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The budget for the fiscal year beginning April 2012 is also expected to include increased spending on the city-state's infrastructure as it struggles to cope with a sharp increase in population over the past five years.
Singapore, a major Asian hub for banks and multinationals, is facing pressure from citizens to tighten immigration and cap the number of foreigners, who now make up a third of the island's 5.2 million people.
Last year, Singapore-based companies employed an extra 79,800 foreigners — mainly from countries such as China and the Philippines — more than double the 36,600 increase in local employment, according to Singapore's Manpower Ministry.
Many Singaporeans blame the influx for overcrowding on roads and trains as well as competition for jobs that has kept real wages for lower-skilled workers stagnant during the past decade.
"Recent budgets have thus sprung more negative surprises on companies, with stricter foreign worker policies, including stricter quotas and increases in foreign worker levies," said Bank of America Merrill Lynch economist Chua Hak Bin.
"Greater attention on Singaporeans and lower-income households means that fiscal surpluses have been largely shared with individuals, and less so with companies, compared to the past," he added.
Singapore enjoys huge surpluses so Finance Minister Tharman Shanmugaratnam is under no pressure to rein in spending.
Chua said Singapore will likely report an overall budget surplus of around S$4 billion ($3.2 billion) for the fiscal year ending March 2011 — or about 1.2 percent of GDP — far higher than the government's initial estimate of about S$100 million.
Citigroup's Kit Wei Zheng said Singapore's overall fiscal surplus would be as high as S$26 billion if the government included as revenue proceeds from land sales as well as interest and dividend income from its investments.
In Singapore, income from government land sales is booked directly into reserves and not reflected as revenue in the annual budgets. Citi estimates Singapore collected nearly S$10 billion in land sales in the 10 months to January 2012.
Budget Steps
Singapore's economy contracted by 4.9 percent in October-December on a quarter-on-quarter, seasonally adjusted and annualized basis and Tharman has warned growth will likely be weak in the next two years.
Inflation remains elevated at above 5 percent, however, which means authorities will have to tread carefully to avoid stoking spending....READ MORE
The Singapore Budget 2012 speech will be delivered by Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam, in Parliament next Friday. Singapore and the world is expected to face an economic slowdown over the next few years, thus this Singapore Budget is especially important in helping businesses prosper and not falter in the Year of the Dragon.
At Green Business Times, our top wish for this year’s Budget is to see the government help more companies reduce their environmental impacts and save on operating costs.
The government can consider results-based incentives to motivate more companies in reducing their environmental impacts, such as water and energy consumption, and waste disposal. The incentives would be based on how much energy, water or waste is reduced by the company, and could include rental or cash rebates, and tax deductions.
Existing government green incentives and funding are often technology-based or restricted to the implementation of a particular process, framework or methodology. In addition, the green incentives and funding usually apply to MNCs and large SMEs or manufacturing companies, and not to smaller SMEs or those in the service industry.
At the end of the day, we want companies of all sizes to reduce energy, water and waste so that they can reduce their operating costs and also do good for the environment. As long as the companies can achieve and verify actual reduction results, it does not really matter what company size they are, which sector they are in, or which technology or process they use. The government should reward any company that takes steps to reduce energy, water and waste, and recognise the company’s sustainability efforts.
For example, there are existing government funding for companies to implement energy efficient equipment or to retrofit equipment, but these technology implementations could be costly upfront and deter companies from doing so, even if there is government funding. There are other ways to reduce energy through non-technology-based initiatives such as increasing employee education, using design thinking, changing behaviour, gamification, or using social web and mobile apps. If companies can use these non-technological ways to reduce energy, then they should be rewarded too.
Another example is companies who are tenants in office buildings and business parks. If the company wishes to reduce its energy, water and waste, there are no existing government incentives. The company usually has to incur extra costs to install energy efficient lighting, water efficient taps, or implement a recycling programme. Although the company could save on its utility bill, it would help the company further if there are incentives to offset its upfront or recurring costs.
Incentives could be adjusted based on how much the company achieved in reducing its environmental impacts. For example, the more energy a company saves, the higher the incentive given to the company, and vice versa. In this way, the government would reward based on results and be technology, process, or industry-neutral. In addition, the government could become more productive by streamlining and consolidating existing incentives and funding programmes, and cause less confusion to the potential applicants. Companies of all sizes would also be motivated to achieve greater reductions.
Businesses need to reduce their operating costs in this time of economic uncertainty. The government can help by providing incentives that would reward companies based on the results of their actual reduction in energy, water and waste, and would benefit companies of all sizes and from all industry sectors...READ MORE
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