty of lamenting at that time because some companies weren’t quick enough to take advantage of the windfall.
Allied to the call for financial prudence is funding. Where will the G get the money to pay for schemes in future?
Mr Vikram Nair (MP for Sembawang GRC) said his concern was that as schemes get “increasingly institutionalised’’ and more and more people get support, the G budget will come under strain. He suggested giving business low-cost financing loans, instead of outright grants. In others, give back to the public purse what has been given out to help make you more prosperous.
No MP has asked the question that is being asked outside the House though about making sure future Budgets balance: When will GST be raised or when will the income tax base be increased? Because these are surely legitimate if unpopular questions to elicit legitimate, if unpopular answers?
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The post Debating Budget 2016: Is money going into a black hole? appeared first on The Middle Ground.
- Bertha Henson
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