Singapore's Deputy Prime Minister and Minister for Finance, Heng Swee Keat, is delivering the #SGBudget2020 speech for the Financial Year 2020 in Parliament at 3.00pm. Stay tuned to this page for all the updates relevant to HR leaders and employers as unveiled in the Budget.
ALSO READ: #SGBudget2020: Wishlist and what to expect
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Financial support for primary to pre-University, Silver Generation, PWDs
For youth in their primary to pre-University School years, the government will:
- Enhance the MOE Financial Assistance Scheme by an additional S$9mn per year. The annual bursary quantum for pre-university students will be raised from S$900 to S$1,000;
- Increase transport subsidies for all students, and school meals subsidies for secondary school students;
- Enhance bursaries for full-time ITE students from Academic Year 2020;
- This will see the cost of bursaries for higher education rise from S$148mn annually to S$198mn annually.
The government will increase retirement support for seniors through three measures:
- The government will do more to help Singaporeans tap on their housing assets for retirement. The Ministry for National Development will provide more details at the upcoming Committee of Supply (COS) debate;
- Introduce a Matched Retirement Savings Scheme from 2021 to 2025. This will help those who have less CPF savings to save more, wherein the government will match every dollar of cash top-up made to the CPF Retirement Account, capped at S$600 per annum. This will apply to about 435,000 Singaporeans.
- More on this will be provided by the Ministry of Manpower at the COS;
- Enhancements to the Silver Support Scheme, to provide lower-income seniors with greater assistance for their retirement needs;
- Top-ups of S$750mn to the ElderCare Fund, S$500mn to the ComCare Fund, and S$200mn to the MediFund.
- The quarterly cash payouts under the scheme will be raised by 20%, increasing the payout from S$750 to S$900/quarter for those living in smaller flats.
- Under this scheme, a new payout tier will be provided to a smaller payout to seniors whose monthly household incomes per person are above S$1,300 but not exceeding S$1,800.
- About 100,000 more seniors are expected to benefit from this enhanced scheme in 2021.
Building an inclusive society for PWDs
In providing stronger support for employers of persons with disabilities (PWDs), the government will introduce the new Enabling Employment Credit (EEC) . It will be available for five years, from 2021 to 2025, at a cost of about S$31mn annually.
To ensure that the EEC remains helpful for PWDs to find employment and remain in the workforce, the EEC will be reviewed after two years, with adjustments to be made if necessary and make adjustments if necessary.
On this, the MOM will provide more details at the COS.
S-Pass sub-DRC ceiling in certain sectors will be reduced from 20% to 15%.
Given Singapore's declining local labour force growth, foreign workers are still a necessary complement, but more opportunities must still be created for Singaporeans.
In doing so, the government will take further steps this year, and will reduce the S-Pass sub-dependency ration ceiling (DRC) for those in the construction, marine shipyard, and process sectors, from 20% to 15%. This will be carried out in two phases beginning January 2021.
However, the government will not reduce the S-Pass DRC for the manufacturing sector at this point, given economic uncertainties.
The government will also maintain foreign worker levy rates for all sectors for 2020.
Investing in the 'Next Bound of SkillsFuture'
Budget 2020 will do more to support Singaporeans as they seek to acquire new skills in the midst of major structural change in the global economy, through the Next Bound of SkillsFuture.
Three key thrusts of the Next Bound of SkillsFuture:
- Enabling the individual;
- Enhancing the role of enterprises in developing their staff; and
- Focusing specially on mid-career workers.
Employees can look forward to the following:
- A one-off SkillsFuture Credit top-up of S$500 for every Singaporean aged 25 years and above;
- A new SkillsFuture Enterprise Credit, and expanding the Productivity Solutions Grant to include support for pre-approved job redesign consultancy services;
- Employers will be able to use this Credit to defray 90% of out-of-pocket costs of job redesign, skills training, and business transformation.
- It will benefit over 35,000 enterprises, most of which will be SMEs, and will allocate S$10,000 to each enterprise.
- As for the Productivity Solutions Grant, this will support enterprises in adopting pre-approved digital solutions and equipment; this will be expanded to include job redesign consultancy services.
- The government will also support large anchor enterprises, in training efforts; these anchor enterprises are supported by SMEs, and the government aims to partner with up to 40 of such anchor enterprises to benefit 4,000 SMEs over the next five years.
For mid-career locals currently in their 40s and 50s, the government will launch a new SkillsFuture Mid-Career Support Package. This will:
- Increase the capacity of reskilling programmes
- Provide a hiring incentive for employers that hire and reskill jobseekers over 40 who have gone through a reskilling programme;
- Provide a special SkillsFuture Credit top-up of S$500 for every Singaporean aged 40 to 60 in 2020
- And allow for peer-level support and career guidance through a group of volunteer Career Advisors.
In other employability efforts, Budget 2020 will continue to support lifelong employability in Singapore, with a new Senior Worker Support Package. Under this package, employers will receive a CPF Transition Offset in 2021.
Through the Senior Worker Early Adopter Grant, the government will support companies that increase their own retirement and re-employment ages the before legislated changes take place.
A part-time re-employment grant will also support and encourage companies to formalise part-time re-employment provisions.
Additionally, institutes of higher learning will partner with more enterprises to provide real-work settings for local students to learn in, through the SkillsFuture Work-Study Programmes.
The capacity for these programmes will be doubled by 2025.
Deeper workplace learning capabilities
In 2018, the Ministry of Education (MOE) Launched the National Centre of Excellence for Workplace Learning (NACE) at Nanyang Polytechnic.
In line with Budget 2020, MOE will expand NACE to two more institutes of higher learning over th enext few years, aiming to benefit over 1,200 enterprises.
The government will also recalibrate funding towards training providers and courses with a stronger link to job and wage outcomes.
Maintaining a sound fiscal footing to respond to uncertainties
GST rate increase will not take effect in 2021. Instead, it will remain at 7%, but must be increased between 2022 and 2025 as it can't be put off indefinitely.
The government assures Singaporeans that when the GST rate is raised, it will provide an Assurance Package in the GSTV Fund, of which the Budget 2020 has set aside $6bn for.
The government will also enhance the permanent GST Voucher scheme so lower-income households will continue to get more help.
Overall productivity growth per year was 2.6% from 2016 to 2016, as compared to 2.2% from 2013 to 2016.
Real median income for Singaporeans grew by 3.7% per year from 2016 to 2019.
Singapore as the Global-Asia Node of Technology, Innovation and Enterprise
The government will allocate S$8.3bn over the next three years to enable Transformation and Growth covering three thrusts:
Enabling stronger partnerships
The first thrust is enabling stronger partnerships – with the world and within Singapore.
As a small, open economy, we must continue to strengthen our partnerships with the world, and build new links in new domains. We must also strengthen partnerships to bring good ideas to global markets.
Even as enterprises compete to differentiate themselves, they must come together to solve common challenges, and gain a competitive edge together. Trade Associations and Chambers play an important role in this.
Deepening enterprise capabilities
Under this thrust, the government will support enterprises at each stage of their growth, to deepen their capabilities. This will be done through identifying business needs; adopting pre-approved digital technologies; and taking the first steps to enter new markets.
To catalyse investment in deep-tech startups, an additional S$300mn will be set aside under the Startup SG Equity.
Aside from helping startups, the government will also enhance support for both new and established enterprises through an Enterprise Grow Package.
The government will also introduce an Enterprise Transform Package, focusing on leadership, which will support business leaders of promising SMEs in achieving the next bound of growth.
Developing our people
The government will introduce a new Asia-Ready Exposure Programme, to support youths in their visits to cities in ASEAN, China or India; enhanced support levels for internships under the Global Ready Talent Programme.
These initiatives will support the government's vision of Singapore as a Global-Asia node of technology, innovation and enterprise – an economy driven by innovation and digitalisation; and a launchpad for multi-nationals and regional corporates to access Asia, and for Asian enterprises to go global.
Advancing as One Singapore: Budget 2020 will aim to address these challenges and opportunities:
- To grow our economy, transform our enterprises;
- Care for and nurture Singaporeans at every stage of their lives;
- Build and secure the nation, to ensure it is well prepared to meet future challenges, while ensuring fiscal sustainability; and
- Work with Singaporeans to build a nation and a home to call their own.
Singapore's economy grew by a modest 0.7% in 2019, the weakest since the Global Financial Crisis in 2008.
With the ongoing COVID-19 outbreak, new uncertainities have emerged. The tourism and aviation industries are the most directly affected.
The virus outbreak has also affected supply chains, and created a ripple effect. The duration and severity of the outbreak, and the impact on the economy, are still unclear.
In light of this, the government will set aside an additional $800mn will be set aside from the budget, and most of it will go to the Ministry of Health - to support the efforts of frontline ministries helping to fight the outbreak.
Help with regard to the COVID-19 impact on businesses and jobs:
Two special packages with a total budget of S$5.6bn will be introduced, to help workers stay in their jobs, and businesses with their cash flow.
The first is the Stabilisation and Support Package for workers and enterprises. The second is the Care and Support Package (costing S$1.6bn) for households, to support Singaporeans through these uncertain times, and alleviate concerns over cost of living.
The Stabilisation and Support Package amounting to S$4bn will be allocated to businesses, to help workers retain jobs and upgrade their skills.
- S$1.3bn to benefit 1.9mn local employees; and
- S$1.1bn to benefit over 700,000 employees.
To help workers stay employed, the government will support enterprises for a part of their wage cost, through introducing a Jobs Support Scheme and enhancing the Wage Credit Scheme.
The new Jobs Support Scheme will offset 8% of wages of every employee who is a Singaporean or permanent resident for three months, up to a monthly cap of S$3,600.
The payout, totalling S$1.3bn will go to all enterprises by 31 July 2020, benefiting more than 1.9mn employees. Whereas, the wage ceiling for the Wage Credit Scheme will be raised to S$5,000 (up from S$4,000) for wage increases given in 2019 and 2020. The government will also co-fund a bigger proportion of qualifying wage increases. It will increase the percentage to 20% for last year and 15% for this year (up from 15% from last year and 10% this year). The enhancements, costing S$1.1bn, will benefit 90,000 enterprises and more than 700,000 Singaporeans.
Sectors directly affected by COVID-19 will get additional support - tourism, aviation, retail, food services, point-to-point transport services.
- Funding period for reskilling in these sectors will be extended from three months, to a maximum of six months;
- The government will support employers in affected sectors to retain and train more than 330,000 local workers during the "lull" period brought on by the outbreak.