Singapore Budget 2009: Savings Reserves To Be Used

Singapore Budget 2009: Savings Reserves To Be Used

I have highlighted some issues why Singapore Savings Account readers might be interested in the Singapore Budget 2009. Now that the Singapore Budget 2009 has been released, let us see if our questions have been answered.

In delivering the Singapore Budget 2009 on 22 January 2009, Singapore's Finance Minister, Mr Tharman Shanmugaratnam, revealed that Singapore will dip into its reserve savings for the first time ever since independence to fund a S$20.5 billion dollar Resilience Package, creating a budget deficit of 6.0% GDP in the process.

What this means is that the Singapore Government will use its savings reserves from its own savings account (accumulated during good times) to help create jobs, cushion the impact of Singapore's worst recession and to build a home for the future.

Singapore's President has given his in-principle approval for withdrawal of $4.9 billion from past savings reserves. The President’s assent to the Supply Bill will be obtained after Parliament has passed the Bill.

This is also the first time that the government has sought the President's approval for such action since the Constitutional framework for protection of reserves was set up in 1991.

Our Finance Minister also made it clear that more off Budget measures may be activated (?? possibly more withdrawal from the savings of our reserves) should the recession worsen.

In the Singapore Budget 2009, the CPF rates remain unchanged. Instead a Jobs Credit has been created (in the form of a cash grant amounting to 12% of the first $2,500 of the each employee's wages) to pay companies who retain their staff on their payroll.

Bank savings account interest rates are unlikely to change much with the release of Budget 2009. The good news is that our Finance Minister thinks that inflation will come down to zero in 2009. So our paltry interest payments received from bank savings accounts in 2009 may actually beat inflation for once!

As to whether bank savings deposits guarantees will still be around after the end of 2010, it will depend on the state of the economy near that point in time. By the decisive and responsive measures taken by our Finance Minister, we can be assured that the decision making will be appropriate and sound.

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Kids’ Money Saving Habit

Kids’ Money Saving Habit

In my school days of old as a kid, I used to save with POSB whenever the bank staff visited our primary school.

My classmates (all kids) and I would bring our savings cards all filled up with stamps (paid for by our parents) to present to the bank clerical officers. It was one of those high points during school days that we looked forward to. The reason? Our money saving habit as kids was expected to pay off. Kids like us got into the kids money saving habit to receive kiddie goodies from the POSB aunties.

Now that I've grown up, the magic of saving seemed to be lost with my own kids and those of my friends. With internet bank transfers, check deposits and ATM withdrawals, the good old practice of physically squirreling coins and dollar notes into a piggy bank as a kid's money saving habit is now gone.

Instead, money (from me) is deposited into my kids' savings account. Cash withdrawals are made for school pocket money to be spent totally rather than saved. I'm not sure if my kids get the message that money comes from parents' hard-earned efforts, rather than a cash-spitting ATM machine.

My own money saving habit that I learnt as a kid is now being applied, for the benefit of my kids. Do you have similar experiences with your kids’ money saving habit?