Deep pocket – Singapore Budget 2009

22 January 2009, Obama’s inauguration, big day for the Americans, big day for the world. Watched the ceremony via CNBC.

All eyes on the new President and his policies to change America.

Another big event for Singaporeans. Our Budget 2009 is out today – 22 January 2009.

Summary:  http://sg.news.yahoo.com/rtrs/20090122/tap-singapore-budget-c3bb44c.html

Full news http://business.asiaone.com/Business/News/My%2BMoney/Story/A1Story20090122-116472.html

My thoughts on Budget 2009

I have some mixed feelings about the Budget, Singapore is not likely to manage the free falling economy.

Spending more money is also not going to help us either (the same old thing-spend more when economy is down) , Singapore, a small country (population is barely 4 million)with very little resources, our consumer goods are mostly imported, by spending more, we are going to stimulate import while export is down. Until our major trading partners – USA and China recovers, we are not going to make a comeback.

Back to the topic….

Government is going to double *GST credits for Singaporeans.

Goods and Services Tax (GST) – Similar to VAT. In case you do not know why GST credits, here’s a short explanation:

1 July 2007, Government increased GST from 5% to 7%, a 2% increase. To help households cope with the increment, the Government gives rebates in cash to Singaporeans. Around $300 per individual, a rough figure (amount depends on household income etc..), it’s hardly of any help since the increment is permanent while the offset will only last for a couple of years.

Back to the topic….

This year the Government will double the payout. The impact will be minimal for Singaporeans, I just hope that there will be no other increment in the cost of living until we recover.

*CPF housing grant will be increased to help new home owners.

CPF – Similar to 40I(K)

Also a tiny amount, but according to the Government’s policy – every Singaporean gets to own a house, so I guess they want it the same way even in a bad time like this. I am not going to comment further, read the full news if you are interested.

Lastly I really hope that we do not need to dig into our reserves but unfortunately we were given no choice. $20.5 billion package is a small amount compared to what other Governments are giving in their respective countries but I guess this is the deepest we have gone.

Fortunately, our Government manages money well thus now we have the resources to tide over the bad situation. I am glad that we have a good Government that response efficiently to crisis.

In the last financial crisis, the Government did not dig into the reserves and got criticised for not doing so but they were proven right, it’s time for rainy day.

We recovered very well from the last crisis.

I am contemplating the idea of a career switch recently, good luck to me, and hopefully the worst will be over very soon.