The S$11.3 billion (US$6.2 billion) package unveiled on Oct 12 included personal and corporate tax rebates, accelerated infrastructure building and cash handouts to citizens to help the city state ride out its worst recession in more than 30 years.

The measures, which will put the government's budget in the red to the tune of S$4 billion in fiscal 2001 and S$1 billion in 2002, was larger than expected. Most analysts had anticipated a package similar to the S$10.5 billion delivered in the Asian financial crisis.

Opposition members of parliament said the stimulus package was a vote-buying measure by the ruling People's Action Party (PAP).

"It's buying votes," Chiam See Tong, one of the two opposition MPs, told parliament after the government's announcement.

Analysts said the government could call an election as soon as November 3 or November 10, although it has until August 2002 before it must face the electors.

SINGAPORE SHARES WEALTH

As part of the package the government is to spend S$2.7 billion on a new plan to give Singaporeans a share of the country's accumulated reserves. The shares will be worth S$1 each and pay a dividend of at least three percent a year over five years, paid in the form of more shares.

Finance minister Richard Hu told Channel NewsAsia the shares, which will be given out from November 1, will put S$200 to S$1700 into the pocket of each adult Singaporean.

He said one reason for the share scheme was that about 70 percent of Singaporeans do not pay income tax and would not benefit from proposed income tax rebates.

Other measures in the package include corporate tax rebates of S$975 million, personal tax rebates of S$650 million and increased property tax rebates of S$880 million.

The government also said it will accelerate infrastructure projects worth S$3.5 billion over the next 18 months.

Industry bodies have welcomed the package.

"The Singapore Chinese Chamber of Commerce and Industry is glad to see that the government has seen fit to bolster the economy by providing a more substantial package of off-budget measures," the SCCCI said in a statement.

Analysts said the package provided welcome relief for small and large companies.

"For the corporate sector, there are benefits which would be staggered over two years. The rebates would enhance cash flow and cushion earnings contraction faced by companies during this downturn," said Lim Jit Soon, analyst with Salomon Smith Barney.

Singapore's share market welcomed the news with the main Straits Times Index ending 1.47 percent higher on Friday at 1,416.24 points.

The Singapore dollar, which fell to 11-week lows after weak advance third quarter economic growth numbers on Wednesday, rose to stand at 1.8165/75 late on Friday.

ECONOMIC GLOOM DEEPENS

The latest package is in response to the sharp deterioration in the economy since the government unveiled an earlier S$2.2 billion package of measures in July.

The city state is suffering from a fall in demand for its key electronics exports.

Advance third quarter data, largely based on two months of numbers, showed GDP fell 5.6 percent versus a year earlier.

Over the next 12 to 18 months, any improvement in the economy will depend on what happens in the United States, Deputy Prime Minister Lee Hsien Loong said.

"It's also a question of how the region responds politically and how it picks up economically and the two are inter-related," he told local television.

"The more stable the political response, the less the negative impact will be on investor confidence and our investments," Lee said.