Minister for Finance, Heng Swee Keat, is delivering the Budget speech for the Financial Year 2019 in Parliament at 3.30pm. Stay tuned for live updates on HR and manpower issues arising from the speech.
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For a fiscally sustainable future, the government will meet recurrent spending needs (in areas such as healthcare, preschool education and security) with recurrent revenues. This includes broad-based taxes such as the GST which contribute significantly to Singapore's fiscal resources.
Hence, this year, GST import relief will be tightened for international travellers in three key areas:
- Relief for those who spend less than 48 hours overseas will be reduced from S$150 to S$100.
- For those who spend 48 hours or more overseas, relief quantum will be reduced from S$600 to S$500. This will be effective tomorrow (19 February 2019).
- Alcohol duty-free allowance will be reduced from 3 litres to 2 litres from 1 April 2019.
When the GST is raised sometime from 2021 to 2025, the government will ensure that the overall system of taxes and transfers remain fair and progressive.
- GST on publicly subsidised education and healthcare will continue to be absorbed.
- More help will be provided to lower-income households and the elderly through the enhanced permanent GST Voucher scheme.
- The Government will also cushion the GST increase for a period through a GST offset package. Lower-income and middle-income households will receive more.
More details will be announced later.
URA Master Plan 2019 will guide Singapore's urban development over a 10 to 15-year time frame.
As a global node, Singapore has to be well-connected within and with the world.
- Within Singapore, there is now 230km of MRT lines, but this will rise to 360km when major MRT projects such as the Cross Island Line are completed in the 2030s.
- To enhance global connectivity, we are increasing the capacities of the airport and sea port.
Ensuring a sustainable environment
Government is studying implications of climate change on Singapore carefully and will come up with measures to prepare the country.
The Climate Action Plan launched in 2016 sets out the strategy for mitigating and adapting to the impacts of climate change, especially on infrastructure.
Carbon tax will be applied on this year’s emissions as an important signal to companies and households to reduce emission and adopt energy-efficient practices.
Ministry of the Environment and Water Resources (MEWR) will also introduce the Zero Waste Masterplan in the second half of this year.
The government will also raise the excise duty for diesel by S$0.10 per litre, to S$0.20 per litre. Annual special tax on diesel cars and taxis permanently reduced by $100 and $850 respectively.
To cushion the impact for commercial diesel vehicles, road tax rebates will be implemented for diesel commercial vehicles. Additional cash rebates will also be provided for diesel buses ferrying school children.
The government will grow the spirit of volunteerism in the youth by nurturing youth community leaders in Institutes of Higher Learning (IHLs).
It will work also with community partners and companies to encourage volunteerism among their older employees.
The government is also encouraging all public officers to volunteer under the Public Service Cares initiative.
Commemorating Singapore's bicentennial
The government has set aside S$200 million for a Bicentennial Community fund to provide dollar-for-dollar matching for donations to Institutions of a Public Character (IPCs) in FY2019. The Giving.sg website has also been enhanced to better match donors to causes.
The government will set aside S$1.1 billion as a Bicentennial Bonus to Singaporeans to commemorate this significant moment in history. This includes:
- Up to S$300 through GST voucher cash for lower-income Singaporeans. This will benefit 1.4 million Singaporeans.
- Those who receive WIS payments will get a Workfare Bicentennial Bonus (in cash) amounting to an additional 10% of their WIS payments for work done in 2018. Minimum payment of $$100.
- Those who pay personal income tax will get 50% personal income tax rebate, subject to a cap of S$200, for YA 2019. Cap set as S$200 so benefits go mostly to middle income earners.
- Primary and Secondary school students to receive S$150 top-up to the Edusave accounts. Those aged 17 to 20 to receive up to S$500 in their PSEA.
- CPF top up of up to S$1,000 for Singaporeans aged 50 to 64 with lower CPF balance (less than $60,000 of retirement savings in their CPF accounts). Majority who receive this will be women, many of whom have left the workforce early to provide care to their families and have less time to accumulate their CPF balance.
Besides the Bicentennial Bonus, the government will also provide another year of Service and Conservancy Charges (S&CC) rebate.
The Public Transport Fund will also be topped up by $10 million.
This budget, the government is introducing a Merdeka Generation Package (MGP) which comprises five key benefits (regardless of income):
- A one-time S$100 top-up to their PAssion Silver EZ-Link cards to support their active lifestyles.
- MediSave top up of S$200 a year for 5 years starting this year to 2023.
- Special CHAS subsidies and other additional subsidies for outpatient care for life.
- Additional MediShield Life premium subsidies for life, starting from 5% of their MediShield Life premiums.
- Additional participation incentive of S$1,500 for Merdeka Generation seniors who join CareShield Life when it becomes available for existing cohorts in 2021. This brings the total incentive to S$4,000.
This will benefit close to 500,000 Singaporeans - those born in the 1950s and who obtained citizenship by 1996; as well as those born in 1949 or earlier, who obtained citizenship by 1996, and do not receive the Pioneer Generation Package (PGP).
The package will cost over S$8 billion over the span of the Merdeka Generation's lifetime. This budget, S$6.1 billion will be set aside for a new Merdeka Generation fund that will cover these costs.
The government will provide a special MediSave top-up of S$100 per year for the next 5 years for Singaporeans aged 50 and above in 2019 who do not receive MGP or PGP.
Increased social spending over the years, from S$15 billion in 2009 to S$30 billion in 2018.
There is a social focus on uplifting Singaporeans, providing greater healthcare assurance, and fostering a community of care and contribution.
For young Singaporeans, the government invests heavily in providing a world-class education to bring out the best in every child, regardless of starting point. Throughout the schooling years, the government subsidises more than 90% of the total costs of education. Children from disadvantaged backgrounds get even more support through schemes like KidSTART.
Support for Singaporeans continues into working lives. For bottom 20% of workers, the Workfare Income Supplement (WIS) scheme will be enhanced to provide better support. Qualifying income cap will be raised from S$2,000 to S$2,300 a month. Maximum annual payout will be increased by up to S$400. An estimate of S$206 million a year will be spent on these enhancements.
For older workers, the government is doing more to help them earn more, save more, and have greater peace of mind in their retirement years. Tripartite Workgroup to study the concerns of older workers will present their recommendations later this year.
The government will extend Special Employment Credit (SEC) and the Additional Special Employment Credit (ASEC) for another year, until end of 2020.
As more Singaporeans enter their senior years, healthcare needs will grow. Major changes have been made in healthcare to make it more affordable, accessible, and comprehensive. This includes the enhancement of CHAS, CareShield Life, MediShield Life.
CHAS subsidies for GP clinics will be enhanced in three ways:
- It will be extended to cover all Singaporeans for chronic conditions, regardless of income.
- Lower to middle-income Singaporeans who are CHAS Orange cardholders will also receive subsidies for common illnesses.
- There will be increased subsidies for complex chronic conditions.
The government expects to pay out more than S$200 million a year on CHAS subsidies.
Ministry of Health has announced that they will be introducing the new CareShield life from 2020. CareShield Life will provide lifetime coverage, with higher monthly payouts of at least $600 a month for those who become severely disabled. This offsets the costs of long-term care for individuals and their families.
A total of S$5.1 billion to be put into new Long-Term Care Support Fund, which will help fund the CareShield Life subsidies as well as other long-term care support measures, such as ElderFund.
Continue to build Singapore’s position as a global node of technology, innovation, and enterprise.
Set aside S$19 billion as part of research innovation and Enterprise 2020 programme.
Enterprise Singapore is collaborating with industry partners to establish a Centre of Innovation in Aquaculture at Temasek Polytechnic to enhance the resilience of Singapore's food supply.
NTU will launch a Centre of Innovation in Energy to drive industry-led innovation in energy. More will be shared next month.
Prepare and develop people to make full use of this node.
For students who are currently in Institute of Higher Learning, the government will combine the local and global internship programmes into a single Global Ready Talent Programme.
Singapore Week of Innovation & Technology and Singapore FinTech festival will be held in same week in mid November. This will bring in the global innovation community to come together in Singapore, to explore and collaborate.
The government expects to spend S$4.6 billion over next three years on the new and enhanced capability-building measures in Budget 2019 and to support Singaporean workers. S$3.6 billion will go towards helping workers to thrive amid industry and technological changes. S$1 billion will go towards firms to build deep enterprise capabilities.
People have to be nimble and build skills for each stage of life. The ultimate goal is to enable people to have good jobs and opportunities, and to be at their best.
Government will will continue to invest in people across all stages of their lives - from preschool to work.
- Workers need to embrace upskilling and re-skilling
- Firms must step up training and job redesign.
- Unions and TACs need to spearhead upskilling and reskilling for businesses and workers.
This year, new PCPs will be launched relating to blockchain, better software and prefabrication.
Career Support Programme to extend for 2 more years.
Starting from 1 April 2020 all enterprise transformation support by the Enterprise Development Grant (EDG) must include benefits for workers such as better wages.
Relying on more foreign workers is not the solution, what we need is to have a sustainable inflow of foreign workers to compliment the local workforce.
However, to manage the manpower growth in Services, and to encourage companies to revamp work processes, redesign jobs, and reskill our workers, the government will adjust the workforce quota in the services sector.
- 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 also be reduced in two steps, from 15% to 13% on 1 January 2020, and to 10% on 1 January 2021.
To support firms as they adjust to these changes, measures will be in place including:
- Enhanced funding support under Enterprise Development Grant and Productivity Solutions Grant - extended till FY2022 to help firms adjust to meet changes.
- Productivity solutions grant will support up to 70% of the out-of-pocket training cost.
- On a case by case basis, firms can bring in foreign workers with skills in demand in the sector provided they have given fair consideration to locals first.
Increased Foreign Worker Levy rates for the Marine Shipyard and Process sectors to be deferred for another year as they have only begun showing early signs of recovery.
Local Enterprise and Association Development (LEAD) programme enable TACs to take on a more strategic and longer-term approach in driving transformation.
The government will develop stronger partnerships around the world, at G2G and B2B levels and further streamline and digitise trade processes.
Singapore’s economy grew by 3.2% in 2018, and real median income of Singaporeans have grown by 3.6% over the past five years. However, global growth is expected to moderate in 2019 with increased uncertainties and downside risks.
Hence Budget 2019 will focus on three key areas to support industry transformation:
- Building deep enterprise capabilities
- Building deep worker capabilities
- Encouraging strong partnerships within Singapore and across the world
Support will be provided in three areas to enable SMEs to scale:
- Customised assistance: Enterprise Singapore will launch a Scale-up SG programme and Innovation Agents scheme. This will help local firms identify and build new capabilities, to innovate, grow and internationalise.
- Better financing options: The government will set aside additional S$100 million to establish the SME Co-Investment Fund III. It will also streamline existing financing schemes into a single Enterprise Financing Scheme, and extend SME Working Capital Loan scheme for about two more years (to March 2021).
- Technological adoption: The government will expand the SMEs Go Digital programme to more sectors, as well as expand the number and range of cost-effective digital solutions under it.
Automation Support Package (ASP) to be extended by 2 years to help firms deploy impactful and large-scale automation technologies.
The government will move to an enterprise-centric approach with resources drawn from each agency and focused in an enterprise-centric stage of growth.
To better support the broad base of companies with diverse needs, resources will be drawn from each government agency, but focus support in an enterprise-centric way to better help firms at each stage of growth.
Firms with large and complex needs or with strong growth potential will be provided a range of customised support by Singapore Economic Development Board - EDB, Enterprise Singapore and other agencies; SMEs facing common challenges will be supported through scalable solutions that are easy to adopt.
Photo / 2019's live stream