Singapore Budget 2019
$6.1 billion for Merdeka Generation package includes Medisave top-ups, higher CHAS subsidies
$1.1 billion Bicentennial Bonus for Singaporeans, including GST Voucher cash payouts, 50% income tax rebate up to $200
$5.1 billion to fund measures such as ElderFund and CareShield Life subsidies; CHAS subsidies to be extended
Child entering Primary 1 in 2018 to receive over $130,000 in education subsidies by end of secondary school
$4.6 billion over three years to help firms and workers build capabilities to stay relevant
Higher payouts under Workfare, more support for older workers
Lower foreign worker quota in services sector; continued support for unemployed PMETs
Tax system to be made more progressive and resilient
Smaller duty-free alcohol allowance and GST relief for overseas shopping from 19 February 2019
Excise duty on diesel fuel increased from S$0.10 to S$0.20 per litre from 18 February 2019
30 per cent of total spending set aside for defence, security and diplomacy efforts
$1.1 billion Bicentennial Bonus for Singaporeans, including GST Voucher cash payouts, 50% income tax rebate up to $200
Child entering Primary 1 in 2018 to receive over $130,000 in education subsidies by end of secondary school
$4.6 billion over three years to help firms and workers build capabilities to stay relevant
Higher payouts under Workfare, more support for older workers
Lower foreign worker quota in services sector; continued support for unemployed PMETs
Tax system to be made more progressive and resilient
Smaller duty-free alcohol allowance and GST relief for overseas shopping from 19 February 2019
Excise duty on diesel fuel increased from S$0.10 to S$0.20 per litre from 18 February 2019
30 per cent of total spending set aside for defence, security and diplomacy efforts
$6.1 billion Merdeka Generation Package unveiled
By Royston Sim, Deputy News Editor, Politics, The Straits Times, 19 Feb 2019
Finance Minister Heng Swee Keat yesterday delivered a generous but targeted Budget aimed at helping Singaporeans with healthcare costs and other expenses, and giving businesses and workers support to thrive in a changing global environment.
He unveiled a $6.1 billion fund that will subsidise healthcare for Singaporeans born in the 1950s, with extra subsidies for outpatient care and MediShield Life premiums, as well as Medisave top-ups for five years.
Called the Merdeka Generation Package, this will benefit nearly 500,000 Singaporeans in all, and is the second initiative of its kind after the $8 billion Pioneer Generation Package announced in 2014.
With Singapore commemorating its bicentenary this year, Mr Heng announced two initiatives to mark what he called a key turning point in Singapore's development - a $200 million community fund to match charity donations, and a $1.1 billion Bicentennial Bonus.
This special bonus includes GST vouchers of up to $300 in cash that will benefit 1.4 million Singaporeans, and a personal income tax rebate of 50 per cent, capped at $200.
These measures are part of Singapore's efforts to forge a caring and inclusive society, said Mr Heng, who presented his first Budget since being named as the designated successor to Prime Minister Lee Hsien Loong late last year.
Noting that support for globalisation was on the wane worldwide, Mr Heng also flagged longer-term domestic challenges such as ageing, social mobility, economic transformation and climate change.
By Royston Sim, Deputy News Editor, Politics, The Straits Times, 19 Feb 2019
Finance Minister Heng Swee Keat yesterday delivered a generous but targeted Budget aimed at helping Singaporeans with healthcare costs and other expenses, and giving businesses and workers support to thrive in a changing global environment.
He unveiled a $6.1 billion fund that will subsidise healthcare for Singaporeans born in the 1950s, with extra subsidies for outpatient care and MediShield Life premiums, as well as Medisave top-ups for five years.
Called the Merdeka Generation Package, this will benefit nearly 500,000 Singaporeans in all, and is the second initiative of its kind after the $8 billion Pioneer Generation Package announced in 2014.
With Singapore commemorating its bicentenary this year, Mr Heng announced two initiatives to mark what he called a key turning point in Singapore's development - a $200 million community fund to match charity donations, and a $1.1 billion Bicentennial Bonus.
This special bonus includes GST vouchers of up to $300 in cash that will benefit 1.4 million Singaporeans, and a personal income tax rebate of 50 per cent, capped at $200.
These measures are part of Singapore's efforts to forge a caring and inclusive society, said Mr Heng, who presented his first Budget since being named as the designated successor to Prime Minister Lee Hsien Loong late last year.
Noting that support for globalisation was on the wane worldwide, Mr Heng also flagged longer-term domestic challenges such as ageing, social mobility, economic transformation and climate change.
Singapore should build on its strengths, he said, pointing to the country's multicultural society and openness to diversity.
Mr Heng also devoted part of his two-hour speech to the importance of keeping Singapore safe and secure. "We cannot take our peace, prosperity and stability for granted," he said.
That is why the Government will continue to invest a significant share of its resources - about 30 per cent of total expenditure this year - to support defence, security and diplomacy efforts, he added.
"This spending is significant, but indispensable," he said, adding that even more would be spent if needed to safeguard Singapore.
Turning to the economy, Mr Heng said efforts to transform it are bearing fruit, with economic growth of 3.2 per cent last year.
All 23 Industry Transformation Maps, which cover about 80 per cent of the economy, have been launched, he said, noting that productivity has grown by 3.6 per cent a year for the past three years.
But with global growth expected to moderate this year in an increasingly uncertain climate, he outlined measures to help companies and workers build deep capabilities so that they can stay relevant amid a wave of disruption.
The Government will spend $4.6 billion on this front over the next three years - $3.6 billion to help workers and $1 billion to strengthen companies.
Among the initiatives are a $100 million fund to help small and medium-sized firms (SMEs) scale up, as well as more aid for them to go digital, and new programmes to help workers pick up skills in areas like prefabrication.
But Mr Heng also flagged uneven productivity growth across sectors, with the service sector seeing a 3 per cent growth in S Pass and work permit holders per year, or 34,000 in the last three years.
Calling this trend unsustainable, he said: "Our workforce growth is tapering, and if we do not use this narrow window to double down on restructuring, our companies will find it even harder in the future."
To that end, foreign worker quotas for the service sector will be tightened in two phases from next year, especially for S Pass holders.
Mr Heng also outlined several targeted steps to help Singaporeans who are less well off.
The monthly income ceiling for the Workfare Income Supplement will be raised from $2,000 to $2,300 by next January. The maximum payout each year will also be increased by up to $400.
These improvements will cost an additional $206 million a year, and benefit nearly 440,000 Singaporeans in total, said Mr Heng.
With healthcare needs growing, he said a scheme that subsidises primary care and basic dental care for lower-to middle-income families will be improved and extended to cover all Singaporeans for chronic conditions.
A $5.1 billion fund has also been set up to fund long-term care support measures such as ElderFund and CareShield Life subsidies.
Despite these spending initiatives, Mr Heng also stressed the need to maintain fiscal discipline.
Recurrent revenues must meet recurrent spending in areas such as healthcare and defence, he said.
"Many countries have taken the easier route by funding these recurrent expenditures through borrowing. We must not do this, as such borrowing shifts the burden of paying for today's needs onto future generations. That is not the Singapore way," he said.
The tax system must hence be continually reviewed, he said, announcing that returning travellers will have a smaller allowance on tax-exempt overseas shopping and duty-free alcohol.
Overall, the Budget remains expansionary, with ministries expected to spend $80.3 billion - 1.6 per cent higher than the year before. An overall deficit of $3.5 billion is projected, which Mr Heng said will be funded by previous surpluses.
Overall, the Budget remains expansionary, with ministries expected to spend $80.3 billion - 1.6 per cent higher than the year before. An overall deficit of $3.5 billion is projected, which Mr Heng said will be funded by previous surpluses.
Singapore Business Federation chairman Teo Siong Seng said the Budget is a "well-balanced and progressive" one that encourages companies to continue to transform and prepare for the future.
Parliament will sit from next Tuesday to March 8, and MPs will debate the Budget as well as spending plans of the various ministries.
Parliament will sit from next Tuesday to March 8, and MPs will debate the Budget as well as spending plans of the various ministries.
Bicentennial Budget for...
The Straits Times, 19 Feb 2019
"There were episodes in the centuries of Singapore's history where our island's fortunes waned due to external forces. These are sobering reminders that we have to constantly build up our security and resilience, and plan long term.
Singapore's success has roots in our port, which thrives on openness and connectivity. These traits have been forged into our identity as a people... We turn our size and strategic location into an advantage...
Like Sang Kancil, the small but quick-witted mousedeer, we can make our way in the world."
FINANCE MINISTER HENG SWEE KEAT
LOWER-WAGE, OLDER WORKERS
At the heart of Singapore's economic transformation are workers, said Finance Minister Heng Swee Keat. "Our ultimate goal is to enable our people to continue to have good jobs and opportunities, and to be at their best."
A range of support measures have been rolled out in previous years to help workers reach their fullest potential, he noted.
Yesterday, he announced that lower-wage workers will get higher payouts under the Workfare Income Supplement (WIS) next year.
Aimed at helping them supplement their income and Central Provident Fund savings, the enhanced WIS will see their maximum annual payouts increase by up to $400. This will take effect from January next year.
The qualifying income cap for the programme will also be raised from the current $2,000 to $2,300 a month. Older workers will continue to get higher payouts than younger workers.
The Straits Times, 19 Feb 2019
"There were episodes in the centuries of Singapore's history where our island's fortunes waned due to external forces. These are sobering reminders that we have to constantly build up our security and resilience, and plan long term.
Singapore's success has roots in our port, which thrives on openness and connectivity. These traits have been forged into our identity as a people... We turn our size and strategic location into an advantage...
Like Sang Kancil, the small but quick-witted mousedeer, we can make our way in the world."
FINANCE MINISTER HENG SWEE KEAT
LOWER-WAGE, OLDER WORKERS
At the heart of Singapore's economic transformation are workers, said Finance Minister Heng Swee Keat. "Our ultimate goal is to enable our people to continue to have good jobs and opportunities, and to be at their best."
A range of support measures have been rolled out in previous years to help workers reach their fullest potential, he noted.
Yesterday, he announced that lower-wage workers will get higher payouts under the Workfare Income Supplement (WIS) next year.
Aimed at helping them supplement their income and Central Provident Fund savings, the enhanced WIS will see their maximum annual payouts increase by up to $400. This will take effect from January next year.
The qualifying income cap for the programme will also be raised from the current $2,000 to $2,300 a month. Older workers will continue to get higher payouts than younger workers.
The higher WIS payouts will cost an additional $206 million a year, bringing the total cost of the programme to $1 billion a year. Almost 440,000 Singaporeans stand to benefit from this.
Meanwhile, the Special Employment Credit (SEC) and Additional SEC schemes, which incentivise and encourage employers to hire senior workers, will both be extended for another year, until Dec 31, 2020. The SEC scheme subsidises the wages of Singaporean workers aged 55 and above who earn up to $4,000 a month, while the Additional SEC scheme encourages companies to hire workers who are above the re-employment age of 67.
To support the extensions, the SEC fund will be topped up by $366 million.
Other worker initiatives include an additional WIS payment of at least $100 for lower-income workers as part of the Bicentennial Bonus.
To support the extensions, the SEC fund will be topped up by $366 million.
Other worker initiatives include an additional WIS payment of at least $100 for lower-income workers as part of the Bicentennial Bonus.
To help mid-career workers take up jobs in new growth areas, more Professional Conversion Programmes will be launched in blockchain, embedded software and prefabrication.
The Career Support Programme, which provides wage support for companies that hire mature and retrenched Singaporeans or those in long-term unemployment, will also be extended by two years.
SME BUSINESSES
Small and medium-sized enterprises (SMEs) got quite a lot of attention at yesterday's Budget, with the Finance Minister talking about supporting start-ups, enabling firms to scale up and how Singapore must adopt an "enterprise-centric" approach.
Chief among the initiatives announced was a Scale-up SG programme which trade promotion agency Enterprise Singapore (ESG) will launch together with the private and public sectors. This will help high-growth local firms identify how they can innovate, grow and venture overseas. ESG will also run a two-year pilot to help firms get advice on innovation opportunities and ways to commercialise technology from experts known as "Innovation Agents".
To give more funding to SMEs, an additional $100 million will be set aside for a new SME Co-Investment Fund III.
The eight financing programmes offered by ESG will also be streamlined into a single Enterprise Financing Scheme to be launched in October. This covers trade, working capital, fixed assets, venture debt, mergers and acquisitions and project financing.
The Career Support Programme, which provides wage support for companies that hire mature and retrenched Singaporeans or those in long-term unemployment, will also be extended by two years.
SME BUSINESSES
Small and medium-sized enterprises (SMEs) got quite a lot of attention at yesterday's Budget, with the Finance Minister talking about supporting start-ups, enabling firms to scale up and how Singapore must adopt an "enterprise-centric" approach.
Chief among the initiatives announced was a Scale-up SG programme which trade promotion agency Enterprise Singapore (ESG) will launch together with the private and public sectors. This will help high-growth local firms identify how they can innovate, grow and venture overseas. ESG will also run a two-year pilot to help firms get advice on innovation opportunities and ways to commercialise technology from experts known as "Innovation Agents".
To give more funding to SMEs, an additional $100 million will be set aside for a new SME Co-Investment Fund III.
The eight financing programmes offered by ESG will also be streamlined into a single Enterprise Financing Scheme to be launched in October. This covers trade, working capital, fixed assets, venture debt, mergers and acquisitions and project financing.
The Government will also expand the SMEs Go Digital programme to cover a larger number and a wider range of cost-effective, pre-approved digital solutions. This programme aims to help SMEs adopt digital technologies.
Three sectors - accountancy, sea transport and construction - will also get their own industry digital plans, with more sectors to be added later.
But it was not all good news for small and medium-sized enterprises. In the service sector, the Government will be tightening the Dependency Ratio Ceiling, or the proportion of foreign workers a firm can employ.
This will go from 40 per cent to 38 per cent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.
For the subset of S Pass workers - mid-skilled foreigners earning at least $2,300 a month - the quota will be cut from 15 per cent to 13 per cent on Jan 1 next year, and to 10 per cent on Jan 1, 2021.
LARGE FIRMS
Large companies will get more help to tap emerging opportunities as Singapore positions itself as a "Global-Asia node of technology, innovation and enterprise", said Finance Minister Heng Swee Keat.
Singapore should be "Asia 101" for global multinational companies looking to expand into Asia, he said.
At the same time, Singapore can be "Global 101" for regional companies ready to go international.
Three sectors - accountancy, sea transport and construction - will also get their own industry digital plans, with more sectors to be added later.
But it was not all good news for small and medium-sized enterprises. In the service sector, the Government will be tightening the Dependency Ratio Ceiling, or the proportion of foreign workers a firm can employ.
This will go from 40 per cent to 38 per cent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.
For the subset of S Pass workers - mid-skilled foreigners earning at least $2,300 a month - the quota will be cut from 15 per cent to 13 per cent on Jan 1 next year, and to 10 per cent on Jan 1, 2021.
LARGE FIRMS
Large companies will get more help to tap emerging opportunities as Singapore positions itself as a "Global-Asia node of technology, innovation and enterprise", said Finance Minister Heng Swee Keat.
Singapore should be "Asia 101" for global multinational companies looking to expand into Asia, he said.
At the same time, Singapore can be "Global 101" for regional companies ready to go international.
To draw greater value from trade networks, the Government will streamline and digitise trade processes further to raise efficiency. In this way, companies can get easier access to overseas markets and make better use of free trade agreements.
To encourage firms to embark on large-scale automation projects and raise productivity, the Automation Support Package will be extended for another two years, up to March 31, 2021.
To encourage firms to embark on large-scale automation projects and raise productivity, the Automation Support Package will be extended for another two years, up to March 31, 2021.
There will also be an Investment Allowance of 100 per cent on the amount of approved capital expenditure, net of grants. The approved capital expenditure is capped at $10 million per project.
Just like for smaller businesses, larger companies will have to brace themselves for the tightening of the Dependency Ratio Ceiling (DRC) in the service sector. DRC is the proportion of foreign workers a firm can employ, from 40 per cent to 38 per cent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.
For the subset of S Pass workers, the quota will be cut from 15 per cent to 13 per cent on Jan 1 next year, and to 10 per cent on Jan 1, 2021.
FAMILIES WITH YOUNG CHILDREN
Parents with school-going children will benefit from the Bicentennial Bonus, with additional support for their children's education.
Just like for smaller businesses, larger companies will have to brace themselves for the tightening of the Dependency Ratio Ceiling (DRC) in the service sector. DRC is the proportion of foreign workers a firm can employ, from 40 per cent to 38 per cent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.
For the subset of S Pass workers, the quota will be cut from 15 per cent to 13 per cent on Jan 1 next year, and to 10 per cent on Jan 1, 2021.
FAMILIES WITH YOUNG CHILDREN
Parents with school-going children will benefit from the Bicentennial Bonus, with additional support for their children's education.
There will be a one-off $150 top-up to the Edusave accounts of primary and secondary school students aged seven to 16.
This is in addition to the annual Edusave contributions they already get from the Government, which this year will be $230 for primary school pupils and $290 for secondary students.
Students aged between 17 and 20 will get a one-off top-up to their Post-Secondary Education Accounts of either $250 or $500, depending on the value of their home.
The top-ups are expected to be made by mid-2019 and will benefit about 570,000 students. They are estimated to cost the Government $140 million.
This is in addition to the annual Edusave contributions they already get from the Government, which this year will be $230 for primary school pupils and $290 for secondary students.
Students aged between 17 and 20 will get a one-off top-up to their Post-Secondary Education Accounts of either $250 or $500, depending on the value of their home.
The top-ups are expected to be made by mid-2019 and will benefit about 570,000 students. They are estimated to cost the Government $140 million.
Finance Minister Heng Swee Keat also pointed out that the Government has been spending more on early education and care. It spent about $1 billion in the pre-school sector last year, more than 21/2 times the $360 million in 2012.
This support continues as a child grows, with the Government subsidising over 90 per cent of a child's education. "This means that a child entering primary school in 2019 will receive over $130,000 in education subsidies by the time he or she completes secondary education," he said.
Children from lower-income homes get even more support through various schemes.
OLDER SINGAPOREANS
The much-awaited goodies for the Merdeka Generation - Singaporeans born from 1950 to 1959 - were announced yesterday, and those in their 60s will have something to smile about
They get five key items:
• A $100 top-up to PAssion Silver cards, which can be used for healthy lifestyle activities like sports
• A yearly Medisave top-up of $200 till 2023
• Additional subsidies for outpatient care for life
• Additional MediShield Life premium subsidies for life
• An additional participation incentive of $1,500 for those who join CareShield Life.
To qualify, they must have become a citizen by 1996.
Those who were born before 1950 and missed out on the Pioneer Generation Package, but who became citizens by 1996, will also be eligible.
In addition, as part of the $1.1 billion Bicentennial Bonus, Singaporeans aged 50 to 64 years old this year will get a CPF top-up of up to $1,000, if they have less than $60,000 of retirement savings in their CPF accounts.
And older workers who are on the Workfare Income Supplement scheme will get higher increases in annual payouts from January next year. Those aged 60 and older will be able to get up to $4,000 a year in payouts.
LOW-INCOME HOUSEHOLDS
Lower-income Singaporeans continue to feature prominently in this year's Budget, with measures to commemorate the bicentennial geared largely to this group.
A $200 million Bicentennial Community Fund will be set up to encourage Singaporeans to give back to those in need. The fund will provide dollar-to-dollar matching for donations garnered by Institutions of a Public Character (IPCs) this year. The amounts matched will be capped so that more IPCs can benefit from the fund.
A Bicentennial Bonus was announced, featuring a special Bicentennial Bonus GST Voucher and Workfare Bicentennial Bonus to help the lower-income with daily expenses.
The Bicentennial Bonus GST Voucher will see those with assessable income of up to $28,000 and who are aged 21 and above get $300 if the annual value of their home is up to $13,000, and $150 if it is more than $13,000 and up to $21,000. This will benefit about 1.4 million Singaporeans.
Those who qualify for the Workfare Bicentennial Bonus will get a bonus of 10 per cent of the total annual Workfare Income Supplement payout for 2018.
This support continues as a child grows, with the Government subsidising over 90 per cent of a child's education. "This means that a child entering primary school in 2019 will receive over $130,000 in education subsidies by the time he or she completes secondary education," he said.
Children from lower-income homes get even more support through various schemes.
OLDER SINGAPOREANS
The much-awaited goodies for the Merdeka Generation - Singaporeans born from 1950 to 1959 - were announced yesterday, and those in their 60s will have something to smile about
• A $100 top-up to PAssion Silver cards, which can be used for healthy lifestyle activities like sports
• A yearly Medisave top-up of $200 till 2023
• Additional subsidies for outpatient care for life
• Additional MediShield Life premium subsidies for life
• An additional participation incentive of $1,500 for those who join CareShield Life.
To qualify, they must have become a citizen by 1996.
Those who were born before 1950 and missed out on the Pioneer Generation Package, but who became citizens by 1996, will also be eligible.
In addition, as part of the $1.1 billion Bicentennial Bonus, Singaporeans aged 50 to 64 years old this year will get a CPF top-up of up to $1,000, if they have less than $60,000 of retirement savings in their CPF accounts.
And older workers who are on the Workfare Income Supplement scheme will get higher increases in annual payouts from January next year. Those aged 60 and older will be able to get up to $4,000 a year in payouts.
LOW-INCOME HOUSEHOLDS
Lower-income Singaporeans continue to feature prominently in this year's Budget, with measures to commemorate the bicentennial geared largely to this group.
A $200 million Bicentennial Community Fund will be set up to encourage Singaporeans to give back to those in need. The fund will provide dollar-to-dollar matching for donations garnered by Institutions of a Public Character (IPCs) this year. The amounts matched will be capped so that more IPCs can benefit from the fund.
A Bicentennial Bonus was announced, featuring a special Bicentennial Bonus GST Voucher and Workfare Bicentennial Bonus to help the lower-income with daily expenses.
The Bicentennial Bonus GST Voucher will see those with assessable income of up to $28,000 and who are aged 21 and above get $300 if the annual value of their home is up to $13,000, and $150 if it is more than $13,000 and up to $21,000. This will benefit about 1.4 million Singaporeans.
Those who qualify for the Workfare Bicentennial Bonus will get a bonus of 10 per cent of the total annual Workfare Income Supplement payout for 2018.
Those with low CPF balances will also benefit from a top-up of up to $1,000, depending on their age and balance, to help build up their retirement savings. This will cost about $230 million and benefit about 300,000 citizens - the majority of them female.
Households with school going children will get more support from recently enhanced financial schemes, including the Uplift scholarship for independent schools, which will help cover out-of-pocket expenses.
And families in need of help with transport expenses will continue to be able to tap public transport vouchers, with a top-up to the Public Transport Fund.
TRAVELLERS
Bad news for travellers. Starting today, those returning from abroad will have a smaller allowance on tax-exempt overseas shopping.
Those who spend fewer than 48 hours outside Singapore will now avoid paying the 7 per cent goods and services tax (GST) only if the total value of items bought abroad is $100 or less, down from $150.
The threshold has also been lowered from $600 to $500 for travellers who spend 48 hours or more outside the country.
Meanwhile, the alcohol duty-free allowance for those who spend two days or more overseas will be reduced from 3 litres to 2 litres, starting on April 1.
The moves, which come amid rising international travel, are aimed at keeping Singapore's tax system resilient and contributing to recurrent spending needs.
SOMETHING FOR EVERYONE
All taxpayers will get a personal income tax rebate of 50 per cent, capped at $200 per taxpayer, as part of the Bicentennial Bonus.
Singaporeans who are aged 50 and above in 2019, and who do not receive the Merdeka or Pioneer Generation packages, will also get a Medisave top-up of $100 a year, for the next five years, to help meet future healthcare expenses.
All Housing Board households will also receive rebates to offset between 11/2 and 3 1/2 months of service and conservancy charges, provided they do not have a member owning a private property.
Working mothers who engage the help of their parents, grandparents, or parents-or grandparents-in-law to look after their young children may also claim grandparent caregiver relief if their child is handicapped and unmarried, regardless of age. Currently, the child has to be 12 or below to claim such relief.
BUDGET 2019: Honouring the Merdeka Generation
Medisave top-up, CHAS subsidies for Merdeka Generation
Most of $6.1 billion set aside for package to ease healthcare costs of nearly 500,000 Singaporeans
By Linette Lai, Political Correspondent, The Straits Times, 19 Feb 2019
A total of $6.1 billion will be set aside for the Merdeka Generation Package, the bulk of which will go towards easing the burden of healthcare costs for nearly 500,000 Singaporeans.
Announcing details of the much-talked-about package yesterday, Finance Minister Heng Swee Keat called it a "gesture of our nation's gratitude" for those in that generation, who were born between Jan 1, 1950, and Dec 31, 1959.
"It will provide them better peace of mind over future healthcare costs, while helping them to stay active and healthy," he said.
Starting this year, those in the Merdeka Generation will receive a $200 Medisave top-up every year until 2023.
They will also get higher subsidies under the Community Health Assist Scheme (CHAS) and an extra 25 per cent discount on their bills at polyclinics and public specialist outpatient clinics.
On top of that, they will get either 5 per cent or 10 per cent off their MediShield Life premiums, as well as an extra "participation incentive" of $1,500 if they choose to join the national disability insurance scheme CareShield Life.
And to support this group's active lifestyles, the Government will give them a one-off $100 top-up to their PAssion Silver cards. This money can be used to pay for public transport, entry to public swimming pools and activities at community clubs, among other things.
Mr Heng estimated that the package will cost more than $8 billion, in current dollars, over the Merdeka Generation beneficiaries' lifetimes.
The $6.1 billion set aside during this year's Budget will, with interest accumulated over time, cover the package's full projected costs, he said.
The oldest people in the Merdeka Generation are now 69 years old, and they will be able to enjoy the benefits of the package for many years, Mr Heng said.
He added that the finance and health ministries took this into account when sizing the budget for these benefits.
"This is a significant commitment by the Government," Mr Heng said. "It is important that the Government of the day continues to monitor the patterns and cost of healthcare utilisation, and life expectancy over the next 30 years or more, so that the Government is able to meet this commitment."
The Merdeka Generation Package comes five years after $8 billion was set aside during Budget 2014 for the Pioneer Generation Package.
For those in the Merdeka Generation, Chas subsidies for common ailments, chronic conditions and dental procedures will be higher than what lower-income blue Chas card holders get.
They will be able to get these subsidies regardless of income, even if they do not have a Chas card today.
They will also receive an extra 5 per cent off their annual MediShield Life premiums, which will go up to 10 per cent after they turn 75.
And the new $1,500 bonus for joining CareShield Life means that they will get a total of $4,000 if they sign up for the insurance scheme, since the Health Ministry had previously announced a similar $2,500 sign-up bonus for people born before 1960.
And families in need of help with transport expenses will continue to be able to tap public transport vouchers, with a top-up to the Public Transport Fund.
TRAVELLERS
Bad news for travellers. Starting today, those returning from abroad will have a smaller allowance on tax-exempt overseas shopping.
Those who spend fewer than 48 hours outside Singapore will now avoid paying the 7 per cent goods and services tax (GST) only if the total value of items bought abroad is $100 or less, down from $150.
The threshold has also been lowered from $600 to $500 for travellers who spend 48 hours or more outside the country.
Meanwhile, the alcohol duty-free allowance for those who spend two days or more overseas will be reduced from 3 litres to 2 litres, starting on April 1.
The moves, which come amid rising international travel, are aimed at keeping Singapore's tax system resilient and contributing to recurrent spending needs.
SOMETHING FOR EVERYONE
All taxpayers will get a personal income tax rebate of 50 per cent, capped at $200 per taxpayer, as part of the Bicentennial Bonus.
Singaporeans who are aged 50 and above in 2019, and who do not receive the Merdeka or Pioneer Generation packages, will also get a Medisave top-up of $100 a year, for the next five years, to help meet future healthcare expenses.
All Housing Board households will also receive rebates to offset between 11/2 and 3 1/2 months of service and conservancy charges, provided they do not have a member owning a private property.
Working mothers who engage the help of their parents, grandparents, or parents-or grandparents-in-law to look after their young children may also claim grandparent caregiver relief if their child is handicapped and unmarried, regardless of age. Currently, the child has to be 12 or below to claim such relief.
BUDGET 2019: Honouring the Merdeka Generation
Medisave top-up, CHAS subsidies for Merdeka Generation
Most of $6.1 billion set aside for package to ease healthcare costs of nearly 500,000 Singaporeans
By Linette Lai, Political Correspondent, The Straits Times, 19 Feb 2019
Announcing details of the much-talked-about package yesterday, Finance Minister Heng Swee Keat called it a "gesture of our nation's gratitude" for those in that generation, who were born between Jan 1, 1950, and Dec 31, 1959.
"It will provide them better peace of mind over future healthcare costs, while helping them to stay active and healthy," he said.
Starting this year, those in the Merdeka Generation will receive a $200 Medisave top-up every year until 2023.
They will also get higher subsidies under the Community Health Assist Scheme (CHAS) and an extra 25 per cent discount on their bills at polyclinics and public specialist outpatient clinics.
On top of that, they will get either 5 per cent or 10 per cent off their MediShield Life premiums, as well as an extra "participation incentive" of $1,500 if they choose to join the national disability insurance scheme CareShield Life.
And to support this group's active lifestyles, the Government will give them a one-off $100 top-up to their PAssion Silver cards. This money can be used to pay for public transport, entry to public swimming pools and activities at community clubs, among other things.
Mr Heng estimated that the package will cost more than $8 billion, in current dollars, over the Merdeka Generation beneficiaries' lifetimes.
The $6.1 billion set aside during this year's Budget will, with interest accumulated over time, cover the package's full projected costs, he said.
The oldest people in the Merdeka Generation are now 69 years old, and they will be able to enjoy the benefits of the package for many years, Mr Heng said.
He added that the finance and health ministries took this into account when sizing the budget for these benefits.
"This is a significant commitment by the Government," Mr Heng said. "It is important that the Government of the day continues to monitor the patterns and cost of healthcare utilisation, and life expectancy over the next 30 years or more, so that the Government is able to meet this commitment."
The Merdeka Generation Package comes five years after $8 billion was set aside during Budget 2014 for the Pioneer Generation Package.
For those in the Merdeka Generation, Chas subsidies for common ailments, chronic conditions and dental procedures will be higher than what lower-income blue Chas card holders get.
They will be able to get these subsidies regardless of income, even if they do not have a Chas card today.
They will also receive an extra 5 per cent off their annual MediShield Life premiums, which will go up to 10 per cent after they turn 75.
And the new $1,500 bonus for joining CareShield Life means that they will get a total of $4,000 if they sign up for the insurance scheme, since the Health Ministry had previously announced a similar $2,500 sign-up bonus for people born before 1960.
Mr Heng said this money will cover a "significant proportion" of their premiums, adding that he hopes this will encourage more people to join the scheme.
Those who missed out on the Merdeka Generation and Pioneer Generation packages will also get extra help, he said.
Singaporeans aged 50 years and above this year, and who are not eligible for either package, will get an extra Medisave top-up of $100 a year for the next five years.
Those who were born in the 1950s and who obtained citizenship by 1996 will be eligible for the Merdeka Generation Package.
Those born in 1949 and earlier will also get the package if they missed out on the Pioneer Generation Package, as long as they obtained citizenship by 1996.
People who are eligible will be notified by April and start getting their Merdeka Generation cards from June. More details will be shared during the debate on the Health Ministry's spending plans.
Those who missed out on the Merdeka Generation and Pioneer Generation packages will also get extra help, he said.
Singaporeans aged 50 years and above this year, and who are not eligible for either package, will get an extra Medisave top-up of $100 a year for the next five years.
Those who were born in the 1950s and who obtained citizenship by 1996 will be eligible for the Merdeka Generation Package.
Those born in 1949 and earlier will also get the package if they missed out on the Pioneer Generation Package, as long as they obtained citizenship by 1996.
People who are eligible will be notified by April and start getting their Merdeka Generation cards from June. More details will be shared during the debate on the Health Ministry's spending plans.
Merdeka package more generous than expected
By Salma Khalik, Senior Health Correspondent, The Straits Times, 19 Feb 2019
The Merdeka Generation (MG) Package for Singaporeans born in the 1950s has turned out to be more generous than anticipated.
All seniors from this generation will get a $100 top-up to their PAssion Silver cards as well as an additional $1,500 if they opt in to CareShield Life when it is open to them from 2021.
Prime Minister Lee Hsien Loong had said that the MG Package would be less generous than the Pioneer Generation (PG) Package.
This is only fair as the PG was around in the early days of nationhood and would have lower savings than the younger MG, and, hence, requires more help.
The MG is getting somewhat similar benefits but at a lower rate. The MG card provides subsidies at Community Health Assist Scheme (Chas) clinics that sit somewhere between what the PG gets and what a blue Chas card gives.
The MG gets an additional 25 per cent off medicine and services at public clinics.
The MG will also get top-ups of $200 a year in the Medisave accounts, but only for five years. This is fair as the MG will live longer and hence collect benefits for many more years than the PG.
Those in the MG will also get 5 per cent to 10 per cent subsidies for their MediShield Life premiums. Again, much lower than that for the PG, but those in the MG would have more in their Medisave to pay for this. All in the MG will get these benefits, with those who get means-tested help continuing to receive it.
What they will not be getting, though, is the $100 a month for life should they become disabled.
That is because those in the MG, unlike those in the PG, were young enough to join ElderShield when it was launched. Instead, they are being offered an additional $1,500 to encourage them to switch from ElderShield to CareShield Life.
This came as a very pleasant surprise as those in the MG already get the "participation" bonus of $2,500 announced earlier.
By Salma Khalik, Senior Health Correspondent, The Straits Times, 19 Feb 2019
The Merdeka Generation (MG) Package for Singaporeans born in the 1950s has turned out to be more generous than anticipated.
All seniors from this generation will get a $100 top-up to their PAssion Silver cards as well as an additional $1,500 if they opt in to CareShield Life when it is open to them from 2021.
Prime Minister Lee Hsien Loong had said that the MG Package would be less generous than the Pioneer Generation (PG) Package.
This is only fair as the PG was around in the early days of nationhood and would have lower savings than the younger MG, and, hence, requires more help.
The MG is getting somewhat similar benefits but at a lower rate. The MG card provides subsidies at Community Health Assist Scheme (Chas) clinics that sit somewhere between what the PG gets and what a blue Chas card gives.
The MG gets an additional 25 per cent off medicine and services at public clinics.
The MG will also get top-ups of $200 a year in the Medisave accounts, but only for five years. This is fair as the MG will live longer and hence collect benefits for many more years than the PG.
Those in the MG will also get 5 per cent to 10 per cent subsidies for their MediShield Life premiums. Again, much lower than that for the PG, but those in the MG would have more in their Medisave to pay for this. All in the MG will get these benefits, with those who get means-tested help continuing to receive it.
What they will not be getting, though, is the $100 a month for life should they become disabled.
That is because those in the MG, unlike those in the PG, were young enough to join ElderShield when it was launched. Instead, they are being offered an additional $1,500 to encourage them to switch from ElderShield to CareShield Life.
This came as a very pleasant surprise as those in the MG already get the "participation" bonus of $2,500 announced earlier.
Now those who join CareShield Life, which pays $600 a month for life should they become disabled, will get a total of $4,000 off the premiums they will have to pay over a 10-year period.
Being part of the MG, this could tilt the scales in deciding whether I opt in for CareShield Life.
Being part of the MG, this could tilt the scales in deciding whether I opt in for CareShield Life.
BUDGET 2019: Fostering a stronger society
$1.1 billion Bicentennial Bonus, with focus on helping lower-income
$200 million Bicentennial Community Fund will also be set up to spur Singaporeans to give back
By Rahimah Rashith, The Straits Times, 19 Feb 2019
To commemorate the bicentennial year, a $1.1 billion Bicentennial Bonus will be shared with Singaporeans, Finance Minister Heng Swee Keat said yesterday.
The bonus is part of two initiatives that will be launched to commemorate the year, with the other being a Bicentennial Community Fund.
$1.1 billion Bicentennial Bonus, with focus on helping lower-income
$200 million Bicentennial Community Fund will also be set up to spur Singaporeans to give back
By Rahimah Rashith, The Straits Times, 19 Feb 2019
To commemorate the bicentennial year, a $1.1 billion Bicentennial Bonus will be shared with Singaporeans, Finance Minister Heng Swee Keat said yesterday.
The bonus is part of two initiatives that will be launched to commemorate the year, with the other being a Bicentennial Community Fund.
As part of the Bicentennial Bonus, 1.4 million lower-income Singaporeans will receive up to $300 through a GST Voucher cash payout.
The bicentennial payment, which will be received at the end of the year, is meant to help them with their daily living expenses.
Lower-income workers who receive Workfare Income Supplement (WIS) payments will also get a Workfare Bicentennial Bonus.
They will receive an additional 10 per cent of their WIS payment for work done last year, with a minimum payment of $100, in cash.
A total of 407,000 low-wage workers received WIS payouts totalling $650 million in 2017.
For all tax resident individuals, personal income tax rebates of 50 per cent will also be granted.
The rebate will be capped at $200 per taxpayer and is estimated to cost about $280 million.
Parents with school-going children will also benefit from the bonus, with additional support for their children's education.
There will be a one-off $150 top-up to the Edusave accounts of Singaporean students aged seven to 16.
Singaporeans aged between 17 and 20 will receive $500 in their Post Secondary Education Accounts.
The education top-ups are expected to be made by the middle of this year and are estimated to cost $140 million. Altogether, 570,000 students are expected to benefit from the top-ups.
For those who are near retirement, additional Central Provident Fund (CPF) top-ups will be made available.
Singaporeans aged 50 to 64 this year and who have less than $60,000 of retirement savings in their CPF accounts will receive a top-up of up to $1,000. This will be credited into the Special Account for members aged 50 to 54, and the Retirement Account for members aged 55 to 64.
About 300,000 Singaporeans will benefit from the top-up. "The majority of these recipients will be women. Many of them left the workforce early and took up important roles as mothers, caregivers or housewives," said Mr Heng. "As a result, they had fewer years to build up their savings. This top-up is a way to recognise their contributions and to help them save more."
Besides the Bicentennial Bonus, a $200 million Bicentennial Community Fund will also be set up to encourage Singaporeans to give back. The fund will provide dollar-to-dollar matching for donations garnered by Institutions of a Public Character (IPCs) this year.
The amounts matched for each IPC will be capped to ensure that more IPCs can benefit from the fund. Donations made to IPCs qualify for a 250 per cent tax deduction.
Besides the Bicentennial Bonus, a $200 million Bicentennial Community Fund will also be set up to encourage Singaporeans to give back. The fund will provide dollar-to-dollar matching for donations garnered by Institutions of a Public Character (IPCs) this year.
The amounts matched for each IPC will be capped to ensure that more IPCs can benefit from the fund. Donations made to IPCs qualify for a 250 per cent tax deduction.
Mr Heng said: "We hope to further encourage more Singaporeans, including younger Singaporeans, to embrace the spirit of giving back."
Ms Iris Lin, senior assistant director of Fei Yue Community Services, welcomed the initiatives. She said that the additional help for lower-income and older Singaporeans is a nice gesture.
"The amount, no matter how big or small, will go a long way to help the low-income. This is also a nice way to recognise the hard work that older Singaporeans have put in, including women who may have had to stop working because of care giving."
Additional $3.1 billion for long-term care; more to get CHAS subsidies
By Felicia Choo, The Straits Times, 19 Feb 2019
The Government will pump in an additional $3.1 billion for long-term care schemes and will enhance Community Health Assist Scheme (Chas) subsidies.
The additional funds for long-term care build on the $2 billion earmarked last year for premium subsidies and other forms of support for Singaporeans.
The $5.1 billion will go into a new Long-Term Care Support Fund that will fund subsidies for disability insurance CareShield Life and other long-term care support measures.
These include ElderFund, which will be launched next year to help severely disabled, lower-income Singaporeans who need additional financial support for long-term care and might not be able to join CareShield Life, or have low Medisave balances.
"As we age, the chances of having one form of disability or another rises significantly," Finance Minister Heng Swee Keat said yesterday.
The Ministry of Health (MOH) estimates that one in two healthy Singaporeans aged 65 could become severely disabled in their lifetime and may need long-term care, he said.
Mr Heng also shared more details on the extension of Chas, which was announced by Prime Minister Lee Hsien Loong at last year's National Day Rally.
The scheme will be extended to all Singaporeans who have chronic conditions, regardless of income.
By Felicia Choo, The Straits Times, 19 Feb 2019
The additional funds for long-term care build on the $2 billion earmarked last year for premium subsidies and other forms of support for Singaporeans.
The $5.1 billion will go into a new Long-Term Care Support Fund that will fund subsidies for disability insurance CareShield Life and other long-term care support measures.
These include ElderFund, which will be launched next year to help severely disabled, lower-income Singaporeans who need additional financial support for long-term care and might not be able to join CareShield Life, or have low Medisave balances.
"As we age, the chances of having one form of disability or another rises significantly," Finance Minister Heng Swee Keat said yesterday.
The Ministry of Health (MOH) estimates that one in two healthy Singaporeans aged 65 could become severely disabled in their lifetime and may need long-term care, he said.
Mr Heng also shared more details on the extension of Chas, which was announced by Prime Minister Lee Hsien Loong at last year's National Day Rally.
The scheme will be extended to all Singaporeans who have chronic conditions, regardless of income.
Currently, Chas subsidises medical and dental care at general practitioners and dental clinics for lower-and middle-income Singaporeans, as well as those from the Pioneer Generation, or Singaporeans who were aged 16 and older in 1965.
In addition, those with the orange Chas card (people who have a household monthly income per person of between $1,101 and $1,800) who now get subsidies only for chronic conditions will also get subsidies for common illnesses like cough and cold. Subsidies for complex chronic conditions will also be increased.
These changes will see an expected increase in payouts for Chas subsidies to more than $200 million a year, said Mr Heng.
In 2017, the Government disbursed about $154 million in Chas subsidies to about 650,000 Singaporeans. The number of Chas card holders grew five times to about 1.3 million Singaporeans from 2012 to 2017. The amount spent on the scheme also grew more than 10 times over this period.
These changes will see an expected increase in payouts for Chas subsidies to more than $200 million a year, said Mr Heng.
In 2017, the Government disbursed about $154 million in Chas subsidies to about 650,000 Singaporeans. The number of Chas card holders grew five times to about 1.3 million Singaporeans from 2012 to 2017. The amount spent on the scheme also grew more than 10 times over this period.
"Chas makes it possible for more Singaporeans to turn to GP clinics near their homes to manage their chronic conditions," said Mr Heng.
"But we must also put in the measures to ensure that Chas clinics are delivering good outcomes."
"But we must also put in the measures to ensure that Chas clinics are delivering good outcomes."
To do this, MOH will study how to help Chas clinics better track their patients' progress and outcomes, and review its clinical guidelines for care at Chas dental clinics.
Health Minister Gan Kim Yong will provide more details on these changes during the upcoming debate on his ministry's budget.
More being spent to give children a good start in life through education
By Amelia Teng, Education Correspondent, The Straits Times, 19 Feb 2019
A child entering primary school last year would have received more than $130,000 in education subsidies by the time he or she finishes secondary school.
Finance Minister Heng Swee Keat disclosed this in Parliament yesterday as he outlined initiatives to help Singaporeans access opportunities and fulfil their potential through education.
"The Government subsidises over 90 per cent of the total cost of educating our children," he said, adding that more help is given to lower-income families.
These efforts, he said, are part of the long-term plan to build a more caring and inclusive society by giving children a good start in life and providing Singaporeans access to opportunities throughout their lives, amid challenges such as maintaining social mobility.
He said the Government invests heavily to provide a "world-class education for young Singaporeans" to bring out the best in every child.
Noting that support for children in need is an area of deep concern for many Singaporeans, he said this starts with ensuring quality pre-schools remain accessible and affordable for all families.
"Pre-schools support parents in laying a strong foundation for children - by helping to develop children's cognitive, language, social and emotional skills," he said.
And the Government is spending more on early childhood education and care, he added.
It pumped in about $1 billion in the pre-school sector last year, more than 21/2 times of the $360 million it spent in 2012.
He said more has been done to support those from disadvantaged backgrounds by allowing more students to benefit from financial assistance, earlier intervention and new forms of help.
One such way, he said, is KidStart, a government scheme to help disadvantaged children through health, learning and developmental support. Since the pilot programme started in 2016, more than 900 families have been on it.
Last year, another initiative called Uplift, short for Uplifting Pupils in Life and Inspiring Families Taskforce, was set up to study issues that affect children from poorer homes and their families, said Mr Heng.
The Uplift scholarship, announced in December last year, will provide $800 per year for eligible lower-income students in independent schools to cover out-of-pocket expenses, he said.
"The task force is also looking at how to strengthen after-school care and support for disadvantaged students in school-based Student Care Centres," he said, adding that more details will be disclosed during the debate on the Education Ministry's spending plans.
To help parents with school-going children, Mr Heng also announced that Singaporean primary and secondary school students will receive a $150 top-up to their Edusave accounts this year.
This is on top of the annual Edusave contributions that the Government already provides - $230 for primary school pupils and $290 for secondary school students.
In addition, Singaporeans aged 17 to 20 will get up to $500 in their post-secondary education accounts, which they can use to pursue post-secondary courses in the universities and polytechnics, for instance.
"This will go towards helping parents to save for their children's tertiary education," said Mr Heng.
By Amelia Teng, Education Correspondent, The Straits Times, 19 Feb 2019
A child entering primary school last year would have received more than $130,000 in education subsidies by the time he or she finishes secondary school.
Finance Minister Heng Swee Keat disclosed this in Parliament yesterday as he outlined initiatives to help Singaporeans access opportunities and fulfil their potential through education.
"The Government subsidises over 90 per cent of the total cost of educating our children," he said, adding that more help is given to lower-income families.
These efforts, he said, are part of the long-term plan to build a more caring and inclusive society by giving children a good start in life and providing Singaporeans access to opportunities throughout their lives, amid challenges such as maintaining social mobility.
He said the Government invests heavily to provide a "world-class education for young Singaporeans" to bring out the best in every child.
Noting that support for children in need is an area of deep concern for many Singaporeans, he said this starts with ensuring quality pre-schools remain accessible and affordable for all families.
"Pre-schools support parents in laying a strong foundation for children - by helping to develop children's cognitive, language, social and emotional skills," he said.
And the Government is spending more on early childhood education and care, he added.
It pumped in about $1 billion in the pre-school sector last year, more than 21/2 times of the $360 million it spent in 2012.
He said more has been done to support those from disadvantaged backgrounds by allowing more students to benefit from financial assistance, earlier intervention and new forms of help.
One such way, he said, is KidStart, a government scheme to help disadvantaged children through health, learning and developmental support. Since the pilot programme started in 2016, more than 900 families have been on it.
Last year, another initiative called Uplift, short for Uplifting Pupils in Life and Inspiring Families Taskforce, was set up to study issues that affect children from poorer homes and their families, said Mr Heng.
The Uplift scholarship, announced in December last year, will provide $800 per year for eligible lower-income students in independent schools to cover out-of-pocket expenses, he said.
"The task force is also looking at how to strengthen after-school care and support for disadvantaged students in school-based Student Care Centres," he said, adding that more details will be disclosed during the debate on the Education Ministry's spending plans.
To help parents with school-going children, Mr Heng also announced that Singaporean primary and secondary school students will receive a $150 top-up to their Edusave accounts this year.
This is on top of the annual Edusave contributions that the Government already provides - $230 for primary school pupils and $290 for secondary school students.
In addition, Singaporeans aged 17 to 20 will get up to $500 in their post-secondary education accounts, which they can use to pursue post-secondary courses in the universities and polytechnics, for instance.
"This will go towards helping parents to save for their children's tertiary education," said Mr Heng.
Increased support for lower-wage and senior workers
Higher Workfare payouts for the low income; subsidies for wages of seniors to be extended
By Adrian Lim, Political Correspondent, The Straits Times, 19 Feb 2019
Lower-wage workers will receive higher payouts under a government scheme to help them supplement their income and Central Provident Fund (CPF) savings.
The qualifying income cap for the Workfare Income Supplement (WIS) programme will also be raised from the current $2,000 to $2,300 per month, Finance Minister Heng Swee Keat announced yesterday.
With the enhanced WIS, to take effect from January next year, the maximum annual payouts will be increased by up to $400, and older workers will see higher increases in payouts. Those eligible for WIS receive payout amounts based on their age and income.
For example, 60-year-old workers earning $1,200 a month can currently receive $3,600 annually from WIS, but with the enhancement, this will be boosted to $4,000. They will continue to receive 40 per cent of WIS in cash and 60 per cent in their CPF.
WIS, which was introduced in 2007, is a key pillar of Singapore's social security system and supports workers whose earnings are in the bottom 20 per cent, as well as those slightly above.
Mr Heng said: "The scheme has raised their incomes, encouraged employment and helped them save more for retirement."
He said the enhanced WIS is expected to cost close to $1 billion a year, and will benefit almost 440,000 Singaporeans.
Meanwhile, to support older workers, the Special Employment Credit (SEC) and the Additional SEC scheme, which incentivise and encourage employers to hire senior workers, will both be extended for another year, until Dec 31 next year.
The SEC subsidises the wages of Singaporean workers aged 55 and above who earn up to $4,000 a month, while the Additional SEC encourages companies to hire workers who are above the re-employment age of 67.
To support the extensions, the SEC fund will be topped up by $366 million, Mr Heng noted.
He said a tripartite workgroup set up to study the concerns of older workers will present its recommendations later this year.
The workgroup is reviewing policies such as the retirement and re-employment age, and CPF contribution rates for older workers.
The Government will also review the relevance and structure of the SEC and Additional SEC, in tandem with recommendations from the tripartite workgroup.
"With a tighter labour market, and more Singaporeans choosing to work longer, more companies will be hiring older workers. The Government will study better forms of support to continue to help workers to remain productive, earn more and save more for retirement," he said.
Higher Workfare payouts for the low income; subsidies for wages of seniors to be extended
By Adrian Lim, Political Correspondent, The Straits Times, 19 Feb 2019
Lower-wage workers will receive higher payouts under a government scheme to help them supplement their income and Central Provident Fund (CPF) savings.
The qualifying income cap for the Workfare Income Supplement (WIS) programme will also be raised from the current $2,000 to $2,300 per month, Finance Minister Heng Swee Keat announced yesterday.
With the enhanced WIS, to take effect from January next year, the maximum annual payouts will be increased by up to $400, and older workers will see higher increases in payouts. Those eligible for WIS receive payout amounts based on their age and income.
For example, 60-year-old workers earning $1,200 a month can currently receive $3,600 annually from WIS, but with the enhancement, this will be boosted to $4,000. They will continue to receive 40 per cent of WIS in cash and 60 per cent in their CPF.
WIS, which was introduced in 2007, is a key pillar of Singapore's social security system and supports workers whose earnings are in the bottom 20 per cent, as well as those slightly above.
Mr Heng said: "The scheme has raised their incomes, encouraged employment and helped them save more for retirement."
He said the enhanced WIS is expected to cost close to $1 billion a year, and will benefit almost 440,000 Singaporeans.
Meanwhile, to support older workers, the Special Employment Credit (SEC) and the Additional SEC scheme, which incentivise and encourage employers to hire senior workers, will both be extended for another year, until Dec 31 next year.
The SEC subsidises the wages of Singaporean workers aged 55 and above who earn up to $4,000 a month, while the Additional SEC encourages companies to hire workers who are above the re-employment age of 67.
To support the extensions, the SEC fund will be topped up by $366 million, Mr Heng noted.
He said a tripartite workgroup set up to study the concerns of older workers will present its recommendations later this year.
The workgroup is reviewing policies such as the retirement and re-employment age, and CPF contribution rates for older workers.
The Government will also review the relevance and structure of the SEC and Additional SEC, in tandem with recommendations from the tripartite workgroup.
"With a tighter labour market, and more Singaporeans choosing to work longer, more companies will be hiring older workers. The Government will study better forms of support to continue to help workers to remain productive, earn more and save more for retirement," he said.
Yesterday, Mr Heng also announced a $1.1 billion Bicentennial Bonus for Singaporeans. As part of it, lower-income Singaporeans will receive additional payments from the WIS at the end of this year, to help them with daily living expenses.
The Workfare Bicentennial Bonus will give these individuals an additional 10 per cent of their WIS payment for work done last year, with a minimum payment of $100. This will be given in cash.
The Workfare Bicentennial Bonus will give these individuals an additional 10 per cent of their WIS payment for work done last year, with a minimum payment of $100. This will be given in cash.
Public Assistance recipients to get more each month
By Theresa Tan, Senior Social Affairs Correspondent, The Straits Times, 19 Feb 2019
Destitute Singaporeans who are on the ComCare Long-Term Assistance Scheme, also known as the Public Assistance scheme, can look forward to a higher monthly cash sum.
For instance, a two-person household will receive an extra $130 a month - from $870 to $1,000 a month.
The scheme provides a cash sum each month to destitute persons who cannot work permanently as a result of old age or illness, and have little or no family support.
In the Ministry of Social and Family Development's (MSF) last financial year ended March last year, there were 4,409 households on the scheme, with its recipients being mostly elderly singles who live alone.
The sums were last revised in 2016, when they went up from $450 to $500 a month for a single person and from $790 to $870 for a two-person household.
The MSF will provide more details during the debate on the ministry's budget next month.
Social workers interviewed welcomed the increase in sums to Public Assistance recipients.
Ms Joyz Tan, 37, senior social worker at Fei Yue Family Service Centre, said: "The increase in quantum helps to cushion the impact of inflation to some extent, such as higher food cost."
By Theresa Tan, Senior Social Affairs Correspondent, The Straits Times, 19 Feb 2019
Destitute Singaporeans who are on the ComCare Long-Term Assistance Scheme, also known as the Public Assistance scheme, can look forward to a higher monthly cash sum.
For instance, a two-person household will receive an extra $130 a month - from $870 to $1,000 a month.
The scheme provides a cash sum each month to destitute persons who cannot work permanently as a result of old age or illness, and have little or no family support.
In the Ministry of Social and Family Development's (MSF) last financial year ended March last year, there were 4,409 households on the scheme, with its recipients being mostly elderly singles who live alone.
The sums were last revised in 2016, when they went up from $450 to $500 a month for a single person and from $790 to $870 for a two-person household.
The MSF will provide more details during the debate on the ministry's budget next month.
Social workers interviewed welcomed the increase in sums to Public Assistance recipients.
Ms Joyz Tan, 37, senior social worker at Fei Yue Family Service Centre, said: "The increase in quantum helps to cushion the impact of inflation to some extent, such as higher food cost."
Besides the higher sums given out to Public Assistance scheme recipients, the Government will also increase the sums for those on the government pension scheme called Singapore Allowance, who draw pensions of less than $1,230 a month.
The Government will raise the allowance and the monthly pension ceiling by $20 each, to $320 and $1,250 a month, respectively. The move will benefit about 9,300 pensioners.
The Public Transport Fund will also be topped up by $10 million. Eligible lower-income families will get vouchers to defray their transport expenses.
Finance Minister Heng Swee Keat also urged Singaporeans to make a difference, under a national movement called SG Cares, to foster a more caring society.
The Government is promoting volunteerism among various groups, such as young people, seniors and among public officers.
For example, the Ministry of Culture, Community and Youth is working with Youth Corps Singapore to nurture youth community leaders in tertiary education institutes to rally their peers to be involved in the community.
It is also encouraging all public officers to volunteer under the Public Service Cares initiative, and over 85 per cent of public officers are making monthly donations.
Mr Heng cited independent content producer Rose Sivam, 54, who started an initiative to bring people from different backgrounds together, including the less fortunate.
She and her husband Chris Choo, 50, run a private dining initiative from their five-room HDB flat, and they want to extend these parties to those who cannot afford them or do not have a chance to attend private dining parties.
Guests to her "My Home, Your Home" initiative have included people with disabilities and dementia patients, who get a free meal and entertainment. Paying guests put in between $78 and $88 per head.
"Those who came all loved it," Dr Sivam said. "And the privileged also gained so much - like some did not know wheelchair users can hold full-time jobs or have never seen a visually handicapped person create calligraphy. Their misconceptions have been cleared."
Singapore Budget 2019: Something for everyone amid a challenging environment
Handouts aside, other measures also stand out for their foresight and compassion
By Li Xueying, Enterprise Editor, The Straits Times, 19 Feb 2019
Budget 2019 was not an easy one to deliver. Finance Minister Heng Swee Keat presented it in an environment that was not the most congenial to the Government.
First, it came in the wake of a series of incidents that has raised the political temperature - the HIV and SingHealth data breaches and the national service training deaths, to name a few. Just over the weekend, another lapse came to light: 7,700 people received the wrong amount of healthcare subsidies due to an IT glitch.
These erupted amid long-term challenges that are political hot potatoes - rising cost of living and stratifying social mobility among them.
At the same time, Budget 2019 was loaded with expectations, for Mr Heng in particular.
While this was his fourth Budget outing as Finance Minister, it was his first as the designated successor to Prime Minister Lee Hsien Loong.
His performance was assessed as coming from the man who will lead the nation in future, and parsed for clues for an inkling of his vision.
How then did the Finance Minister do?
There are the short-term handouts that will make most voters happy.
The centrepiece is the widely flagged $6.1 billion Merdeka Generation bonanza that half a million Singaporeans in their 60s will get. But there is something for almost everyone else: a $1.1 billion Bicentennial Bonus for mainly lower-income workers; a 50 per cent personal income tax rebate for middle-incomer earners; Edusave top-ups and more for students.
Taken together, these goodies help assuage worries about rising cost of living. "The Government keeps a close watch on the cost of living," Mr Heng made clear.
Handouts aside, there were other measures that stood out for their compassion and foresight.
Singapore's version of the minimum wage and the most critical safety net for low-income workers - the Workfare Income Supplement (WIS) - will be improved. The qualifying income cap will be raised from $2,000 to $2,300, and maximum annual payouts hiked by up to $400.
This is an important move. Incomes have been rising in tandem with inflation, and this change will ensure that the bottom 20 per cent will continue to be helped.
Also noteworthy was Mr Heng's frank assessment that Singapore is not doing as well as it should in increasing productivity on some fronts.
Thus, the quota for foreign workers in the service sector will be tightened. This will be painful for the 200,000 establishments in industries such as retail and business services and they are bound to belly-ache at it.
But the move sent a strong signal that the People's Action Party (PAP) Government has its eye firmly on the long term when it comes to policymaking.
In no uncertain terms, Mr Heng warned: "If we do not use this narrow window to double down on restructuring, our companies will find it even harder in the future."
Social mobility - a topic that the fourth-generation leadership has pledged to moved decisively on - however received surprisingly short shrift in this Budget. Mr Heng touched briefly on existing efforts such as more support for pre-schools and the KidStart scheme for disadvantaged kids. Hopefully, more will be announced during the ensuing debate on the Education Ministry's budget.
Those concerned about whether there is a truly level playing field for all Singaporeans, regardless of their family backgrounds, will hold him to his word. "We are improving the lives of our people, by enabling them to be the best that they can be," said Mr Heng, in a line worthy of a future National Day Rally.
So to what extent did Singapore's next prime minister inspire?
Handouts aside, other measures also stand out for their foresight and compassion
By Li Xueying, Enterprise Editor, The Straits Times, 19 Feb 2019
First, it came in the wake of a series of incidents that has raised the political temperature - the HIV and SingHealth data breaches and the national service training deaths, to name a few. Just over the weekend, another lapse came to light: 7,700 people received the wrong amount of healthcare subsidies due to an IT glitch.
These erupted amid long-term challenges that are political hot potatoes - rising cost of living and stratifying social mobility among them.
At the same time, Budget 2019 was loaded with expectations, for Mr Heng in particular.
While this was his fourth Budget outing as Finance Minister, it was his first as the designated successor to Prime Minister Lee Hsien Loong.
His performance was assessed as coming from the man who will lead the nation in future, and parsed for clues for an inkling of his vision.
How then did the Finance Minister do?
There are the short-term handouts that will make most voters happy.
The centrepiece is the widely flagged $6.1 billion Merdeka Generation bonanza that half a million Singaporeans in their 60s will get. But there is something for almost everyone else: a $1.1 billion Bicentennial Bonus for mainly lower-income workers; a 50 per cent personal income tax rebate for middle-incomer earners; Edusave top-ups and more for students.
Taken together, these goodies help assuage worries about rising cost of living. "The Government keeps a close watch on the cost of living," Mr Heng made clear.
Handouts aside, there were other measures that stood out for their compassion and foresight.
Singapore's version of the minimum wage and the most critical safety net for low-income workers - the Workfare Income Supplement (WIS) - will be improved. The qualifying income cap will be raised from $2,000 to $2,300, and maximum annual payouts hiked by up to $400.
This is an important move. Incomes have been rising in tandem with inflation, and this change will ensure that the bottom 20 per cent will continue to be helped.
Also noteworthy was Mr Heng's frank assessment that Singapore is not doing as well as it should in increasing productivity on some fronts.
Thus, the quota for foreign workers in the service sector will be tightened. This will be painful for the 200,000 establishments in industries such as retail and business services and they are bound to belly-ache at it.
But the move sent a strong signal that the People's Action Party (PAP) Government has its eye firmly on the long term when it comes to policymaking.
In no uncertain terms, Mr Heng warned: "If we do not use this narrow window to double down on restructuring, our companies will find it even harder in the future."
Social mobility - a topic that the fourth-generation leadership has pledged to moved decisively on - however received surprisingly short shrift in this Budget. Mr Heng touched briefly on existing efforts such as more support for pre-schools and the KidStart scheme for disadvantaged kids. Hopefully, more will be announced during the ensuing debate on the Education Ministry's budget.
Those concerned about whether there is a truly level playing field for all Singaporeans, regardless of their family backgrounds, will hold him to his word. "We are improving the lives of our people, by enabling them to be the best that they can be," said Mr Heng, in a line worthy of a future National Day Rally.
So to what extent did Singapore's next prime minister inspire?
Never a flamboyant speaker, there were few flourishes in Mr Heng's speech. He made some gentle quips, such as when he highlighted a local product, a screen protector that allows long-sighted users to use digital devices without need for glasses.
"I am sure this House will support the enabling of us to see issues, far or near, with greater clarity," he said, to chuckles in the chamber.
He also used a favourite line - "low risk does not mean no risk" - in a nod to his stroke in 2015, when calling on Singaporeans to take care of their health.
Mr Heng did not address the latest lapses that have dominated news headlines and chatter on the ground, and which have raised questions about the competency of certain agencies.
But the Budget speech is not the platform to address such concerns, which no doubt will get an airing in Parliament on another occasion.
What did come through in Mr Heng's two-hour speech was his repeated call for Singaporeans to be united - whether in the face of external challenges such as with Malaysia, or in weaving a tightly knit social fabric at home.
That, in fact, was the title of his speech: Building A Strong, United Singapore.
This harks back to a belief that Mr Heng has consistently held and had raised when he first plunged into the political arena in 2011.
In an interview with The Straits Times then, he said: "I'm deeply convinced that we need to build a cohesive community, and we need to build trust - a deep level of trust between the Government and our people."
Singaporeans will be looking forward to hearing more on this from Mr Heng.
Singaporeans will be looking forward to hearing more on this from Mr Heng.
BUDGET 2019: Supporting our workers and firms
Service sector firms will have to lower foreign worker ratio
Proportion will be cut from 40% to 38% on Jan 1 next year, and to 35% on Jan 1, 2021
By Joanna Seow, Manpower Correspondent, The Straits Times, 19 Feb 2019
Companies will have to rely less on foreign workers and become more productive if the service sector is to remain competitive.
That has led to the Dependency Ratio Ceiling - the proportion of foreigners on work permits or S Passes a firm can employ - being cut from 40 per cent to 38 per cent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.
The quota for S Pass workers - mid-skilled foreigners paid at least $2,300 a month - will drop from 15 per cent to 13 per cent on Jan 1 next year, and to 10 per cent on Jan 1, 2021.
The last quota reductions for the sector were in 2013.
Firms that already exceed the new levels will have to meet the quotas when applying for permit renewals.
Finance Minister Heng Swee Keat said the decision to reduce the quota was done "after much deliberation".
Although some companies - such as those in manufacturing - have done well to deploy staff efficiently, service segments such as retail and food and beverage remain very labour-intensive, he added.
Growth in the number of S Pass and work permit holders in services has been picking up pace. It rose by about 3 per cent a year, or 34,000 in the past three years.
Indeed, the increase in the number of S Pass holders in services last year was the highest in five years.
These trends may be unsustainable, noted Mr Heng. "We need to act decisively to manage the manpower growth in services, and encourage our companies to revamp work processes, redesign jobs and reskill our workers," he said.
"Our workforce growth is tapering, and if we do not use this narrow window to double down on restructuring, our companies will find it even harder in the future."
Mr Heng said a sustainable inflow of foreign workers is needed to complement local staff while Singaporean workers upgrade themselves and enterprises build deep capabilities.
Higher funding of up to 70 per cent under two grants will be extended to March 31, 2023, to help firms adjust to the changes.
These are the Enterprise Development Grant (EDG), which funds projects for firms to improve efficiency and internationalise, and the Productivity Solutions Grant (PSG), which subsidises the cost of off-the-shelf technology to help companies boost productivity.
The funding cap of 70 per cent had been due to drop to 50 per cent after March 31 next year for the EDG and for certain sectors under the PSG.
The Ministry of Manpower also provides some flexibility for companies to employ more foreign workers while they move to an operating model requiring fewer employees under the Lean Enterprise Development Scheme. There is also provision on a case-by-case basis if firms need to bring in foreign workers with specialised skills that are lacking among Singaporeans.
Meanwhile, there will be no changes to the foreign worker levy rates this year.
Manpower Minister Josephine Teo said in a Facebook post yesterday that if service industries remain very labour-intensive and see too much growth in foreign manpower, job quality may not improve significantly and workers will face poorer wage growth prospects.
But she noted that there is a global skills shortage in areas such as artificial intelligence and data science, and so Singapore must still welcome top professionals from overseas to complement local talent.
PwC Singapore tax leader Chris Woo and OCBC economist Selena Ling said the lower service-sector quota will probably force enterprises to turn more to technology. Mr Woo called it "necessary medicine" for the medium term.
Maybank Kim Eng senior economist Chua Hak Bin said the changes could lead to higher costs as firms may need to raise wages to attract locals in the tight labour market.
High-tech solutions are not always an immediate boost. Yee Cheong Yuen Noodle Restaurant director Veronica Koh said that as her customer base is older, they are not so keen to use the iPad ordering system she tried to implement. But she said that with the quota being tightened, she will have to keep trying. "We will probably look to automation and a range of government support to help us cope."
Service sector firms will have to lower foreign worker ratio
Proportion will be cut from 40% to 38% on Jan 1 next year, and to 35% on Jan 1, 2021
By Joanna Seow, Manpower Correspondent, The Straits Times, 19 Feb 2019
That has led to the Dependency Ratio Ceiling - the proportion of foreigners on work permits or S Passes a firm can employ - being cut from 40 per cent to 38 per cent on Jan 1 next year, and to 35 per cent on Jan 1, 2021.
The quota for S Pass workers - mid-skilled foreigners paid at least $2,300 a month - will drop from 15 per cent to 13 per cent on Jan 1 next year, and to 10 per cent on Jan 1, 2021.
The last quota reductions for the sector were in 2013.
Firms that already exceed the new levels will have to meet the quotas when applying for permit renewals.
Finance Minister Heng Swee Keat said the decision to reduce the quota was done "after much deliberation".
Although some companies - such as those in manufacturing - have done well to deploy staff efficiently, service segments such as retail and food and beverage remain very labour-intensive, he added.
Growth in the number of S Pass and work permit holders in services has been picking up pace. It rose by about 3 per cent a year, or 34,000 in the past three years.
Indeed, the increase in the number of S Pass holders in services last year was the highest in five years.
These trends may be unsustainable, noted Mr Heng. "We need to act decisively to manage the manpower growth in services, and encourage our companies to revamp work processes, redesign jobs and reskill our workers," he said.
"Our workforce growth is tapering, and if we do not use this narrow window to double down on restructuring, our companies will find it even harder in the future."
Mr Heng said a sustainable inflow of foreign workers is needed to complement local staff while Singaporean workers upgrade themselves and enterprises build deep capabilities.
Higher funding of up to 70 per cent under two grants will be extended to March 31, 2023, to help firms adjust to the changes.
These are the Enterprise Development Grant (EDG), which funds projects for firms to improve efficiency and internationalise, and the Productivity Solutions Grant (PSG), which subsidises the cost of off-the-shelf technology to help companies boost productivity.
The funding cap of 70 per cent had been due to drop to 50 per cent after March 31 next year for the EDG and for certain sectors under the PSG.
The Ministry of Manpower also provides some flexibility for companies to employ more foreign workers while they move to an operating model requiring fewer employees under the Lean Enterprise Development Scheme. There is also provision on a case-by-case basis if firms need to bring in foreign workers with specialised skills that are lacking among Singaporeans.
Meanwhile, there will be no changes to the foreign worker levy rates this year.
Manpower Minister Josephine Teo said in a Facebook post yesterday that if service industries remain very labour-intensive and see too much growth in foreign manpower, job quality may not improve significantly and workers will face poorer wage growth prospects.
But she noted that there is a global skills shortage in areas such as artificial intelligence and data science, and so Singapore must still welcome top professionals from overseas to complement local talent.
PwC Singapore tax leader Chris Woo and OCBC economist Selena Ling said the lower service-sector quota will probably force enterprises to turn more to technology. Mr Woo called it "necessary medicine" for the medium term.
Maybank Kim Eng senior economist Chua Hak Bin said the changes could lead to higher costs as firms may need to raise wages to attract locals in the tight labour market.
High-tech solutions are not always an immediate boost. Yee Cheong Yuen Noodle Restaurant director Veronica Koh said that as her customer base is older, they are not so keen to use the iPad ordering system she tried to implement. But she said that with the quota being tightened, she will have to keep trying. "We will probably look to automation and a range of government support to help us cope."
More help to boost skills and switch jobs
By Joanna Seow, Manpower Correspondent, The Straits Times, 19 Feb 2019
More help is coming to improve the skills of workers so that they can adapt in the competitive and technology-intensive environment.
The initiatives include new conversion programmes relating to fields such as blockchain and prefabrication to assist people who want to switch to jobs in growth areas.
By Joanna Seow, Manpower Correspondent, The Straits Times, 19 Feb 2019
More help is coming to improve the skills of workers so that they can adapt in the competitive and technology-intensive environment.
The initiatives include new conversion programmes relating to fields such as blockchain and prefabrication to assist people who want to switch to jobs in growth areas.
Another step noted in the Budget is to extend the Career Support Programme that was to end next month by two years.
The scheme subsidises the wages when a Singaporean who is mature and retrenched or unemployed for the long term is hired for a professional, manager, executive or technician job.
"Our ultimate goal is to enable our people to continue to have good jobs and opportunities, and to be at their best," said Finance Minister Heng Swee Keat.
The Budget has set aside $3.6 billion over the next three years for the Ministry of Manpower and the Ministry of Education to help workers amid industry and technological disruptions.
About $1.1 billion was spent on career support initiatives, such as the Adapt and Grow programmes, and continuing education and training, in the 2017 financial year.
The push to help workers adapt and gain skills has borne fruit, with around 76,000 job seekers finding work through Adapt and Grow programmes between 2016 and last year.
More people are also going for training, with the participation rate growing from 35 per cent in 2015 to 48 per cent last year among Singaporeans and permanent residents in the labour force.
Workers, firms, unions and trade associations and chambers all need to play a part to continue this progress, said Mr Heng.
Two grants for businesses will include new components to ensure that staff benefit from transformation in their companies.
Firms that want to tap the Enterprise Development Grant to lift efficiency and internationalise will need to commit to positive outcomes for workers, such as wage rises, from April 1 next year.
The Productivity Solutions Grant will allow firms to apply for a subsidy of up to 70 per cent of out-of-pocket training expenses, capped at $10,000. They must submit a training plan for assessment.
Details on the grant changes will be given later.
$4.6 billion over three years to help workers and boost businesses
$3.6 billion will be used to assist workers during industrial disruptions; help for start-ups, SMEs
By Ng Jun Sen, Business Correspondent, The Straits Times, 19 Feb 2019
Around $4.6 billion will be invested to boost businesses and support Singaporean workers over the next three years.
Of this, $3.6 billion will be earmarked to assist workers during industrial disruptions, while $1 billion will enable firms to grow their deep enterprise capabilities.
$3.6 billion will be used to assist workers during industrial disruptions; help for start-ups, SMEs
By Ng Jun Sen, Business Correspondent, The Straits Times, 19 Feb 2019
Around $4.6 billion will be invested to boost businesses and support Singaporean workers over the next three years.
Of this, $3.6 billion will be earmarked to assist workers during industrial disruptions, while $1 billion will enable firms to grow their deep enterprise capabilities.
"But let me emphasise that supporting companies and supporting workers are mutually reinforcing," Finance Minister Heng Swee Keat said yesterday. "Stronger companies provide better jobs and pay for workers, and highly skilled workers make companies stronger."
Start-ups and small and medium-sized enterprises will also get help:
• A Scale-up SG programme by trade promotion agency Enterprise Singapore (ESG) that aims to help high-growth local firms innovate, grow and venture overseas.
• A two-year pilot where firms can get advice on innovation opportunities and ways to commercialise technology from "Innovation Agents" - industry veterans with expertise in technology and business.
• An additional $100 million for a new SME Co-Investment Fund III to help companies draw in "smart, patient capital that attracts investors with the expertise and the right time horizon". The fund is expected to bring in another $200 million for SMEs during fund-raising.
• An Enterprise Financing Scheme, to be launched in October, that will combine ESG's eight financing programmes covering trade, working capital, fixed assets, venture debt, mergers and acquisitions, and project financing.
• The Government will take on up to 70 per cent of the risk for bank loans, up from 50 per cent in most existing schemes, made by firms that have been incorporated for less than five years.
• The extension of the existing SME Working Capital Loan scheme until March 2021.
• Trade associations and chambers will develop five-year plans to map out how they can help their industries transform. The Government is also working with partners on the secure exchange of electronic trade documents to lift productivity.
Government assistance will also be available in a tiered manner to help firms build deep enterprise capabilities, said Mr Heng. Large firms will get customised support from the Economic Development Board, ESG and other agencies, while SMEs will be supported through "scalable solutions".
These measures come amid an expected moderation of global economic growth this year. Singapore's economy grew by 3.2 per cent in 2018 compared with 3.9 per cent in 2017. "Our efforts to transform our economy are bearing fruit," said Mr Heng, who cited the 23 Industry Transformation Roadmaps that were launched in the 2016 Budget. Productivity has grown by 3.6 per cent a year since 2016, up from 1.6 per cent a year recorded in the preceding three years, he noted.
Part of the productivity boosts arise from the Government's support of SMEs, many of which would otherwise be hard-pressed for resources to beat industrial disruption, said business owners.
"Young companies face a constant challenge of being resource-or capital-constrained, which potentially limits growth and the speed to scale," said e-commerce platform Shopmatic's CEO Anurag Avula, adding that the measures to support SMEs are "very encouraging".
Food manufacturer Golden Bridge had tapped the Lean Enterprise Development Scheme and partnered local institutes to help automate production and raise efficiency.
These have enabled it to be competitive against other manufacturers in Europe, where it is now seeking to expand, said operations director Ong Chew Yong.
While the manufacturing industry has performed strongly, Mr Heng said the construction and some service sectors continue to show weaker productivity growth.
"There is much more we can do, especially in sectors like domestic services. We must press on."
SMEs to get more help to adopt technology
By Irene Tham, Senior Tech Correspondent, The Straits Times, 19 Feb 2019
As new technologies disrupt their traditional business models, small and medium-sized enterprises (SMEs) will see an existing initiative expanded to help them transform digitally and to stay relevant in their business.
Specifically, SMEs can continue to look forward to having up to 70 per cent of the cost of more tools such as cyber security and artificial intelligence subsidised, Finance Minister Heng Swee Keat said yesterday.
Such help will come under the SMEs Go Digital programme, announced in 2017.
"We will expand the number and range of cost-effective, pre-approved digital solutions that will be supported under SMEs Go Digital to boost technology adoption among SMEs," he said.
So far, the scheme has helped some 4,000 out of 200,000 SMEs in Singapore in basic automation. The Infocomm Media Development Authority (IMDA) has budgeted some $80 million for potential beneficiaries over four years starting from April 2017.
IMDA will also roll out Industry Digital Plans (IDPs) for the accountancy, sea transport and construction sectors, where innovation has been lagging.
Specifically, these IDPs will contain a non-intimidating guide to help SMEs in identified sectors assess their digital readiness and explore opportunities to go digital.
Similar IDPs have already been launched for the logistics, retail and wholesale trade sectors.
SMEs Go Digital replaced a more basic seven-year-old iSprint initiative, which provided similar subsidies and basic technology advice benefiting some 8,000 SMEs.
Separately, IMDA will also jointly pilot a cross-border marketplace with the Monetary Authority of Singapore. To be powered by artificial intelligence, the marketplace aims to help SMEs find global buyers and suppliers.
Known as Business sans Borders, the initiative is at proof-of-concept stage and aims to enhance domestic and international trade opportunities for SMEs.
The Automation Support Package (ASP), announced in Budget 2016, will also be extended by another two years until March 2021.
Under the scheme, more than 300 SMEs have had better access to loans for qualifying projects, with the Government sharing risks with participating financial institutions and jointly providing up to 70 per cent of the cost of technology projects.
Mr Jonathan Ho, head of enterprise market in KPMG, said the moves will build more digital capabilities in companies. But SMEs also need help "to road-map their digital journey".
By Irene Tham, Senior Tech Correspondent, The Straits Times, 19 Feb 2019
As new technologies disrupt their traditional business models, small and medium-sized enterprises (SMEs) will see an existing initiative expanded to help them transform digitally and to stay relevant in their business.
Specifically, SMEs can continue to look forward to having up to 70 per cent of the cost of more tools such as cyber security and artificial intelligence subsidised, Finance Minister Heng Swee Keat said yesterday.
Such help will come under the SMEs Go Digital programme, announced in 2017.
"We will expand the number and range of cost-effective, pre-approved digital solutions that will be supported under SMEs Go Digital to boost technology adoption among SMEs," he said.
So far, the scheme has helped some 4,000 out of 200,000 SMEs in Singapore in basic automation. The Infocomm Media Development Authority (IMDA) has budgeted some $80 million for potential beneficiaries over four years starting from April 2017.
IMDA will also roll out Industry Digital Plans (IDPs) for the accountancy, sea transport and construction sectors, where innovation has been lagging.
Specifically, these IDPs will contain a non-intimidating guide to help SMEs in identified sectors assess their digital readiness and explore opportunities to go digital.
Similar IDPs have already been launched for the logistics, retail and wholesale trade sectors.
SMEs Go Digital replaced a more basic seven-year-old iSprint initiative, which provided similar subsidies and basic technology advice benefiting some 8,000 SMEs.
Separately, IMDA will also jointly pilot a cross-border marketplace with the Monetary Authority of Singapore. To be powered by artificial intelligence, the marketplace aims to help SMEs find global buyers and suppliers.
Known as Business sans Borders, the initiative is at proof-of-concept stage and aims to enhance domestic and international trade opportunities for SMEs.
The Automation Support Package (ASP), announced in Budget 2016, will also be extended by another two years until March 2021.
Under the scheme, more than 300 SMEs have had better access to loans for qualifying projects, with the Government sharing risks with participating financial institutions and jointly providing up to 70 per cent of the cost of technology projects.
Mr Jonathan Ho, head of enterprise market in KPMG, said the moves will build more digital capabilities in companies. But SMEs also need help "to road-map their digital journey".
New centres of innovation for food and energy
Move to position Singapore as Global-Asia node of technology, innovation and enterprise
By Cheryl Teh, The Straits Times, 19 Feb 2019
A centre of innovation focusing on food resilience and another on industry-led innovation in the energy sector will be opened here as part of efforts to cement Singapore's position as the Global-Asia node of technology, innovation and enterprise, Finance Minister Heng Swee Keat said yesterday.
He added that the Government will also prepare and develop people here to take advantage of the opportunities.
Move to position Singapore as Global-Asia node of technology, innovation and enterprise
By Cheryl Teh, The Straits Times, 19 Feb 2019
A centre of innovation focusing on food resilience and another on industry-led innovation in the energy sector will be opened here as part of efforts to cement Singapore's position as the Global-Asia node of technology, innovation and enterprise, Finance Minister Heng Swee Keat said yesterday.
He added that the Government will also prepare and develop people here to take advantage of the opportunities.
The Centre of Innovation in Aquaculture at Temasek Polytechnic will bring together high-tech marine farms in Singapore to improve the country's food resilience.
The farms will be able to pool resources, share ideas and use the infrastructure as well as tap expertise provided by government agencies, institutes of higher learning, and public research institutes.
Separately, an energy centre at Nanyang Technological University will work with the Sustainable Energy Association of Singapore to drive industry-led innovation in the areas of energy efficiency, renewable energy and electric mobility.
Enterprise Singapore said the centre will enable firms to commercialise their cutting-edge innovations by providing the technical know-how to turn energy research into scalable, industry-applicable technology. The centre will also work as an incubator for energy sector start-ups, and link them with private sector-owned test beds to trial their projects.
Mr Heng said these two centres, along with other initiatives announced yesterday, will cement Singapore's position as "Asia 101" for global multinational companies looking to expand into Asia's growing markets, and as "Global 101" for Asian companies ready to go global.
To develop and prepare talent, he said current local and overseas internship programmes will be combined into a single Global Ready Talent Programme with more funding for students at institutes of higher learning who plan to intern with overseas-based Singapore firms.
The talent programme, which is not just for students, will also send Singaporeans with up to three years of working experience for postings in high-growth Singapore firms in markets such as South-east Asia, China and India.
Singapore will continue to build global partnerships so that local firms and people can forge new areas of collaboration with the international community, he added.
One of the initiatives involves organisers combining two events - the Singapore Week of Innovation and Technology (Switch) and the Singapore FinTech Festival - to draw more entrepreneurs, investors and innovators from around the world. This, he said, will increase partnership opportunities, and allow participants to collaborate in technological innovation in the fourth industrial revolution. The two events will be held in the same week in mid-November.
Mr Heng said the spirit of entrepreneurship is critical for all these endeavours to succeed, adding that it is important to have a vision of the future, and take practical steps to explore a range of possibilities and solve a myriad of problems.
HSBC Singapore chief executive Tony Cripps said the Budget further cements Singapore's Smart Nation ambitions, through its focus on driving better innovation collaboration with universities and the move to lift the skills of its domestic and international talent.
"Encouraging international expertise and also broad-based domestic upskilling programmes shows that the Government is taking a holistic approach to innovation," Mr Cripps added.
He said the continued investment in research and development, as well as the focus on the actual application of technologies already in play, means that the current and future state are being jointly considered. "Our international clients are telling us this is a prerequisite for further investment," he added.
Singapore Budget 2019: Expansionary Budget, but what about demographic challenge?
By Vikram Khanna, Associate Editor, The Straits Times, 19 Feb 2019
Budgets come in various forms. Some are "Big Bang", full of startling surprises, good and bad. Some are status-quoist, hardly distinguishable from what came in previous years. Others are cumulative, building on the past towards a long-term goal, taking many small steps forward and a few big ones.
Finance Minister Heng Swee Keat's latest Budget is in the latter category. In what is expected to be a year of slower economic growth, it is appropriately expansionary, with expenditure projected to rise to $80.3 billion, 1.6 per cent higher than in FY2018, which was also an expansionary Budget year.
Budget 2019 adds to past initiatives to build enterprise capabilities for small and medium-sized enterprises (SMEs) - a long-haul exercise. It sets aside $100 million for the SME co-investment fund, which will catalyse funding for SMEs and help them scale up and expand overseas. It will (from October) consolidate eight existing SME financing schemes into a single one, which will save companies the trouble of having to navigate a financial maze.
To nurture the enterprises of the future, it will expand support for SMEs less than five years old by taking 70 per cent of the risk for bank loans to these companies, compared with 50 per cent at present. It will also expand programmes to help SMEs go digital and automate.
While companies will welcome all of the above, many will be disappointed to learn that the quotas for foreign workers in the service sector will be tightened gradually over the next two years.
While the effects will be partly offset by transitional funding support for training and development, service-intensive industries such as retail, food and beverage, healthcare and IT could face rising costs over the medium term, and find it harder to expand.
GENEROUS SOCIAL POLICIES
Budget 2019 provides generously for social policies, in keeping with what Mr Heng describes as "our long-term plan to build a caring and inclusive society".
One significant initiative is to increase assistance under the Workfare Income Supplement (WIS) scheme, which provides cash payouts and Central Provident Fund top-ups to some 440,000 workers whose earnings are in the bottom 20 per cent. The qualifying income cap will be raised from $2,000 to $2,300 and the maximum payouts will be increased by up to $400, with older workers getting higher payouts.
Budget 2019 provides a raft of benefits for healthcare, including enhanced subsidies under the Community Health Assist Scheme, which enables lower and middle-income Singaporeans to access primary medical and dental care at clinics near their homes; and more financial support for long-term care.
But the highlight of Budget 2019 is the $6.1 billion for the Merdeka Generation Package, essentially a healthcare subsidy scheme for citizens born during the 1950s, and who obtained citizenship by 1996.
Mr Heng described this group as "an independent and resilient generation" who played a critical role in Singapore's development, was among the earliest batches to do national service, build the public services, modernise the economy and help forge a harmonious multicultural, multiracial society.
DESERVING BUT DIVERSE
These achievements deserve acknowledgement and gratitude. But, compared with the Pioneer Generation, the Merdeka Generation is better educated, enjoyed more of the best years of Singapore's economic growth as well as increases in asset values, earned more and saved more. So, it is fitting that it gets a less generous package of benefits than the Pioneer Generation received in Budget 2014.
The Merdeka Generation is also diverse, including business tycoons, well-heeled professionals, middle-class people, as well as blue-collar and low-income workers, some of whom have retired. So, to the question of whether all of them are equally deserving, at least in terms of need, the answer is "no".
Normally, when distributing benefits, the Government follows strict eligibility criteria based on need, as in, for example, the GST Voucher Scheme, the WIS or Silver Support Scheme, all of which are subject to rigorous means testing, and rightly so. But surprisingly, in the case of the Merdeka Generation Package, the benefits are to be distributed regardless of need, with the well-heeled getting the same as low-income retirees. Moreover, most of the benefits are not one-off, but for life.
While still rewarding all of the Merdeka Generation, the package could be made more progressive by giving bigger benefits to its lower and middle-income members than to those more affluent.
By Vikram Khanna, Associate Editor, The Straits Times, 19 Feb 2019
Budgets come in various forms. Some are "Big Bang", full of startling surprises, good and bad. Some are status-quoist, hardly distinguishable from what came in previous years. Others are cumulative, building on the past towards a long-term goal, taking many small steps forward and a few big ones.
Finance Minister Heng Swee Keat's latest Budget is in the latter category. In what is expected to be a year of slower economic growth, it is appropriately expansionary, with expenditure projected to rise to $80.3 billion, 1.6 per cent higher than in FY2018, which was also an expansionary Budget year.
Budget 2019 adds to past initiatives to build enterprise capabilities for small and medium-sized enterprises (SMEs) - a long-haul exercise. It sets aside $100 million for the SME co-investment fund, which will catalyse funding for SMEs and help them scale up and expand overseas. It will (from October) consolidate eight existing SME financing schemes into a single one, which will save companies the trouble of having to navigate a financial maze.
To nurture the enterprises of the future, it will expand support for SMEs less than five years old by taking 70 per cent of the risk for bank loans to these companies, compared with 50 per cent at present. It will also expand programmes to help SMEs go digital and automate.
While companies will welcome all of the above, many will be disappointed to learn that the quotas for foreign workers in the service sector will be tightened gradually over the next two years.
While the effects will be partly offset by transitional funding support for training and development, service-intensive industries such as retail, food and beverage, healthcare and IT could face rising costs over the medium term, and find it harder to expand.
GENEROUS SOCIAL POLICIES
Budget 2019 provides generously for social policies, in keeping with what Mr Heng describes as "our long-term plan to build a caring and inclusive society".
One significant initiative is to increase assistance under the Workfare Income Supplement (WIS) scheme, which provides cash payouts and Central Provident Fund top-ups to some 440,000 workers whose earnings are in the bottom 20 per cent. The qualifying income cap will be raised from $2,000 to $2,300 and the maximum payouts will be increased by up to $400, with older workers getting higher payouts.
Budget 2019 provides a raft of benefits for healthcare, including enhanced subsidies under the Community Health Assist Scheme, which enables lower and middle-income Singaporeans to access primary medical and dental care at clinics near their homes; and more financial support for long-term care.
But the highlight of Budget 2019 is the $6.1 billion for the Merdeka Generation Package, essentially a healthcare subsidy scheme for citizens born during the 1950s, and who obtained citizenship by 1996.
Mr Heng described this group as "an independent and resilient generation" who played a critical role in Singapore's development, was among the earliest batches to do national service, build the public services, modernise the economy and help forge a harmonious multicultural, multiracial society.
DESERVING BUT DIVERSE
These achievements deserve acknowledgement and gratitude. But, compared with the Pioneer Generation, the Merdeka Generation is better educated, enjoyed more of the best years of Singapore's economic growth as well as increases in asset values, earned more and saved more. So, it is fitting that it gets a less generous package of benefits than the Pioneer Generation received in Budget 2014.
The Merdeka Generation is also diverse, including business tycoons, well-heeled professionals, middle-class people, as well as blue-collar and low-income workers, some of whom have retired. So, to the question of whether all of them are equally deserving, at least in terms of need, the answer is "no".
Normally, when distributing benefits, the Government follows strict eligibility criteria based on need, as in, for example, the GST Voucher Scheme, the WIS or Silver Support Scheme, all of which are subject to rigorous means testing, and rightly so. But surprisingly, in the case of the Merdeka Generation Package, the benefits are to be distributed regardless of need, with the well-heeled getting the same as low-income retirees. Moreover, most of the benefits are not one-off, but for life.
While still rewarding all of the Merdeka Generation, the package could be made more progressive by giving bigger benefits to its lower and middle-income members than to those more affluent.
Health subsidies now cover just about all of Singapore's elder population. While this is a solid achievement that should do any government proud, it also entails the risk of overconsumption of healthcare services, signs of which are already evident. With subsidy bills likely to escalate over the coming years, it might in future be prudent to shift some of the burden to the private sector - for example, by giving incentives to companies to provide more generous health benefits to employees.
Another surprise in Budget 2019 is that while it astutely flags the key medium-term challenge of climate change, it contains no measures to address Singapore's demographic challenge, which is at least as urgent. At current birth rates, the citizen workforce is projected to start declining from next year.
In the absence of immigration, and barring a sudden increase in fertility rates (which seems improbable), Singapore would be at risk of moving into an era of chronically low economic growth - unless productivity keeps rising and remains high, which is also improbable.
Thus, while Budget 2019 does an admirable job of building enterprise capabilities and strengthening the pillars of Singapore's now-quite-impressive social security system, there remains much unfinished business to be addressed in future Budgets.
In the absence of immigration, and barring a sudden increase in fertility rates (which seems improbable), Singapore would be at risk of moving into an era of chronically low economic growth - unless productivity keeps rising and remains high, which is also improbable.
Thus, while Budget 2019 does an admirable job of building enterprise capabilities and strengthening the pillars of Singapore's now-quite-impressive social security system, there remains much unfinished business to be addressed in future Budgets.
BUDGET 2019: Keeping Singapore safe and secure
30% of total expenditure set aside for defence, security, diplomacy
Spending is significant, but indispensable, and more will be invested if need arises: Heng
By Tan Tam Mei, The Straits Times, 19 Feb 2019
About 30 per cent of the Government's total expenditure this year is being set aside to support defence, security and diplomacy efforts - spending that is "significant, but indispensable", said Finance Minister Heng Swee Keat.
And the Government will invest more, if the need arises, to protect Singapore's sovereignty and Singaporeans' well-being, he said.
"Everyone has a role to play to keep Singapore safe and secure. Let us continue to stay united in defending our home and way of life," added Mr Heng.
About $22.7 billion - or 28.3 per cent of the $80.3 billion total budgeted expenditure - is set aside for the Defence, Home Affairs and Foreign Affairs ministries this year.
The lion's share is for defence expenditure, which is expected to increase by 4.8 per cent to $15.5 billion. Spending for the other two areas is expected to be steady at $6.7 billion and $500 million, respectively.
Last year, about $21.9 billion - about 27.8 per cent of the $79 billion revised total expenditure - was allocated to the three ministries.
There was a greater focus on security and external relations issues in this year's Budget than in previous years, with Mr Heng speaking on these at the start of his speech.
Noting that a safe and secure Singapore "gives us the confidence to chart an independent course", he said the Republic cannot take its peace, prosperity and stability for granted, as it remains vulnerable to regional and global fluctuations.
Also, Singapore cannot waver in its commitment to defence and security - with diplomacy and deterrence as twin pillars of its approach - against an increasingly uncertain geopolitical environment.
Even as Singapore builds good relations with other countries through the Ministry of Foreign Affairs, the Singapore Armed Forces (SAF) lends weight to diplomatic efforts and ensures that negotiations with Singapore are taken seriously, noted Mr Heng.
"Should diplomacy fail, we must stand ready to safeguard our interests and defend ourselves," said Mr Heng, adding that Home Team agencies and the Cyber Security Agency of Singapore also ensure a safe and secure environment for all.
The SAF remains a "bulwark" as security threats evolve and become more complex, said Mr Heng.
He also cited how the threat of terrorism remains high, with Singapore continuing to detect individuals here who have been radicalised as it sees a global rise in attacks by radicalised individuals and cells.
In addition, the threat of malicious cyber activities is also growing, and connectivity can be exploited to disrupt and divide society through cyber attacks and the spread of falsehoods, Mr Heng said.
"In particular, foreign actors will try to influence our domestic affairs and politics. This is not new, but new technologies have made it easier for others to mount attacks with greater ease and intensity, and with more sophisticated tactics."
To stay ahead of these threats, Mr Heng said, Singapore must continue to innovate and build new capacities to meet security needs.
In the same vein, the Ministry of Home Affairs (MHA) will set up the Home Team Science and Technology Agency by this year to develop capabilities and support the ministry's operational needs.
30% of total expenditure set aside for defence, security, diplomacy
Spending is significant, but indispensable, and more will be invested if need arises: Heng
By Tan Tam Mei, The Straits Times, 19 Feb 2019
About 30 per cent of the Government's total expenditure this year is being set aside to support defence, security and diplomacy efforts - spending that is "significant, but indispensable", said Finance Minister Heng Swee Keat.
And the Government will invest more, if the need arises, to protect Singapore's sovereignty and Singaporeans' well-being, he said.
"Everyone has a role to play to keep Singapore safe and secure. Let us continue to stay united in defending our home and way of life," added Mr Heng.
About $22.7 billion - or 28.3 per cent of the $80.3 billion total budgeted expenditure - is set aside for the Defence, Home Affairs and Foreign Affairs ministries this year.
The lion's share is for defence expenditure, which is expected to increase by 4.8 per cent to $15.5 billion. Spending for the other two areas is expected to be steady at $6.7 billion and $500 million, respectively.
Last year, about $21.9 billion - about 27.8 per cent of the $79 billion revised total expenditure - was allocated to the three ministries.
There was a greater focus on security and external relations issues in this year's Budget than in previous years, with Mr Heng speaking on these at the start of his speech.
Noting that a safe and secure Singapore "gives us the confidence to chart an independent course", he said the Republic cannot take its peace, prosperity and stability for granted, as it remains vulnerable to regional and global fluctuations.
Also, Singapore cannot waver in its commitment to defence and security - with diplomacy and deterrence as twin pillars of its approach - against an increasingly uncertain geopolitical environment.
Even as Singapore builds good relations with other countries through the Ministry of Foreign Affairs, the Singapore Armed Forces (SAF) lends weight to diplomatic efforts and ensures that negotiations with Singapore are taken seriously, noted Mr Heng.
"Should diplomacy fail, we must stand ready to safeguard our interests and defend ourselves," said Mr Heng, adding that Home Team agencies and the Cyber Security Agency of Singapore also ensure a safe and secure environment for all.
The SAF remains a "bulwark" as security threats evolve and become more complex, said Mr Heng.
He also cited how the threat of terrorism remains high, with Singapore continuing to detect individuals here who have been radicalised as it sees a global rise in attacks by radicalised individuals and cells.
In addition, the threat of malicious cyber activities is also growing, and connectivity can be exploited to disrupt and divide society through cyber attacks and the spread of falsehoods, Mr Heng said.
"In particular, foreign actors will try to influence our domestic affairs and politics. This is not new, but new technologies have made it easier for others to mount attacks with greater ease and intensity, and with more sophisticated tactics."
To stay ahead of these threats, Mr Heng said, Singapore must continue to innovate and build new capacities to meet security needs.
In the same vein, the Ministry of Home Affairs (MHA) will set up the Home Team Science and Technology Agency by this year to develop capabilities and support the ministry's operational needs.
"These capabilities will strengthen the Home Team's ability to carry out its mission of safeguarding Singapore," said Mr Heng, adding that more details will be given by the Home Affairs Minister.
MHA will also help the private security industry to innovate and use technology to better partner the Home Team, he said.
But every Singaporean needs to play a part too in keeping Singapore safe and secure, through the Total Defence approach, said Mr Heng.
At the national level, Singapore plans for the long term and takes measures such as stockpiling critical supplies, diversifying sources of water and strengthening food security.
Mr Heng's emphasis comes as Singapore and Malaysia are discussing several bilateral issues, which include disputes over maritime borders, airspace management and water prices.
Last December, Malaysia also announced it was considering limiting or stopping egg exports, and restricting exports of certain types of seafood.
Mr Heng added that as a people, Singaporeans must have the "psychological and emotional resilience to face crises stoically". "As threats get more sophisticated, Singaporeans must stay vigilant and guard against non-conventional forces that threaten to divide us."
Touching on the importance of national service and its role in forging a deep understanding that each Singaporean has a duty to defend the nation, he urged families and employers to support national servicemen in every way possible.
Meanwhile, Mr Heng noted that a sixth pillar of digital defence was just incorporated into Singapore's Total Defence framework. "Like other pillars of Total Defence, digital defence involves everyone - individuals, community groups, businesses and the Government," he said.
But every Singaporean needs to play a part too in keeping Singapore safe and secure, through the Total Defence approach, said Mr Heng.
At the national level, Singapore plans for the long term and takes measures such as stockpiling critical supplies, diversifying sources of water and strengthening food security.
Mr Heng's emphasis comes as Singapore and Malaysia are discussing several bilateral issues, which include disputes over maritime borders, airspace management and water prices.
Last December, Malaysia also announced it was considering limiting or stopping egg exports, and restricting exports of certain types of seafood.
Mr Heng added that as a people, Singaporeans must have the "psychological and emotional resilience to face crises stoically". "As threats get more sophisticated, Singaporeans must stay vigilant and guard against non-conventional forces that threaten to divide us."
Touching on the importance of national service and its role in forging a deep understanding that each Singaporean has a duty to defend the nation, he urged families and employers to support national servicemen in every way possible.
Meanwhile, Mr Heng noted that a sixth pillar of digital defence was just incorporated into Singapore's Total Defence framework. "Like other pillars of Total Defence, digital defence involves everyone - individuals, community groups, businesses and the Government," he said.
S. Rajaratnam School of International Studies research fellow Graham Ong-Webb said the increased focus on defence and security issues, despite the proportion of spending staying roughly the same this year, could be aimed at sending a message to other countries.
"It shows that we mean what we say and are willing to put that into resourcing to bolster diplomatic, defence and security lines to ensure that Singapore is not compromised in any way," he added.
"It shows that we mean what we say and are willing to put that into resourcing to bolster diplomatic, defence and security lines to ensure that Singapore is not compromised in any way," he added.
Investing more in infrastructure to protect against climate change
By Chang Ai-Lien, Science Editor, The Straits Times, 19 Feb 2019
The Government will be investing in infrastructure in a big way and developing long-term plans to protect the country against climate change, Finance Minister Heng Swee Keat said yesterday.
But individuals must also change their ways and work towards a more sustainable future.
"As a low-lying island nation, there is nowhere to hide when sea levels rise," he said. "To protect ourselves against climate change and rising sea levels, we will have to invest more. Together with existing infrastructure needs, our total bill for infrastructure will increase significantly," he said.
By Chang Ai-Lien, Science Editor, The Straits Times, 19 Feb 2019
The Government will be investing in infrastructure in a big way and developing long-term plans to protect the country against climate change, Finance Minister Heng Swee Keat said yesterday.
But individuals must also change their ways and work towards a more sustainable future.
"As a low-lying island nation, there is nowhere to hide when sea levels rise," he said. "To protect ourselves against climate change and rising sea levels, we will have to invest more. Together with existing infrastructure needs, our total bill for infrastructure will increase significantly," he said.
Mr Heng pointed out that it is very difficult to project spending needs so far ahead, although the different ministries have done some preliminary estimates.
"We will continue to do our best to look forward, develop fiscal plans well in advance, and put in place the right approach to finance such long-lived major infrastructure. Each generation should contribute its fair share," he added.
The Government's Climate Action Plan, launched in 2016, has seen low-lying roads near coastal areas raised. Changi Airport's Terminal 5 is also being built 5.5m above the mean sea level. And there are pilot projects involving dikes and new reclamation methods on Pulau Tekong to shed light on how to deal with rising sea levels.
Mr Heng said the carbon tax being applied to this year's emissions is an important signal to companies and households to adopt energy-efficient practices.
And the Zero Waste Masterplan, which will be launched in the second half of the year, will look at better management of food waste, e-waste and packaging waste, including plastics, among other issues.
However, individuals must also change their ways, he noted, by adopting the 3Rs: reducing consumption, reusing and recycling.
Building a more sustainable environment also creates opportunities. "Just as we closed the water loop, we can now turn our attention to closing the waste loop," Mr Heng said.
Start-ups are already tackling the challenge: Two companies, UglyGood and Tria, for instance, have been working on innovative ways to convert food-related waste into useful products, he said.
Praising the National Parks Board for its "excellent job" in greening the island, he said that the more than 40 per cent green cover here improves both the living environment and air quality.
"Our beautiful living environment can also be enhanced through the smart use of technology as part of our Smart Nation efforts," he added, giving as examples pneumatic waste collection, the use of district cooling in the Marina Bay area and environmentally friendly buildings. "Today, our shining Little Red Dot can hold its own on the global stage," he said.
But the work is not over: Singapore's development plans must be far-sighted and must include the country's need to be well connected within and with the world.
Within Singapore, there are now about 230km of MRT lines, a figure which will rise to about 360km in the 2030s. Airport and sea port capacities are also being enhanced. "This will strengthen our role as a key node within Asia and to the world."
Mr Heng said the long-term transformation of the city must start with Housing Board estates, where most people live.
"Many cities have large tracts that slip into disrepair over time - we must avoid that. We must strive to make every town in Singapore green and liveable by rejuvenating them systematically over time."
The nation's public housing policies have been uniquely successful because of long-term planning, he said.
"Today, we are not just building new flats. We are improving the quality of life for Singaporeans through the rejuvenation of our public housing estates."
Touching on the upcoming URA Master Plan 2019, he said it would guide the country's urban development over a 10-to 15-year timeframe, ensuring that the limited land could meet the needs of current and future generations.
"Today, we are not just building new flats. We are improving the quality of life for Singaporeans through the rejuvenation of our public housing estates."
Touching on the upcoming URA Master Plan 2019, he said it would guide the country's urban development over a 10-to 15-year timeframe, ensuring that the limited land could meet the needs of current and future generations.
Diesel duty doubled to 20 cents a litre
By Christopher Tan, Senior Transport Correspondent, The Straits Times, 19 Feb 2019
The excise duty on diesel will be raised from 10 cents to 20 cents a litre with immediate effect.
At the same time, the annual Special Tax for diesel-powered cars and taxis will be reduced further by $100 and $850, respectively, from Feb 18. They were reduced by the same quantums two years ago.
By Christopher Tan, Senior Transport Correspondent, The Straits Times, 19 Feb 2019
The excise duty on diesel will be raised from 10 cents to 20 cents a litre with immediate effect.
At the same time, the annual Special Tax for diesel-powered cars and taxis will be reduced further by $100 and $850, respectively, from Feb 18. They were reduced by the same quantums two years ago.
With the change, an owner of a Euro 5 1.6-litre diesel car who pays an annual Special Tax of $540 will now pay $440 a year. And a fleet owner of a diesel taxi who currently pays $4,250 a year will now pay $3,400.
However, these may not fully offset the excise duty at the pumps.
Announcing the move yesterday, Finance Minister Heng Swee Keat said: "Diesel exhaust is highly pollutive, and adversely affects our people's health and quality of life. Many cities in Europe have announced restrictions on diesel vehicle usage. We have also taken steps to discourage diesel consumption."
Owners of private diesel buses and goods vehicles will be granted new road tax rebates for a three-year period from Aug 1 this year to July 31, 2022.
A 100 per cent road tax rebate will be granted in the first year, followed by 75 per cent in the second year and 50 per cent in the third year.
The new road tax rebate of 100 per cent will apply for the period from Aug 1 this year to July 31, 2020.
Diesel school buses and eligible diesel private-hire or excursion buses that ferry schoolchildren will receive additional cash rebates for the same three-year period.
Over three years, Mr Heng said these buses will receive as much as $3,200 in cash rebates.
ComfortDelGro Corp, which has one of the largest diesel fleets here, said it will be passing on the entire savings resulting from the reduction in the annual Special Tax for diesel taxis to its drivers. The savings will help offset a foreseeable increase in running cost.
Taxi drivers and private-hire drivers who use diesel vehicles will incur around $1,000 more a year if their driving patterns do not change.
This is based on an average daily mileage of 300km and a fuel efficiency of 10km a litre.
A private bus operator will incur around $2,000 more per full-sized bus a year, based on an average mileage of 140km a day and a fuel efficiency of 2.5km a litre.
At 20 cents a litre, the duty on diesel is still less than half that for petrol.
This is based on an average daily mileage of 300km and a fuel efficiency of 10km a litre.
A private bus operator will incur around $2,000 more per full-sized bus a year, based on an average mileage of 140km a day and a fuel efficiency of 2.5km a litre.
At 20 cents a litre, the duty on diesel is still less than half that for petrol.
BUDGET 2019: Drawing on past for the future
Reflecting on past to chart way forward
Lessons learnt from island's history will help Singaporeans forge better future together: Heng
By Melody Zaccheus, Heritage and Community Correspondent, The Straits Times, 19 Feb 2019
As Singapore marks its bicentennial year this year, Finance Minister Heng Swee Keat urged Singaporeans to reflect on the "twists and turns" in the island's history to chart a path forward for an even better future, and to respond to challenges with grit and determination.
He said the country is today facing four major shifts: The pivot in global economic weight towards Asia; rapid technological advancements; changing demographic patterns; and the decline in support for globalisation, with some countries questioning its value.
On the global stage, trade frictions between the United States and China have developed into a strategic competition of strength and of governance systems, and this has raised geopolitical uncertainty.
Closer to home, he noted that the 10 Asean economies collectively are projected to become the fourth largest in the world by 2030. However, bilateral issues have surfaced with Malaysia.
He said these need to be resolved based on mutual respect and common interests as well as international laws and norms. He added that Singaporeans must remain united.
On the domestic front, Mr Heng said longer-term challenges need to be addressed, including ageing, social mobility, inequality, economic transformation and climate change.
Mr Heng said the Budget's strategic plan centres on building a strong, united Singapore for the country to continue to progress. It will draw on the country's strengths and the Singaporean DNA - of openness, multiculturalism and self-determination - forged from its roots as an open port.
The Government also picked up on three lessons from the country's history. The first is that as long as the Republic stays relevant and useful, Singapore and Singaporeans will have a place in the world. The country, he said, must develop deep capabilities, stay open and connected, and draw ideas and talents from around the globe.
"Singaporean talents have been making their mark in various fields, and connecting with other highly skilled individuals from around the world will make our team even stronger," he added.
Mr Heng also noted that external events around Singapore will also shape and reshape lives here. "Our people have shown time and again that we can take the long view, adapt with the times and thrive," he said.
The third lesson learnt is that Singapore draws its strength from its diversity, "by focusing on what we have in common". He noted that while the country's forefathers clustered around ethnic and religious groups to support one another, this support today is regardless of race, language or religion.
He said that as a city-state, Singapore is nimbler and can adapt to changes faster. It can also take advantage of its strategic location and "serve as a neutral, trusted node in key spheres of global activity".
Mr Heng added: "We strive to be a place where people and ideas congregate, at the frontier of global developments. We want to be a Global-Asia node of technology, innovation and enterprise."
Mr Heng called on all Singaporeans to partner with the Government and support one another to succeed in this endeavour. "We are using our financial resources to help realise our strategies for a strong, united Singapore. But financial resources alone do not get us there," he said.
Reflecting on past to chart way forward
Lessons learnt from island's history will help Singaporeans forge better future together: Heng
By Melody Zaccheus, Heritage and Community Correspondent, The Straits Times, 19 Feb 2019
He said the country is today facing four major shifts: The pivot in global economic weight towards Asia; rapid technological advancements; changing demographic patterns; and the decline in support for globalisation, with some countries questioning its value.
On the global stage, trade frictions between the United States and China have developed into a strategic competition of strength and of governance systems, and this has raised geopolitical uncertainty.
Closer to home, he noted that the 10 Asean economies collectively are projected to become the fourth largest in the world by 2030. However, bilateral issues have surfaced with Malaysia.
He said these need to be resolved based on mutual respect and common interests as well as international laws and norms. He added that Singaporeans must remain united.
On the domestic front, Mr Heng said longer-term challenges need to be addressed, including ageing, social mobility, inequality, economic transformation and climate change.
Mr Heng said the Budget's strategic plan centres on building a strong, united Singapore for the country to continue to progress. It will draw on the country's strengths and the Singaporean DNA - of openness, multiculturalism and self-determination - forged from its roots as an open port.
The Government also picked up on three lessons from the country's history. The first is that as long as the Republic stays relevant and useful, Singapore and Singaporeans will have a place in the world. The country, he said, must develop deep capabilities, stay open and connected, and draw ideas and talents from around the globe.
"Singaporean talents have been making their mark in various fields, and connecting with other highly skilled individuals from around the world will make our team even stronger," he added.
Mr Heng also noted that external events around Singapore will also shape and reshape lives here. "Our people have shown time and again that we can take the long view, adapt with the times and thrive," he said.
The third lesson learnt is that Singapore draws its strength from its diversity, "by focusing on what we have in common". He noted that while the country's forefathers clustered around ethnic and religious groups to support one another, this support today is regardless of race, language or religion.
He said that as a city-state, Singapore is nimbler and can adapt to changes faster. It can also take advantage of its strategic location and "serve as a neutral, trusted node in key spheres of global activity".
Mr Heng added: "We strive to be a place where people and ideas congregate, at the frontier of global developments. We want to be a Global-Asia node of technology, innovation and enterprise."
Mr Heng called on all Singaporeans to partner with the Government and support one another to succeed in this endeavour. "We are using our financial resources to help realise our strategies for a strong, united Singapore. But financial resources alone do not get us there," he said.
Changi's T5, Cross Island Line to be partly funded through borrowing
By Karamjit Kaur, Senior Aviation Correspondent, The Straits Times, 19 Feb 2019
The cost of huge infrastructure projects such as Changi East, which includes Terminal 5 (T5), and the Cross Island Line will be partly funded through borrowing, as will other infrastructure investments such as those to tackle climate change.
Finance Minister Heng Swee Keat noted: "For these large and lumpy expenditures where the benefits span many generations of Singaporeans, paying for them through some borrowing is fairer and more efficient."
But the Government will take a different approach to recurrent expenditures in areas like healthcare, pre-school education and security.
Here, spending will be funded by recurrent revenues such as the goods and services tax (GST).
Mr Heng noted that responsible and sustainable borrowing for large infrastructure investments helps instil financial discipline and distributes the share of funding more equitably across current and future generations.
The Government borrowed in the 1980s to build the first MRT lines. Statutory boards and government-owned companies have also financed many major infrastructure projects through borrowing.
Changi's T5 - being built as part of the Changi East development that includes other aviation-related facilities - is slated to open around 2030.
The first stretch of the Cross Island Line will be ready by 2029.
Changi Airport Group will operate T5 and take out loans to fund its share of the cost, Mr Heng said.
The Government, with the President's agreement, will provide a guarantee for the loans to lower financing costs, he added.
Passengers and airlines using Changi Airport have also been paying higher fees since last July to help fund the expansion plans, with the $34 fee to fly out of Changi raised by $13.30, and further hikes planned.
The Government is also studying the feasibility of using government debt as part of the financing mix for long-term infrastructure projects, Mr Heng said.
Singapore's ability to plan for the long term is its strategic advantage, but this can be realised only with a sound fiscal plan, he said, adding: "While our nation's needs are growing significantly, we must continue to take a disciplined and prudent approach."
He said recurrent social and security spending are "necessary expenditures - to take care of our elderly, give our children a good start in life, and keep Singapore safe and secure for our families".
Many countries fund these areas through borrowing, but such borrowing shifts the burden of paying for today's needs onto future generations. "That is not the Singapore way," he noted.
Mr Heng said a fairer and more robust approach is to meet recurrent spending with recurrent revenues, which is why Singapore must continually review its tax system to ensure its resilience.
The GST will be raised by two percentage points some time between 2021 and 2025. Mr Heng noted that when this happens, "we will ensure that our overall system of taxes and transfers remains fair and progressive".
The Government will continue to absorb GST on publicly subsidised education and healthcare, provide more help to lower-income households and the elderly, and cushion the impact of the increase for a period through an offset package that will benefit lower-and middle-income households more. Details will come later.
Mr Heng noted that Singapore's main indirect tax, the GST, is not high by international standards, even after it will be raised to 9 per cent. The Organisation for Economic Cooperation and Development average is 19 per cent.
By Karamjit Kaur, Senior Aviation Correspondent, The Straits Times, 19 Feb 2019
The cost of huge infrastructure projects such as Changi East, which includes Terminal 5 (T5), and the Cross Island Line will be partly funded through borrowing, as will other infrastructure investments such as those to tackle climate change.
Finance Minister Heng Swee Keat noted: "For these large and lumpy expenditures where the benefits span many generations of Singaporeans, paying for them through some borrowing is fairer and more efficient."
But the Government will take a different approach to recurrent expenditures in areas like healthcare, pre-school education and security.
Here, spending will be funded by recurrent revenues such as the goods and services tax (GST).
Mr Heng noted that responsible and sustainable borrowing for large infrastructure investments helps instil financial discipline and distributes the share of funding more equitably across current and future generations.
The Government borrowed in the 1980s to build the first MRT lines. Statutory boards and government-owned companies have also financed many major infrastructure projects through borrowing.
Changi's T5 - being built as part of the Changi East development that includes other aviation-related facilities - is slated to open around 2030.
The first stretch of the Cross Island Line will be ready by 2029.
Changi Airport Group will operate T5 and take out loans to fund its share of the cost, Mr Heng said.
The Government, with the President's agreement, will provide a guarantee for the loans to lower financing costs, he added.
Passengers and airlines using Changi Airport have also been paying higher fees since last July to help fund the expansion plans, with the $34 fee to fly out of Changi raised by $13.30, and further hikes planned.
The Government is also studying the feasibility of using government debt as part of the financing mix for long-term infrastructure projects, Mr Heng said.
Singapore's ability to plan for the long term is its strategic advantage, but this can be realised only with a sound fiscal plan, he said, adding: "While our nation's needs are growing significantly, we must continue to take a disciplined and prudent approach."
He said recurrent social and security spending are "necessary expenditures - to take care of our elderly, give our children a good start in life, and keep Singapore safe and secure for our families".
Many countries fund these areas through borrowing, but such borrowing shifts the burden of paying for today's needs onto future generations. "That is not the Singapore way," he noted.
Mr Heng said a fairer and more robust approach is to meet recurrent spending with recurrent revenues, which is why Singapore must continually review its tax system to ensure its resilience.
The GST will be raised by two percentage points some time between 2021 and 2025. Mr Heng noted that when this happens, "we will ensure that our overall system of taxes and transfers remains fair and progressive".
The Government will continue to absorb GST on publicly subsidised education and healthcare, provide more help to lower-income households and the elderly, and cushion the impact of the increase for a period through an offset package that will benefit lower-and middle-income households more. Details will come later.
Mr Heng noted that Singapore's main indirect tax, the GST, is not high by international standards, even after it will be raised to 9 per cent. The Organisation for Economic Cooperation and Development average is 19 per cent.
Smaller tax-free shopping and alcohol allowances
By Tiffany Fumiko Tay, The Straits Times, 19 Feb 2019
Returning travellers have a smaller allowance on tax-exempt overseas shopping, under new rules that kicked in at midnight today.
Those who spend fewer than 48 hours outside Singapore will now avoid paying the 7 per cent goods and services tax (GST) only if the total value of items bought abroad is $100 or less, down from $150.
The threshold has also been lowered from $600 to $500 for travellers who spend 48 hours or more outside the country, Finance Minister Heng Swee Keat announced yesterday. The alcohol duty-free concession will also be reduced, from 3 litres to 2 litres, starting on April 1.
In a joint statement yesterday, the Inland Revenue Authority of Singapore and Singapore Customs said the revision of GST import relief limits is aimed at keeping Singapore's tax system resilient, amid rising international travel.
They also reminded travellers to declare their taxable goods upon arrival in Singapore, and advised them to keep their purchase receipts.
Advance declaration and payment of GST can also be made using the Customs@SG mobile app or Web portal, the statement said.
Failure to declare, or making an incorrect declaration, is an offence that carries a fine of up to $10,000 or the equivalent of the amount of tax payable - whichever is greater - as well as up to 12 months in prison.
Mr Adrian Ball, EY Asia-Pacific indirect tax leader, said the Budget "continues to look at GST as a key source of revenue for the Government, with a focus on tightening concessions". The smaller GST import relief and alcohol duty-free allowances were "unexpected", and it remains to be seen if more enforcement action will follow, he said.
Housewife Jessie Neo, 44, who shops in Johor Baru, said: "Usually, I spend less than $100 on groceries, but I have to be more careful now."
By Tiffany Fumiko Tay, The Straits Times, 19 Feb 2019
Returning travellers have a smaller allowance on tax-exempt overseas shopping, under new rules that kicked in at midnight today.
Those who spend fewer than 48 hours outside Singapore will now avoid paying the 7 per cent goods and services tax (GST) only if the total value of items bought abroad is $100 or less, down from $150.
The threshold has also been lowered from $600 to $500 for travellers who spend 48 hours or more outside the country, Finance Minister Heng Swee Keat announced yesterday. The alcohol duty-free concession will also be reduced, from 3 litres to 2 litres, starting on April 1.
In a joint statement yesterday, the Inland Revenue Authority of Singapore and Singapore Customs said the revision of GST import relief limits is aimed at keeping Singapore's tax system resilient, amid rising international travel.
They also reminded travellers to declare their taxable goods upon arrival in Singapore, and advised them to keep their purchase receipts.
Advance declaration and payment of GST can also be made using the Customs@SG mobile app or Web portal, the statement said.
Failure to declare, or making an incorrect declaration, is an offence that carries a fine of up to $10,000 or the equivalent of the amount of tax payable - whichever is greater - as well as up to 12 months in prison.
Mr Adrian Ball, EY Asia-Pacific indirect tax leader, said the Budget "continues to look at GST as a key source of revenue for the Government, with a focus on tightening concessions". The smaller GST import relief and alcohol duty-free allowances were "unexpected", and it remains to be seen if more enforcement action will follow, he said.
Housewife Jessie Neo, 44, who shops in Johor Baru, said: "Usually, I spend less than $100 on groceries, but I have to be more careful now."
BUDGET 2019: Summing up the numbers
Overall Budget surplus of $2.1 billion for FY2018
Figure is $2.7 billion rise from earlier forecast; boost from HSR suspension, stamp duty collections
By Adrian Lim, Political Correspondent, The Straits Times, 19 Feb 2019
An overall Budget surplus of $2.1 billion is expected for the 2018 financial year, a $2.7 billion increase from the $0.6 billion deficit that was forecast a year ago.
The fiscal boost was due to the two-year suspension of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project and higher-than-expected stamp duty collections. A $2.1 billion surplus is equivalent to about 0.4 per cent of Singapore's gross domestic product.
Overall Budget surplus of $2.1 billion for FY2018
Figure is $2.7 billion rise from earlier forecast; boost from HSR suspension, stamp duty collections
By Adrian Lim, Political Correspondent, The Straits Times, 19 Feb 2019
An overall Budget surplus of $2.1 billion is expected for the 2018 financial year, a $2.7 billion increase from the $0.6 billion deficit that was forecast a year ago.
The fiscal boost was due to the two-year suspension of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project and higher-than-expected stamp duty collections. A $2.1 billion surplus is equivalent to about 0.4 per cent of Singapore's gross domestic product.
It is much lower than the $10.86 billion achieved in FY2017. If the Government's top-ups to funds and the Net Investment Returns Contribution (NIRC) are excluded, a basic deficit of $7 billion is expected for 2018.
The 2018 Budget was expansionary, Finance Minister Heng Swee Keat said yesterday.
Revenue is expected to come in at $73.7 billion, a $1 billion increase over earlier budgeted estimates.
This is mainly due to higher collections from statutory boards' contributions, corporate income tax, stamp duties and other taxes, but the increase was partially offset by decreases in vehicle quota premiums, and Customs and excise fees.
Owing to lower-than-projected certificate of entitlement (COE) prices and higher disbursements of COE rebates, revenues from vehicle quota premiums are estimated to decrease by $2.3 billion to $3.3 billion - a 41.4 per cent fall.
Total expenditure for FY2018 ending March 31, 2019, is revised downwards by $1 billion to $79 billion.
This exceeds the actual expenditure the year before by $5.4 billion, owing to more being spent in defence, home affairs, transport plus trade and industry, among others.
While operating expenditure was revised upwards by $1 billion, development spending is expected to be lower - by $2 billion - against an earlier estimated sum.
The main reason is the HSR project suspension and rescheduling of works for some public housing projects. Partially offsetting it are the higher requirements for the Research, Innovation and Enterprise 2015 Plan, and the Economic Development Assistance Scheme.
The NIRC is projected to be $16.4 billion. The latest 2019 Budget remains expansionary, with the basic deficit forecast to reach $7.1 billion.
Owing to lower-than-projected certificate of entitlement (COE) prices and higher disbursements of COE rebates, revenues from vehicle quota premiums are estimated to decrease by $2.3 billion to $3.3 billion - a 41.4 per cent fall.
Total expenditure for FY2018 ending March 31, 2019, is revised downwards by $1 billion to $79 billion.
This exceeds the actual expenditure the year before by $5.4 billion, owing to more being spent in defence, home affairs, transport plus trade and industry, among others.
While operating expenditure was revised upwards by $1 billion, development spending is expected to be lower - by $2 billion - against an earlier estimated sum.
The main reason is the HSR project suspension and rescheduling of works for some public housing projects. Partially offsetting it are the higher requirements for the Research, Innovation and Enterprise 2015 Plan, and the Economic Development Assistance Scheme.
The NIRC is projected to be $16.4 billion. The latest 2019 Budget remains expansionary, with the basic deficit forecast to reach $7.1 billion.
Ministries' total expenditures are projected to be $80.3 billion, 1.6 per cent up on 2018.
Higher spending in healthcare, defence, and the environment and water resources will be offset by lower transport expenditure, owing to factors including the HSR project suspension.
The Government is also setting aside funds to meet long-term needs, including $6.1 billion for the Merdeka Generation Package and $5.1 billion for long-term care support. On the whole, an overall deficit of $3.5 billion is projected for FY2019.
"We have sufficient fiscal surplus accumulated over this term of government to fund the overall deficit in 2019. There is no draw on past reserves," Mr Heng noted.
"We have sufficient fiscal surplus accumulated over this term of government to fund the overall deficit in 2019. There is no draw on past reserves," Mr Heng noted.
BUDGET 2019: Responding to the Budget
Budget gets thumbs-up from older folk and young people
Support for needy and Merdeka Generation, and plans to tackle climate change welcomed
By Rei Kurohi and Fabian Koh, The Straits Times, 19 Feb 2019
As part of the $1.1 billion Bicentennial Bonus announced by Finance Minister Heng Swee Keat yesterday, 1.4 million lower-income Singaporeans will receive up to $300 in GST Voucher cash payouts.
This is "very significant", said the National Council of Social Service president Anita Fam, who added that she was "heartened by the generosity" of the Budget.
Mr Heng also announced a $200 million Bicentennial Community Fund, which will match donations to Institutions of a Public Character (IPCs) dollar for dollar.
Ms Fam, a former lawyer, said she hopes this will spur Singaporeans to donate more.
"I am really hopeful that the dollar-for-dollar matching for donations to IPCs will incentivise giving, especially to social service agencies which are doing good but are finding resourcing a challenge."
In his speech, Mr Heng also outlined some of the benefits to those in the Merdeka Generation, including a one-off $100 top-up to their PAssion Silver cards and an annual $200 Medisave top-up until 2023.
Singaporeans born between Jan 1, 1950 and Dec 31, 1959 will also get additional subsidies for outpatient care and additional MediShield Life premium subsidies.
Retiree Karin Tan, who worked in sales in the industrial sector, is "very happy" with the package.
Budget gets thumbs-up from older folk and young people
Support for needy and Merdeka Generation, and plans to tackle climate change welcomed
By Rei Kurohi and Fabian Koh, The Straits Times, 19 Feb 2019
This is "very significant", said the National Council of Social Service president Anita Fam, who added that she was "heartened by the generosity" of the Budget.
Mr Heng also announced a $200 million Bicentennial Community Fund, which will match donations to Institutions of a Public Character (IPCs) dollar for dollar.
Ms Fam, a former lawyer, said she hopes this will spur Singaporeans to donate more.
"I am really hopeful that the dollar-for-dollar matching for donations to IPCs will incentivise giving, especially to social service agencies which are doing good but are finding resourcing a challenge."
In his speech, Mr Heng also outlined some of the benefits to those in the Merdeka Generation, including a one-off $100 top-up to their PAssion Silver cards and an annual $200 Medisave top-up until 2023.
Singaporeans born between Jan 1, 1950 and Dec 31, 1959 will also get additional subsidies for outpatient care and additional MediShield Life premium subsidies.
Retiree Karin Tan, who worked in sales in the industrial sector, is "very happy" with the package.
"I am currently already retired, and do not draw any income. This will help subsidise my medical costs," said Ms Tan, 64, who has high blood pressure and goes to the polyclinic every four months.
Mr Ameerali Abdeali, 68, head of a safety consultancy company, said that while the material benefits of the Merdeka Generation Package are attractive, it is the intangible aspect that is more important to him.
"I appreciate the recognition and validation that members of my generation are being given for our contributions to the country," he said.
Mr Ameerali, who has seven grand-nieces and grand-nephews, also praised the boosts that school-going children will receive.
There will be one-off top-ups of $150 for the Edusave accounts of Singaporean students aged seven to 16, and $500 for the Post Secondary Education accounts (PSEA) of students aged 17 to 20. The PSEA funds can be used to pay for fees in local polytechnics and universities, and also for skills-related upgrading courses.
Young people The Straits Times spoke to welcomed the announcement that the Government will invest in long-term plans to protect Singapore from the effects of global warming.
Mr Heng announced a carbon tax on this year's emissions and the Zero Waste Masterplan, to be launched in the second half of the year, which will focus on waste management and other issues.
But individuals must also change their way of life and adopt the 3Rs: reduce, reuse and recycle, he said.
Undergraduate Arjun Dhar agreed. "We are a city with the highest greenery density in the world, in which otters live in the middle of our central business district," said the 22-year-old, who is studying law.
"As we reflect on the Bicentennial, Singapore should also look to inculcate in all individuals a sense of care for the planet that nurtures us. This means replacing the idea that we are too small to make a difference with the idea that we each have a responsibility to try."
Miss Pamela Low, 24, a member of the Singapore Youth for Climate Action, said: "The Government eagerly investing in infrastructure to mitigate rising tides and sharing about it at the Budget shows the urgency of addressing the impact of climate change on the national agenda as it would become costlier in the future."
But she added that Singapore cannot simply rely on individuals to take voluntary actions, and that better policies are needed to help them understand the true costs of their actions on the environment.
Mr Ameerali Abdeali, 68, head of a safety consultancy company, said that while the material benefits of the Merdeka Generation Package are attractive, it is the intangible aspect that is more important to him.
"I appreciate the recognition and validation that members of my generation are being given for our contributions to the country," he said.
Mr Ameerali, who has seven grand-nieces and grand-nephews, also praised the boosts that school-going children will receive.
There will be one-off top-ups of $150 for the Edusave accounts of Singaporean students aged seven to 16, and $500 for the Post Secondary Education accounts (PSEA) of students aged 17 to 20. The PSEA funds can be used to pay for fees in local polytechnics and universities, and also for skills-related upgrading courses.
Young people The Straits Times spoke to welcomed the announcement that the Government will invest in long-term plans to protect Singapore from the effects of global warming.
Mr Heng announced a carbon tax on this year's emissions and the Zero Waste Masterplan, to be launched in the second half of the year, which will focus on waste management and other issues.
But individuals must also change their way of life and adopt the 3Rs: reduce, reuse and recycle, he said.
Undergraduate Arjun Dhar agreed. "We are a city with the highest greenery density in the world, in which otters live in the middle of our central business district," said the 22-year-old, who is studying law.
"As we reflect on the Bicentennial, Singapore should also look to inculcate in all individuals a sense of care for the planet that nurtures us. This means replacing the idea that we are too small to make a difference with the idea that we each have a responsibility to try."
Miss Pamela Low, 24, a member of the Singapore Youth for Climate Action, said: "The Government eagerly investing in infrastructure to mitigate rising tides and sharing about it at the Budget shows the urgency of addressing the impact of climate change on the national agenda as it would become costlier in the future."
But she added that Singapore cannot simply rely on individuals to take voluntary actions, and that better policies are needed to help them understand the true costs of their actions on the environment.
Budget addresses cost of living concerns, says Heng Swee Keat
He highlights help for households, stresses that economic transformation is necessary
By Linette Lai, Political Correspondent, The Straits Times, 20 Feb 2019
It is important to the Government that the cost of living is kept affordable, Finance Minister Heng Swee Keat said yesterday as he spoke at length on the various measures to help households cope.
He highlighted how families in the lowest 20 per cent by household income get $4 of benefit for every dollar they pay in taxes, and even those in the middle get $2 of benefit per tax dollar.
On top of that, primary and secondary school education is "almost free", and when children enter institutes of higher learning, subsidies range from 75 per cent to 90 per cent, he added.
And having a strong Singapore dollar, importing goods from all over the world and fostering competition among local firms are further ways in which the cost of living is kept within reach, Mr Heng added.
Meanwhile, the $6.1 billion Merdeka Generation Package will ease healthcare costs for seniors.
During the dialogue on Channel NewsAsia's Ask The Finance Minister programme, Mr Heng also stressed that transforming Singapore's economy will not be easy, but it must be done now to avoid "hitting a brick wall a few years down the road".
"I know it is not easy for us to just restructure, but my concern is that if we do not act now, we will be storing up problems for the future," he said.
He was responding to a question about how the lowered foreign worker quota in the service sector could affect businesses.
Mr Heng said that Singapore has a choice between two roads, and that if it takes the easy road, it will end up hitting a brick wall.
"I know it is difficult, but if we go through this difficult journey, I think we will come out stronger," he said.
The quota was one of several announcements Mr Heng made during his Budget statement on Monday, in which he outlined measures to help Singaporeans with healthcare costs and other expenses, and support for firms and workers to thrive in a changing environment.
During the dialogue, which was televised live, he also fielded questions on whether this year's Budget could have included measures to support more groups of people or addressed topics such as housing.
He reiterated several times that it is not possible for one Budget to "hit 10 targets at one time" or "tackle A to Z". Instead, each Budget seeks to address different priorities, he said.
"We have to see the Budget from year to year and look at how it is building up over time... Every year's Budget builds upon previous years' Budgets," he said.
In his Budget speech, Mr Heng said the overall budget deficit for the 2019 financial year is expected to be $3.5 billion, but the Government has, over its current term, accumulated a sufficient fiscal surplus to fund it.
Asked how he planned to spend the surpluses, he said some come from "unexpected developments".
"We cannot plan our Budget on the basis that there will be some good luck, because there will also be years where it is the other way round," he said.
He added that at the end of this term of government, any surplus will be locked into past reserves, which are invested for Singaporeans. This Net Investment Returns Contribution is the largest component of the Government's revenue, he said.
"It is a way for us to use it in a much more sustainable way to flow back for future users," he said. "It doesn't mean that, we have this surplus, so therefore let's go splurge it tomorrow."
"We have to see the Budget from year to year and look at how it is building up over time... Every year's Budget builds upon previous years' Budgets," he said.
In his Budget speech, Mr Heng said the overall budget deficit for the 2019 financial year is expected to be $3.5 billion, but the Government has, over its current term, accumulated a sufficient fiscal surplus to fund it.
Asked how he planned to spend the surpluses, he said some come from "unexpected developments".
"We cannot plan our Budget on the basis that there will be some good luck, because there will also be years where it is the other way round," he said.
He added that at the end of this term of government, any surplus will be locked into past reserves, which are invested for Singaporeans. This Net Investment Returns Contribution is the largest component of the Government's revenue, he said.
"It is a way for us to use it in a much more sustainable way to flow back for future users," he said. "It doesn't mean that, we have this surplus, so therefore let's go splurge it tomorrow."
Is Budget 2019 an election budget? 'I don't plan on that basis,' says Heng Swee Keat
By Tang See Kit, Channel NewsAsia, 20 Feb 2019
The Budget is a “strategic plan” to ensure Singapore’s long-term success and it is not based on election cycles, said Finance Minister Heng Swee Keat on Tuesday (Feb 19) at a post-Budget television forum.
He was responding to a question from the show’s presenter about the Government’s balance sheet, and if the healthy surplus accumulated since the start of the Government’s term would “drive election strategy” with the next General Election due by early 2021.
Forecasts by some economists have tipped the accumulated surplus over the past three years to be more than S$15 billion, even after taking into account the estimated deficit of S$3.5 billion for this financial year.
Mr Heng said: “The Budget is a strategic plan to allocate resources for Singapore to remain successful, vibrant in the long run and to be fair across generations.
“It is not about ‘we are near the election so let’s spend this, let’s spend that’ … (and) it doesn’t mean that next year, we are going to spend that S$15 billion.”
Asked about what he would say to those who describe the latest Budget as an election budget, the finance minister replied: “If they mean that they are very happy with the Budget then I’ll say that is good, but I don’t plan on that basis.”
Elaborating, he said he usually starts with a “very long list of requests” as he holds pre-Budget meetings with the heads of various ministries, before cutting it down to a few priorities following more discussions with ministers and the Prime Minister.
“This is the way that we plan our budget and I must say, let us maintain that.”
Mr Heng said “unexpected developments” have helped to boost the Government’s coffers.
Take FY2018 for instance, the unexpected suspension of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, as well as better-than-expected collections from stamp duties and statutory boards, contributed to a S$2.1 billion surplus. This is compared to expectations for an overall deficit of S$600 million.
While Singapore has been “fortunate” to have better balance-sheet results for recent financial years, these are “one-off events” and “good luck” cannot form the basis of Budget planning, he added.
All surplus left at the end of the Government’s term will become a part of past reserves, which will be invested to generate higher net investment returns contribution (NIRC) for the future.
This is a more sustainable way of using Budget surpluses, said the finance minister.
“It doesn’t mean that we have this surplus and we splurge it tomorrow. If our founding fathers had taken that approach, we would not even have one cent of this NIRC to talk about and we will not be talking about increasing goods and services tax (GST) from 7 to 9 per cent. It would be much more.”
Speaking to reporters after the forum where he was asked if the Ministry of Finance had been too conservative with its budgeting thus far, he explained that the economy goes through cycles.
Surpluses come along when the economy performs well but when a slowdown occurs, the Government will need to ensure it has sufficient resources to support the economy and its workers.
“So it’s important for us to plan not just from year to year, but plan with our needs in mind and be able to meet unexpected events.”
COST OF LIVING AMONG QUESTIONS RAISED
Mr Heng on Monday delivered the Budget for 2019, which included details of the much-anticipated Merdeka Generation Package, a slew of measures worth S$4.6 billion to help firms and workers keep pace with changes, as well as a S$1.1 billion Bicentennial Bonus to mark Singapore’s bicentennial.
During the hour-long forum, questions were raised, among others, about how the Merdeka Generation Package encourages active living, as well as the ongoing economic restructuring’s impact on firms and workers.
Some in the audience also asked about “glaring omissions”, including policies concerning the local property market and the country's birth rates. Others wanted more help for certain segments of the population, like the sandwiched generation and the middle class, when it comes to coping with rising living costs.
Mr Heng said it is not possible for a single Budget to “tackle A to Z” – a point that he repeatedly made during the show.
On the perennial issue of cost of living, he said it is important for the Government to keep costs affordable, and it does so through various ways.
This includes operating an open and competitive system where imports come from all over the world, as well as maintaining a strong economy.
An audience member asked if the Government has considered absorbing GST for essential items, like food.
Mr Heng replied this was “very carefully studied” before GST was even introduced and he had also revisited the topic recently.
Citing his observations of different countries that have tried to differentiate essential items, he said this usually entails a “big quarrel” about what defines essentials and a "very distortionary" end result.
He went on to explain that Singapore’s “simple system” of having everyone pay the same amount but issue “targeted” help to those from the lower income, is much more effective.
When asked by Channel NewsAsia if the Government needs to do more about cost-of-living concerns, he responded by highlighting two issues that contribute to the perception of things becoming less affordable.
Nevertheless, the Government has continued to ensure low unemployment rates of below 3 per cent despite global uncertainties, alongside “quite credible wage growth” over the years.
“A very important element of tackling the cost of living is that (we) keep our workers employed,” said Mr Heng. “We must continue with this.”
Budget addresses both short- and long-term concerns says Indranee Rajah at REACH Budget 2019 feedback session
By Hariz Baharudin, The Straits Times, 22 Feb 2019
Highlighting plans to transform businesses through embracing technology and lifelong learning, Ms Indranee said these are part of long-term efforts to restructure the economy.
"When you are planning as a government, you have to plan as a whole. And in this particular Budget, we have planned to address both short-term as well as long-term needs," she said at a feedback session on the Budget organised by the government feedback unit REACH.
Around 150 people, including business leaders and young people, attended the event held yesterday at the Asian Civilisations Museum.
In a poll conducted before the feedback session started, about half of them felt that the Budget seemed to be focused on addressing short-term concerns.
"Actually, that is not what this Budget does - the Budget actually does both. It addresses current needs, but there is a long-term view to it," said Ms Indranee, who is also Minister in the Prime Minister's Office.
She also pointed to the 30 per cent of national spending set aside by the Government for defence, security and diplomacy efforts, and programmes such as SkillsFuture that are available to ensure Singaporeans upskill and upgrade themselves.
The $6.1 billion that will be set aside for the Merdeka Generation Package also drew queries. The package, for those born between Jan 1, 1950, and Dec 31, 1959, has benefits such as a Medisave top-up of $200 a year for five years, a one-off $100 top-up to the PAssion Silver Card and additional subsidies for outpatient care for the rest of their lives.
Some asked why the benefits of the package were not means-tested.
Ms Indranee said that the package was designed to recognise a generation's contributions, which is why the handouts for the Merdeka Generation are given to everyone who qualifies equally across the board, regardless of their circumstances.
"For the Merdeka Generation Package, we felt that you are recognising a cohort, you are recognising the cohort's contributions. So all of them, from all different backgrounds, in their different ways, also contributed. So, that was the reason why it was felt that we will give it to them without means testing," she said.
Some asked why the Government is setting aside 30 per cent of total expenditure this year for defence, security and building good relations with neighbouring countries and major powers.
REACH chairman Sam Tan said that a strong defence force had made Singapore well-respected and allowed it to build connections with its foreign partners.
Drawing upon his experience in the Foreign Affairs Ministry, Mr Tan, who is also Minister of State for Foreign Affairs, and Social and Family Development, said: "My own sense is that whenever we go into another country, we are treated well and with respect. Why? It is because we have a defence capability that is more than able to defend our interests.
"So, people know that when we have a credible Singapore Armed Forces, we are able to defend ourselves, and they take us seriously and they take the discussion seriously."
Related
Singapore Budget 2019
Merdeka Generation Package
Merdeka Generation Package unveiled at Singapore Budget 2019
Budget 2019 - Overview of Tax Changes
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Budget 2019 debate in Parliament
Singapore Budget 2019
Merdeka Generation Package
Merdeka Generation Package unveiled at Singapore Budget 2019
Budget 2019 - Overview of Tax Changes
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MOM announcements in 2019 Budget Statement
Budget 2019 Foreign worker quota cuts: Will they finally nudge services?
Budget 2019 debate in Parliament
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