5 reasons why the Singapore Budget 2013 is a 'good' one

There is nothing called a great budget or I’m yet to see one. The Singapore budget however was a very good budget indeed for several reasons

· It was a very balanced budget for today and tomorrow. For young and the old. For the economic progress as well as wellbeing of the people.

· It was forward looking, not just for 2013-2014 but with economic impact elements over the next 3-5 years

· It was aimed at quality of future growth v. quantity of goodies.

· There were several initiatives aimed at driving financial prudence amongst people at large, something seldom seen in budgets these days.

· It focussed as much on income growth for the people as for the income growth for the government.

How much of the planned initiatives will work and deliver on the expectations of the people is yet to be seen but the budget was broadly on the right track as a reflection of the thinking of a progressive and forward looking government.

There are some caveats though e.g. the foreign worker strategy coupled with the productivity ad automation enhancement initiatives to counter the workforce gaps is a long drawn affair. This will bound to have some negative economic impact on the SME segment in the short term.

The revised auto financing and related policies revision might ease of CEO prices and the traffic pressure but will make it extremely difficult for the auto industry to survive.

Banks will also likely get impacted by several factors and will see a lot of pressure on lending. With the property cooling measures, lower loan to value ratios and now the cap on auto loans percentage, the deposit ratios will drop affecting liquidity as people will be forced to spend more of their savings. The banks will likely end up shifting focus towards more unsecured lending to fulfil the cash demand which will have its own adverse effect.

Having said that, I always like to watch out and monitor the “Ripple Effect” factors rather than debate on what’s already been done. So we need to wait and watch for the true economic impact of the budget which will start to unfold in the next 4-6 months going all the way into 1015.