$1.1 billion Cost-of-Living Support Package to provide more relief for Singaporean households, especially lower- to middle-income families
Extra $200 CDC vouchers for Singaporean households in 2024
By Jean Iau and Natasha Ann Zachariah, The Straits Times, 28 Sep 2023
Some 2.5 million adult Singaporeans will receive an additional cash payout of up to $200 in December, and every Singaporean household will receive an extra $200 in Community Development Council (CDC) vouchers in 2024 to help with the rising cost of living.
These support measures, among others, are part of a $1.1 billion Cost-of-Living Support Package to provide relief for all Singaporean households, with more support for lower- to middle-income families. They build on the measures announced at Budget 2023.
The measures include an $800 million enhancement to the Assurance Package (AP) and the AP will now be more than $10 billion.
Announcing the support package on Thursday, Deputy Prime Minister and Minister for Finance Lawrence Wong acknowledged that many Singaporeans are anxious about the overall economic outlook, price increases and the impact on their cost of living.
“The Government is committed to supporting Singaporeans through these uncertain times,” said Mr Wong, adding that it will not be dipping into the past reserves for the package.
“As Prime Minister said at the National Day Rally recently, the Ministry of Finance has been studying how we can do more, to provide better support for Singaporeans.”
Mr Wong noted that the measures will cushion the impact of higher utility bills arising from the increases in the price of water, and also the upcoming increase in carbon tax.
AP cash special payment
The additional payment of up to $200 cash for 2.5 million eligible adult Singaporeans will be disbursed in December 2023, together with the existing AP cash component.
In total, eligible adult Singaporeans will receive up to $800 cash in December 2023. This will provide more support to lower- and middle-income adult Singaporeans.
Singaporeans aged 21 and above in 2024 who own no more than one property, and have an assessable income of $34,000 or less for the Year of Assessment 2022, will receive an additional $200, on top of the $600 under the earlier announced AP cash payment.
Those in this group who have an assessable income of more than $34,000 and up to $100,000 will receive an additional $150 on top of the $350 payout from the existing AP.
Those who own more than one property, or have an assessable income of more than $100,000, will not receive an additional payout under the AP cash special payment, but will receive $200 from the existing AP cash component.
CDC vouchers
Every Singaporean household will get an additional $200 in CDC vouchers in 2024, bringing the total amount of CDC vouchers for each Singaporean household to $500 in 2024.
The $200 worth of additional CDC vouchers will be spilt in half, with $100 of these vouchers allocated for spending at participating heartland merchants and hawkers, and $100 for spending at participating supermarkets.
The 2024 CDC vouchers should be claimed digitally at go.gov.sg/cdcv from Jan 3, 2024. The vouchers can be claimed at any time during their validity period. They will expire at the end of 2024.
S&CC rebates
Some 950,000 Singaporean HDB households will receive an additional one-off 0.5-month service and conservancy charges (S&CC) rebate in January 2024, together with the regular S&CC rebates.
This will, on average, fully offset the S&CC increase in the first year of increases for one- to four-room Housing Board flats and about 85 per cent for larger HDB flats, said the Ministry of Finance (MOF).
U-Save rebates
The 950,000 Singaporean HDB households will also receive an additional $20 per quarter in U-Save rebates from January 2024 to December 2025, or a total of $80 a year for two years.
These rebates will be disbursed together with the regular U-Save rebates, and will cushion the impact of the carbon tax and water price increases in 2024 and 2025.
Over these two years, the additional U-Save rebates will, on average, fully offset the increase in utility bills for one- to two-room HDB flats. For three- to four-room HDB flats, they will offset about 80 per cent of the increase in utility bills, and for larger flats, about 65 per cent.
On average, this translates to 3- to 4- room HDB flats paying about $2 more per month, and 5-room and larger HDB flats paying about $4 more per month.
Public transport support measures
There will be additional subsidies of about $300 million in 2024 to cover the deferred fare adjustment quantum of 15.6 per cent that will be carried over to future fare review exercises, as announced by the Public Transport Council on Sept 18.
The additional subsidies will help to moderate the increase in fares and pay for the higher costs of providing public transport services due to the continued increase in energy prices in 2022, core inflation and strong wage growth, said the MOF.
Resident households with a monthly household income per person of not more than $1,600 will each receive public transport vouchers worth $50.
The vouchers, which will be disbursed from end-December 2023, can be used to top up fare cards or buy monthly travel or concession passes.
Mr Wong said on Thursday that while the goods and services tax increase was already planned for, there were certain things that could not have been anticipated, such as some of the recent price increases, and “also the more uncertain economic outlook, possible disruptions to energy and food supplies... and the uncertainties in the global environment”.
He said the Government has been monitoring income growth very closely, and there is a likelihood that real income growth will moderate in 2023, because employers are more cautious about salary increments.
“These are the considerations that motivate us to consider whether or not there ought to be more help for Singaporeans, particularly households and families (in) the lower- and middle-income segments,” he added.
“And we’ve decided, after looking at all the factors, looking at our fiscal position, we will be able to provide within our budget for such an additional package.”
Mr Wong was also asked about the need to raise prices for water now, and the GST, which will increase to 9 per cent next year.
He explained that there are measures such as the AP in place so the majority of Singaporeans will not feel the impact of the GST rise for a few years.
“We don’t want to wait until we are at the very brink (of having) not enough money and then start raising taxes. We want to put in place all the measures that are necessary to ensure sound public finances, not just for one, two years, but for the medium- and longer-term,” he said.
On water, he noted that it is an essential, strategic resource to Singapore.
As a “water-stressed nation”, he said efforts have been made to price water properly to “make sure that consumers understand what the full price of water is.”
Mr Wong said PUB does price reviews from time to time. When the pricing is insufficient to cover the full cost of water, he said that it is right for the national water agency to explain the necessary increases and “not just kick the can down the road”.
He assured Singaporeans that the Government will continue to be there for them and support them every step of the way.
“As long as we continue to be responsible for one another and keep a lookout for each other, we can overcome the challenges ahead, and move forward together.”
$1.1 billion Cost-of-Living Support Package: 5 key questions answered by DPM Wong
By Jean Iau, The Straits Times, 29 Sep 2023
Deputy Prime Minister and Minister for Finance Lawrence Wong on Thursday announced a $1.1 billion Cost-of-Living Support Package for Singaporean households, particularly lower- to middle-income families, to help with the rising cost of living.
“I know that many Singaporeans are anxious about the overall economic outlook, the price increases and the impact on their cost of living. The Government is committed to supporting Singaporeans through these uncertain times,” he said.
After announcing various support measures and payouts – which include an additional cash payout of up to $200 for 2.5 million Singaporeans, and an extra $200 in Community Development Council (CDC) vouchers for every Singaporean household – Mr Wong answered questions from the media, including on the impetus for the package and the financial sustainability of such payouts.
Here are some of the highlights:
1. Why is this support package coming now, beyond what was announced in Budget 2023?
Mr Wong said that in the course of the year, there were certain things that were not planned for, such as recent price increases, possible disruptions to energy and food supplies, and uncertainties in the global environment.
National water agency PUB announced on Wednesday that water will soon cost consumers an additional 50 cents per cubic m, starting with a 20-cent increase in April 2024 and a 30-cent rise in April 2025.
“We’ve decided after looking at all the factors, looking at our fiscal position, we will be able to provide, within our budget, for such an additional package.”
2. How is the Government ensuring that rising business costs are not unfairly passed on to consumers, especially for hawker food?
Mr Wong said the Government is monitoring the impact of the cost changes on sellers in the food and beverage industry, including that of water and ingredients.
“So far, we think the overall impact on their cost is actually a relatively small proportion of their overall cost.
“There are many other cost items like rental and labour that are much bigger sources of cost than these relatively smaller components,” he added.
Nevertheless, Mr Wong noted that whatever cost increases there are, they will eventually filter down into prices, so the Government is monitoring the impact of price increases and how it can cushion these for consumers.
This is why it included the extra $200 CDC vouchers in the package.
“Another aspect of this is to make sure that there is no profiteering because that (is), from a consumer point of view, a source of concern that whether it’s hawkers or other businesses, (they) may use these price increases as an excuse to profiteer; increase prices more than necessary,” said Mr Wong.
He added that the Government has a committee set up against profiteering, and will continue to monitor such behaviour.
3. Why are businesses not covered in this package?
While the Government had provided support for businesses during the Covid-19 pandemic, there were no such measures in the latest package.
Mr Wong said the focus of the Cost-of-Living Support Package was the impact on consumers, particularly the lower- to middle-income families, and providing support to cope with inflation.
He acknowledged that costs may be higher for businesses, but said the Government cannot permanently subsidise businesses.
“The businesses must be self-sustaining. They must be profitable, they must be viable – and what’s important for businesses is to continue to restructure, continue to focus on moving up the value chain, be more efficient, be more productive, and all the schemes we have in the Budget so far have been supporting this direction,” said Mr Wong.
He added that the Government will continue to think of ways to help businesses along this path, not so much to prop up unviable businesses, but to help businesses become more productive and efficient.
4. Will the Government continue to roll out off-Budget packages, and is it sustainable?
Mr Wong responded: “It’s not as though we planned for this. This is not by design. Ideally, we don’t have to.”
He noted that if the economic environment and inflation were stable, the Government would prepare for such expenditures in the Budget, and that should provide for all anticipated needs across the year.
“But in recent years, we have seen so many uncertainties in the economic environment, a lot of volatility, new sources of disruptions, and that’s why in recent years we’ve had more instances of off-Budget packages being rolled out, and this year is like that,” said Mr Wong.
“Will this be the pattern in the future? No one can tell. As I said, our preference, of course, would be to prepare and provide for things within the Budget itself.
“But if there are these unpredictable changes in the external environment, then certainly the Government will always stand ready to respond promptly and swiftly and to make sure we provide all the necessary support for Singaporeans.”
The Government did not need to dip into past reserves for the Cost-of-Living Support Package, and it did not have to file a supplementary supply Bill, as the costs were within the current provisions that were included in 2023’s Budget.
Mr Wong said: “Down the road in Budget 2024, we will probably have to do a supplementary supply Bill to cover the additional funding, and how much exactly, we will provide the details in due course.”
5. Is the Government looking at other sources of revenue?
The Government’s “critical imperative” is to make sure public finances always remain sound and sustainable, said Mr Wong.
While it is prepared to spend more to address the social and healthcare needs of Singapore’s ageing population as well as vulnerable groups, it has to ensure there is sufficient revenue to cover the spending.
He noted that this is why the goods and services tax (GST) is so important, and the Government will continue to look at revenue sources to make sure that Singapore’s fiscal position is sound and sustainable.
“In the coming years, we should be all right. (That) doesn’t mean that we will stop looking at revenue sources; we will continue to do so. And there were a range of different options we will continue to explore,” said Mr Wong.
Asked if the Government would consider tweaking the Net Investment Returns Contribution (NIRC), Mr Wong said this would involve drawing from Singapore’s past reserves, and that the current formula for the NIRC has been specified in the Constitution.
“I think that’s fair, I don’t think we should touch that for quite some time. But if there’s a need for more money, we look at additional revenues from different sources. It could be from income, it could be from wealth, it could be from a whole range of different options.
“But for the time being, looking at where we are, I think we are, with the GST increase, in a good position, or at least a stable position where our public finances are concerned in the near future,” he said.
Related
No comments:
Post a Comment