Roundup: Singapore's budget focuses on R.D., needy residents

Singapore Prime Minister and Minister for Finance Lee Hsien Loong announced Friday the government's budget for fiscal year 2006, promising to allocate billions of dollars to research and development (R.D.) as well as to needy Singaporeans.

Singapore expects to enjoy a budget surplus of 430 million Singapore dollars (about 263 million U.S. dollars) for fiscal year 2005, which will end on March 31 this year, equaling 0.2 percent of its Gross Domestic Product (GDP), according to Lee.

The good fiscal position is largely supported by the city state 's robust economic performance last year with GDP growing by a better-than-expected 6.4 percent.

Fixed asset investments in manufacturing rose by 3 percent in 2005 over the previous year to reach 8.5 billion Singapore dollars (about 5.2 billion U.S. dollars) while annual total business spending from services registered 2.5 billion Singapore dollars ( about 1.5 billion U.S dollars), up 11 percent from 2004.

As a result, a record number of 110,800 new jobs were created last year since 2000, bringing the seasonally-adjusted unemployment rate down to 2.5 percent in last December.

"Our strong performance results not only from a favorable external environment, but also, more importantly, from our efforts to upgrade and restructure the economy," Lee pointed out, making economic upgrading and restructuring the first priority of his new budget.

Noting that R.D. will be one of the new sources of economic growth, Lee announced that a R.D. Trust Fund will be set up to help build Singapore's R.D. capabilities and competitiveness.

A total of 5 billion Singapore dollars (about 3 billion U.S. dollars) are expected to be injected into the fund over five years with an initial allocation of 500 million Singapore dollars (about 306 million U.S. dollars) this year, according to Lee.

This announcement supplements the country's fourth five-year Science and Technology Plan revealed by the Ministry of Trade and Industry a day ago, under which, the Singapore government will invest a total of 13.55 billion Singapore dollars (about 8.3 billion U.S. dollars) over the next five years in R.D.

Singapore hopes to spend at least 3 percent of its GDP in R.D. by 2010, up from the 2.3 percent in 2004, aiming to build itself a knowledge hub in Asia.

To nurture more local talent, the government will also increase the investment in the university sector for additional places and new physical infrastructure. Two billion Singapore dollars (about 1.2 billion U.S. dollars) will be allocated in this area.

"The government aims to have 25 percent of each primary one cohort enrolled in publicly-funded universities by 2010, up from the 21 percent in 2002," Lee said.

Another focus of the new budget is the well-being of all Singaporeans, especially those in need such as low-income workers and older workers.

As expected, Lee said, the government has accepted the recommendations proposed by different committees on helping these two vulnerable groups.

A sum of 40 million Singapore dollars (about 24 million U.S. dollars) will be allocated over three years to help re-create 10, 000 jobs each year, and more than 130 million Singapore dollars ( about 79 million U.S. dollars) will be invested in training programs.

In addition, the government will spend 75 million Singapore dollars (about 46 million U.S. dollars) a year as housing grant to help low-wage workers become house owners.

While announcing a Progress Package (Providing Opportunities through Growth, Remaking Singapore for Success) of 2.6 billion Singapore dollars (about 1.6 billion U.S. dollars) to share the budget surplus with every Singaporean, Lee said that low-income workers and older workers will get more under the package.

These workers may expect larger Growth Dividends, a one-off Workfare Bonus, top-up of their Eldercare Fund and Medifund, as well as more financial support for their children's education.

"Growing our economy is only one aspect of making Singapore our best home. We must extend a helping hand to those who face difficulty coping with globalization and change," Lee told Members of Parliament at the end of his budget speech.

This year's budget has been largely expected as an "election budget" as many speculated that the government will generously share its wealth with the people to secure the vote in the next general elections, which has to be held by June 2007 but is expected to be called in the next few months.

However, Lee said at a constituency event last month that the government's efforts in helping the needy are for the long-term progress of Singapore, not just an election strategy.

Whether for the election or not, the budget seems to be conducive to sharpening Singapore's competitive edge in the global economic arena and raising Singaporeans' standard of living.

Source: Xinhua