Singapore Budget 2024: Building Our Shared Future Together

A Budget for all as Singapore tackles immediate cost-of-living challenges, invests in longer-term goals

By Goh Yan Han, Political Correspondent, The Straits Times, 17 Feb 2024

Everyone will have a slice of the Budget 2024 pie, which aims to address immediate challenges like cost-of-living pressures while investing in longer-term goals of strong economic growth, better jobs and a culture of lifelong learning.

Key policy moves include enhancements to the Assurance Package like giving out more Community Development Council (CDC) vouchers.

A significant top-up of SkillsFuture credits will benefit mid-career workers, while a corporate income tax rebate aims to help companies manage rising costs.

The Government will also be rolling out strategies to improve retirement adequacy, lower healthcare costs and provide more for lower-wage workers.

Many of these moves were signposted earlier in the Forward Singapore report released in October 2023.

Budget 2024 rolls out the first instalment of the Forward Singapore programmes, Deputy Prime Minister Lawrence Wong said in Parliament on Feb 16 as he delivered his third annual Budget speech.

He laid out a $131.4 billion proposal – about 18.3 per cent of Singapore’s gross domestic product.

These moves are part of an “ambitious agenda” to achieve the shared goals of building a nation that is vibrant and inclusive, fair and thriving, as well as resilient and united, he said.

They come amid a mixed outlook for 2024, he said. Growth in major economies is expected to be resilient, but geopolitical risks continue to loom large.

At the same time, global inflationary pressures are tipped to further recede, said DPM Wong, who is also Finance Minister.

He was “cautiously optimistic” that 2024 will be better than 2023, as he projected a $0.8 billion surplus for the upcoming financial year – “essentially a balanced fiscal position”.

Tackling cost-of-living pressures

DPM Wong acknowledged the pressure of higher living costs faced by many households.

While the economic situation is expected to improve in 2024, there are still uncertainties, which is why he has further enhanced the Assurance Package, said DPM Wong.

The package, meant to offset the impact of the goods and services tax hike, will be boosted by another $1.9 billion.

This includes an additional $600 in CDC vouchers for all Singaporean households, with the first tranche of $300 to be disbursed in end-June, and the remainder in January 2025.

All adult Singaporeans with an assessable income of up to $100,000 and who do not own more than one property will also receive a Cost-of-Living Special Payment of between $200 and $400 in cash.

Other measures to help individuals with costs include a MediSave top-up of up to $300 for about 1.4 million adult Singaporeans aged 21 to 50.

Those aged 51 and above will receive up to $1,500 in their Medisave Accounts under the earlier announced Majulah Package.

To help parents, fee caps – the maximum amount that school operators can charge – will be reduced for government-supported pre-schools. There will also be fee reductions for special education schools.

In addition, there will be a personal income tax rebate of 50 per cent, capped at $200, for the 2024 year of assessment.

Businesses will also receive help to manage rising costs, such as a 50 per cent corporate income tax rebate, capped at $40,000.

Supporting workers and businesses

A key component of the Budget is a suite of measures targeted at mid-career workers.

All Singaporeans aged 40 and above will receive a $4,000 top-up in SkillsFuture Credit as part of a new SkillsFuture Level-Up programme.

This will benefit about 1.95 million Singaporeans currently, though those younger will receive the top-up as well when they turn 40.

While the existing basic tier of $500 SkillsFuture Credit covers a wide range of courses, the new credit will only be allowed for use for selected training programmes with better employability outcomes. More details will be announced later.

Under the new programme, there will be subsidies for all Singaporeans aged 40 and above to pursue another full-time diploma at polytechnics, institutes of technical education and arts institutions from the 2025 academic year onwards. Currently, only those studying for their first diploma benefit from government subsidy.

DPM Wong also unveiled a monthly training allowance for Singaporeans aged 40 and above who enrol in selected full-time courses.

These moves are meant to help Singaporeans develop to their fullest potential, and to have productive and meaningful careers, he said.

A key priority of the Government is to ensure a strong, innovative and vibrant economy – and it will do so by focusing on productivity and innovation, he added.

DPM Wong announced a new Refundable Investment Credit, a tax credit meant to help Singapore stay competitive and attract investments from global companies.

There will also be investments to upgrade the Nationwide Broadband Network to enable mass market access to broadband speeds of up to 10 gigabits per second in the second half of this decade. This would be 10 times faster than the broadband speed in most homes today.

DPM Wong also brought up the temporary financial support scheme for the involuntarily employed, which had been mentioned in the Forward SG report.

He said that the Government is working out the parameters for the scheme, and will provide more details later in the year.

“Ours must always be an economy that provides opportunities for all; an economy that benefits the many rather than the few,” he said.

In this vein, DPM Wong announced enhancements to schemes that uplift lower-wage workers, such as the Workfare Income Supplement scheme and Workfare payouts.

The Government will also provide more support for employers who raise the wages of lower-wage workers by increasing its co-funding levels of the Progressive Wage Credit Scheme – from a maximum of 30 per cent to 50 per cent.

To encourage and support more young ITE graduates in upskilling efforts, a new ITE Progression Award will be rolled out for those aged 30 and below.

This will include a $5,000 top-up to their Post-Secondary Education Accounts when they enrol in a diploma programme, as well as a further $10,000 top-up to their Central Provident Fund (CPF) Ordinary Account when they attain their diplomas.

Help for seniors

Another area that the Budget provides for is support for the retirement needs of senior citizens.

DPM Wong said there will be adjustments to the CPF system, such as an increase in CPF contribution rates for those aged 55 to 65 by 1.5 percentage points in 2025.

Employers will be able to benefit from the CPF Transit Offset for another year, to cover half of the increase in their contributions for 2025. This will help cushion the impact on business costs.

The Enhanced Retirement Sum – the maximum amount one can put in the CPF retirement account to receive CPF payouts – will also be raised from 2025, to become four times the Basic Retirement Sum (BRS). It is currently three times the BRS.

The CPF system will also be tweaked, as the Special Account will be closed for those aged 55 and above, starting in 2025. The savings in the Special Account will be transferred to the Retirement Account, up to the Full Retirement Sum. The rest will be transferred to the Ordinary Account.

In addition, there will be enhancements to retirement support schemes for seniors who need more help. These include the Silver Support Scheme and Matched Retirement Savings Scheme.

DPM Wong also provided more details on the Majulah Package, announced by Prime Minister Lee Hsien Loong at the National Day Rally in 2023. The scheme will benefit about 1.6 million Singaporeans.

The package includes an Earn and Save Bonus for seniors earning up to $6,000 a month to accumulate more retirement savings and a one-time Retirement Savings Bonus of between $1,000 and $1,500 for seniors with retirement savings below the BRS.

Rounding up his speech, DPM Wong said the Forward Singapore policy moves will cost around $5 billion in the 2024 financial year, and will in total reach close to $40 billion by the end of the decade.

Projections by the Finance Ministry in 2023 assessed that government spending would increase to around 20 per cent of GDP by 2030.

DPM Wong said that for now, that remains the Government’s assessment.

Assuming the Government stays within this range of spending increase, it should have sufficient revenues to maintain a balanced budget over the coming years, he added.

But the medium-term fiscal position is tight, as there are many pressures to spend more.

“We will have to manage these expenditures carefully, or we will end up with a significant funding gap,” he said.

This is already happening in many other advanced economies, where public finances are on an unsustainable path and fiscal systems are at risk of breaking, he added.

“We must never allow this to happen in Singapore. Instead, let us uphold the ethos of fiscal discipline and responsibility that has served us well, and ensure that our fiscal position always remains balanced, sound and sustainable.”

He reiterated that Singapore has been able to weather past storms and emerge stronger.

“I believe we can do so again in our road ahead, so long as we stay united, work together and continue to keep faith in each other.”

Parliament will debate the Budget and the spending plans of various ministries from Feb 26 to March 7.

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.

As GST goes up, is it time to rethink support from Government?

As prices stay high and Singaporeans get older, some are calling for more government help. But what kind of help do they need, and where should the money come from?

By Grace Ho, Insight Editor, The Straits Times, 1 Jan 2023

For many, getting older stirs mixed feelings of anticipation – finally, retirement! – and anxiety for the future.

With one in four citizens here aged 65 and older by 2030, more Singaporeans will have to grapple with the challenges of living longer, from maintaining job security and health, to caregiving and finances. As seniors become more well-educated and have richer work experience, they, too, are likely to be more vocal about their needs and wants.

How can their expectations be funded sustainably? Is government aid a universal right of citizenship, or should it be targeted at the poor? These and other burning questions were tackled in a recent study on ageing-related policies by researchers from the National University of Singapore.

As part of the study, two workshops were conducted with 82 citizens of different ages and socio-economic backgrounds. Participants took a survey before the first workshop to establish their baseline sentiments on policies, and were surveyed again after the second workshop to measure the change in their opinions.

More help wanted for caregiving and health

When asked how they would make use of an extra $10,000 per person for age-related government policies and programmes, participants cited the following:

• Health ($2,900)
• Caregiving, to help with physical mobility ($1,700)
• Transfer payments to seniors ($1,700)
• Housing ($1,200)
• Social and emotional support ($1,200)
• Transport ($970)

Health and caregiving were top-of-mind. Those in the sandwiched generation were worried about sacrificing their wages and time, should they become caregivers for their elderly family members and children.

They felt that the Home Caregiving Grant – $200 a month in cash to support family members with at least permanent moderate disability – was not enough to tip the balance in making the decision to take on caregiving responsibilities easier.

They also wanted the state to come up with nursing care and broader caregiving arrangements, including those to manage dementia among the growing number of seniors.

Middle-income participants felt they did not have the heavily subsidised support that lower-income households enjoy. Means-testing, they said, is too blunt an instrument, especially for those who are asset-rich yet cash-poor. They proposed assistance that is more attuned to the health rather than socio-economic status of seniors.

What about caregivers whose work is unpaid and invisible? The study suggests that tax reliefs and having caregivers’ savings multiplied through the Central Provident Fund (CPF), compared with just having family members contribute to their personal bank accounts, can move the needle.

Today, the maximum annual tax relief for cash top-ups to family members’ Special/Retirement Accounts and/or MediSave Accounts is $8,000 – not a huge sum considering that some caregivers have to completely give up work, and hence their retirement security, to look after an unwell senior.

One solution is to extend this tax incentive so that caregivers have up to the Basic Retirement Sum for CPF Life, or achieve a payout equivalent to it, said Institute of Policy Studies deputy director for research and senior research fellow Gillian Koh, who is one of the study’s co-authors.

“The difference would be to either remove the current cap of $8,000 or provide more leeway to reach a sensible limit, so that anyone who is a caregiver has that assurance of a basic payout sum from CPF upon reaching 65 years of age,” she said, adding that a more ambitious target could be the Full Retirement Sum.

Depending on whether the support is more generous or restrained, some criteria can be set, such as whether there has been significant disruption to a person’s earnings. More discussion and design work are needed to identify a suitable upper limit for the top-ups. But as Dr Koh pointed out, this is not an insurmountable problem.

Where will the money come from?

At first, the participants’ preferred sources to fund the increase in public expenditure were:

• Corporate tax ($2,200)
• National reserves ($2,100)
• Income tax ($1,600)
• Stamp duty on purchases of property ($1,600)
• Goods and services tax ($1,300)
• Carbon tax ($1,200)

This isn’t surprising; people the world over love taxing corporates and the rich. But what’s interesting is that after they attended the workshops, 15.2 per cent of the participants said the Government should draw more on GST to meet demands for ageing-related social support.

There was a distinct shift in attitudes towards the use of GST when the policy trade-offs – as well as greater help for lower-income households, such as permanent GST vouchers and cash transfers through the Assurance Package – were explained to them.

There’s an educational dimension here: Participants with only post-secondary education were more likely than those with polytechnic diplomas, university degrees or other professional qualifications to indicate support for generating more resources from GST.

This is because those in the lower socio-economic strata, of which education is a proxy indicator, understood that they would benefit significantly from the help.

Another notable point is that participants ranked the national reserves second highest among the funding sources.

Not only did this not decrease after the workshops, but 8.3 per cent of the participants allocated even more to the reserves to finance expanded age-related policies. A similar proportion of participants also allocated more to property tax.

Does this mean that Singaporeans expect the Government to tap its own resources before relying on individual efforts or families? Not quite: The participants said in the same breath that they planned to save more and get more help from family and friends.

Why is Singapore raising the GST?

Singapore's GST hike to go through after Bill passed in Parliament on 7 Nov 2022

GST will increase from 7 per cent to 8 per cent from Jan 1, 2023 and from 8 per cent to 9 per cent from Jan 1, 2024

Tourists, foreigners living in Singapore paid half of net GST in 2018 and 2019

Assurance Package to help households offset GST hike to get $1.4 billion boost, will now total $8 billion

Workers’ Party’s alternatives to GST hike do not add up, GST hike among options needed to meet funding gap: DPM Lawrence Wong

By Hariz Baharudin and Ng Wei Kai, The Straits Times, 7 Nov 2022

The suggestion that the goods and services tax (GST) increase should be postponed due to current inflationary pressures does not hold water, Deputy Prime Minister Lawrence Wong told Parliament on Monday.

The Government’s support measures delay the effect of the hike by at least five years for the majority of Singaporean households, he said.

That the support is targeted at lower- to middle-income households, rather than broad-based, will also minimise any additional inflationary pressures, he added.

“We have designed the overall package to ensure we neither stoke inflation inadvertently nor choke aggregate demand, and this is an appropriate macroeconomic stance to adopt at this juncture,” he said.

Rounding up the debate on the GST (Amendment) Bill, which saw 15 MPs speak, Mr Wong rebutted alternatives raised by Workers’ Party MPs Louis Chua and Jamus Lim (both Sengkang GRC) saying these entailed spending more from past reserves and leaving less for the future.

The Government has also explored other sources of revenue, and still needs to raise the GST, he said.

Why increase GST now?

The Government had considered the GST hike carefully and decided that it was necessary to do so, given how Singapore’s economic challenges are not just near-term or cyclical in nature, Mr Wong said.

The ongoing war in Ukraine, disruptions to energy and food supplies, rising geopolitical tensions and more fragmented supply chains are realities Singapore has to deal with possibly for a more prolonged period, he added.

“International economic conditions have fundamentally changed,” he said.

While inflationary pressures here are expected to ease in the second half of next year, inflation rates are unlikely to go back to what they were over the past decade, he added.

It is for this reason that the Government has extended comprehensive support to Singaporeans, especially lower and middle income families.

Mr Wong had at the start of the debate announced a $1.4 billion boost to the support package for households to offset the GST hike’s impact, amid higher inflation. This means the Assurance Package, first announced in 2020, will now be worth $8 billion, up from $6.6 billion before.

Responding to a point Mr Chua made on how households’ annual expenditure will increase due to inflation, Mr Wong said that the support they get will increase.

Mr Chua had cited the example of a middle-income couple with two young children, and estimated that with inflation, their annual expenditure would go up by $2,500.

Mr Wong acknowledged the rise in spending, but pointed out that the support they get this year would be around $1,500.

This support will keep to the Government’s commitment to offset more than half of the inflation-driven increase in cost of living this year for middle-income households, he said, adding this does not take into account wage rises for individuals which many will likely enjoy.

Associate Professor Lim had also cited how Japan saw an increase in inflation after it increased its version of the GST three times in the past 25 years.

Mr Wong pointed out that Japan was in a deflationary environment, and had raised the GST and had its inflation double from a “chronically low” 1 per cent to 2 per cent - and temporarily.

“Let’s avoid raising these alarmist examples that may not be so relevant to our context,” he said, adding that Singapore must continue to learn the right lessons from others.

He noted that while there are considerable uncertainties in the economic outlook, there is nothing uncertain about government expenditures, especially in healthcare.

Noting that MPs like Mr Liang Eng Hwa (Bukit Panjang), Mr Sharael Taha (Pasir Ris-Punggol GRC) and Ms Joan Pereira (Tanjong Pagar GRC) had made this point, Mr Wong said even as Singapore deals with healthcare spending, it has to resource many other spending needs.

These include planned investments on early childhood education, efforts to uplift lower wage workers as well as helping to ease concerns of SMEs, self-employed persons and those keen to purchase HDB flats.

“It’s a few billion here, a few billion there, they all add up. None of these needs has become less urgent because of the global economic situation. On the contrary, we must do more, especially in an uncertain and volatile environment,” said Mr Wong.

“That is why having considered this so carefully before the Budget, after the Budget, even in the last few months when the global economic environment had deteriorated, we felt that there was no possibility for us to delay the GST increase any further.”

Why not try alternatives to the GST hike?

Mr Wong also addressed four alternatives to the GST hike that WP MPs had raised.

One, the suggestion that Singapore has enough fiscal surplus to delay the hike of 1 percentage point set for January 2023.

Mr Wong said: “I wish that were so.”

He noted Prof Lim had suggested the Government is shielded from inflation because when inflation goes up, so does its revenues as prices also increase.

“But he didn’t mention this: Government spending must also go up correspondingly,” said Mr Wong, citing public servants’ salaries and support schemes for residents.

He added that while the Government collected more revenue than expected in the last financial year and had a surplus of $1.9 billion, it had already used this surplus as well as the return from the first half of this year to fund two support packages.

In June and October 2022, the Government announced two $1.5 billion support packages targeting lower-and-middle income Singaporeans.

Mr Wong said: “The bottom line is that any surpluses are imaginary - they are not there and will not allow us to delay the GST.”

Two, there have been suggestions to use more of Singapore’s reserves, including increasing the proportion used from returns on investments and changing the definition of land sales revenues.

Mr Wong said WP’s position, which it said was not raiding but slowing down the rate of accumulating reserves, sounds attractive but will leave future generations with less resources.

Such a move would be irresponsible, he added. “Let’s not succumb to the temptation of taking this easy way out, making things worse for our children and grandchildren.”

Mr Wong noted that global uncertainties are also likely to slow the growth of Singapore’s investments anyway, making tapping on these to delay a GST hike even more untenable.

Three, Prof Lim had suggested exempting essential items from GST, a point that had been raised by Ms He Ting Ru (Sengkang GRC) at the Budget Debate in February.

Mr Wong said this does not work in practice.

Such tiered GSTs are cumbersome, he said, citing a recent BBC article about India’s system.

In August, an Indian firm making pizza toppings went to court claiming their mozzarella topping should be classified as cheese - which had a GST of 12 per cent.

The court disagreed, arguing that because the topping had other ingredients such as vegetable oil it should be taxed at 18 per cent in a class known as ‘edible preparations’.

Mr Wong said there is no end to these challenges, and such tiered systems are not effective.

“When you exempt a basket of goods or essential items in the end you benefit the well-to-do, because the well-to-do will spend more on everything, not just luxury items but basic necessities as well,” he said.

This was a conclusion also reached by studies from numerous governments and the Organisation for Economic Co-operation and Development (OECD), he added.

Mr Wong said Singapore’s GST system - with its series of offsets and rebates - is deliberately designed to be fair and effective, contrary to Prof Lim’s view that these were a patchwork of offsets.

Four, suggestions continue to be made that Singapore should explore other streams of revenue such as property, income, corporate and sin taxes.

Mr Wong said while these have been carefully considered, the sums do not add up.

Increasing corporate and income taxes could result in investors leaving Singapore, especially amid tight global competition for talent and investments, he said.

He added that GST revenue alone is in fact not enough to fund policies the Government wants to push through, from healthcare spending to improving conditions for low-wage workers.

“Really, that question is not GST or these other alternatives - we need GST, and these other alternatives,” he said.

Mr Wong added: “The WP is entitled to your own position. By all means, oppose the GST, adopt a different position, fine.”

“But at least be honest and responsible, acknowledge that your alternatives would either end up requiring the middle income to pay more or would use more of the past reserves.”

More support, earlier roll-out of Budget 2022 measures

Singaporean households to get $100 CDC vouchers, other support measures earlier amid rising prices

By Goh Yan Han, Political Correspondent, The Straits Times, 4 Apr 2022

More support is on the way for households given the economic impact of the conflict in Ukraine, and some Budget measures will be rolled out earlier, Finance Minister Lawrence Wong told Parliament on Monday (April 4).

He noted that the war has contributed to a further spike in inflation around the world and other factors, such as supply chain issues, have contributed to rising prices.

As such, the $100 worth of Community Development Council (CDC) vouchers for 2022, which was announced in this year's Budget, will be given out to every Singaporean household by the middle of May, said Mr Wong.

This comes after the first tranche of $100 CDC vouchers for all Singaporean households was disbursed four months ago last December to help Singaporeans with their daily expenses.

Mr Wong said: "I understand the concerns that many households and businesses have about the current situation... Where possible, I will bring forward the implementation of our Budget measures."

More financial support is also on the cards for lower-income households that will be more impacted by the higher prices during this period.

All new ComCare short- to medium-term assistance applicants between April and September 2022 will be given at least six months' worth of support from the social service offices, said Mr Wong.

Households that are already on this assistance scheme can also have their assistance extended for at least another three months if they need more help.

Lower-income households will also get more help with their public transport fares.

Mr Wong also announced another round of public transport vouchers worth $30 for more than 30,000 ComCare recipients.

These vouchers had been made available last December to help households cope with the public transport fare hike.

This group will hence receive $60 worth of the vouchers in total, which will roughly cover the additional fares paid by a family of four this year following the fare hike last December.

These vouchers are also available to all households with a monthly income per member of up to $1,600. Applications are open from now to Oct 31, 2022. Eligible households who had already received the first voucher, and who need a second voucher, can also apply again, said Mr Wong.

Mr Wong also announced that to help businesses, he will bring forward the disbursement of the Small Business Recovery Grant, which provides up to $10,000 for small- to medium-sized enterprises most affected by Covid-19 restrictions over the past year.

Most eligible businesses will be able to receive the grant by June, he said. Originally, eligible businesses for the grant would have been notified from June 2022.

The finance minister was responding to MPs who had asked if the Government would be enhancing the support measures announced in the Budget.

"We will need time to allow these measures to take effect and feed through the economy, before we can monitor their impact, assess the overall situation and then consider what additional steps we might want to take," he said.

Mr Wong also noted that the Budget had included rebates for service and conservancy charges (S&CC) and utility bills for households.

The first tranche of S&CC rebates and U-Save rebates to eligible households will be disbursed this month, and the rest will be disbursed in the coming quarters.

"This will address a key cost of living component which several members asked about," he said.

Other measures in place include the Covid-19 Recovery Grant to help those experiencing job loss or sustained income loss - available till the end of the year - and the Taxi Subsidy Scheme for lower-income persons with disabilities who require point-to point services to commute.

Mr Wong said: “If the situation worsens and more support is needed, the Government stands ready to do so.”

Budget 2022 Debate Round-Up Speech by Finance Minister Lawrence Wong

Singapore must maintain fair and progressive system of taxes and benefits, says Lawrence Wong

By Justin Ong, Political Correspondent, The Straits Times, 2 Mar 2022

Even as it seeks to raise revenues to meet growing spending needs, Singapore must insist on "keeping faith" with both current and future generations through a fiscal structure that is fair, inclusive and progressive, Finance Minister Lawrence Wong said.

This entails a good mix of income, asset and consumption-based taxes - which is why the goods and services tax (GST) cannot be ignored, Mr Wong said in rounding up the debate on Budget 2022 on Wednesday (March 2).

"We have designed our system on the principle of collective responsibility," he told Parliament in underlining why Singapore needs to raise the broad-based consumption levy from 7 per cent to 9 per cent.

"Those who have greater means bear a higher burden, and they draw less on government support… Those with fewer means carry a lighter share, but they still contribute something and, in return, they receive more benefits from the Government," he said.

"In this way, we all do our part to help ourselves and one another, and we strengthen the trust that binds us together as a society," he added in a 1½-hour speech wrapping up three days of debate during which 64 MPs spoke.

The House on Wednesday endorsed this year's $109 billion Budget, including plans to raise the GST rate in two stages - by 1 percentage point on Jan 1, 2023, and by a further 1 percentage point on Jan 1, 2024.

Opposition members objected to these plans. Leader of the Opposition and Workers' Party (WP) chief Pritam Singh recorded his party's dissent, saying "no offset package lasts forever" in reference to a $6.6 billion raft of measures to help cushion the blow of the GST hike.

In their speeches earlier in the week, WP MPs and the Progress Singapore Party's (PSP) Non-Constituency MPs Hazel Poa and Leong Mun Wai had cited disagreement with the GST increase as their primary reason for objecting to the Budget.

On Wednesday, Mr Wong began his response by noting that the Russian invasion of Ukraine would have an impact on the global economy. The Government is monitoring the risk - in growth and inflation - to Singapore's economy, he said.

"If the situation worsens, we will not hesitate to take further actions to protect jobs and to help households and businesses deal with increased costs," Mr Wong said.

He then acknowledged MPs' earlier questions and suggestions on labour policies and the green economy, among other issues, though much of his speech was focused on taxes.

"In many countries, the tendency is for politicians to focus only on the spending side, because it is inconvenient to talk about taxes," said Mr Wong. "As a result, these governments spend beyond their means, they run up unfunded obligations and debt, and they kick the fiscal can down the road. We are not immune to such pressures."

He reiterated that an increase in healthcare and social spending would be necessary and unavoidable, given Singapore's rapidly ageing population. To fund these pressing revenue needs, the GST increase cannot be pushed back any further.

While addressing alternative revenue options raised by MPs, he slammed the WP and PSP for their "simplistic and divisive" proposals to make other groups - such as the wealthy, large companies, and future generations - pay more tax in lieu of raising the GST.

Singapore cannot sustain a system where the bulk of the tax burden is borne by a small group at the end, Mr Wong stressed.

He also said the opposition MPs' criticisms of the GST offsets being temporary and the tax hike disproportionately affecting the poor were "misguided claims", given the schemes to ensure the effective rate for the lower-income remains unchanged.

Mr Wong also promised that the Government would continually review and update its system of taxes and transfers, to mitigate the pressures of social inequalities.

Mr Singh later rose to point out that since the GST hike was first announced in 2018, global events like the pandemic have since pushed inflation to its highest in years. "Is this a reasonable thing to do in these circumstances?" he asked of the tax hike.

Acknowledging that it was a very difficult decision to make in view of concerns over rising prices, Mr Wong said this was why the GST hike was delayed and staggered over two steps.

"If indeed inflation turns out to be more persistent and higher than expected, which may happen, we will deal with that decisively," he said.

Later, in response to questions from WP MP Leon Perera (Aljunied GRC) on rules and the optimal level for the reserves, Mr Wong said he could not understand why the party was willing to touch the reserves, but reject the option of a GST increase.

"I can only therefore ask whether you are taking things too lightly, or whether you are raising this in opposition because of… political reasons, or other things, as opposed to seriously looking at the facts and doing what's right for Singapore," he said.

A move like a GST increase is not the popular thing for him to do, Mr Wong said in his speech. "Certainly not for my first Budget as Finance Minister. But I have a responsibility to do what's right, and what's in the best interest of all Singaporeans. Not what's politically expedient now," he said.

"I have confidence that Singaporeans can instinctively sense if any Budget is not worthy of them and fails to renew their trust in the Government, in each other, and in the future," Mr Wong concluded.

"They can decipher whether the Budget reflects our shared vision of a fair and just society, whether this Government is one they can trust to manage our resources in a way that is in line with our values, and whether this Government is keeping faith with them and their children."