February 7th, 2014

Rethinking fundamental approaches to budget making

budget2014On 29 January, AWARE submitted its fourth annual set of recommendations for the national budget through the public consultation portal REACH. This year we question some of the fundamental approaches that underlie budget making and call for the budget process to be more transparent and inclusive, so that citizens and civil society organisations can have a greater stake in an inclusive nation. Our recommendations have also been sent to Members and Nominated Members of Parliament.

This year, our nine recommendations cover five key areas:

  1. Fundamental approaches to the Budget
  2. Income inequality and poverty
  3. Caregiving
  4. Healthcare
  5. The Budget Process

Singapore needs to debate our fundamental approaches to budget making

AWARE questions some of the fundamental approaches that underlie current budget making so that the Government, the citizenry and the corporate sector can, in tripartite alliance, arrive at truly inclusive solutions. For example, we ask: Is social spending too low in Singapore? Should children be advantaged or disadvantaged based on their parents’ choices in employment or marriage? Do policies require too much “self-reliance” from individuals in contexts where problems cannot be effectively addressed at the individual level? Should means-testing take the income of all family members into account, rather than the income of the individual concerned? These questions need careful consideration and open discussion.

More needs to be done to tackle income inequality and poverty

Income inequality in Singapore is growing. Even after government transfers and taxes, our Gini coefficient rose from 0.448 in 2011 to 0.452 in 2012. More effective measures must be taken to lower the Gini coefficient below 0.4, which is the international alert line for the inequality threshold.

Social protection spending in Singapore is far below what it should be for a high-income country. According to the Asian Development Bank (2013), Singapore’s Social Protection Index (SPI – a simple indicator assessing social protection programmes) is a mere 0.169, with social protection spending taking up only 3.5% of GDP. For comparison, the Republic of Korea, with per capita GDP less than half that of Singapore, has an SPI of 0.2, with 7.9% of GDP allocated to social protection spending.  This places vulnerable groups in Singapore at severe financial risk, especially the elderly, women who drop out of the workforce, and disabled persons .

A yearly, regular and reliable poverty measurement should be produced to enable citizens to track the extent to which poverty is reduced by various “tailored schemes”. There should be transparent evaluation of whether the Multiple Lines of Assistance[1] in the Ministry of Social and Family Development effectively address the needs of the poorest and most vulnerable.

Caregiving must be valued and caregivers protected

Rapidly changing family forms and social structures require recognition in public policy if they are not to leave caregivers vulnerable. Policies that support children should be delinked from those supporting caregivers. No child should be penalised for parents’ personal choices in employment or marriage.

We would also like to see the provision of caregiving services as a public good, with significant investments in childcare and eldercare as publicly funded services.

Universal healthcare must be a priority

For many years, healthcare policy has treated healthcare as a financial issue, with the responsibility to afford healthcare wholly resting on the patients and her/his family. We hope that with the ‘Healthcare 2020 Masterplan’ the limitations of this policy are becoming visible.

Singaporeans currently pay 75% out-of-pocket for healthcare expenditure. This should be lowered significantly to ease the burden on those unable to finance their healthcare. Key questions about the future of the healthcare system must be discussed with stakeholders openly and transparently.

A more transparent Budget process means better feedback from the public

We call strongly for the Budget process to be more transparent and inclusive. Public consultation on the Budget through REACH must be continuous to allow citizens and civil society organisations to contribute effectively at all stages. We ask the Ministry of Finance to publish key budget documents in accordance with international best practice, including a pre-budget statement, detailed breakdown of the budget for the financial year, in-year reports, mid-year review, and an annual report detailing the spending of individual ministries. Data, disaggregated by gender, age, ethnicity and income, should be made available to all citizens.

Read the full text of AWARE’s Budget 2014 Recommendations here. The budget recommendations were also covered in the Business Times and the Online Citizen.

AWARE has made recommendations to Singapore’s National Budgets since 2011, advocating for equitable allocation of resources to meet the needs of vulnerable groups. Our recommendations for Budget 2013 are here.


[1] Multiple lines of assistance, Ministry of Social and Family Development  http://app.msf.gov.sg/Portals/0/Chart%20of%20Government%20Schemes.pdf

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