Singapore Budget Speech 2013 roundup
Yahoo! Newsroom – 2 hours 26 minutes ago
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam bared Monday a government budget for the next fiscal year starting April that he said aimed to ensure Singapore could achieve quality yet inclusive growth.
In a nearly two-hour speech, he detailed plans to make the tax system more progressive and further increase subsidies for lower-income and elderly workers in order to help improve social mobility.
He also disclosed measures to mitigate the country's reliance on foreign labour and to improve productivity.
Also, for this current fiscal year, he projected that government would post a surplus of $2.4 billion equivalent to 0.7 per cent of GDP.
Here are the main highlights:
Personal income tax rebate announced for year assessment 2013, meaning income earned 2012.
Government will extend a rebate of 30 per cent subject to a cap of $1,500 to those below 60. Those aged 60 or above will receive a rebate of 50 per cent.
This year, to help household with cost of living, government will provide an extra GST voucher on top of the permanent GST voucher.
Health subsidies to be boosted.
Medifund will be increased by $1 billion to $4 billion and Eldercare to go up by a quarter million to $3 billion.
Government will expand senior mobility fund to cover a much wider range of devices such as hearing aids.
Cars with an open market value of above $50,000 will have an ARF of 180 per cent.
Property tax changes announced.
"I will make the tax schedule for property tax more progressive," he said.
Band for zero property tax will be widened. Property tax for high-end investment residential properties will be raised.
Changes to CPF. Employer contribution rate will be restored fully.
He bares enhancements to Workfare scheme.
WIS payments will be raised. Workers will receive 40 per cent of WIS in cash as compared to 29 per cent.
Workfare will now cover workers earning up to $1,900 from $1,700 ceiling. This will benefit 480,000 workers or 30 per cent of the workforce.
An additional $72 million will be put into Opportunity Fund for students from less advantaged backgrounds and will be extended to polytechnics. $300 million top-up to Edusave fund.
Government will more than double spending in pre-school sector to S$3 billion over next five years. It will expand capacity so pre-schools are closer to homes and bring more operators to the anchor operator scheme. Government will provide 16,000 additional places by 2017.
He talks about the need to address income inequality. He notes that older singaporeans make up 40 per cent of singapore workers in the lower income ladder.
Tobacco excise duties to be raised.
EDB will set aside $500 million for next five years to develop new frontiers in manufacturing.
Government will introduce a land productivity grant, which will be provided to companies that intensify land use or relocate some operations to immediate region.
It will also link up SMEs with research institutions to look into solutions that will give the SMEs a competitive advantage.
Productivity incentives will be provided to further boost training. Government will also launch an SME talent programme.
On road tax, commercial vehicles will get a 30 per cent rebate.
He bares a three-year co-funding package under the Wage Credit Scheme.
The government will co-fund 40 per cent of wage increases to Singaporeans with gross monthly wage up to S$4,000.
WCS payouts will be paid out to employers automatically and annually over three years. No application needed. The scheme will cost government $3.6bn over 3 years.
MOM will continue to tighten eligibility for Q1 pass holders.
Minimum S Pass qualifying monthly salary will be increased from $2k to $2.2k from 1 July 2013.
Dependency ratio ceilings will be cut.
DRC in services will be cut from 45 per cent to 40 per cent.
In construction, levy rates for less skilled Work Permit Holders in Construction Sector will increase by $150 between Jul 2013 and Jul 2015
He bares a new quality growth programme that will include:
Tightening of foreign worker policies through a targeted approach. All foreign worker levies will be increased 2014 and 2015.
Will introduce a special 3-year package to support companies.
Will help companies strengthen productivity through incentives.
Will develop capabilities to chart new frontiers in manufacturing and help companies seize opportunities in new growth industries in Asia.
The government can and will actively support all SMEs that are willing to upgrade. The restructuring of our economy must result in a dynamic and re-engergised SME sector, he said.
He says dependency ratio ceiling cuts will be made in sectors which are behind global productivity leaders. Levies will also be increased on industries most dependent on foreign workers.
"We will not increase levies for skilled workers. Most companies will not need to pay higher levies if they rely on skilled workers," he said.
Currently, foreign workforce makes up 33.6 per cent of Singapore's total work force.
Net inflow of 67,000 foreign workers in 2012, but most of the growth was in construction and the services sectors. In manufacturing there was in fact a slight decline, he said.
But in construction and retail, productivity is one-fifth below HK's.
He also cites greater strides in productivity. Three decades ago, he said Singapore's productivity level was 30 per cent of that of global leaders but now it is 70 per cent. It is now even greater than HK's.
He also bares greater investments for sports and culture.
Government will invest 30 per cent more in sports programmes over the next five years. The government will also create a fund to match investments for cultural programmes.
He announces enhancements to workfare.
Low wage worker will get a top up of his pay of 30%. This is in addition to what his employer will receive through new wage scheme that will encourage his employer to up the worker's pay.
Flexible working practices must be more important. We should also make it possible to give employees to be working from home or smart working centres near their homes. The government will help businesses in these efforts.
"If we do not do better in raising productivity... businesses and workers will be worse off.
We must help SMEs revitalise themselves," he says.
He notes that society is facing widening income disparity. "We must take further steps to temper inequality," he says. More must also be done to help seniors enter their retirement, he adds.
Our strategy for achieving higher quality of growth and an inclusive society are bound together, he says.
While fixing these problems, Singapore has to shift gears for an economy and society in transition.
He notes that there are pressing challenges on housing and transport.
The budget will introduce further measures to support our workers, especially lower-income workers.
Our budget for 2012 is expected to have a surplus. We expected S$1.3 billion but we now expect the higher surplus of S$3.9 billion due to higher revenues from stamp duties.
He maintains that Singapore's economic growth will likely range between 1 per cent to 3 per cent this year.
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