The Singapore budget

The underlying problem of Singapore

I feel that Singapore today is facing the problem of rapid inflation. Singapore’s inflation accelerated to an 18-month high as record economic growth in the first half of 2010 spurred demand for goods and services, sustaining pressure on the central bank to allow currency gains. As prices soared, many Singaporeans found it harder and harder to sustain their basic necessities.

Is there a hidden agenda in giving out free money?

Along with this rapid inflation, Singapore's economy grew at a record 17.9 percent pace in the first six months of 2010, as surging exports bolstered manufacturing and the opening of two casino-resorts boosted services. Coult it be because of this growth, that the government has agreed to give this budget of One-off Benefits for households?

Aims of Singapore budget

 With this budget of One-off Benefits for Households,  it is said that all Singaporeans would be able to cope with the rising costs of living. The elderly  will also benefit as their CPF Medisave Accounts of Singaporeans aged 45 and above will be topped up. The Needy would also be taken care of by funds.  Families supporting children would also get cash bonuses. Additional Utilities-Save (U-Save) and Service and Conservancy Charges (S&CC) rebates will be given this year, further alleviating the problem of inflation. Finally, a one-off Special Bonus will be paid out to those on the Workfare Income Supplement (WIS) scheme and Personal Income Tax Rebate will help low and middle income groups.

Will the government succeed in fulfilling its aims?

To me, I feel that this solution does not work in the long run. The problem is that wages have barely kept pace with inflation. After this giveaways, it is uncertain when the next giveaway would be held. With all this giveaways, it would not last very long too. Most people might even spend it straight on the spot. Therefore, this would just save us from the relentless inflation for a short period of time. The government even stated that :" we can't do this every year", which is to say that they are barely balancing or making a deficit and dipping into reserves. After this one-off benefits, the reality will once again sink into us as we are plunging into poverty and recession. Therefore I think the government should work more on long term measures instead of one time measures as this measure is not really solving the problem that we are currently facing.