By John Geddie
SINGAPORE (Reuters) – Seniors in Singapore are ready to benefit from a generous budget unveiled next week, analysts said, as the government prioritizes the needs of an aging population ahead of next scheduled elections this year.
As more and more seniors are more likely to stay in the workforce beyond the retirement age, the low-tax financial center will attempt to appease the family. 39, growing social anxiety over the welfare of a generation born towards the end of British colonial rule, while Singapore's basic port city.
The February 18 budget, to be introduced by Finance Minister Heng Swee Keat, will be his first since he was chosen last year as the next likely leader of the Action Party. popular, who runs the city for more than half a century. .
"Spending hopes are expected before the early elections announced later this year," said Bank of America economist Merrill Lynch, Mohamed Faiz Nagutha.
Singapore is expected to hold its next general election in early 2021, but Prime Minister Lee Hsien Loong, considering retiring, has hinted that this could be this year.
Analysts estimate that the other highlights of the 2019 fiscal year beginning April 1 likely include an increase in security spending following a recent high-profile cyber attack, maritime stresses with Malaysia, and plans to crack down. acquisition of F-35 combat apparatus. A new sugar tax, higher alcohol taxes and more taxes on e-commerce are also considered opportunities.
While Singapore was forecasting a small deficit over the 2018 fiscal year, Maybank analysts Kim Eng said their estimates of a US $ 19 billion budget surplus accumulated over the last three years left " enough room for more social spending ".
Other analysts believe that an increase in spending is also needed to cope with increased external pressure on the economy, particularly because of the US-China trade war and the imminent departure of Great Britain. Brittany vis-à-vis the European Union.
"Despite the prospect of a pre-election budget, Singapore still needs to remain relevant in the business world and support education amidst the uncertainties that prevail in the global economic space", said the economist UOB, Barnabas Gan, adding position. "
Analysts also believe that retraining and retraining programs for workers, especially older workers and those facing technological upheavals, will likely be included in the budget.
Gifts distributed to households, directly or through rebates, usually occur before the elections. But the government has marked this year Singaporeans born in the 50s – the so-called Merdeka generation or "Independence" – for special treatment.
Singapore is the second-fastest-growing country in the world after South Korea. Singapore is increasingly dependent on older residents to remain in the labor market after retirement age, as the birth rate declines and foreign labor is curtailed.
But many complain that the government's retirement savings plan does not provide enough money in a country often ranked as the most expensive in the world and where life expectancy is close to 83 – the third in the world .
Prior to the 2015 elections – which the PAP has easily won – a "Silver Support" system was put in place to provide regular payments to low-income retirees, while a "Pioneer" program of $ 9 billion Singaporeans was unveiled for all Singaporeans born in 1949 or before covering their health care costs.
Analysts believe that a similar amount will be reserved for the Merdeka generation – in what Maybank Kim Eng reportedly said in a note to be the "centerpiece" of the 2019 fiscal year budget.
While the welfare needs of its aging population have weighed on Singapore's low-tax model, there are few tax changes expected given last year's announcement that Goods and Services Tax (GST) would increase between 2021 and 2025.
However, with the introduction of a "Netflix tax" on digital services next year, some analysts expect that imports of online products will soon be taxed because the purchases on platforms similar to those of Amazon and Alibaba are increasing.
A tax on sugar – already adopted in France, Great Britain, Thailand and the Philippines – is also considered a possibility given the high rates of diabetes in Singapore, as does another tax increase in the country. alcohol that was last raised five years ago.
(Report by John Geddie, edited by Shri Navaratnam)