Monday, February 21, 2011

Budget 2011 – Effective ?

Our govt is still taking the same old path and patching up pot holes as and when they appeared. In other words, the budget is not addressing the problems facing S’pore adequately. It failed to address the one of the key issues, which is the large influx of foreign workers which has impacted HDB / property prices, wages, availability of hospital beds, public transport... Thus, their patch work will not work but will just temporary ‘relieve’ the problem.

Work Levy
The increase in foreign workers levy will not curtail the demand for foreign workers. It will only fatten the govt revenue and this is the reason they continue to open the flood gate to foreign workers.

What will happen is employers will reduce benefit, cut wages or pass on the cost. S'pore workers will suffer too even if they are able to get the job as their wages will be further suppressed due to competition from foreign workers. Without minimum wage to protect local low income workers, all these patch work schemes will not work.

HDB Grant
The 40K grant looks good on paper only. It is unlikely to benefit the target recipient of lower income earning $1.5k. This is because their earning is too low to enable them to buy a flat in the first place. The price of flat has increase do much that it is basically out of reach for them. With a family to support, they will be heavily burden servicing their housing loan. Even if they are able to keep their job for the next 30 years, they will end up with no retirement fund. The govt is not addressing the problem which they know existed. Most S'porean do NOT have enough fund for their retirement. Are their policies sound ? Why are they still continuing with this 'explosive littered' path ?

We know older workers have reduced CPF rate. Thus the 'rebate' to employers, which is meant to encourage them to retain / employ older workers is negligible.

As there is no CPF contribution to foreign workers, there will be more saving for employers to use them instead of locals.

The CPF top up scheme for self employed as it so ridiculous. Those who are eligible in the low income group has to top up their CPF in order to receive the govt top-up which is mainly paid into their medisave a/c.

Folks are struggling to make ends meet and have to come up with money. Then the Since most of the govt top up is into the medisave a/c, how can this help them in coping with daily expenses ? Most may rather forego the govt top-up since they may not have the extra cash to top up their CPF a/c in the 1st place !

A total of S$90 million, BUT read on - only $300 per year. This work out to $25 a month ! With inflation, how much can $25 help ? Besides, if my understanding is correct, seems like the family has to top up their child Children Development Account in order to receive the govt 'grant'. All our govt schemes ask citizens to come up with cash out front before giving them 'peanuts'. If folks are struggling to make end meet, they are better off without the 'grant' which basically suck their money first. Is our govt sincere in giving help to the lower income with so much conditions attached ?

These temporary measures they have been implementing over the years do NOT solve the root problem. If they do not WAKE up soon, the problem will balloon till it burst and the social cost will be very high.

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