|Singapore Table of Contents
Budgeting and Planning
Although Singapore billed itself as a free-enterprise economy, the economic role of government was pervasive. As governing body for both the nation and the city, the government was responsible for planning and budgeting for everything from international finance to trash collection. The government owned, controlled, regulated, or allocated land, labor, and capital resources. It set or influenced many of the prices on which private investors based business calculations and investment decisions.
State intervention in the economy had a positive impact not only on private business profitability but also on the general welfare of the population. Beyond the jobs created in the private and public sectors, the government provided subsidized housing, education, and health and recreational services, as well as public transportation. The government also managed the bulk of savings for retirement through the Central Provident Fund and Post Office Savings Bank. It also decided annual wage increments and set minimum fringe benefits in the public and private sectors. State responsibility for workers' welfare won the government the support of the population, thus guaranteeing the political stability that encouraged private investment. In general, state intervention in the economy managed to be probusiness without being antilabor, at least regarding material welfare.
Budgeting and taxation were frequently used for attaining economic goals. In the postrecession period, budgetary changes primarily benefited business. For example, the fiscal year ( FY) 1988 budget included an overseas investment incentive program, administered by the Economic Development Board, allowing tax write-offs for losses from approved overseas investments. Other concessions such as suspension of taxes on utilities and a 50 percent rebate on property taxes were in effect between 1985 and 1988 to counteract the economic slump.
Budgeting and taxation also were often used to achieve or reinforce social goals such as population control. Until 1984 the government encouraged limiting of families to two children by levying higher medical and education costs for additional children. In 1986, however, tax rebates were introduced to encourage collegeeducated women to have third and fourth children.
More about the Economy of Singapore.
Source: U.S. Library of Congress