International Business & Economy Singapore’s Budget 2019: Overview and highlights

Singapore’s Budget 2019: Overview and highlights

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Singapore’s Finance Minister delivered the national Budget for 2019 in Parliament on the afternoon of February 18, Monday.

Heng Swee Keat said this “is an opportune time to reflect on our history so that we can chart an even better future for our people.”

Before going into the specifics Mr Heng acknowledged the global situation, particularly the decline in support for globalization, as well as the ongoing trade dispute between the two biggest economies in the world, the US and China. However, on the regional front, he underlined that there are abundant opportunities for growth within ASEAN.

The Finance Minister then discussed the issues that the country must address, namely, ageing, social mobility, inequality, economic transformation, and climate change.

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Heng called Budget 2019 “a strategic plan to build a Strong, United Singapore” and pledged to do the following: “Keep Singapore safe and secure; Continue to transform our economy; Build a caring and inclusive society; Build a globally connected, smart and sustainable global city and home for all; and Do this in a responsible and fiscally-sustainable manner.”

Highlights of the 2019 Budget:

Security

With security being a high priority at present, Mr. Heng said that 30 per cent of the total expenditures for this year will go towards supporting defence, security and diplomacy efforts. The Finance Minister deemed this as “indispensable.”

Additionally, the Ministry of Home Affairs will be setting up a Home Team Science & Technology agency for the purpose of transforming the private security industry through innovation and technology.

Economic Growth

The country’s economy grew by 3.2% in 2018, and the real median income of Singaporeans has grown by 3.6% per year over the past five years.
But the Finance Minister also said economic growth around the world may slow down this year due to greater uncertainties and downside risks.

Economic Competitiveness

The country is endeavoring to keep a stable environment for investors to stay in the long-term, and this year’s budget focuses on three main areas to support industry transformation and foster economic competitiveness:
a) Building deep enterprise capabilities;
b) Building deep worker capabilities; and
c) Encouraging strong partnerships, within Singapore and across the world

Supporting Start-ups and Enabling Firms To Scale

This year, the Government will render greater assistance in the following ways:

  1. Customised assistance through launching a Scale-up SG programme and Innovation Agents scheme.
  2. Better financing options through setting aside additional $100m to establish the SME Co-Investment Fund III.
  3. Technological adoption through expanding the SMEs Go Digital programme to more sectors, as well as expand the number and range of cost-effective digital solutions under it.

Mr Heng also announced that the Automation Support Package (ASP) will be extended by two years.

Manpower Growth in Services

Mr Heng added that the services sector Dependency Ratio Ceiling (DRC) will be reduced in two steps from 40% to 38% on 1 January 2020, and to 35% on 1 January 2021; the services sector S Pass Sub-DRC will be reduced in two steps from 15% to 13% on 1 January 2020, and to 10% on 1 January 2021.

For the purpose of supporting companies as they get used to these changes, the 70% funding support level for the Enterprise Development Grant and the Productivity Solutions Grant will see a three-year extension.

Additionally, the increase in Foreign Worker Levy rates for the Marine Shipyard and Process sectors will be deferred another year, to give the sector a longer time to recover.

Promoting the country as a global tech hub

The Government continues to encourage the country to become the global tech hub in Asia, with new chances for Singaporeans to take advantage of the Fourth Industrial Revolution.

Mr. Heng announced that the Government will continue to invest in Research and Development and that a Centre of Innovation in Aquaculture at Temasek Polytechnic and Centre of Innovation in Energy at NTU will be established.

Also, the government is setting aside $4.6 billion over the next three years for new economic capability-building measures in #SGBudget2019, and to support Singaporean workers.

A Caring and Inclusive Society

In building a caring and inclusive Singapore, this year’s budget will concentrate on (1) uplifting Singaporeans to maximise their potential and providing access to opportunities through stages of life, (2) providing greater assurance for healthcare, and (3) fostering a community of care and contribution through strong partnerships.

The Finance Minister made special mention of the bottom 20 percent of workers, for whom the Workfare Income Supplement (WIS) Scheme is going to be enhanced.

Starting from January of next year, the qualifying income cap will be raised from the current $2,000 to $2,300 per month, and maximum annual payouts will be raised by up to $400.

For workers who are older, the Government will review the relevance and structure of the Special Employment Credit (SEC) and the Additional Special Employment Credit (ASEC). Additionally, the SEC and ASEC will be extended another year, until the end of 2020.

Healthcare

These are the changes the Government is implementing in the area of healthcare:
Community Health Assist Scheme (Chas) subsidies for GP clinics will be enhanced in various ways. One, HAS will be extended to cover all Singaporeans for chronic conditions, regardless of one’s income. Then, CHAS Orange cardholders (lower to middle-income Singaporeans) will also be receiving subsidies for common illnesses. And finally, subsidies will increase for complex chronic conditions.

Additionally, $5.1 billion will be put into a new Long-Term Care Support Fund, to help fund the CareShield Life subsidies as well as other long-term care support initiatives, such as ElderFund.

Merdeka Generation Package (MGP)

Mr. Heng introduced the Merdeka Generation Package (MGP), “as a gesture of our nation’s gratitude for the Merdeka Generation’s contributions, and a way to show care for them in their silver years. It supports them in staying active and healthy, while providing greater peace of mind over future healthcare costs, for the Merdeka Generation and their families.”

Here are the 5 key benefits of the MGP
1. One-time $100 top-up to their PAssion Silver cards to support their active lifestyles.
2. MediSave top-up of $200 per year for five years, starting this year until 2023.
3. Additional subsidies for outpatient treatment, for life.
– Special CHAS subsidies at CHAS GPs and dental clinics.
- Additional 25% off subsidised bills at Polyclinics and public Specialist Outpatient Clinics (SOCs).
4. Additional MediShield Life premium subsidies, for life. This will start from 5% of their MediShield Life premiums, and increase to 10% after they reach 75 years of age.
5. Additional participation incentive of $1,500 to join CareShield Life, when it becomes available for existing cohorts in 2021.

Care for Seniors and other vulnerable groups

Here are the provisions within this year’s budget for senior citizens and other groups.

Cash assistance rates for the ComCare Long-Term Assistance scheme will be increased.

Additionally, the SG Cares movement will grow through the following endeavors: 1) encouraging volunteerism among the youth and nurturing young community leaders 2) encouraging volunteerism among older employees in companies, and 3) encouraging volunteerism among public officers under the Public Service Cares initiative.

Bicentennial commemoration

For Singapore’s Bicentennial Year, $200 million has been allotted for a Bicentennial Community Fund for dollar-for-dollar matching for donations made to all Institutions of a Public Character (IPCs) in FY2019.

Singaporeans will also partake of a $1.1 billion Bicentennial Bonus, with lower-income citizens receiving up to $300 through a GST Voucher (Bicentennial Payment), and WIS payment recipients will be receiving a Workfare Bicentennial Bonus equivalent to an additional 10% of their WIS payment for work done in 2018.

Mr. Heng added the additional bonuses because of this historic moment
“Personal income taxpayers can look forward to a 50% personal income tax rebate, subject to a cap of $200, for the Year of Assessment 2019.

Parents with children in schools can look out for a $150 top-up to the Edusave accounts of their children in primary and secondary school. Those who are aged 17 to 20 will also receive up to $500 in their Post-Secondary Education Accounts (PSEA).

Older Singaporeans aged 50 to 64 who have less than $60,000 in their CPF accounts will receive CPF top-up of up to $1,000.”

Also, the Government will also provide another year of Service and Conservancy Charges (S&CC) rebate, and an additional $10 million is going toward the Public Transport Fund.

Here are the other items that the Finance Minister announced for Budget 2019

Climate Change— the Ministry of the Environment and Water Resources (MEWR) will introduce the Zero Waste Masterplan in the second half of 2019.

Diesel Taxes— The Government will raise the excise duty for diesel by $0.10 per litre to $0.20 per litre. The annual Special Tax on diesel cars and taxis will be permanently reduced by $100 and $850 respectively.

GST Import Relief for travellers—For travellers who spend less than 48 hours outside Singapore, the relief limit will be reduced from $150 to $100. For 48 hours or more, the relief quantum will be reduced from $600 to $500. The alcohol duty-free concession for travellers will be tightened from three litres to two litres from 1 April.

Mr. Heng ended his speech with an eye toward the future: “There are three lessons for us to learn from our past in order to chart our future as we commemorate our Bicentennial year.

First, Singapore and Singaporeans will have our place in the world as long as we stay relevant and useful. We must stay open and connected, drawing ideas and people from across the globe.

Second, external events around us will shape and re-shape our lives. We must take the long-view, adapt with the times and thrive.

Third, we must draw strength from our diversity, by focusing on what we have in common.

The changes ahead will be faster and deeper, #SGBudget2019highlights the key challenges we are facing, and how we are preparing to ride on the changes, to turn challenges into opportunities, for Singaporeans and for our partners in the global community.”

Read related: As anticipated, booming Merdeka Generation Package for the elderly unveiled

https://theindependent.sg.sg/as-anticipated-booming-merdeka-generation-package-for-the-elderly-unveiled/

 

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