Budget 2014: The Government Still Doesn’t Spend A Single Cent (Part 1)

This is a two-part article by Leong Sze Hian and I where we analysed Budget 2014 and reveal that even in Budget 2014, the Singapore government is still not spending a single cent for Singaporeans, but not only that, are earning from us at the same time. 

Budget 2014 was just recently announced last week. Is Budget 2014 truly as transformative for Singaporeans? Does it really represent any fundamental shift by the government towards wanting to move Singapore towards being a more equal society? We take a quick look.

Education

For education, the government announced that they will increase the per capita monthly household income threshold for students to be able to qualify from bursaries from $1,700 to $1,900 (or two-thirds of all Singaporean households). For university undergraduates, those from the lowest one-third of households will see bursaries increase to $3,600 a year. Middle-income students will see a $450 increase to $2,600 a year.

According to the government, these changes will together cost up to $147 million more each year.

However, the government had recently announced that $210 million in tuition grants are given to international students in the polytechnics and universities each year, and they had also announced that $36 million are given in scholarships to each cohort pre-tertiary and undergraduate students every year (or an estimated $144 million for 4 years of undergraduate cohorts). This would mean that a total of at least $354 million are given to international students each year.

The question then is, if the government can afford to give at least $354 million to international students, would they be able to do more for the fees of Singaporeans other than the subject additional spending of $147 million? $354 million is almost 2.4 times more than the additional $147 million.

Slide1

Healthcare: Medisave

The government announced that there would be Medisave top-ups for Singaporeans aged 55 and above in 2014.

For older Singaporeans born before 1950 and aged 65 and above in 2014, they will receive annual Medisave top-ups of $200 to $800, with the older cohorts receiving more. This is part of the Pioneer Generation Package, which is budgeted at $260 million this year. For older Singaporeans aged 55 to 64 years old in 2014, they will receive a Medisave top-up of $100 to $200 annually over the next five years, which the government said is expected to cost around $440 million over 5 years, or about $88 million a year.

Healthcare: Subsidies

Not only that, the government had also announced that they will raise subsidies for lower- and middle-income Singaporeans for Specialist Outpatient Clinics to 70% and 60% (from 50%) subsidy respectively. This would cost an additional $123 million to the government.

In total, the Pioneer Generation Package, the Medisave top-ups for Singaporeans aged 55 to 64 this year and the healthcare subsidies would cost around $471 million to the government.

But does this mean that the government would lose $471 million?

Healthcare: Government Doesn’t Pay A Single Cent

Not really. This is because the government had also announced that the CPF employer contribution rate will increase by 1% to all workers, which will be channelled to the Medisave Account.

In 2013, the total contributions for CPF is $28.5 billion. The total CPF contributions had increased by an average of 9% every year for the past 4 years. So, assuming that the total contributions in 2014 would increase by 9% to about $31 billion, a 1% increase would add another roughly at least $860 million to Medisave.

Thus the government might be paying out $471 million for the Pioneer Generation Package, the Medisave top-ups for older Singaporeans and the healthcare subsidies, but they would be collecting $860 million more from Singaporeans, or at nearly 2 times more.

Slide2

This means that the government doesn’t have to spend a single cent to pay for these “increments”. In fact, not only does the government not have to spend a single cent, they would be able to earn from Singaporeans as well.

Quite shocking isn’t it, that the government had said that they had wanted to move towards a more “fair and equitable society” but yet when you do the maths, they are still not fulfilling their part of the bargain. Instead, they have once again made Singaporeans pay more than what we rightfully should – then where is all the additional money that they are collecting going to?

Yet, as we have shown, they are willing to spend an extravagant amount for international students for their education fees but are less willing to spend for Singaporean students for our fees – which makes you wonder, how valuable are citizens in their eyes? Are we being taken for granted?

But this is not even all – join us tomorrow where we would share with you that when you look at the larger picture, not only is the government still not spending a single cent in Budget 2014, they are still doing much less than what their responsibility should be.

Roy Ngerng and Leong Sze Hian

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18 comments

  1. Wtf

    Suggestion- use columns instead of squares. Looking at the squares it is not obvious that government gives more than double to international students than locals. Furthermore the larger pool of money is going to a smaller group of students from overseas whereas the smaller pool s going to a much larger group of students wo are locals. Uniquely singapore.

    • Keng Onn

      I agree with Wtf – use columns (or bars) instead of squares. In terms of data visualization, we (humans) perceive 1-dimensional attributes (e.g. length/height of column or bar charts) more accurately than 2-D (boxes or areas in general), or heaven forbid, pie-charts.

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  3. Not Singaporean

    Maybe it’s because I don’t understand the quirks of Singaporean government, but I don’t follow your idea that the government ‘doesn’t spend a single cent’. A government spends what it collects in taxes and insurance contributions. That is where its budget comes from. You seem to be complaining that the government only spends the money it receives in taxes and refuses to spend ‘its own money’. But that doesn’t make sense to me.

    If the government is setting taxes too high and then sitting on most of the revenue instead of spending it to solve urgent problems, that’s another (very serious) matter. But saying that the government ‘doesn’t spend a single cent’ sounds like nonsense. Do enlighten me.

    • Roy Ngerng

      Very good question. Watch out for our article that will be published today.

      For other Singaporeans, it would also be clear immediately that the whenever the government says they would increase expenditure for a public good, they would find a way to get us to pay for it, but more importantly, they would also find a way to earn from it.

      The 1% increase in Medisave contribution rate is point in case. Most Singaporeans would be able to see this, anyway.

  4. Singaporean

    Singaporean here. I agree with not singaporean, governments manage the funds (taxes) from people. So doesnt that mean that the government doesnt *actually* have money? It’s the states money that comes from taxes to keep everything running and to ensure things keep running.

  5. William

    Me think the government spend less than what it collects for us. The rest of the money in their pocket. Like PA adverse audit. They spend on their Grass Root Organisations half a billion each year unaccounted for. Probably to buy pineapple tarts.

    • Alan

      Remember the recent grassroots CNY celebrations @each constituency, every household gets an invitation to redeem quite a no. of treats & goodies + lucky draws. Just imagine if they budget for every household but actually cater only a certain % for those who actually attended, do you think someone @ the grassroot level will not be cunning enough to pocket the difference?

      Remember there was once a case where a grassroot committee member who even tried to poison other members in his committee because of jealousy? It makes one wonder whether there must be enough ‘motivation’ to make someone resort to such desperate acts? Maybe that is why the auditors have to give such an adverse opinion on their accounts? Maybe there is easy money to be made just like the case of the pineapple tarts? And if there is anything fishy, I’m sure they will cover the shit just like the AIM case!

    • Roy Ngerng

      I find that your question is asked from someone who does not understand accountability.

      Of course the government is supposed to return the spending to Singaporeans. Any logical person would understand that tax paid should be returned.

      The question is – the government has been under-spending and has undeclared surpluses which should be returned to Singaporeans and spent on Singaporeans.
      The money is being siphoned off.

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  8. Flo Tan

    Very good article posted.

    Basically, I have 3 questions for the Singapore Government, which I label it as the BCG (not boy chase girl) but rather they are :
    1. B – Benefits – begin a citizen here, WHAT are our benefits that we enjoy in Singapore ?
    2. C – CPF, WHY is the government withholding back our CPF withdrawal and now be eligible to withdraw at 67 years old, when it was first set at 55 years old? Is our moneies begin used to invest in other countries, at our expense that we have to tolerate and suffer but given the concession that it is put aside for our old age, not forgetting inflation and standard of living eccslates too.
    3. G – GST, does anyone ever question, WHERE the GST moneies goes to ? What is the GST money collected over the years used for ?

    How long can the Singapore Government evade issues such as these and try to camouflage it, least alone the younger generation are now more literate, and better educated.

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