SINGAPORE, Feb 21 — Singapore expects to have its first budget deficit since 2010 in the coming fiscal year, during which the government will set aside billions to support the elderly and help low- and middle-income families.

The government unveiled today a budget for 2014/15 that includes steps to support citizens born by 1949 via subsidies to help cover health care costs. It said it will set aside S$8 billion (RM20.8 billion) in the fiscal year starting April 1 to help its “Pioneer Generation”.

Singapore’s electorate has become increasingly angry over the high cost of living and a gap between rich and poor, forcing the long-ruling People’s Action Party (PAP) to re-set its goals and focus on providing more affordable healthcare and extra support measures to the less well-off.

Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam announced the spending plan in a speech presenting the budget for the coming year.

After including the Pioneer Generation Fund and other measures, the overall budget balance in 2014/15 is a deficit of S$1.2 billion, or about 0.3 per cent of gross domestic product, Tharman said.

The fund will ensure that future budgets can focus on addressing needs such as infrastructure investment and expected rises in government healthcare spending for the population as a whole.

“Our spending needs will grow significantly in the next 10 to 15 years,” Tharman said.

The budget also included measures to help the government in its long-running mission to boost productivity and reduce reliance on foreign labour.

The construction sector in particular, will get incentives via higher levies on lower-skilled foreign workers to focus instead on automating processes and retaining more skilled employees.

Unhappiness about the presence of many foreign workers contributed to the ruling party’s worsening performance in recent elections. In the 2011 general elections, 40 per cent of votes went against the PAP, its poorest result since independence in 1965. — Reuters