3 focus sectors for Singapore FY2014 budget revealed

All about healthcare, productivity and SMEs.

Policy will likely shift in the FY2014 budget to more medium- to long-term issues -- specifically productivity, healthcare and SMEs -- now that the job and income issues have relatively improved, according to OCBC.

"For the FY2014 Budget, there may be slightly less policy focus on bread-and-butter issues given the tight labour market, very low resident unemployment rate, and progress has been made in terms of the rising median household income (+4% yoy in nominal terms and +1.6% in real terms for 2013), and narrowing GINI coefficient (0.463 unadjusted which is the lowest since 2005, and 0.412 after adjusting for government transfers and taxes)," said OCBC.

"Therefore, there may be more specific policy focus on medium-term healthcare cost concerns, especially for the elderly, given the ageing population, higher quality care demand, longer life expectancies and rising chronic diseases incidence, and to address the out-of-pocket medical expenses," it added.

"While the Singapore economy is starting to see improvement in the labour productivity growth data in the most recent quarters of 2013, the performance across sectors remain very mixed. Hence despite the clarion call by companies to lighten up on the foreign manpower curbs, we think it is too premature to expect an unwinding on this front."

"Enhancing and/or extedning the Quality Growth Programme will likley be more than welcomed, especially for the SMEs since every dollar counts, and given that the screws on the foreign worker policy is likely to remain tight or be tightened further over time and they need to overcome their inherent size limitations, scalability and capability issues. Against this backdrop, SME financing and growing the Singapore brand remains important."