Singapore Budget 2007 - Off the mark by a factor of 10!

, I wrote a letter to the Straits Times forum on the (embarassing) budget surplus that the Singapore government garnered for financial year 2007. They would serve their citizens well by reversing their decision to increast GST to 7%.

A shorter, less caustic, version of the letter, was published in The Straits Times Forum the following week:

Dear sir,

Our Finance Ministry's estimate of a S$0.7 billion deficit for 2007 was off the mark by a factor of 10 (actuals were $6.4 billion surplus). Question is, why were we so off the mark with this estimate? A lot of political goodwill was exhausted persuading citizens to accept a 2% increase in GST. The $1.4 billion that this generated could have been covered by the surplus if we had done a more realistic budget last year. Even if you factor in an unprecedented year for stamp duty (caused by a sizzling property market), which yielded $2.3 billion more than anticipated (and this does not include proceeds from government land sales which are off-budget revenue for the government), from a planning perspective, we would still have a $2.7 billion surplus if we did not increase GST and if we assumed our stamp duty numbers were as projected.

Singapore is a world model for planning in general. Lets see if we can apply the same rigour to our fiscal planning. This is especially so since this impacts citizens directly, such as an increase in GST that have exacerbated current inflationary pressures.
Dear sir,

Our Finance Minsitry's estimate of a S$0.7 billion deficit for 2007 was off the mark by a factor of 10 (actuals were $6.4 billion surplus). Question is, why were we so off the mark with this estimate? A lot of political goodwill was exhausted persuading citizens to accept a 2% increase in GST. The $1.4 billion that this generated could have been covered by the surplus if we had done a more realistic budget last year. Even if you factor in an unprecedented year for stamp duty (caused by a sizzling property market), which yielded $2.3 billion more than anticipated (and this does not include proceeds from government land sales which are off-budget revenue for the government), from a planning perspective, we would still have a $2.7 billion surplus if we did not increase GST and if we assumed our stamp duty numbers were as projected.

Singapore is a world model for planning in general. Lets see if we can apply the same rigour to our fiscal planning. This is especially so since this impacts citizens directly, such as an increase in GST that have exacerbated current inflationary pressures.

Yours sincerely,
Malek Ali