Singaporeans may receive more cash payouts in Budget 2024: Economists

SINGAPORE: UOB economists have forecast that the Government will expand on the cash payouts under the Assurance Package as well as the Community Development Council (CDC) voucher scheme to help alleviate the impact of the rising cost of living and the Goods and Services Tax (GST) hike.

Speaking to Singapore Business Review (SBR), the experts also predicted that the government will focus on elevating the “productivity and competitiveness of Singapore’s workforce” through the upcoming Budget.

UOB Senior Economist Alvin Liew suggested that the government might introduce additional incentives to encourage workers to acquire expertise in digitalization, artificial intelligence, and the green transition.

He proposed the possibility of a top-up to the annual SkillsFuture Credit, funded through a co-matching scheme with employers or training allowances for mid-career individuals pursuing full-time, extended courses.

The economist also speculated that the government might augment the co-funding share under the Progressive Wage Credit Scheme (PWCS) for 2024-2026.

Jester Koh, UOB Associate Economist, added that a potential increase in the Local Qualifying Salary (LQS) might be on the horizon.

The economists foresee a one-off Central Provident Fund (CPF) transition offset to alleviate the impact on business costs arising from the scheduled CPF monthly salary ceiling increase to $8,000 by 2026, as well.

Beyond workforce development initiatives, the experts expect that Budget 2024 will also serve as an effort to address the cost of living squeeze, particularly for lower- and middle-income households grappling with the recent GST increase and escalating public transport and utility expenses.

To support households, UOB suggested the government might enhance cash payouts and U-save utility rebates under the existing Assurance Package, accompanied by a possible one-off cost-of-living special cash payment in FY24.

The economists also told SBR they anticipate additional CDC vouchers for each Singaporean household or one-off top-ups to Personal Skills Development Accounts (PSEA), Edusave, or Child Development Accounts (CDA).