Perhaps one of the more interesting coincidences of the Emerging Stronger Together Budget is this factoid: the government will run a deficit of S$11 billion for FY2021.
S$11 billion happens to be the exact size of the Covid-19 Resilience Package this year announced by Deputy Prime Minister and Finance Minister Heng Swee Keat, which among other things, funds schemes like the Covid-19 Recovery Grant and the Jobs Support Scheme (JSS).
In his speech on Feb. 16, Heng said: "Hence, beyond this crisis, we must return to running balanced budgets."
It's almost as if this Budget sends a message that if it wasn't for the Covid-19 crisis, Singapore could get back to running sensible, balanced budgets and prudent spending, in contrast to the largesse of 2020.
Spending prevented even bigger recession
2020 saw the usually-parsimonious Singapore government spending like ordinary Singaporeans do during a Shopee sale.
A whopping S$92.9 billion was dedicated to dealing with the fallout of Covid-19 alone, across four Budgets.
Another S$8 billion was doled out in a Ministerial Statement, taking the total to over S$100 billion.
But the staggering figure turned out to be necessary to stave off a recession that could have been even more catastrophic than it ending up being.
Singapore still experienced unprecedented economic turmoil.
The economy contracted by 5.4 per cent, the worst since we gained our independence.
Thousands of workers lost their jobs, many others saw their salaries cut or pay rises frozen.
But according to Heng, the financial measures prevented the economy from shrinking by a double-digit 12.4 per cent, and saved the jobs of 155,000 workers, an economic disruption of biblical magnitude.
Spending the money was undoubtedly the right call.
Looking towards the future
Now we're in 2021.
There is hope on the horizon with vaccinations being rolled out that things can return to a new normal, since the pre-pandemic way of life is gone.
Perhaps that informed the nature of Heng's budget, with several measures designed to prepare Singapore for the economy of the future, instead of the complexities of the present.
S$24 billion will be dedicated to further transform local firms and workers to innovate and find creative solutions.
Where former Prime Minister Lee Kuan Yew once spoke of a need to "leapfrog" Southeast Asia, Heng commits to greater regional integration instead, stepping up infrastructure investment and pursuing common frameworks in which to do business.
Temasek will get half a billion dollars, which it will match, to provide growth capital for local firms.
Sustainability got its own section in Heng's speech, with an eye towards encouraging the use of electric vehicles, and a surprise, immediate hike on petrol duty that generated much reactions from Singaporeans.
After all, it's hard to plan for a future if climate change destroys that future.
Do more to be future-ready
One wonders if the Budget is as far-reaching as it could have been, when it comes to thinking about the future.
As it stands, the Budget's vision of the future paints a picture of, "Much like the present day, just with a few added bits stuck on."
60,000 electrical vehicle charging points by 2030 is a good start, and it is in DPM Heng's words, a "more ambitious" target than the previous target of 28,000.
But it depends on where charging points are installed, with reports noting that it remains a challenge for the charging points to be installed in condominiums.
And will the technology for electrical vehicles change by 2030 where we no longer need charging points?
Moreover, there appears to be no major move to get Singapore's electrical grid off fossil fuels like natural gas, and onto renewables like solar and wind power.
Heng regularly speaks of a "Fourth Industrial Revolution", but the last one disrupted entire industries and made certain jobs obsolete forever.
The Budget appears to lean heavily into keeping up with technological progress with capital to "redesign" jobs, but it seems to be less-focused on developing "soft skills" and social intelligence that is just as important in the changing economy.
We have seen a shift towards the development of "soft skills" and social intelligence through SkillsFuture initiatives, but will future Budgets be even more targeted so as to future-proof Singaporeans?
Drop in direct spending on Covid-19 fallout
But even as we look towards the future, the fact remains that we are unquestionably still in the grip of the pandemic. It's not like any of us can hop on a plane and have a holiday in Tokyo or London without needing to quarantine upon our return.
True, S$11 billion is not a small sum, and businesses in hard-hit sectors will be thankful that the JSS will be extended. The additional S$5.4 billion for the Jobs and Skills Package to hire local workers could also be seen as mitigating the impact of Covid-19 job losses.
But if S$11 billion is the only direct financial assistance against Covid-19 that will be given this year, it will be about one-tenth of what was distributed last year.
There is a puzzling decision too. If nightlife establishments like pubs, karaoke outlets and clubs, whose small-scale pilots of re-opening had been put on hold, were looking for comfort and succour, they got little.
"Nightlife establishments such as pubs, and karaoke outlets, are not yet permitted to re-open. They can apply for grants from the Ministry of Trade and Industry and Enterprise Singapore to pivot to other permissible activities or wind down. [Our emphasis]"
Wind down? This is a contrast compared to the treatment of workers and firms in Tier 1 sectors.
Granted, workers in the nightlife establishments are not considered essential workers like many in the Tier 1 sector.
On the other hand, the salary boost for healthcare workers and support staff is well-deserved for their tremendous efforts during this crisis.
IMF: Spend now
Meanwhile, countries around the world are moving ahead with massive spending plans in 2021 to keep their economies afloat.
Perhaps the most prominent example is in America, where the CARES Act was passed in March 2020, worth about US$2 trillion. The newly-elected President Joe Biden is not letting up, moving ahead with another US$1.9 trillion stimulus bill.
In Japan, government spending for Covid-related measures reached US$3 trillion, after an additional package was announced in December 2020.
Closer to home, Malaysia's Prime Minister Muhyiddin Yassin announced plans to spend US$78 billion in 2021, with his finance minister calling it an unprecedented crisis.
None other than the International Monetary Fund (IMF) cautioned governments against prematurely cutting spending while the pandemic is still ongoing, and encouraged countries to get the virus under control so economies can reopen, according to the Wall Street Journal.
Borrowing in the right circumstances
Governments have different priorities than households, and for advanced economies that can borrow money at low interest rates, it makes more sense to spend now to boost the economy, than to let businesses and households fail and suffer.
Heng even alluded to this fact with the Significant Infrastructure Government Loan Act (SINGA), which issues bonds for infrastructure projects.
He called it "efficient" due to the current low interest rate environment.
Singapore traditionally has an aversion to borrowing money, but it might make more sense in the current environment to borrow with interest rates being as low as they are, rather than to dip into the reserves to fund spending.
Perhaps that would address Heng's concerns about not taking the reserves for granted, and give the government greater leeway to provide even more direct financial assistance for businesses that are not yet completely out of the woods.
Prudence has always been our watchword, but prudence doesn't always translate into, "Don't spend." Sometimes spending more money now obviates spending even more in the future.
To take a recent example, if the American state of Texas had weatherised and insulated its energy infrastructure years ago, it might not experience massive blackouts today.
Compared to the other countries, Heng's prudent budget this year look "normal", which is not a bad thing at all.
Let's hope Heng's budget instincts are right about the future, and we will continue to be different from other countries.
Top image from CNA's Facebook page.