What everyone should look forward to in the Budget 2014 revelation this Friday

It will still be be about productivity boost.

According to DBS, Budget 2014 will be announced this Friday (21 Feb). It will continue to lay out the strategies for the restructuring process particularly when the economy approaches the halfway mark of this economic transformation. 

The focus will remain on raising productivity and strengthening inclusive growth.

Here's more from DBS:

On the fiscal front, expect a massive upside surprise in the overall fiscal balance for FY13. The final fiscal position in FY13 will likely record SGD 5.1bn (0.8% of nominal GDP), significantly higher than the budgeted SGD 2.4bn.

This comes largely on the back of a better than expected economic growth performance. The official GDP growth forecast for 2013 was originally 1-3% but as it turns out, full year growth will likely surprise on the upside, at close to 4.0%.

The lower expectation on growth outlook essentially has resulted in a conservative estimate for the fiscal position in FY13.

So, against the backdrop of the buoyant economic conditions, healthy wage growth and resilient corporate earnings would have bolstered the official coffer.

Tax revenue collections (corporate tax, personal income tax and GST) will likely surpass expectation. Concomitantly, stamp duty collections from property transactions and taxes on vehicles are likely to have remained strong in the first half of the year.

But the introduction of the Total Debt Servicing Ratio (TDSR) and the tightening in car loans probably have put a dent on collections in the later part of the year.

For FY14, we expect a generous special transfer worth SGD 9bn to be introduced to alleviate the well-being of the less fortunate segments of the society.

While strengthening inclusive growth will continue to be the focus, the recently announced Pioneer Generation Package will likely take the spotlight.

Recognition for the contributions by the pioneer generation in nation building as well as preparing the economy for the challenge of an aging population will likely dominate the government transfer package.

Given that the generous transfer package, the projected overall fiscal position for FY14 would be a surplus of SGD 3.3bn (approx. 0.5% of nominal GDP).

This once again demonstrates the prudent and conservative stance by the government in maintaining a small surplus to build up the fiscal reserves, particularly given an increasingly conducive global environment.