Ramblings

According to Wikipedia, the definition of a blog is as follows:

A blog is a user-generated website where entries are made in journal style and displayed in a reverse chronological order.

Well, this definition pretty much describes the format of any blog. The problem with this definition is that it left out the content part of blogs. Of course, to bring in the content into the definition would be a big headache because a blog can be so many different things at the same time.

For some people, a blog is akin to a personal diary. They write down all the things that they experience, as well as all their thoughts. Yet for others, a blog could well be an academic journal or conference paper, where one writes a well-researched entry to prove a point. Some people take blogs as a means for political subversion. Others turn blogs into a business. The varieties of content on blogs can go on and on and on.

I’ve received comments from a couple of people that there are too many loopholes in my entries, and that I shouldn’t be writing so much. One well-meaning commenter said that it usually takes him a week of brainpower to come up with an entry, and it would be good for me to take some time to think and read before I make an argument.

It’s not that I don’t see the value in doing so, but doing that defeats my purpose for blogging. I see blogging as a form of conversation between myself and whoever reads my blog. I have knowledge gaps that sometimes result in less than perfect arguments. However, I think that’s perfectly fine. People who drop leave comments based on their knowledge, and I reply, they reply, and both parties walk away with a little extra knowledge.

I don’t see blogging as an end in itself, which is why I don’t write with tons of research materials backing up my views. To me, blogging is a means to an end. I see blogging as a spontaneous activity where people with imperfect knowledge come together, share their knowledge, discuss and hopefully, everyone walks away with something that they didn’t have to begin with.

It doesn’t matter to me if I happen to look stupid by making some wrong comments due to imperfect knowledge. Making mistakes is part and parcel of learning, and I enjoy learning from the many people who have dropped by my blog and left thoughtful comments. I might not necessarily see eye to eye with everyone all the time, but that’s only natural. What’s important to me is that people (many who are strangers to me) are willing to share their perspectives. Without my blog, I won’t be able to engage in discussions with all of them in real life.

Alright, enough of ranting. Here’s wishing everyone a happy chinese new year, and if you’ve ever dropped by my blog, read and/or left comments, thanks for giving me some of your time.

To be honest, it’s not bad at all. I read some comments online complaining about the Budget not doing enough in certain areas, or for certain groups of people. I think these comments are really weird sometimes. I mean, this is a budget, and not Santa’s gift bag. Let’s look at the definition from dictionary.com about the word budget.

-noun
1. an estimate, often itemized, of expected income and expense for a given period in the future.
2. a plan of operations based on such an estimate.
3. an itemized allotment of funds, time, etc., for a given period.
4. the total sum of money set aside or needed for a purpose: the construction budget.
5. a limited stock or supply of something: his budget of goodwill.
6. Obsolete. a small bag; pouch.
–adjective
7. reasonably or cheaply priced: budget dresses.
–verb (used with object)
8. to plan allotment of (funds, time, etc.).
9. to deal with (specific funds) in a budget.
–verb (used without object)
10. to subsist on or live within a budget.

So, the general idea behind the word budget is planning how to spend a limited amount of funds. If we are going to spend more in one area, we have to spend less in others. Is anyone prepared to cut the budget for Ministry of Home Affairs so that more money can be given out for everyone to spend? Sure, you might have more money to spend, but you might not live to spend it if criminals start roaming the streets. Or maybe we should cut the Budget for Ministry of Environment and Water Resources. Let the rubbish pile up on the streets and let’s drink substandard water too. Our money isn’t exactly coming out of the ground like the countries in the Middle East, so I think we have to make some decisions on how to distribute the pie as equitably as possible.

While I think the Budget is pretty reasonable, what really irked me is the way the MSM pounced on the Budget and start giving it all kinds of flowery (and I think some bordering on ridiculous) labels like “Capitalist head, Socialist heart”. Man, the Budget is fairly good all round, but is there a need to bootlick to such an extent? It’s not as if every Singaporean is another fifty-thousand dollars richer or something. I was shaking my head reading the MSM. No wonder they get criticisms all the time. They cannot even differentiate between something that’s not too bad and a gift from heaven. If one didn’t read carefully the Budget, reading the MSM news stories might lead you to think that it’s Christmas come early.

Ultimately, given that resources are scarce, perhaps there really isn’t much that we can ask for, unless we want to plunder our reserves. I just hope that the Budget will be able to generate continued economic growth. I don’t need the government to give me pocket money. I have my own brains, hands and feet. What I need is a good environment for earning my own pocket money. And I hope that this Budget will deliver that.

I read with interest that we will be expecting a budget deficit this year. Well, a budget deficit really is quite common. Just look at the United States. The surprising thing is that Singapore has historically been experiencing budget surpluses, but of late, we are actually going into budget deficit.

Of course, I’m no expert on budget deficits, but since most of government spending goes into the public sector, I’m wondering if we will have budget deficits if the public sector spends money more wisely.

My case in point is from my experience in the army while serving national service. I’m not going to go into details because I’m not sure what is confidential and what isn’t. So, I’m just going to talk in general. It is my observation and opinion that that there’s no incentive (at least the few years back when I was serving full time NS) for government agencies (ok, just the army) to save money. It appears that there this somewhat misguided and warped attitude that spending less than what’s allocated will mean less allocation the following year because if a unit spends less than allocated, there’s no necessity to give more. The net result is that there’s a spending frenzy when the financial year is about to close to try and prevent being given less allocation the next financial year.

I’ve always been wondering to myself about this issue. Should we reward those who can keep expenditure down? I would think that it’s more logical to reward those who can consistently keep their expenditure well below the allocated amount. In fact, those who are unable to keep expenditure down should have requests for additional funds turned down (of course, the facts of each request should be considered as well). I mean, in private companies, one could very well expect a promotion for being very efficient in using company funds.

I’m not sure if the entire public sector is like that. I’m only speculating that there’s a possibility that many public organisations operate with this warped idea of monetary efficiency. If enough incentives can be given to those who make efficient use of money in public organisations, we can trim down the budget deficient. Of course, I’m aware that there has been some budget cuts for the public sector, but I think that we should incentivise fiscal effectiveness and make fiscal efficiency a culture. Compared to many other countries in the world, we probably are already very efficient in our use of public money, but I think there’re still alot more room for improvement.

“Building capabilities for the future, strengthening our social security system and providing for the needs of older Singaporeans will require Government to spend more in future. This means we will need additional revenues. We cannot raise direct taxes. Countries the world over are reducing corporate and personal income taxes. To continue to attract talent and investments, and maintain strong incentives for our people to excel, we will in fact have to lower our direct taxes further over time.” — Extracted from Budget Speech 2007

I had argued in an earlier entry that it is not necessary to increase GST because countries with higher corporate and income taxes than Singapore still enjoy economic growth. I also argued that countries without GST, for example Hong Kong (I was corrected by someone that USA has consumption tax, but it’s not at federal level, so the earlier entry was inaccurate in this respect) isn’t in a state of economic stagnantation without income from GST. I’m going to review these 2 propositions that were made a few months back.

Regarding Hong Kong, while it is true that they don’t have GST, I forgot one very important thing, and that is Hong Kong is a part of China. Hong Kong has a really big brother to fall back upon should anything happen. Unfortunately, we don’t have such a luxury in Singapore. If Singapore wants to compete with Hong Kong in terms of corporate taxes, our government has to make up for the shortfall somehow because we can’t stretch our hands to someone and ask for a bailout. Who will give us money if we run into trouble? Malaysia or Indonesia? I’ll be glad if our neighbours don’t cut off our water and sand supply.

And, while there are many countries with taxes higher than Singapore progressing economically, that is true historically. With regards to the future, I’m not too sure. If it is indeed true that countries all over the world are cutting taxes, then I’m afraid Singapore won’t have a choice but to follow suit. However, I can’t comment more until I see updated figures on the tax rates of other countries over the next 1 – 2 years.

All said, I think I’ll tentatively agree with the need to increase GST. It is important that we keep our economy competitive so that Singaporeans will have jobs. I think that it is a very natural thing to try and match competitors when it comes to business, because failure to do so can mean death. But, I think that the government should explore other alternatives other than to increase the GST to make up for loss of income from cutting corporate taxes. I think that there’s a limit to how much GST Singaporeans are willing to pay. The PM has earlier hinted at the possibility of increasing the GST further. I would like to hint back that the next GST increase could be would be an expensive political price that might not be worth paying. There’s a limit to the threshold of tolerance from Singaporeans.

In anycase, the GST is a done deal. It will happen, no matter what. At the very least, the offset package was reasonable enough. As citizens, what we can do is to monitor the effectiveness of this policy over the next few years. If swallowing the bitter pill doesn’t yield the future benefits that the government is presently so convinced about, I’m not going to vote the PAP at the next General Elections.