Wednesday 15 February 2023

Singapore Budget 2023: Moving Forward in a New Era

Family-friendly Budget offers help to weather inflation, uncertain future
By Goh Yan Han, Political Correspondent, The Straits Times, 15 Feb 2023
  • More cash payouts to cope with GST increase
  • Higher Baby Bonus and more paternity leave
  • CPF salary ceiling to go up to $8,000 by 2026
  • Higher taxes for high-end property and luxury cars
Budget 2023 proposes to decisively address the pressing concerns of Singaporeans, such as inflation and long waiting time for flats, while strengthening social safety nets to keep the nation in sound shape over the longer term.

The tax system is also being made more progressive, with changes to the buyer’s stamp duty regime for properties and additional registration fee tiers for cars, to fund the Government’s growing expenses. Buyers of more expensive properties and higher-end cars will have to fork out relatively more.

The Budget unveiled on Tuesday also tackled several longstanding issues such as the low fertility rate and the retirement adequacy of seniors as the Government widened its support for citizens in need. The Central Provident Fund (CPF) monthly salary ceiling is being raised, for example, to ensure that Singaporeans have enough to draw upon in their silver years. Families will also be given more help to offset the expenses of raising children.

At the same time, there will be more measures to reduce waiting times for new Housing Board flats and more monetary support for first-timer families seeking to purchase resale flats.

Deputy Prime Minister Lawrence Wong, in his Budget speech in Parliament, loosened the Government’s purse strings in a $123.7 billion proposal – about 18.2 per cent of Singapore’s gross domestic product.

This comes amid a mixed and uneven global economic outlook, said Mr Wong, who is also Finance Minister.

While a global recession is not expected, there are major uncertainties ahead, he said. These include the possibility that the United States and European Union economies could decline more steeply than expected and tip the world into recession. The prolonged Russia-Ukraine war may also escalate and disrupt global trade, or a new Covid-19 variant may emerge.

Headline inflation is also expected to remain high in Singapore, at least for the first half of the year, said Mr Wong.

To tackle this, the Assurance Package, meant to offset the impact of the goods and services tax hike, will be further boosted to $9.6 billion, up from $8 billion following a November 2022 update and $6.6 billion announced in Budget 2022.

The enhanced package will see increases in cash payouts for eligible adult Singaporeans, and a boost of $100 to the 2024 tranche of Community Development Council vouchers to a total of $300.

Mr Wong also announced new one-off support measures under the package, such as a Cost-of-Living Special Payment of between $200 and $400 for adult Singaporeans aged above 21 who have an annual assessable income of less than $100,000 and do not own more than one property, to be given out in June.

He also unveiled a Cost-of-Living Seniors’ Bonus cash payout of between $200 and $300 for about 850,000 eligible senior Singapore citizens also to be given out in June.

Budget 2023 also had a strong focus on stepping up support for families in terms of housing and financial needs, and sharing the caregiving load between parents.

Mr Wong acknowledged that while the HDB already sets aside the bulk of its Build-To-Order flats for first-timer families, who are given priority in flat applications, the pool of first-timers covers a wide range, such as those who already have their own homes but have not received housing subsidies before.

The Government will focus on first-time applicants who are families with children, as well as young married couples aged 40 and below who are buying their first home, through measures such as giving them an additional ballot chance in BTO flat applications, said Mr Wong. He also announced enhancements to the CPF Housing Grant for resale flats for first-timer families.

To support parents with the costs of raising children, the Baby Bonus cash gift will be increased by $3,000, such that eligible first- and second-born children will now receive $11,000 and subsequent children will receive $13,000.

The Government will also increase its contributions to the Child Development Accounts, which parents can use to directly offset pre-school and healthcare expenses, said Mr Wong.

Paternity leave will be doubled from two to four weeks, with the extra two weeks given on a voluntary basis for a start, to give more time for employers to adjust, said Mr Wong.

The paternity leave allowance was last doubled from one to two weeks in 2017.

Another key move in Budget 2023 was the announcement of the increase to the CPF monthly salary ceiling, meant to help middle-income Singaporeans save more for their retirement.

This move is expected to have wide repercussions, ranging from increased employer contributions and thus business costs, to a larger pool of funds for Singaporeans to tap for housing loans as well as a bigger nest egg for retirement.

The current ceiling, set at $6,000, was last updated in 2016. Starting this September and in January 2024, 2025 and 2026, the ceiling will move up to $8,000 eventually, to keep up with rising wages.

Mr Wong also announced a slew of tax changes – increased marginal buyer’s stamp duty rates for higher-value properties to take effect on Wednesday and increased additional registration fee rates for higher-end cars to take effect from the next round of certificate of entitlement (COE) bidding.

He also unveiled a 15 per cent increase in excise duty on all tobacco products with effect from Tuesday to discourage the consumption of such products. The tobacco tax was last hiked by 10 per cent in 2018.

Mr Wong, who leads the nationwide Forward Singapore engagement exercise launched in June 2022, also provided an update on the discussions.

He noted that long wait times for new flats and rising resale home prices are key concerns for many young Singaporeans, and parents have also called for help to better balance work and family commitments, which are areas that the Government is moving sooner on in rolling out measures.

He added that to achieve shared aspirations of a fairer and more inclusive society, the Government is pursuing new strategies in some key areas – uplifting lower-wage worker salaries, better support for reskilling and upskilling, giving everyone opportunities throughout their lives to uplift themselves, and better care for the growing number of seniors.

“These are important but complex issues which require further exploration,” said Mr Wong.

“It is not just a matter of having the Government do more to provide greater assurance and support… Government actions must reinforce the values of personal effort, responsibility for the family and mutual support in the community.”

Parliament will debate the Budget and the spending plans of various ministries from Feb 22 to March 6.

Saturday 11 February 2023

Singapore to lift all remaining COVID-19 measures from 13 February 2023

Masks no longer required on public transport from 13 February as Singapore moves to DORSCON green
By Goh Yan Han, Political Correspondent, The Straits Times, 10 Feb 2023

Singapore will lift its remaining Covid-19 restrictions like requiring masks on public transport from next Monday, when the country adjusts its disease outbreak response to the lowest level.

The lowering of the Disease Outbreak Response System Condition (Dorscon) from yellow to green comes as the global and local pandemic situation is stable and the disease is mild, especially among vaccinated individuals, the Ministry of Health (MOH) said on Thursday, noting that Covid-19 currently poses minimal disruption to healthcare capacity and people.

However, MOH will still require mask-wearing for visitors, staff and patients in healthcare and residential care settings such as hospital wards, clinics and nursing homes, where there is interaction with patients, the multi-ministry task force handling Covid-19 said at a media conference.

Vaccination will continue to be offered free to all Singapore citizens, permanent residents, long-term pass holders and certain short-term pass holders.

Everyone aged five and above should still get minimum protection – three doses of mRNA vaccines or the Novavax vaccine, or four doses of the Sinovac vaccine – while the Government will recommend that certain groups take booster jabs annually, said task force co-chair Ong Ye Kung, who is Health Minister.

However, pandemic subsidies will be further scaled back as Covid-19 is treated as an endemic disease. Treatment will no longer be fully subsidised, and patients will have to pay for any Covid-19 testing.

Mr Ong said Singapore’s high vaccination coverage was a key reason why it could progressively restore normal living while keeping deaths caused by Covid-19 at one of the lowest levels in the world, and arrive at Dorscon green.

About 80 per cent of the population have achieved minimum protection, and around half are up to date with Covid-19 vaccination, said MOH.

Mr Ong noted that Singapore had been worried about three areas of potential risk: the year-end travel season, the Northern Hemisphere winter and China’s shift away from its zero-Covid policy.

“But today, those risks are substantially past. We cannot rule out the future possibility of dangerous variants of concern emerging, but the uncertainties and risks we face now are significantly lower compared with one or two months ago,” he said.

Border measures will also be lifted from next Monday. All non-fully vaccinated travellers entering Singapore will no longer have to show proof of a negative pre-departure test, while non-fully vaccinated short-term visitors will also no longer be required to purchase Covid-19 travel insurance.

Meanwhile, migrant workers will no longer face community restrictions from Monday, as the Government discontinues the Popular Places Pass system meant to manage crowding in four designated popular locations on Sundays and public holidays.

From March 1, workers will also be able to recover from Covid-19 within their dormitories instead of being taken to recovery facilities.

Given the stable pandemic situation, MOH said it will step down its contact tracing systems, which comprise SafeEntry and the TraceTogether contact tracing app rolled out in 2020.

MOH has also deleted all identifiable TraceTogether and SafeEntry data from its servers and databases, it said.

A TraceTogether token return exercise will be held from next Monday to March 12 at all 108 community clubs.

The multi-ministry task force, which was convened in January 2020, will also be stood down from next Monday with the lifting of restrictions. MOH will assume management of the Covid-19 situation.

If the situation worsens significantly, an appropriate multi-agency crisis management structure will be reactivated, the ministry said.

Deputy Prime Minister Lawrence Wong, who co-chairs the task force, said the Government’s pandemic management framework and processes continue to be in place.

“We are standing down, but as many of my colleagues have said in this panel, we are continuing to maintain a high level of alertness and preparedness. So we are operationally ready, to use the words of the SAF (Singapore Armed Forces). Any time the button is pressed, we will stand up again,” he added.

These moves come more than three years after Singapore detected its first case of the coronavirus.

The Republic raised its Dorscon level from green to yellow on Jan 21, 2020, and to orange on Feb 7 that same year. The Dorscon level was lowered from orange to yellow on April 26, 2022, as the local Covid-19 situation improved.

Trade and Industry Minister Gan Kim Yong, also a co-chair of the task force, said Covid-19 will not be Singapore’s last pandemic or crisis. “We must always remain vigilant and draw on the lessons we have learnt during the Covid-19 pandemic, so that we can be better prepared for future crises.”

In a Facebook post, Prime Minister Lee Hsien Loong said battling the pandemic has been a long hard slog, with many unexpected twists and turns.

“This crisis of a generation has profoundly shaken our lives and changed the world. But standing united, we weathered the pandemic safely,” he added.

“We supported and trusted one another throughout this journey, and have emerged stronger and more resilient as a nation. This is a hard-earned achievement.”

Friday 10 February 2023

Singapore Government is committed to keep HDB flats affordable and accessible for Singaporeans

Singaporeans will not have to worry about having an affordable home to call their own: PM Lee Hsien Loong
By Michelle Ng, Housing Correspondent, The Straits Times, 8 Feb 2023

Singaporeans, now or in generations to come, will not have to worry about having an affordable home to call their own, said Prime Minister Lee Hsien Loong.

Giving this assurance in a Facebook post on Tuesday, PM Lee said the Government is working hard to ramp up the supply of flats, cool the resale market and keep Housing Board flats affordable and accessible to a wide range of Singaporeans.

“We are working hard at the problem, and are confident we will solve it,” he said.

His post comes after Parliament debated two motions on the affordability and accessibility of HDB flats for 12 hours over two days. One was filed by National Development Minister Desmond Lee, and the other by Progress Singapore Party Non-Constituency MP Leong Mun Wai.

Noting that public housing is an issue close to the hearts of most Singaporeans, PM Lee said the Covid-19 pandemic greatly disrupted the supply of flats, and waiting times for Build-To-Order (BTO) flats and resale prices have gone up.

As a result, families have had to adjust their life plans. “They are concerned and often anxious about when they can get their flats, and whether they can afford them,” he added.

Responding to calls from MPs to address the BTO supply crunch during the debate, Mr Desmond Lee said HDB has ramped up its public housing programme to meet the current strong demand, with 150 BTO projects to be concurrently under construction by around 2025, up from the current 100.

He added that the Government is studying how to provide more support for first-timers buying HDB resale flats, as well as reduce the high rejection rate for BTO flat applications.

This is to ensure new flats are prioritised for those with genuine and urgent housing needs.

In his post, PM Lee said MPs had presented a range of ideas on how to deal with the public housing issue during the debate.

“Some are promising and well worth exploring further. Others appear attractive, but upon a closer look, turn out to be unworkable, unfair or unsustainable,” he said.

Mr Leong had proposed a housing scheme that would allow Singaporeans to buy a BTO flat at construction cost, plus a notional location premium. They would pay the land cost, with accrued interest, only when they sell their flats in the resale market.

His proposal drew criticism from political office holders and backbenchers from the People’s Action Party, as well as Nominated MPs, with many saying it would erode the country’s reserves.

Leader of the Opposition Pritam Singh, meanwhile, said the proposal should be studied further.

On Wednesday, PM Lee said Singapore’s public housing system works, with more than eight in 10 Singaporeans owning the HDB flats they live in.

More families are also becoming flat owners as more than 20,000 new flats are completed each year, he added.

HDB plans to launch up to 23,000 BTO flats in 2023, and up to 100,000 new flats in total from 2021 to 2025.