Reflections on the Singapore Budget 2018

It has been a week since the Singapore Budget for 2018 was announced.

Following further reflection, this is a budget that perhaps prepares Singapore the best for the future and remains cognisant not just to the opportunities of a rising Asia but also the very real challenges of inequality and an ageing society.

There is the notion of building society over self built into the Budget that remains hugely aspirational.

It remains hugely relevant to evolving needs and develops robustness and inculcates values of innovation throughout the various initiatives and interventions.

Social mobilily remains crucial and the interventions being proposed will help address social mobility through education and social support. Ultimately, this will help Singapore addressing the growing challenges income inequality presents.

This Budget allows Singapore to remain adaptable as a nation and as a people. The budget will allow Singapore to remain poised to take advantage of the opportunities and ride the challenges the future holds.

Below is a brief 4 minute summary of the Budget 2018 (which was perhaps one of the longest in recent times running to close to 2 hours)


Reflections on the Singapore National Day Rally 2017

The Singapore National Day Rally 2017 took place on the 20th of August 2017. The full video of the rally can be viewed here. However, the salient points of the rally are depicted in the image (copyright: Reza Ali) below. (For a PDF version of the image, please download it here: NDR2017)

My personal reflections on the rally can be found below the image.



The emphasis on childhood education and development is an important one. As the Prime Minister noted, this helps ensure greater social mobility over time.

In my earlier article on income inequality, I wrote the following:

Governments and policy makers should also consider more directed interventions to enhance the social conditions of lower income families. For instance, in the UK, the Child Benefit offers a weekly allowance to parents for every child they raise. The transfer could be better targeted by making the income taxable as personal income, which will reduce the size of the benefit for those in higher tax brackets or who do not have face any other mitigating circumstances. In the UK, child poverty has dropped sharply whilst in the USA; it has risen by a third between 1969 and 2013. A child-benefit programme will help make a major dent in child poverty and also represent a powerful investment in the future. Introducing a child-benefit program in the US will make a major dent in child poverty and represent a powerful investment into the future.

The focus towards building greater support and increased investment towards the KidStart programme  – which ensures lower income families are supported in their children’s education and development – will have a huge impact on the recipient families. It will support greater social mobility and enhanced potential for economic empowerment.

The support being provided to expectant mothers even before the children are born is also similar to the Finnish system – and one which I admire deeply. Parents of new-born babies are given books to read to their children so as to inculcate greater reading, social and cognitive development amongst their newborns.

The second pillar of the National Day Rally was on healthcare, and particularly diabetes, is an interesting one. The Prime Minister’s emphasis on a good quality of life, rather than a long life is an important one. Whilst potential solutions, including the imposition of a sugar tax or better consumer awareness of high-sugar food are being reviewed for efficacy, the government needs to provide a clearer framework as to how the war on sugar and diabetes will be fought.

The final area of consideration at the Rally was that of a ‘Smart Nation,’ or the development of an integrated approach to information technology, employability and productivity in light of massive developments in the areas of big data, the Internet of Things (IoT) and blockchain technology.

The Prime Minister spoke of a need to further enhance areas such as mobile payment – but beyond merely the technological enablers, there needs to be a greater consideration in terms of educating and socialising to people the benefits of such solutions and also help convince them that this is indeed the way to go by also clearing up some of the pain-points and fears around online security and their own protection.

The Prime Minister spoke of how technological innovations are driving areas of retail, logistics and security. However, the examples he chose also demonstrated how employability is going to be impacted – with less people able to do more. The Prime Minister spoke of how new areas of employability such as big data analytics will be created but urgent measures are still required to support the employment dislocation that is inevitable as companies use greater technology with less manpower. Whilst programmes such as SkillsFuture will go some way towards alleviating the challenges, there needs to be further measures to support individuals who are further down the education spectrum who need more help and assistance.

The close of the Rally with a fantastic story of three generations of the same family achieving social mobility through education was inspiring and inspired! It carefully encapsulated the central theme of the rally around how education allowed for the son of a gardener to become a rail engineer and how his son, through the investments being made in the areas of technology, has all the opportunities to succeed.

Ultimately, the National Day Rally was one in which the government’s duty to its people and building of the nation’s future was clearly demonstrated. The challenges are many, but not insurmountable.

The Singapore Budget 2016 in a nutshell

The Singapore Budget 2016 was announced on the 24th of March 2016 by Finance Minister, Heng Swee Keat.

Below is a simple view of the budget (please click here to download high resolution version):

budget 2016
A summary of the Singapore Budget 2016

Some have claimed that this budget represents a ‘game plan for the next 50 years’ but my view is that this is a very functional budget that sets out a 5-year planning approach.

The budget itself can be split across five areas: support for small and medium sized enterprises (SMEs); Economic Transformation; Social support; Infrastructure Investment; and Individual Taxation.

The main focus of the budget has been primarily around partnership (particularly between government and industry), internationalisation (and support for companies that seek to establish Singapore as a trusted brand) and a transformation of the economy, towards greater efficiency and focus on high value drivers.

Theme of the 2016 Budget: Clarity, Consistency and Compassion

The aims of the government seems to be very much around providing clarity to businesses across a number of areas (from finding relevant grants, to addressing their pressing issues and providing them with the right information to ensure their alignment to the government’s wider aims).

There is also significant consistency with previous policies and measures and little deviation to what has already been established. This includes buttressing of existing policies around SkillsFuture or other social policies.

It is the final theme of compassion that strikes me the most. There is a tacit acknowledgement that social mobility is a critical matter that needs to be addressed urgently. The Deputy Finance Minister in a speech has indicated as much.

Looking at the slew of social-focused policies and support pillars designed to help the underprivileged and support social mobility is important as Singapore enters her 51st year.

Income disparity and social mobility remain the biggest threat to our social systems and to any country’s progress. Putting into place the pillars to enhance mobility is an important investment to ensure the harmonious development of society and nation.

Climate change

One area that could have been addressed in more detail is the impact of climate change and the government’s wider approach to addressing this important area – particularly given the severe consequences this has on Singapore. In time to come, I suspect, governments around the world will start devoting more of the government budget and resources towards addressing this and report on the developments.

The government touched on tax rebates for companies for CSR practices. I hope over time this extends to wider sustainability measures adopted by companies to reduce their carbon footprint.

Big Data and Planning

Another interesting development is the development of the National Trade Platform (NTP) that seeks to integrate all business and finance data of companies. This is going to support the predictive ability of the government in understanding the various levers of economy and also develop more timely and appropriate interventions to support businesses. If done right, the type of data and the insights gained from this initiative could be hugely  influential and something other nations will sit up and take note of in order to have a better handle on their wider economic affairs.


A review of Prime Minister Lee Hsien Loong’s 2014 National Day Rally

It was an interesting National Day Rally session by Prime Minister Lee this year. The Pioneer Generation was saluted, challenges were outlined, the government’s responses to the challenges were highlighted and there was a strong call to action to not forget the past and to reflect on the successes made by Singapore over the last five decades.

Below is a graphic illustration and personal take on the overall session and some of my own interpretations and thoughts. (Please click on image if it doesn’t appear clearly on your browser)

A summary of key messages (and some personal interpretations) of the 2014 National Day Rally by PM Lee
A summary of key messages (and some personal interpretations) of the 2014 National Day Rally by PM Lee

There was an interesting statement on the need to be ‘hard-headed’ in order to be ‘good hearted’ in relation to the need for economic growth to create opportunities. It remains to be seen what these hard-headed options are that are required for economic growth.

The PM’s take on the need to go beyond just academic qualifications and to also focus on relevant skills and qualifications is also an important one. This is what will support the employability agenda eschewed by the government which in turn addresses issues of social mobility and in the process go some way to resolving the widening income equality within the country.

Whilst the emphasis on the ‘Pioneer Generation’ (or PG) is important, it will be vital to support the upcoming ‘Frontier Generation’ (whom I have classified broadly as falling into the 18-35 group) and allowing them to fully explore their passions which are as important as the determination and resolve the PM highlighted in his speech.

On the whole, a thoroughly enjoyable rally with a rousing finale!

An alternative to the current exorbitant model of car ownership in Singapore.

  1. The status quo
  2. The problem with the status quo
  3. An alternative solution – in brief
  4. A few worked examples
  5. Conclusion

The status quo

Singapore, given her limited space, has in place a Certificate of Entitlement (COE) system in place for the ownership of cars. What this essentially means is that prior to the purchase of a private motor vehicle in Singapore, one has to purchase a Certificate of Entitlement (COE) – valid only for 10 years – which gives one the right to purchase and operate a private vehicle. Once this COE expires, an individual will have to purchase the COE for another 10 or 5-year period.

The current COE prices in Singapore for larger cars (over 2,000 cc) currently hover over S$90,000 (just over US$70,000) and around S$80,000 (US$65,000) for smaller cars (under 2,000 cc). This coupled with the high import duties for cars makes car ownership one of the most expensive in the world. For instance, a standard Mercedes E200 costs over S$200,000 against S$50,000 if the same car is purchased in Europe.

The justification for this is that given Singapore’s limited land space and high population density (approximately 5.5 million people in 650 square meters); it will not be feasible for cars to be easily available as this will create a grid-locked transportation system. Given the excellent public transportation infrastructure, there is further justification to support this excessively high cost of car ownership.

The problem with status quo

The current system is one that imposes an excessively high cost of car ownership to deter individuals without the financial means from purchasing cars. Another excuse commonly cited is that a good public transportation system negates the need for one to own a car. However, this is missing the point. Car ownership is an extremely aspirational motivation for a large number of individuals. It also offers freedom for individuals who have a pressing need to purchase a car to meet their various personal circumstances. Therefore, these individuals lose out the opportunity to purchase something which has become a necessity simply out of the sheer exorbitance.

In that same vein, there are also individuals who own anything up to 14 luxury cars and who do not bat an eyelid purchasing a S$1.2 million (US$1 million) prized Bentley.

An alternative – in brief

There are currently 1.4 million households in Singapore. There are also about 700,000 private cars on the roads of Singapore – i.e. 1 car per 2 households on average.

The proposal in brief:

  1. Let the existing COE system expire naturally – i.e. the COEs that have been issued should be left to expire as per the remaining lengths they have.
  2. Implement a car permit system.
  3. The car permit will be issued in a random ballot to one in every two households. Households with drivers who have previous driving violations (such as driving under influence, demerit points, etc) will go further down the list and have a smaller chance of getting the permits issued.
  4. Households that receive a permit and choose to exercise the option of purchasing a car can do so at no additional cost.
  5. However, households that do not wish to exercise their permit options can choose to sell it on an exchange managed by the Land Transport Authority (LTA).
  6. Households/drivers who were not successful in the ballot system can get on the exchange and agree on a price with a willing seller of the permit and obtain the right to drive a car.
  7. This way, households that give up their option will get cash instead of having the opportunity of driving a car. This can also be viewed as the natural economic reward they get for choosing to use a public transportation system and for incurring a lower carbon footprint.
  8. If a household already has a permit in place but seek to get additional permits for additional cars will need to pay an additional levy (calculated as a percentage of the prevailing permit price) to the LTA. So for instance, if a household wanted to get one additional car (to the existing car they have), they may need to pay an additional 70% of the prevailing permit rate. If the household wanted to get a third car, they may need to pay an additional 100% of the prevailing permit rate. This additional levy will be incremental for each additional car that the household seeks to add.
  9. This will also give a fair opportunity for individuals to own a car within a reasonable cost rather than the existing system where only the wealthy can afford a car and thus depriving other residents from owning a car.
  10. It also taxes individuals who seek to have more than one car – and this will be a natural economic burden imposed on them for the higher carbon footprint that particular household will incur as a result of additional cars within the household.
  11. It also allows for a small redistribution of wealth to households that may not be financially well-off as they will benefit from selling off the permits they may receive.
  12. It also ensures that the number of cars on the roads is managed and there are always only an X number of cars on the road depending on the permits being released by the government/LTA.
  13. There should also be a number of rules to prevent the hoarding of permits by any one household and a ceiling/maximum of 1 car per household member should be established. In any event, if sufficient levies are charged for subsequent permits, it will create a financial deterrence towards more permits within one household.

A few worked examples

Example 1:

Household A successfully receives a permit. Household B did not receive a permit.

However A decides that car ownership is not a priority for them and chooses to sell the permit on the LTA exchange. B can enter the exchange and purchase the permit from A directly and transfer the funds to A for the right to drive.

Household A benefits financially for forfeiting the right to purchase and drive a car in Singapore (and are rewarded for their environmentally conscious decision) and B will also pay a fair price for the right to own and drive a car in Singapore.

Example 2

Household C already has a permit and has a car. However, they wish to purchase a 2nd and 3rd car for 2 other members in the household.

C goes to the LTA exchange and when they choose to purchase an available permit, they will pay the prevailing rate to the household selling its permit but also pay an additional levy (example additional 70%) to the LTA for purchasing a second car.

They will have to pay a higher levy for the third car (perhaps an additional 120% of prevailing rate) to the LTA.


My question to Singaporeans and friends: will this work? I will be keen to hear about the loopholes, feedback and suggestions.

Thanks for taking the time to read this!