Budget 2015 geared at solving tomorrow’s problems today: PwC

Skills development is the answer to future challenges.

Singapore’s 2015 Budget is geared at preparing the country for future challenges, particularly by investing in skills development, identifying priority industries, and unveiling measures to encourage value creation and investment in the country’s economic infrastructure.

According to PwC, the Budget continued the government’s twin foci on economic restructuring by promoting productivity and innovation, and on strengthening the social safety nets.

“At the end of the day, Budget 2015 does not contain any significant surprise. It characterised the government’s longstanding prudent fiscal policy. While the government sought to capitalise on our strong fiscal position by sharing the fruits of the past economic successes, the nation is also being positioned for future challenges,” stated PwC.

Read the full commentary here. 

Here’s more from PwC:

To sustain our past economic successes and promote further growth, the most significant measure this year has to be the SkillsFuture development effort. The comprehensive approach to SkillsFuture, which ranges from training subsidies to mentoring programmes, aims to cover all bases.

It is interesting to note the renewed focus on encouraging our companies to internationalise, given that it was in the 1990s when the external economy was first touted as a new wing to Singapore’s growth. With almost all of this year’s tax measures targeted at domestic businesses, the absence of anything specific for foreign direct investments might be a signal of the government’s cautious approach to dealing with the changing global tax environment in the light of the OECD’s Action Plans to address base erosion and profit shifting issues by international businesses.

While short on specific details, of potentially even greater significance is the government’s intention to increase development expenditures to around $30 billion by 2020. This represents a more than doubling of the level of investment within a 10 year time frame. Important infrastructure developments such as Changi Airport Terminal 5, Tuas Seaport and investment in our public healthcare system will serve as pillars for economic growth in the next decade and beyond.

To enable it to fund the expected increase in future expenditures, the government will increase personal income tax rates for the higher income earners and revise the framework under which it can include the expected investment returns of its three investment entities in its revenue base.