Helicopter money for tourism sector is ‘pushing on a string’

Year: 2020

This post is written as a brief comment to an article published on Channel News Asia titled: Singaporeans aged 18 and above to receive S$100 worth of local tourism vouchers (16 September 2020).

“The Minister has defined this scheme to grant every Singapore above the age of 18 $100 to spend on domestic tourism as “This is not a social assistance scheme. This is an economic scheme to help our tourist attractions to preserve their capabilities that have been built up over the years, while they consolidate capacity in the interim”.

At FMG, we view this as ‘helicopter money’. These easy solutions to knotty problems are not good governance but convenient governance given the abundance of capital available to Government and the fungibility of cash.

It begs the question why for so many years financial prudence was used as a catch-all defence to deny greater support for the lower-income and the middle-income and why an anticipated lack of fiscal resources was used as a premise to raise GST on multiple past occasions and now, at an indefinite point in the future.

What are the economics behind this scheme as compared to merely subsidising the minimum maintenance cost of parks, the zoo and other State-affiliated and thus taxpayer-invested entities? Tourism is not expected to normalise until 2024.

Why ‘bailout’ an entire sector and what happens after June 2021? After one helicopter drop, it is inevitable that more will be expected. So this is just ‘pushing on a string’.”

– Devadas Krishnadas
CEO, FMG