Budget 2019 - Everyone Receives Bishop Nose

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7 things you need to know about Budget 2019

SINGAPORE: The 2019 Budget remains an "expansionary" one, with Finance Minister Heng Swee Keat announcing a Bicentennial Bonus and measures to help Singaporeans with healthcare costs.

He also set out details for the much-anticipated Merdeka Generation Package, which will cost the Government S$8 billion in all.

What do the measures announced on Monday (Feb 18) mean for Singaporeans and Singapore businesses?

Here’s a quick overview:

1. THANKS, MERDEKA GENERATION

As expected, the Finance Minister fleshed out the previously announced Merdeka Generation Package, which he called a “gesture of our nation’s gratitude” for those who played a critical role in Singapore’s development.

The five key benefits announced were:

A S$100 top-up to Merdeka Generation seniors’ PAssion Silver cards
Medisave top-ups of S$200 for five years
Community Health Assist Scheme (CHAS) subsidies and discounts at polyclinics, public specialist outpatient clinics
MediShield Life premium subsidies
A S$1,500 incentive to join CareShield Life

2. AN “EXPANSIONARY” BUDGET THIS YEAR

Like the previous financial year, the Government’s budget position for FY2019 remains expansionary, with a basic deficit of S$7.1 billion expected.

This is excluding government top-ups to funds and Net Investment Returns Contribution from past reserves.

On the whole, a deficit of S$3.5 billion or 0.7 per cent of GDP is predicted, with increased spending expected for defence, education and health.


3. NOT EXACTLY A “HONG BAO”, BUT STILL A BONUS

Last year, the Finance Minister ended his Budget speech on a prosperous note, announcing a one-time “hongbao” for Singaporeans aged 21 and above.

In a similar vein, a S$1.1 billion Bicentennial Bonus was announced to commemorate Singapore’s bicentennial this year.

This includes GST vouchers and a personal income tax rebate of 50 per cent (capped at S$200 per taxpayer), for income earned in 2018.

Budget 2019 GST voucher
Younger Singaporeans will get additional top-ups to their Edusave and Post-Secondary Education Accounts, while eligible older Singaporeans can look forward to a one-off CPF top-up.

Lower wage workers will also get more in Workfare Income Supplements.

4. HEALTHCARE IN FOCUS

Healthcare was a key focus, with more money earmarked for premium subsidies and other forms of support.

With another S$3.1 billion set aside this year, a total of S$5.1 billion will be put into a new Long-Term Care Support Fund, to fund CareShield Life subsidies and ElderFund.

In addition, CHAS subsidies will be enhanced:

CHAS coverage will be extended to all Singaporeans for chronic conditions, regardless of income

Lower to middle-income Singaporeans who are CHAS Orange cardholders will also see subsidies extended to include common illnesses
Subsidies for complex chronic conditions will also be increased

5. MORE SUPPORT FOR WORKERS, BUSINESSES…

Measures worth S$1 billion were also announced to help local companies build “deep” capabilities. Firms can look forward to “customised” assistance in overcoming business challenges and scaling up.

For workers, there will be new Professional Conversion Programmes relating to blockchain, embedded software and pre-fabrication, while there will be extended wage support for older workers.

However, there will be a lower foreign worker ratio in the services sector, with Mr Heng saying that “relying on more and more foreign workers is not the long-term solution”.

foreign worker ratio DRC Budget 2019 Graphic

6. … BUT LESS FUN FOR HOLIDAYMAKERS

There was bad news for holidaymakers, with the announcement of less GST import relief and a reduced alcohol duty-free concession.

Travellers who spend fewer than 48 hours outside Singapore will have to start paying GST on goods bought overseas worth more than S$100, down from the previous S$150 allowance. This change takes place with effect from midnight, Tuesday.

Those who like their booze duty-free should also take note – from Apr 1, travellers will only be able to buy 2 litres of duty-free alcohol, down from the current 3 litres.

7. DOUBLED DUTY ON DIESEL

Mr Heng also announced that the excise duty on diesel fuel has been increased from S$0.10 to S$0.20 per litre with immediate effect, as part of measures to restructure diesel taxes.

At the same time, the annual special tax on diesel taxis will be permanently reduced by S$850, while the special tax on diesel cars will be cut by S$100.

However diesel buses ferrying schoolchildren will get additional cash rebates of up to S$3,200 over three years.

Commercial diesel vehicles will get a 100 per cent road tax rebate for one year, and partial road tax rebate for another two years.

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With so many 'íncentives', driving the country towards deficit will help justify increase in GST. It was mentioned, 10%, not 9%.

Diesel tax. In the first place, why allow diesel cars when they disallowed it previously, only to slap higher tax on owners? It's just like CNG, when so many car owners, the early adopters, got played out.

Cutting foreign worker ratio in Service sector. Parents will want to bring up their children to be waiters, retail sales? Maybe PAP can lead by example, have their children work in service sector.

Overall, a good budget.... let Singaporeans eat bishop nose first. No scare, they will still retain 2/3 majority one.

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SINGAPORE: The Government will give out a S$1.1 billion Bicentennial Bonus to Singaporeans as part of initiatives to commemorate the Singapore Bicentennial, Finance Minister Heng Swee Keat announced on Monday (Feb 18).

This bonus comprises several components, including a GST voucher for lower-income Singaporeans and a personal income tax rebate.

Delivering his Budget speech, Mr Heng said that from time to time, when finances allow, the Government shares the surpluses with Singaporeans, and provides more help to those with specific needs.

“With this bonus, I hope all Singaporeans, young and old, will join us to commemorate this significant moment in Singapore’s history,” he said, as he outlined the various components of the bonus.

First, it will help lower-income Singaporeans with their daily expenses. About 1.4 million people will benefit from a GST Voucher – Cash (Bicentennial Payment), of up to S$300.

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 in 2018, with a minimum payment of S$100 in cash.

Second, all tax resident individuals will also be granted a personal income tax rebate of 50 per cent, subject to a cap of S$200, for income earned in 2018. Mr Heng said this cap was set so that the benefits go mostly to middle-income earners.

Third, parents with school children will receive additional support for their children’s education.

There will be a S$150 top-up to the Edusave accounts of all Singaporean students at primary and secondary school levels. This is on top of the annual Edusave contributions the Government already makes.

Singaporeans aged 17 to 20 will receive up to S$500 in their Post-Secondary Education Accounts, if they do not already benefit from the Edusave top-up. Mr Heng said this will go towards helping parents to save for their children’s tertiary education.

In total, about 570,000 students are expected to benefit, and the top-ups will cost the Government S$140 million.

Finally, Mr Heng said there will be more support for older Singaporeans who are near retirement.

Eligible Singaporeans aged 50 to 64 years in 2019 who have less than S$60,000 of retirement savings in their CPF accounts will receive a top-up to their CPF accounts of up to S$1,000.

This top-up is expected to benefit about 300,000 Singaporeans, the majority of whom will be women, said Mr Heng.

“Many of them left the workforce early, and took up important roles as mothers, caregivers or housewives,” he said. “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.”

Mr Heng added that Singaporeans in the age group of 50 to 64 who also qualify for Workfare will also benefit from the WIS enhancements. Most of those in the 60 to 64 age group will also receive the Merdeka Generation Package, he added, while the rest will receive the five-year MediSave top-ups.

“Together, we hope that these measures will provide greater peace of mind for our older workers now and later in their silver years.”

BICENTENNIAL COMMUNITY FUND TO ENCOURAGE SINGAPOREANS TO GIVE BACK

Apart from the Bicentennial Bonus, Mr Heng also announced another special initiative in support of the Singapore Bicentennial.

A S$200 million Bicentennial Community Fund will be set up to encourage Singaporeans to give back to the community. This fund will provide dollar-for-dollar matching for donations made to Institutions of a Public Character (IPCs) in financial year 2019.

“With this, we hope to encourage more Singaporeans, including younger Singaporeans, to embrace the spirit of giving back,” he said. “At the same time, we are encouraging IPCs to reach out to more donors.”

The fund, he added, will be designed to ensure a good distribution of support for all donations to IPCs which do not currently receive government matching, and to increase the impact of the good work they are doing.