2020 Budget Speech by MOF Heng in Parliament on 18th Feb 2020 [see copy below]:
2020 Budget has S$109 billion spending in total. It is called Unity Budget 2020 due to the COVID-19 pandemic.
The 2020 Budget has a S$10.9 billion deficit or 2.1% of the estimated GDP of S$518 billion.
No drawdown on past reserves in required.
Is S$10.9b deficit enough as Singapore is facing an economic downturn due to the COVID-19 pandemic?
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GDP of S$518b.
If NR is capped at 2.5 times = S$1.3 trillion. Can red dot grow NR by S$300b from the present S$1 trillion within 10 years?
How long will it take? By 2050?
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Singapore Budget 2020: Summary And Key Highlights
|Posted by | Finance News, News
The Singapore Budget is the country’s fiscal plan for the current financial year that is planned with Singapore’s current and future needs in mind. This article will provide you with live updates on the key announcements made during SG Budget 2020.
Similar to the budget we set aside for our own expenditures, the Singapore Budget is planned so that Singaporeans can aim to spend wisely. You can get up to speed on what was announced during Budget 2019 with our quick recap.
On Monday, 17 February 2020, The Ministry of Trade and Industry (MTI) downgraded its economic growth forecast to between -0.5% and 1.5%, indicating a possible recession. Back in November 2019, the forecast was between 0.5% and 2.5% for 2020. The change in the economy forecast came through due to a weakened outlook after the outbreak of Novel Coronavirus (COVID-19).
This year’s budget is largely centred around the government’s plans to help Singapore families and lift our economy impacted by the ongoing COVID-19 outbreak.
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Singapore Budget 2020 summary: 7 key highlights and announcements you need to know
Summary and highlights from Singapore Budget 2020:
1. $800 million support for COVID-19
A total of $800 million has been aside to help the economy recover from COVID-19, even as the severity and duration of COVID-19 remains unclear. The bulk of this will go to the Ministry of Health. This is on top of what’s already committed to public health every year.
Singapore’s economy grew by 0.7% in 2019 — recording the weakest growth since the 2008 financial crisis. Tourism and aviation are most directly affected by COVID including visitor arrivals and hotel occupancy. Affected supply chain created ripple effects on other sectors. The Ministry of Trade and Industry has downgraded GDP from 0.5-2.5% to -0.5-1.5%. Deputy Prime Minister and Minister for Finance Heng Swee Keat stated that Singapore must be prepared that the economic impact may be worse than predicted.
Here’s a summary of the COVID-19 $800million package and additional support provided for 5 key sectors.
2. Stabilisation and Support package of $4 billion
The aim of this package is to help our workers stay employed in this time of slow growth.
A new cash grant will offset 8% of local workers’ wages for 3 months to help them stay employed amid the COVID-19 crisis. This will cost the government $1.3 billion and benefit all enterprises and their employees, and will be given by the end of July 2020.
To help enterprises with cash flow, there will be a corporate income tax rebate for the year of assessment (YA 2020) at 25% of tax payable, capped at $15,000 per company. This is to benefit all tax paying companies, costing the government $4 million. The wage credit scheme will also be enhanced to support wage increases for Singaporean workers.
3. GST to remain at 7% for 2021
The 2% increase in GST will not be implemented in 2021 keeping in mind the current state of the economy. However, the GST increase will still be needed by 2025, and the government will assess the appropriate time to announce it.
When the GST is raised, Singaporeans will be provided a $6 billion Assurance Package. This $6 billion will be set aside to cushion the impact of the GST increase. Households wIll receive offsets equivalent of 5 years worth of additional GST expenses incurred. Low-income households will receive offsets equivalent of 10 years worth of additional GST expenses incurred.
Singaporeans living in 1- to 3-room HDB flats will receive offsets equivalent to about 10 years worth of additional GST expenses incurred.
4. $8.3 billion to enable transformation and growth efforts
A total of $8.3 billion will be set aside over the next 3 years to help Singapore enable in its transformation and growth efforts. There are three main areas for this:
- Enabling stronger partnerships
- Deepening enterprise capabilities
- Developing our people
Our startup ecosystem is ranked in the top 15 for the global startup ecosystem report. As part of deepening enterprise capabilities, the government will set aside an additional $300 million under the StartupSG equity. The government expects to draw in more than $800 million of private funding in the next 10 years.
There are two packages as part of this transformation and growth efforts to help businesses:
Enterprise Grow Package
- Grow business platform
- Greater adoption of digital technology. Extend the SME Go Digital Program
- Help more enterprises enter new markets and enhance market readiness grant by expanding the support coverage
Enterprise Transform Package
- Enterprise Singapore to launch the Enterprise Leadership For Transformation programme that aims to support business leaders of small and medium-sized enterprises to help them achieve the next bound of growth
- Enterprise Development Grant to expand reach with the government expecting to support around 3,000 projects
5. Supporting lifelong learning with SkillsFuture Enhancements
Budget 2020 will help support Singaporeans acquire new skills in the midst of structural changes in the global economy. This will be done through the Next Bound SkillsFuture. The 3 key elements of this are:
- Enabling the individual
- Enhancing the role of enterprises in developing their staff
- Special focus on mid-career workers
(Individual) SkillsFuture credit top up of $500
All Singaporeans aged 25 years old and above will receive a SkillsFuture Credit top up of $500. This top up will be available from October 2020 and will expire by the end of 2025. This is to encourage Singaporeans to take action earlier to learn new skills and make the best use of this period of economic slowdown.
(Enterprises) SkillsFuture Enterprise credit at $10,000 per enterprise
To encourage employers to embark on the upskilling of workforce. This will help companies defray up to 90% of transformation costs. Most of the companies that stand to benefit from this will be SMEs. The Productivity Solutions Grant will also be expanded.
(Mid-Career Workers) SkillsFuture Mid-Career Support Package
This focuses on mid-career workers in their 40s and 50s to help them stay employable and move on to new jobs and new roles. The aim is to double annual job placements of people in their 40s and 50s.
The government plans to achieve this by:
- Increasing the capacity of reskilling programmes
- Providing hiring incentives to enterprises that hire those aged 40 and above through a reskilling programme. Government will provide 20% salary support for employers for 6 months, capped at $6,000 in total.
- Giving peer-level support and career guidance through a group of volunteer Career Advisors
6. CPF and increased retirement support for seniors
A. Senior Workers Support Package
With the impending raises in retirement and re-employment ages, the Senior Workers Support Package will be rolled out. This is to help seniors remain active and contribute to society and economy by supporting lifelong employability. The package includes:
- Senior Employment Credit: To provide employers with wage offsets when they hire Singaporean workers aged 55 and above.
- CPF Transition Offset: This will help employers to offset half the increase in employer CPF contribution rates in 2021
- Senior Worker Early Adopter Grant: To support companies that increase their own retirement age and re-employment age above the statutory minimum.
- Part Time Re-employment Grant: To support companies that voluntarily commit to providing part-time re-employment to all eligible older workers who request for it.
B. Enhancing Silver Support and Lease Buyback Scheme
The Silver Support Scheme and the Lease Buyback Scheme will both be enhanced.
For the Enhanced Silver Support Scheme, quarterly cash payouts will be raised by 20%. Eligibility criteria will be expanded to cover more seniors. A new payout tier will also be introduced to provide a smaller payout to seniors whose monthly income falls between $1,300 and $1,800. Currently, these senior citizens do not receive the benefits.
C. Matched Retirement Savings Scheme
To help those with less CPF savings to save more, the government will introduce the Matched Retirement Savings Scheme.
Lower income Singaporeans aged 55 to 70, who have not been able to set aside the Basic Retirement Sum (BRS) will be eligible. Under this scheme, the government will match the cash top-ups to the CPF Retirement Account, up to a maximum of $600 per person annually from 2021 to 2025. The government has stated that 435,000 Singaporeans will be eligible for this scheme.
7. $1.6 billion Care & Support Package for households
This Care And Support Package will help to alleviate concerns of rising cost of living. All Singaporeans aged 21 and above will receive a cash payout depending on their income in 2020. Singaporeans under a lower income group will receive additional help with living expenses.
U-Save Special Payments: The GST-voucher U-Save rebates are extended for another year and will be doubled through a one-off special payment to all HDB households. These rebates will range between 1.5 to 3.5 months.
Lower-income Singaporeans:
- Workfare Special Payment: Singaporeans on workfare will receive an additional 20% of their income from 2019 with a minimum cash payment of $100
- Grocery vouchers for lower income households: Needy households will receive grocery vouchers of $100 each year in 2020 and 2021
Additional vouchers for families with children and elderly:
- Families will receive $100 cash payout for every adult with at least one Singaporean child aged 20 and below this year
- Additional GST voucher U-Save rebate for households with 5 or more members to help them with the utility bills. In total, larger households can receive up to $1,000 in U-Save rebates depending on their flat type
PAssion Card top up of $100:
There will be a $100 top up to PAssion Card for all Singpaoreans aged 50 and above in 2020, including the Pioneer and Merdeka Generations. Those without a PAssion Card can receive one for free to receive the top-ups.
8. Addressing climate change and sustainability
Cleaner energy vehicles
To encourage environmentally clean vehicles, four key measures will be carried out.
- Commercial Vehicle Emissions Scheme: This will be introduced for light goods vehicles
- EV Early Adoption Incentive: Buyers of electric vehicles can get rebates of up to 45% on the Additional Registration Fee, capped at $20,000 per vehicle
- Road tax methodology for cars to be revised
- Expand EV charging infrastructure: To get 29,000 chargers island-wide
The government will also take the lead and use cleaner vehicles themselves.
Adoption of energy-efficient appliances
Encourage households to purchase energy-efficient appliances by introducing incentives to lower the cost of these appliances.
New HDB Green Towns Programme
There will be a new HDB Green Towns Programme introduced to make sustainable living a key feature for HDB estates. This programme has three key areas of focus:
- Reduce energy consumption
- Recycling rainwater
- Cooling HDB towns
Coastal and flood protection fund: The government will inject an initial $5 billion into this fund.
A generous budget
Singapore Budget 2020 will see an overall budget deficit of $10.9 billion (2.1% of GDP) and no draw on past reserves.
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Supplementary Budget Statement
A. IMPACT OF COVID-19
B. THE RESILIENCE BUDGET
C. FISCAL IMPACT
D. CONCLUSION
ANNEXES
Annex B-1: Enhanced Jobs Support Scheme (
140kb)
Annex B-2: COVID-19 Support Grant (65kb)
Annex B-3: Enhanced Care And Support Package (284kb)
Annex B-4: Deferment Of Income Tax Payments For Companies And Self-Employed Persons (284kb)
Annex B-5: Enhanced Property Tax Rebate For Non-Residential Properties (271kb)
Annex B-6: Rental Waivers For Tenants In Government-owned/Managed Non-Residential Facilities (249kb)
Annex B-7: Enhanced Financing Support (375kb)
Annex B-8: Providing Sector-Specific Support (122kb)
Annex B-9: Building Capabilities And Resilience (394kb)
Annex C-1: Use Of Past Reserves In Supplementary Budget (144kb)
Annex C-2: Revised Fiscal Position In FY2020 (154kb)
IMPACT OF COVID-19
A1. Mr Speaker Sir, Members of this House have heard the President’s message, delivered on her behalf by the Speaker. I thank the President for her in-principle support for the Government’s proposal to draw on the Past Reserves. I also thank the Council of Presidential Advisers for their deliberations.
A2. On 18 February, just five weeks ago, I started my Budget 2020 speech setting out what we must do to combat the threats posed by the COVID-19 outbreak. At that time, there were 800 confirmed cases outside of China. I said then that the Government was monitoring the situation closely, and that we can and are prepared to do more if the situation warrants it.
A3. The outbreak has escalated quickly. Three weeks after my Budget speech, on 11 March, the World Health Organization (WHO) declared COVID-19 a pandemic, recognising the severity and risk of further global spread.
A4. Today, the WHO estimates that the number of people infected has exceeded 410,000, across more than 190 countries.
A5. The COVID-19 outbreak is a battle on many fronts – medical, economic, and social.
A6. First, on the medical front, countries are taking extraordinary measures to contain the spread of the virus, so that their healthcare systems are not overwhelmed. Many countries have implemented lockdowns, while the US has declared a national emergency.
A7. In Singapore, we are doing everything we can to keep you and your families safe.
A8. We acted early and decisively. As the severity of the virus outbreak grew worldwide, we stepped up our measures.
a. This has, so far, helped to keep the number of cases at manageable levels during the first wave.
b. Ministers Gan Kim Yong and Lawrence Wong gave comprehensive updates on the further measures that we have put in place, and gave us vivid and moving accounts in their Ministerial Statements yesterday. We thank Minister Gan and Minister Wong and members of the taskforce for your leadership.
c. On behalf of all of us in the Government, and in this House, I thank our dedicated and professional healthcare workers, and all our frontline officers, for working courageously and tirelessly. Let me also commend fellow Singaporeans for your care and support for one another, and for being so civic-minded.
A9. However, as much as we try, as the Prime Minister and Senior Minister Teo have warned earlier, the COVID-19 pandemic is likely to take at least a year to be resolved, and the economic repercussions would last even longer. The world is seeing successive waves of infection, and importation of infections. We must be prepared to take further tougher measures.
A10. Yet measures on the medical front to contain the pandemic, both in Singapore and around the world, have made the second front of the battle – the economic front, even more difficult.
A11. These public health measures have caused severe economic disruptions and uncertainties.
A12. As more countries implement their measures, the economic disruptions will be wider, deeper, and more prolonged.
A13. The global economy is now facing both a supply and demand shock.
a. On the supply side, supply chains have been disrupted as locked-down workers are unable to work. With highly integrated global supply chains, a disruption in any one part of the chain, or in any one country, will have knock-on effects worldwide.
b. On the demand side, aggregate demand has fallen as people stay home and curtail spending. Consumer and business confidence are plunging in the face of growing uncertainties.
A14. Global growth forecasts for 2020 have fallen sharply compared to just a month ago.
a. The IMF has downgraded its 2020 global growth forecast three times since January 2019, and flagged that a further downgrade is imminent in April1. It added that it expects a recession at least as bad as during the 2008 Global Financial Crisis.
A15. Global financial markets are being roiled by the mounting uncertainties and cutback in economic activity.
a. Stock markets have come down from their peak some weeks ago.
i. The S&P 500 index took only 22 trading days to fall by 30% from its peak, making it the fastest drop of this magnitude in history.
b. The key volatility indices in Europe and the US, which some call the “fear index”, briefly reached levels last seen during the Global Financial Crisis.
c. Credit has tightened across the world, and the US yield curve has fallen below 1% for the first time in history.
A16. The disruptions around the world will significantly curtail global demand, disrupt supply chains, and possibly lead to financial shocks. As an open economy that is highly integrated with the global economy, we will be deeply impacted by these global shocks.
a. Based on advance GDP estimates released this morning, in the first quarter, the Singapore economy contracted by 10.6% quarter-on-quarter, or 2.2% year-on-year, reversing the 0.6% growth in the previous quarter.
b. This morning, the Ministry of Trade and Industry further downgraded Singapore’s GDP growth forecast for 2020, from a range of -0.5% to 1.5% announced last month, to between -4.0% and -1.0%.
A17. The outbreak has impacted broad swathes of our economy, with some more affected than others.
a. The most badly affected sectors are our aviation and tourism sectors, as international visitor arrivals to Singapore have nearly ground to a halt.
b. Consumer-facing sectors such as food services, retail trade, and land transport have been significantly affected.
c. The outward-oriented sectors such as manufacturing and wholesale trade have also been affected, as external demand falls and supply chains get disrupted.
A18. I have spoken on the medical and economic fronts of the battle. The third front is social and psychological.
A19. COVID-19 is a test of our social cohesion and our psychological resilience.
a. While people are understandably fearful, we must not surrender to this fear or panic.
b. The Government will take all the social and economic measures we need to keep our people safe, keep our economy growing, and prepare ourselves for the recovery.
c. Now, more than ever, we need Singaporeans to be strong, and ride through these challenges together.
A20. COVID-19 is a defining challenge for us.
a. It is a public health crisis, an economic shock, and a social test.
b. It will challenge our resilience as individuals and as a society.
c. In such extraordinary times, it is collective acts of kindness and courage that make a people extraordinary.
d. How Singapore manages this, and whether we emerge stronger from this, will define us as a people and nation.
A21. My last Budget was called the Unity Budget. I have decided to call this Supplementary Budget the Resilience Budget.
a. It reflects our determination that Singapore and Singaporeans remain resilient in the face of these challenges.
b. Come what may, no matter how daunting the challenge at hand, we will bounce back, stronger and more united than ever, as we weather this storm together.
THE RESILIENCE BUDGET
B1. Mr Speaker Sir, we are facing an unprecedented crisis of a highly complex nature. In economic terms alone, this will likely be the worst economic contraction since independence.
B2. This extraordinary situation calls for extraordinary measures.
B3. Last month, I committed $6.4 billion in the Unity Budget towards the Stabilisation and Support Package, the Care and Support Package, and to support our frontline agencies.
B4. Today, I will introduce measures worth over $48 billion in this Resilience Budget, to deal decisively with the situation at hand. This is over seven times of the first tranche.
B5. Altogether, we are dedicating close to $55 billion to support our people in this battle, amounting to 11% of our GDP. This is a landmark package, and a necessary response to a unique situation.
B6. The Government has sought and obtained the President’s in-principle support to draw up to $17 billion from our Past Reserves to fund part of the Resilience Budget.
B7. The Resilience Budget focuses on three key areas:
a. First, save jobs, support workers, and protect livelihoods.
b. Second, help enterprises overcome immediate challenges.
c. Third, strengthen economic and social resilience so that we can emerge intact and stronger.
B8. Before I get into the details, I thank NTUC, the Singapore Business Federation, as well as the many citizens and groups who have given us valuable feedback. Your views have shaped our responses to the challenges posed by COVID-19.
Saving Jobs, Supporting Workers, Protecting Livelihoods
B9. Our immediate priority is to save jobs, support our workers, and protect livelihoods. Over one-third of the Resilience Budget is dedicated to this.
B10. Even then, we cannot prevent an economic recession, as the external health and economic situation will evolve beyond our control. But it will help us mitigate the extent of the downturn, and more importantly, help save jobs, and protect livelihoods.
Helping employees stay employed
B11. For workers who are currently employed, our top priority is to help them stay employed.
B12. In the Unity Budget, I introduced the Jobs Support Scheme and enhanced the Wage Credit Scheme. Both are focused on preserving and enhancing jobs.
a. The situation now calls for bolder and more aggressive moves to save jobs and keep workers in employment.
b. I will significantly enhance and extend the Jobs Support Scheme, to provide more impactful and sustained wage support.
i. For every local worker in employment, I will raise the Government’s co-funding of wages from 8% to 25%. Firms in the food services sector will receive higher support, at 50% of wages, and firms in the aviation and tourism sectors, which are the most badly affected sectors, will be supported at 75% of wages.
ii. I will raise the monthly qualifying wage ceiling from $3,600 to $4,600, which is the median wage in Singapore.
iii. I will also extend the Jobs Support Scheme for another two quarters, till the end of 2020, so employers will receive a total of three tranches of payouts, in May, July, and October this year.
iv. With these enhancements, a total of $15.1 billion will be allocated to support more than 1.9 million local employees under the Jobs Support Scheme.
v. This is more than twice the level of support provided during the Global Financial Crisis. With this support from the Government, I urge employers to do your part to hold on to your workers. [Details in Annex B-1.]
Helping the self-employed
B13. The enhancements to the Jobs Support Scheme and Wage Credit Scheme will support workers employed in our enterprises.
B14. The second group of individuals whom we seek to support is self-employed persons.
a. Over the last few weeks, I received feedback from the Labour Movement and many self-employed persons calling for stronger support for the self-employed, who have less income security, and whose livelihoods may be worse affected during this period of economic uncertainty.
b. This group has been harder to reach, as they work in diverse industries, many occupations, with varying working arrangements. They include taxi and private hire car drivers, real estate agents, media and art freelancers, and sports coaches.
B15. In the Unity Budget, we were able to support some of them.
a. For taxi and private hire car drivers, we partnered with NTUC, the operators, and the Land Transport Authority to deliver help. They comprise the largest group of self-employed persons.
b. We also introduced the Self-Employed Person Training Support Scheme, to provide a training allowance of $7.50 per hour to self-employed persons attending courses under the SkillsFuture Series, or select training programmes.
B16. In this Resilience Budget, we plan to provide direct cash assistance to more self-employed persons. Some of them have less means and family support, and need help to tide over this difficult period.
a. I have discussed with the Minister for Manpower and NTUC Secretary-General on developing a Self-Employed Person Income Relief Scheme (SIRS) for this period.
i. Eligible self-employed persons will receive $1,000 a month for nine months.
ii. Overall, we expect to reach out to most of the self-employed persons who depend on self-employment for their livelihood and have less means and family support.
iii. I will set aside $1.2 billion for this.
iv. The Ministry of Manpower will provide more details soon.
b. I will also provide sustained support for self-employed persons to make full use of any downtime during this period to train and upskill. I will set aside another $48 million to extend the Self-Employed Person Training Support Scheme to December 2020, and enhance the hourly training allowance from $7.50 to $10, with effect from 1 May 2020.
i. The enhanced training allowance is on top of the already generous training subsidies, which cover up to 90% of fees.
ii. In addition, trainees will be able to tap on their SkillsFuture Credit to further offset the course fees.
c. Through these schemes, and with our many partners, we hope to provide a safety net for the self-employed during this outbreak.
d. Looking ahead, we will see how we can better support self-employed persons in strengthening their financial security. We will study this carefully.
Helping lower-income workers
B17. For lower-income workers, including self-employed persons, we have been supplementing their incomes through the Workfare Income Supplement Scheme (WIS).
a. In the Unity Budget, I announced that Singaporeans on Workfare in 2019 would receive a one-off Workfare Special Payment amounting to 20% of their 2019 payout, with a minimum payout of $100.
b. In this Resilience Budget, I will enhance the Workfare Special Payment, and increase the payout received by this group of Workfare recipients to $3,000 each, in cash.
B18. The Jobs Support Scheme, Self-Employed Person Income Relief Scheme, and enhanced Workfare Special Payment will help to sustain the employment and salaries of our workers, with more financial support for workers who earn less.
Creating opportunities for jobseekers
B19. Apart from employees and the self-employed, I will provide more help for jobseekers to find employment.
B20. In particular, first-time jobseekers may be concerned about the current job market. These include our students who have just graduated or are graduating from the ITE, polytechnics, and universities this year.
B21. I will introduce the SGUnited Traineeships programme to provide our young people with opportunities to gain valuable work experience, while giving an added boost for employers to emerge stronger from this crisis.
a. Under this programme, Workforce Singapore (WSG) will co-share manpower costs with enterprises that offer traineeships targeted at local first-time jobseekers this year.
i. We are looking to support up to 8,000 traineeships this year, across both large and small enterprises.
ii. This will include science and technology traineeships in our R&D labs, deep-tech startups, accelerators, and incubators.
b. The Ministry of Manpower will announce more details soon.
B22. I will also launch the SGUnited Jobs initiative to create about 10,000 jobs over the next one year.
a. The public sector will take the lead. Our agencies have been planning our manpower needs early, and there is a range of jobs which we need to fill in emerging areas. We will accelerate hiring plans to fill these roles, while giving our people meaningful employment opportunities.
i. We will recruit for long-term roles in the public service and sectoral partner institutions, in areas such as social services, early childhood education, and ICT, so that we can enhance our provision of essential services.
ii. We will also offer short-term, temporary jobs to handle the increase in COVID-19 related operations, such as health declaration assistants, temporary management support officers, and the Transport Ambassadors announced by the Minister for Transport earlier this week.
b. At the same time, we are working with the Singapore Business Federation and other Trade Associations and Chambers to identify private sector job opportunities.
i. These may come from businesses recruiting for the eventual recovery, or with short-term manpower needs due to disruptions in labour supply.
ii. I am heartened to see that companies such as Micron and SMRT have already come on board the SGUnited Jobs initiative.
c. WSG will launch an SGUnited Jobs virtual career fair tomorrow with more than 2,200 job vacancies. This will focus on short-term temporary jobs that are immediately available. Jobseekers looking for longer-term roles can consider the wider range of jobs advertised on MyCareersFuture.sg. I encourage interested jobseekers to explore these.
Supporting the unemployed
B23. The best way to safeguard the well-being of our people is by supporting them to stay employed. But as the impact of COVID-19 on our economy deepens, some workers will lose their jobs or see their incomes significantly reduced. We will help them.
a. Today, the ComCare scheme provides assistance to those who fall into financial hardship. We will exercise more flexibility when considering applications for ComCare during this period, to ensure that affected Singaporeans can get help.
b. Some families may require help urgently, while waiting for the new help measures to kick in. We will set up a Temporary Relief Fund in the month of April, to provide them with immediate financial assistance. This will be available at our Social Service Offices and Community Centres.
c. We will also introduce a COVID-19 Support Grant at our Social Service Offices from May to September this year, to help our workers who become unemployed due to COVID-19. Low- and middle-income employees who lose their jobs can receive a grant of $800 per month for three months, to tide them over while they find new jobs or go for training. [Details in Annex B-2.]
d. In total, I will set aside $145 million for the new schemes and increased flexibilities to ComCare.
Helping our households
B24. Many Singaporeans are concerned about how they will pay their bills and household expenses if their livelihoods are affected during this uncertain period. We will put more cash in the hands of all families to help them cope.
B25. First, I will enhance the Care and Support Package announced in the Unity Budget. [Details in Annex B-3.]
a. I will triple the cash payout for all adult Singaporeans from the earlier announced range of $100 to $300, to a range of $300 to $900, depending on income.
b. I will provide additional help for families with young children. I will triple the additional cash payout given to each Singaporean parent with at least one young Singaporean child, from $100 to $300.
c. For lower-wage workers, the enhanced Workfare Special Payment I mentioned earlier will provide them $3,000 in cash this year for their household needs.
d. To further help needy Singaporeans with their daily expenses, and in particular, the cost of food, I will triple the Grocery Vouchers given to them this year from $100 to $300. Together with the $100 which will be given to them next year, needy Singaporeans will receive $400 in Grocery Vouchers over 2020 and 2021.
e. I will also provide the earlier-announced one-off PAssion Card top-up for Singaporeans aged 50 years and above in cash instead. This is to avoid the need to queue at top-up stations during this period.
f. With these enhancements, a young family will now receive around $2,900, instead of $1,300, under the Care and Support Package. A 3-generation family will receive about $6,700, instead of $1,800.
B26. Second, the Government will partner the community to strengthen the network of support around our workers and families.
a. Self-Help Groups and Community Development Councils, or CDCs, have stepped up their efforts to help families and vulnerable groups through their own assistance schemes.
i. I will support them to do more, and better meet the needs of their communities and residents. I will double the grant given to Self-Help Groups to $20 million over two years, and increase the additional grant given to CDCs from $20 million to $75 million.
ii. Together with the other Care and Support measures announced during the Unity Budget, the enhanced Care and Support Package will cost around $4.6 billion.
b. The Labour Movement is also doing its part to help our workers and self-employed persons.
i. Last week, NTUC announced the $25 million NTUC Care Fund (COVID-19), which is jointly funded by NTUC, unions, and the Government. The fund will provide one-off relief of up to $300 to low- to middle-income union members.
ii. Yesterday, NTUC announced a $4 million top-up to the Self-Employed Person Training Support Scheme, to give union members an additional training allowance of up to $1 per hour. This will be on top of the enhanced training allowance rates of $10 per hour which I announced earlier.
c. Our social service agencies also do good work supporting vulnerable groups in our community. We will support them to adopt digital tools to continue to reach out and serve their clients during this period, through the existing VWOs-Charities Capability Fund. Social service agencies can reach out to the National Council of Social Service to apply.
B27. Third, the Government will exercise greater flexibility on its fees and loans during this period.
a. The Government will freeze all government fees and charges for one year, from 1 April 2020 to 31 March 2021. This will apply to all fees for government services.
b. To help graduates who are worried about having to pay off their student loans while finding jobs in this economic climate, I will suspend all loan repayment and interest charges for one year, from 1 June 2020 to 31 May 2021. This will apply to all graduates who have taken a government loan for their university and polytechnic studies.
c. I will also suspend all late payment charges on HDB mortgage arrears for three months, for those who are struggling with their mortgage payments during this difficult period. HDB will continue to exercise flexibility when providing assistance during this period, through existing measures such as deferring payment of loan instalments for six months.
B28. To summarise, we will protect jobs, support our workers, and protect livelihoods. We will do this by:
a. Helping employees stay employed;
b. Stepping up support for the self-employed and lower-income;
c. Creating more opportunities for jobseekers;
d. Helping unemployed workers tide over this period; and
e. Helping our households with their expenses.
B29. We will continue to monitor the situation closely, and are prepared to take swift action to do more if needed.
Supporting Businesses
B30. The second thrust of the Resilience Budget is to help businesses overcome the immediate challenges. The Resilience Budget will address the three Cs on the mind of every business owner now – cash flow, cost, and credit.
B31. The first ‘C’ is cash flow. For businesses, ‘cash is king’, and many have called for more timely assistance. As some have told me in Mandarin, 远水救不了近火, or “distant water cannot put out a nearby fire”.
B32. We are doing our best to flow the payouts under the wage support schemes quickly:
a. By the end of this month, more than $600 million would have been disbursed to employers, under the former Wage Credit Scheme parameters.
b. By the end of May, a total of $5.6 billion would have been paid out, under the Jobs Support Scheme and the Wage Credit Scheme.
c. The agencies are working hard to bring forward an additional $500 million of wage credits under the enhanced parameters, from September to end-June.
d. Altogether, the Jobs Support Scheme and Wage Credit Scheme will flow $16.2 billion into the hands of businesses by October this year.
B33. To further ease cash flow for businesses in the immediate period, I will grant an automatic deferment of income tax payments for companies and self-employed persons, for three months. No application is required. [Details in Annex B-4.]
a. For companies, we will defer income tax payments due in April, May, and June 2020. Instead, income tax payments will only be payable from July 2020. In other words, if you made money last year and need to pay tax this year, you will delay paying for 3 months. So you can use the cash to meet other urgent needs.
b. For self-employed persons, the payment cycle for personal income tax for the Year of Assessment (YA) 2020 generally starts in May 2020. We will defer income tax payments due in May, June, and July 2020. So income tax payments will only start from August 2020.
c. Employees may approach IRAS, if they need help with their income tax payments and wish to avail themselves of this arrangement.
B34. The second ‘C’ is cost. Where the cost is within the Government’s control, we will do our best to help.
B35. I will therefore enhance the Property Tax Rebate which I announced in the Unity Budget, by raising the amount and covering more types of properties. [Details in Annex B-5.]
a. For 2020, qualifying commercial properties that have been more badly affected by the COVID-19 outbreak, including hotels, serviced apartments, tourist attractions, shops, and restaurants, will pay no Property Tax. This is a big enhancement, from the 15% to 30% Property Tax Rebate announced in the Unity Budget.
b. Businesses in other non-residential properties such as offices and industrial properties are also affected by the COVID-19 situation. I will now grant a Property Tax Rebate of 30% for the year 2020.
B36. I strongly urge landlords to fully pass on the rebate to tenants, by reducing rentals, to directly ease the cash flow and cost pressures faced by tenants.
a. Many businesses have pointed out that it will be a lose-lose situation if landlords do not support their tenants. After all, if tenants fail, the properties will be empty.
b. So my message to landlords is: do your part, chip in, and give additional help to tenants who are more badly hit.
B37. The Government will lead by example in supporting tenants by enhancing rental waivers. [Details in Annex B-6.]
a. The National Environment Agency (NEA) will give stallholders in hawker centres managed by NEA or NEA-appointed operators three months of rental waiver, up from one month announced in the Unity Budget.
b. Other government agencies, like HDB and the National Arts Council, will provide two months of rental waiver to eligible tenants, up from half a month announced in the Unity Budget. Beneficiaries include social service agencies and charities.
c. All other non-residential tenants will receive half a month of rental waiver.
B38. In addition, as mentioned earlier, I will freeze all government fees and charges by one year, from 1 April 2020 to 31 March 2021.
B39. The third ‘C’ is credit.
B40. I will further enhance our financing schemes so that even the hardest-hit businesses can continue to have access to credit.
a. I earlier enhanced the Enterprise Financing Scheme (EFS) – SME Working Capital Loan to alleviate SMEs’ cash flow concerns, and introduced the Temporary Bridging Loan Programme (TBLP) for enterprises in the tourism sector.
i. To support businesses’ trade financing needs, I will enhance the EFS – Trade Loan, by increasing the maximum loan quantum from $5 million to $10 million, and increasing the Government’s risk-share from up to 70%, to 80%.
ii. I will also increase subsidies to businesses for loan insurance premiums under the Loan Insurance Scheme, from 50% to 80%.
iii. I will expand the Temporary Bridging Loan Programme to all sectors, and increase the maximum supported loan from $1 million to $5 million.
iv. SMEs that require support beyond the TBLP can continue to tap on the EFS –SME Working Capital Loan. The maximum loan quantum for this will be further enhanced, from $600,000 to $1 million.
b. In addition, we will work with Participating Financial Institutions to defer capital payments for one year on the EFS-Working Capital Loan and the TBLP loans if requested by businesses, subject to assessment by Participating Financial Institutions. [Details in Annex B-7.]
B41. In addition to these enhancements to our financing schemes, I will set aside $20 billion of loan capital in this Budget. This will help to support good companies with strong capabilities, and catalyse private sector loan capital. As the situation is fluid, we will seek to provide help where the credit needs are more acute.
B42. Concurrently, MAS is working with banks and insurers to see how best to help businesses and individuals facing cash flow challenges with their loan obligations and insurance premium payments. Details of these measures will be announced by MAS and the industry later.
B43. All these measures deal with helping people financially.
B44. But there is also an important and complementary part – giving people relief from legal obligations that have arisen because of the COVID-19 situation. It is no fault of theirs that they cannot perform these obligations.
B45. For example, people may have paid deposits for a big gathering that now cannot go ahead. It is not their fault that the gathering cannot go ahead. Should the deposits be simply forfeited? That won’t be right.
B46. The Government is studying the issue, and the Minister for Law will present a set of measures to deal with this, at the next Parliamentary sitting.
Support for specific sectors
B47. On top of the broad-based support to help businesses address the three ‘C’s, I will provide additional help to specific sectors that are most directly affected by COVID-19. [Details at Annex B-8.]
B48. Sectors that rely on tourism and international travel have been hit the hardest.
a. The sharp drop in international visitors has impacted the whole tourism ecosystem, from our airport and airlines, to hotels and attractions and their tenants, to travel agents and bus companies.
B49. The aviation sector sits at the core of this ecosystem. I spoke earlier about countries enacting border control measures to curb the spread of COVID-19.
a. Around the world, many airlines have responded with steep cuts to their capacity.
b. Some have suspended operations. Many airlines unfortunately may not survive the crisis.
c. COVID-19 is the single biggest shock that air hubs and airlines around the world have ever experienced.
i. The International Air Transport Association projected that COVID-19 will hit worldwide airline revenues by more than US$250 billion this year. That is more than 40% of last year’s overall revenues.
d. This will have a profound impact on the global aviation sector for years to come.
i. Consolidation is expected. The better-prepared ones will emerge stronger.
e. Against this backdrop, governments around the world are taking steps to support their carriers.
i. For example, the US administration has indicated its intent to support both US airlines and aerospace manufacturers.
ii. State support for the private sector where there are critical national interests at stake is not unprecedented.
iii. During the Global Financial Crisis, the Americans and Europeans stepped in to support their key financial institutions and other companies in major sectors, to avoid wider contagion to the rest of their economies and preserve key economic assets.
B50. Air hubs and airlines with large domestic markets are under stress. Our air hub, with only international traffic, faces an even sharper impact from widespread international border closures.
a. As of 24 March 2020, daily passenger traffic has fallen by more than 90%.
b. The Singapore Airlines Group (SIA) has announced a 96% cut to their scheduled capacity up to end-April across their entire network.
B51. Global connectivity is of fundamental importance to Singapore. It links us to the rest of the world.
a. We are connected by more than 100 airlines to some 380 cities in about 100 countries and territories worldwide.
b. We are an open, globally-connected society. Air connectivity connects us to families and friends studying, working, and living abroad.
c. It enables Singapore-based companies to access growth opportunities overseas, and catalyses investments and business location decisions by overseas companies here.
d. The air hub supports other economic sectors, such as tourism, manufacturing and logistics, and anchors aerospace companies like Rolls Royce and Airbus here.
e. The Changi Air Hub is an important pillar of our economy. The hub and its adjacent industries contribute to over 5% of Singapore’s GDP and employ approximately 192,000 people.
f. It makes us an ideal Global-Asia node, where companies all over the world can access opportunities in Asia, and companies in Asia can access opportunities around the world.
B52. Our aviation sector has significant linkages to the rest of our economy. If it collapses in a crisis, it will be very hard for the aviation industries to rebuild after the crisis is over, and the recovery of the rest of the economy will be impeded.
a. We must therefore ensure that this temporary shock to our air hub does not become a permanent one.
B53. We will support our aviation sector to ride out the COVID-19 pandemic.
a. To help businesses whose activities are based principally in the aviation sector retain their local workers, I will provide an enhanced Jobs Support Scheme.
i. For every local worker in employment, I will provide a total of 75% wage offset for the first $4,600 of monthly wages. This will be paid in the same months as the main Jobs Support Scheme payouts. This enhancement will cost the Government more than $400 million.
b. I will also introduce a $350 million enhanced aviation support package to fund measures such as rebates on landing and parking charges, and rental relief for airlines, ground handlers, and cargo agents. This will also allow Singapore to retain a minimum level of connectivity to the world even during the pandemic. This is critical to enable overseas Singaporeans to return home and keep our supply lines for essential goods open.
B54. The SIA Group sits at the heart of our aviation ecosystem, and anchors our position as an air hub.
a. In 2019, SIA Group accounted for over half of passenger traffic and cargo tonnage in Singapore.
b. As the main hub carrier, SIA links us to the rest of the world. Many foreign airlines choose to come to Changi, because they can tap on SIA’s connectivity to the rest of the region.
c. A diminished SIA will undermine our air hub’s ability to recover from the crisis.
B55. Air travel will eventually resume when COVID-19 comes under control. Until then, SIA will need liquidity to tide over this outbreak.
B56. In this regard, SIA will benefit from the enhanced Job Support Scheme and the enhanced aviation support package which will help reduce its operating expenditure.
B57. Members will be aware that SIA requested a halt to trading of its securities this morning. I have been informed that SIA is considering a corporate action, supported by Temasek Holdings, and will be making an announcement in due course.
a. I welcome Temasek’s decision to lend support to SIA. SIA is an outstanding airline and a strategic asset for Singapore.
b. Through the Government’s support for the aviation sector, and if necessary more direct support measures, we will make sure that SIA is able to come through this in good shape.
B58. Ultimately, this is about preserving the status of our air hub so that it can emerge stronger from this crisis.
a. Riding out this storm will require patience and adjustments. With resilience, I am sure our air hub will be able to emerge stronger.
B59. Apart from the aviation sector, several other tourism-related industries, from hotels and attractions to travel agents and bus companies have had a difficult time.
a. As mentioned earlier, I will therefore also enhance the Jobs Support Scheme for licensed hotels, travel agencies, tourist attractions, cruise terminals and operators, and purpose-built MICE venue operators, to offset a total of 75% of the first $4,600 of monthly wages.
b. In addition, I will set aside $90 million to help the tourism industry rebound strongly, when the time is right.
B60. Beyond sectors that depend directly on international travel, sectors that involve a high level of human interaction will take a hit from the recently-announced safe distancing measures.
a. Food services is one such sector, with more Singaporeans avoiding crowds and choosing to eat at home.
i. As mentioned earlier, I will enhance the Jobs Support Scheme for F&B firms by providing a total of 50% wage offset, for the first $4,600 of monthly wages.
b. Our taxi and private hire car or PHC drivers have seen their takings fall significantly, as more people work from home and as visitorship falls.
i. To support them, we will extend and enhance the Point-to-Point Support Package. This will cost the Government another $95 million.
ii. Eligible taxi hirers and PHC drivers will continue to receive the Special Relief Fund payments of $300 per vehicle per month until end-September.
iii. We will also extend support to the taxi and PHC operators.
c. To help private bus owners, I will provide them with a one-year road tax rebate and a six-month waiver of parking charges at government-managed parking facilities. This will cost the Government $23 million.
d. For the arts and culture sector, we will provide an additional $55 million support package. This will save jobs and support upskilling and digitalisation of the sector.
i. First, we will provide additional support to major companies and leading arts groups, which are integral to our vibrant arts scene. This will help safeguard jobs, and retain capabilities in our local arts ecosystem.
ii. Second, we will enhance the National Arts Council’s Capability Development Scheme for the Arts, to deepen skills and support the professional development of arts organisations and practitioners.
iii. Third, we will step up digitalisation efforts, by building the sector’s digital capabilities, and establishing more digital arts platforms which can reach out to new audiences.
iv. The Ministry of Culture, Community and Youth will share more details later.
Emerging Stronger
B61. The third thrust of the Resilience Budget is to build resilience in our economy and society, as we battle this downturn, and build capabilities for when the eventual recovery comes.
B62. Let us not face COVID-19 with fear and despair, but with a spirit of resilience. This means keeping our eyes on the future and staying the course, even in the face of hardship and adversity.
B63. If we prepare ourselves well today, we can emerge stronger, not only as an economy, but as a society. I will set aside $1.9 billion in this Budget to support this.
Economic Resilience
B64. We will build economic resilience at all levels.
B65. At the national level, we will continue to invest in our long-term capabilities for growth.
a. The COVID-19 outbreak has reinforced the importance of investing in R&D to prepare for critical challenges – such as in managing pandemics and ensuring food security.
i. Our investments in R&D have borne fruit.
ii. It has enabled Singapore to become one of the first countries to successfully develop COVID-19 test kits.
iii. An example is the Fortitude 2.0 kit developed by A*STAR and Tan Tock Seng Hospital. This is currently used in nine local hospitals, and has been sent to several countries including China, Myanmar, and the Philippines.
iv. We will continue to make steady investments in R&D, under our masterplan for Research, Innovation and Enterprise. I will provide more details on this towards the end of the financial year.
b. COVID-19 has also emphasised the importance of having resilient supplies of food and other essential items.
i. We are building up our national stockpile of health supplies, including masks and hand sanitisers, so that we will continue to be well-stocked.
ii. Some may be concerned about the impact on our food supplies, arising from supply chain disruptions. We need not worry.
iii. We have in place a robust, multi-pronged strategy, to ensure that we continue to have a stable supply of safe food.
iv. As we did with water, we are strengthening our food resilience for the long term. Under our “30 by 30” vision, we aim to produce 30 per cent of our nutritional needs by 2030, up from less than 10% today.
B66. At the industry level, all firms have a part to play in building economic resilience, as we prepare for recovery.
a. This is why we introduced the SG Together Enhancing Enterprise Resilience (STEER) programme, which supports industry-led initiatives to help companies tide over today’s economic uncertainties, and build longer-term capabilities.
i. The Government will now match $1 for every $2 raised by Trade Associations and Chambers (TACs) or business groups for qualifying initiatives, doubling the earlier matching rate of $1 for every $4.
ii. I encourage more TACs and industry groups to join us in helping the business community emerge stronger and better from this crisis.
b. Businesses should continue to make use of this downtime to digitalise, restructure, and transform. Today, they can leverage the SMEs Go Digital Programme, the Productivity Solutions Grant (PSG) and the Enterprise Development Grant (EDG) to do so. I will further enhance these programmes to give businesses a boost during this period.
i. First, I will enhance the SMEs Go Digital Programme to provide support for more digital solutions, from basic remote working tools, to more advanced systems.
ii. Second, I will raise the maximum support levels for PSG and EDG to 80% and 90% respectively to spur transformation.
iii. The enhancements to these three schemes will last until December 2020.
c. To support our workers to stay resilient, we will enhance our support for skills upgrading.
i. In our Unity Budget, we raised course fee subsidies and absentee payroll to 90% for the aviation, tourism, food services, and retail trade sectors, to last until June 2020.
ii. I will extend the enhanced training support to the arts and culture and land transport sectors, starting from 1 April 2020.
iii. And I will extend the 90% absentee payroll rates to all employers, to provide additional cash flow relief when they send their workers for training, from 1 May 2020.
iv. The duration of the enhancements will also be extended, to cover eligible courses starting before 1 January 2021. [Details at Annex B-9.]
B67. At the individual level, we can all continue to grow and learn in this time of disruption.
a. The SkillsFuture movement is a big part of this.
b. At the Unity Budget, I launched the Next Bound of SkillsFuture to further support our people in acquiring new skills.
c. SSG has worked with Institutes of Higher Learning and Continuing Education and Training Centres, to allow Singaporeans to make early use of the base $500 SkillsFuture Credit Top-up for their courses from 1 April 2020, ahead of the full implementation date in October.
d. I hope this will help many more workers, jobseekers, and self-employed persons make use of the downtime to learn, develop new skills, and stay employable.
Social Resilience
B68. Let me now touch on building social and psychological resilience.
B69. I mentioned earlier that we are spending over a third of this Resilience Budget to save jobs, protect workers, and support households.
B70. This is ultimately about keeping our society strong. It is about giving us a sense that we are all in this together, that we will look after those in need, and trust in one another.
B71. But building a strong society is not just about giving more social support. It is also about fostering a culture of social responsibility. We will do what we can to encourage this.
a. As the COVID-19 situation develops, we may need to introduce a broader range of safe distancing measures to stop the transmission chain. Everyone must play their part to comply with these measures, for the sake of others.
b. But it may sometimes be costly for employers and households to comply with these measures. We will provide help where appropriate to mitigate the impact and support responsible behaviour.
i. For example, we have provided support for the costs of quarantine accommodation, to mitigate the costs to individuals and families.
B72. The outbreak has also been a stark reminder of the need for good public hygiene.
a. The Minister for the Environment and Water Resources launched the SG Clean campaign in February to drive higher levels of personal and public hygiene, not just during the COVID-19 outbreak, but beyond.
b. To make a real difference to public health outcomes, we will need the collective action of businesses and individuals alike. The Government will help.
c. We are already offsetting the audit and certification fees for tourism, retail, and food services businesses participating in SG Clean.
d. We will also co-fund businesses to undertake professional cleaning of premises which have experienced a confirmed COVID-19 case.
e. The Ministry of the Environment and Water Resources will share more details in due course.
B73. Together with the support that we are providing to workers and households, these will help to keep social bonds strong, encourage social responsibility, and foster trust in our society.
B74. To summarise, even as we deal with our immediate challenges, we must keep our sights on the future.
B75. With our collective creativity and resilience, Singapore can emerge stronger from this, both as an economy and as a society.
FISCAL IMPACT
C1. Let me now elaborate on our considerations for drawing on Past Reserves in this Budget, and our fiscal position after the measures that I have put forth to tackle the COVID-19 pandemic.
Drawing on Past Reserves to Fund Extraordinary Measures
C2. Our reserves are our strategic asset, built up through the discipline and prudence of our people and political leaders, across generations.
C3. Our reserves serve as our bulwark against shocks and crises of an extraordinary nature. For a nation with no oil, no gas, no gold, no diamonds, or natural resources of any kind, it is remarkable that we have built this up.
C4. Our prudence and discipline in saving and growing our reserves give us the wherewithal to respond decisively when our nation faces extraordinary circumstances.
C5. Our founding fathers created a rigorous framework to ensure that such strategic assets are used only for the right purpose. We amended the Constitution in 1991 to provide for an Elected President who is the custodian of our Past Reserves.
a. Under Article 148A of the Constitution, the President can withhold her assent to any Supply Bill if she is of the view that it is likely to draw on Past Reserves.
b. Our principle is that each term of government must live within its means. Any additional spending that the Government of the day proposes must be funded in a sustainable manner – recurrent expenditures should be funded from recurrent revenues.
c. Past Reserves can be drawn down only in exceptional circumstances, under a two-key system, if the President, after consulting the Council of Presidential Advisers, agrees with the Government’s proposal to draw on the Past Reserves in exceptional situations.
C6. Despite political pressure to dip into the reserves, the Government has scrupulously upheld the principle that Past Reserves are to be used only for exceptional situations.
a. Until now, the Government has drawn on Past Reserves only once, during the Global Financial Crisis, when the President approved a draw of $4.9 billion to fund the Jobs Credit Scheme and special risk-sharing initiative.
b. During that period, the Government also sought the President’s concurrence to use $150 billion of Past Reserves to back the Deposit Guarantee Scheme. I was at MAS at that time. We had asked for this, and it took us a long time to deliberate on this. As it turned out, the guarantee was not triggered, and there was no draw on Past Reserves.
C7. The COVID-19 pandemic, and the multiple threats it poses to our nation, is the sort of event that we had accumulated reserves for.
a. We have saved up for a rainy day. The COVID-19 pandemic is already a mighty storm, and is still growing.
b. If over the years we had frittered the reserves away, on more immediate but less existential needs, big and small, as some in this House have pressed the Government to do, we would be in a much weaker position today.
C8. We are experiencing a confluence of multiple external shocks – a pandemic that has triggered many nations to shut their borders, limit exports, and halt economic activities, in order to fight this pandemic.
a. This economic impact is magnified, as the global economy is already fragile, and further weakened by a protracted US-China trade conflict, and an oil price war.
b. So this is not a normal business cycle that we would have anticipated and dealt with using the revenues collected by each term of government.
c. It is a “black swan” event that comes only once every few decades.
C9. In view of the exceptional circumstances, the Government has sought the President’s in-principle support to use Past Reserves to fund part of the package.
C10. Before my Ministerial Statement, Members heard the President’s message to Parliament, delivered on her behalf by the Speaker. The Government has obtained President’s in-principle support to draw up to $17 billion to fund some of the measures to save jobs and the economy.
a. These include the Jobs Support Scheme enhancements, the Self-Employed Person Income Relief Scheme, the Temporary Bridging Loan Programme, the enhanced Enterprise Financing Scheme, and the enhanced Aviation Support Package. [Details at Annex C-1.]
C11. Let me caution that there remains a high level of uncertainty over the future course of the outbreak.
a. Unlike the Global Financial Crisis or the Asian Financial Crisis, where both the causes and solutions were economic and financial in nature, this crisis is far more complex with additional medical, social, and psychological dimensions.
b. The global economy is also more deeply intertwined, with many complex interlinkages.
c. The COVID-19 situation is fluid and fast-moving, and nobody is quite sure how it will develop.
C12. But because we have prepared ourselves well, Singapore has the resources to meet this crisis with confidence.
a. We will use our resources to get through this together.
b. Once again, let me thank the President and Members of the Council of Presidential Advisers for your support.
C13. The Government will continue to monitor the situation closely, and do more as and when we need to. Should it become necessary, I am prepared to propose to the President further draws on Past Reserves to deal with the situation. I trust that every Member of this House will deeply internalise the mission to be careful stewards of our reserves.
Budget Position
C14. The measures that I have announced today will raise the Overall Budget Deficit for FY2020 to $39.2 billion (7.9% of GDP). [Details at Annex C-2.]
C15. We are able to support this unprecedented deficit, and still remain fiscally sustainable, because we have been disciplined in the use of Past Reserves, tapping on it only in exceptional circumstances like these.
C16. The situation remains highly fluid and uncertain, with significant risks. Our fiscal position will be affected from both the revenue and expenditure sides.
a. With a weak GDP outlook, our revenues will be affected. Sentiment-driven revenues may come down sharply.
b. While revenues are coming down, our expenditure will be going up, to enable us to respond effectively to the crisis.
c. In the past few years, we benefitted from unexpected revenue upsides, such as exceptional Statutory Board Contributions from MAS and increased stamp duty collections. We cannot hope to rely on a repeat of this.
d. Instead, we must be prepared to bear the downsides when they happen. Because we have been prudent and did not decide to spend all of the surplus that we collected, we are ready to meet such downsides.
C17. We can expect significant volatility in the economy, and in financial markets, in the near future. We will need to continue to review our expenditure plans very carefully in this fluid situation. We must stay nimble and adapt our responses as new developments occur.
C18. We will adopt a nimble fiscal posture, so that we can quickly channel the resources at hand to the most urgent and important needs of our people.
C19. All of us must remain prudent in the use of our resources. Because of the urgency of the situation, we are providing significant help to many groups in this Budget, in a broad-based manner so that we can reach as many of those who need help as possible, and as quickly as possible.
a. I hope that those who receive support will use the resources wisely and responsibly, or channel it to those who may need it more.
b. At the same time, we will not hesitate to take action against any abuse.
CONCLUSION
D1. Mr Speaker, Sir, before I conclude, allow me to say a few words in Mandarin.
D2 to D9 in Mandarin.
D10. Mr Speaker, Sir, I will now conclude in English.
D11. The COVID-19 pandemic is the most serious crisis we have faced in a generation.
D12. It has put all countries around the world to the test – on the medical, economic, and social fronts.
D13. We have been able to respond boldly and decisively to the outbreak in Singapore, because we have forged a cohesive, resilient society.
D14. The whole nation has come together in response.
a. Our healthcare and frontline workers are working tirelessly to care for the infected.
b. Our cleaners are doing humble but heroic work to keep our environment clean.
c. Thousands of public officers are working round the clock to respond to the threat of COVID-19.
d. Private sector and corporations too have stepped forward.
i. Keppel has put together a $4.2 million package to support communities most affected by the COVID-19 outbreak. This includes healthcare workers and patients, lower-income families, and SMEs. This amount was funded by voluntary contributions from Keppel’s directors and staff, and dollar-for-dollar matching by Keppel.
ii. Our local aviation firms, such as SIA, Jetstar Asia, and SATS have also leaned forward to facilitate interested workers to help out in public services that require surge capacity during this period.
e. Individuals are doing their part – vloggers and bloggers are helping to share public messages, others are volunteering, giving support and encouragement and crucially by complying with health advisories and practising safe distancing. This includes foreigners who live amongst us and who care deeply about Singapore.
D15. Many have also had to make sacrifices in this time.
a. Families have had to make difficult adjustments to their lives, some having to undergo quarantine, cancel celebrations or put off other long-awaited plans including wedding plans.
b. And despite our best efforts to work with businesses and unions to save jobs, some workers have suffered a loss of income or jobs.
D16. The Government and the political leadership are in this with Singaporeans. We share the worries and anxieties of Singaporeans, and we will do our best for you. We will walk with every Singaporean, through every up and down.
D17. To show solidarity with Singaporeans, I announced at the Budget Debate last month that the political leadership will take a one-month pay cut. With the deteriorating situation, we will go further.
a. All political office holders will take an additional pay cut of two months, altogether a three-month cut in their salary.
b. The President, Speaker, and both Deputy Speakers have informed me that they will join in, and take a similar three-month pay cut in total.
D18. Mr Speaker Sir, it is in times of crisis that the true character of a nation can be seen.
D19. We are all in this together. And we must all look after one another in these trying times. We will stand with one another, through thick and thin.
D20. This is what it means to be SG United. This is what it means to be Singapore Together.
D21. The months ahead will not be easy, as the situation continues to evolve dynamically and unpredictably.
D22. We must continue to be on high vigilance, mentally and psychologically prepared for every scenario.
D23. The Government will lead the way. We will do our best to anticipate and respond to developments, make decisions based on facts and evidence, and exercising judgement when there are trade-offs.
D24. While we attend to the immediate and urgent tasks, we will set our sights on the long-term, so that Singapore comes out of this crisis stronger as a nation.
D25. We will protect and advance the well-being and livelihoods of Singaporeans. We will take care of our people. We will leave no one behind.
D26. And we will stand with Singaporeans of all walks of life to battle this crisis, together.
a. We will stand with our dedicated and courageous frontline workers – healthcare workers, cleaning staff, immigration officers, public transport workers – who keep Singapore going, despite the risks they face on the job.
b. We will stand with our workers and businesses, to ride through this economic storm together, and overcome this challenge to our growth and prosperity.
c. We will stand with our fellow Singaporeans, to look out and care for one another, at a time of fear and anxiety.
d. We will work with our people and institutions around the world, to combat this global threat.
e. This is the essence of who we are as a nation. This is the essence who we are as a people. This is SG United. This is SG Together!
D27. I am confident that together, we will ride through this storm, and emerge even .stronger.
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| Support for Families
• One-off cash payout from $100-$300, depending on income |
Related article: Budget 2020: Cushioning the impact of COVID-19
Resilience Budget [announced 26 Mar 2020]
| Support for Families 1. Help with daily expenses • One-off cash payout tripled, from $100-$300 to $300 to $900 • Additional cash payout for each parent with a child below 21 tripled, from $100 to $300 • Enhanced Workfare Special Payment of $3,000 this year for lower-wage workers • Grocery Voucher for Singaporeans in need tripled, from $100 to $300 this year • $100 PAssion Card top-up for Singaporeans aged 50 years and above in cash instead 2. Strengthening our network of support 3. Greater flexibility on fees and loans |
Related article: 3 ways the Resilience Budget 2020 will help families ride through COVID-19
Solidarity Budget [announced 6 Apr 2020]
Every adult Singaporean will receive an additional $300 cash payout. This is on top of the $300 to $900 cash payment of the Care and Support package announced in the Resilience Budget.
The payment of the first tranche of the Care and support Package will also be brought forward to April 2020.
Here’s when you can expect to receive the cash payments:
| Assessable Income for Year of Assessment 2019 | Additional + Enhanced Cash Payments | Total Cash Payments | Payment in April 2020 | Payment in June 2020 |
| Not more than $28k | $300 + $900 | $1,200 | $600 | $600 |
| Above $28k to $100k | $300 + $600 | $900 | $600 | $300 |
| >$100k or owns more than 1 property |
$300 + $300 | $600 | $600 | – |
All other payments from Resilience Budget will remain, and will be brought forward to June 2020 instead of August 2020:
• Remaining $300 or $600 from the Care and Support package
• $300 additional cash payout for each parent with a child below 21
• $100 PAssion Card top-up for Singaporeans aged 50 years and above
Additional support for those who need it
If you need additional support, please approach the Social Service Offices and Community Centres to apply for new schemes, such as the Temporary Relief Fund and the upcoming COVID-19 Support Grant (available from May 2020), as well as existing ComCare schemes.
For more on Budget 2020, visit www.singaporebudget.gov.sg.
View the Budget booklets here
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Solidarity 2020 Budget Statement
A. INTRODUCTION
B. SOLIDARITY BUDGET
C. FISCAL IMPLICATIONS
D. CONCLUSION
ANNEXES
Annex B-1: Temporary Enhancement to JSS (217kb)
Annex B-2: Solidarity Payment and Other Cash Payouts (117kb)
Annex C-1: Use of Past Reserves in Supplementary Budget (32kb)
Annex C-2: Revised Fiscal Position in FY2020 (22kb)
A. INTRODUCTION
A1. Mr Speaker, Sir, we are sailing in uncharted waters.
A2. Since I delivered my Ministerial Statement on 26 March, eleven days ago, the pandemic has exploded.
a. As of 5th April 2020, COVID-19 has spread to more than 200 countries and territories, infecting over 1 million people, and taken more than 60,000 lives.
b. Today, to control the spread of the virus, more than 3.9 billion people, or half of humanity, are on lockdown.
A3. In Singapore, we have progressively ratcheted up our measures, as the situation develops and the medical evidence comes in.
a. To minimise the risk of import of cases, we have severely restricted incoming flights, and Singapore Airlines mounted dedicated flights to bring back Singaporeans who were overseas.
b. To limit local transmission, we have implemented comprehensive and complementary measures – safe-distancing, early identification and isolation of cases, and quarantine of close contacts.
A4. These have kept the number of infections manageable, but in recent days, the numbers have been rising.
a. Local transmission has increased, and continues to grow. As of yesterday, we have a total of 1,309 infection cases. Six have succumbed to the virus.
b. These individuals mostly became infected when they were in close contact with infected persons at the social, workplace and family settings. Some clusters have emerged in our foreign worker dormitories.
A5. To stay on top of the situation, the Government has taken a decisive step to pre-empt escalating infections. It is critical that every one of us keeps physical contact with others to a minimum.
A6. PM addressed the nation last Friday. The Multi-Ministry Taskforce announced an elevated set of safe distancing measures immediately after that. These circuit breaker measures begin tomorrow, and will last for four weeks.
A7. The circuit breaker is essential, but we are acutely aware that it will be painful. It will disrupt businesses and impact workers severely. We will miss face-to-face interactions with our friends and family. Familiar routines will be put on hold. Many will be anxious about their jobs, and families.
A8. As the pandemic sweeps through the world, restrictions put in place in our trading partners will reduce demand for our exports even more. We must expect our overall GDP growth to take a further hit.
A9. But we must take these hard decisions, make the difficult adjustments, and do all that we can in the next few months, to protect the lives of our people. Otherwise, if the outbreak escalates, the impact on lives and livelihoods will be even worse. We must take short-term pains, to avoid even sharper pain later. Let us bear these immediate pains with fortitude, and stay strong.
A10. In the Resilience Budget, the Government committed $48 billion to support workers, protect livelihoods, and help enterprises overcome immediate challenges. We obtained the President’s in-principle support for a draw of up to $17 billion from our Past Reserves towards this.
A11. To further support our people and businesses during these extraordinary four weeks, when the circuit breaker measures are in place, I will bolster the Resilience Budget with a supplementary Solidarity Budget. The Unity, Resilience and Solidarity Budgets all build upon and reinforce each other. Together, they represent our strong and decisive response to the economic and social consequences of the COVID-19 crisis.
A12. I thank the Labour Movement, the Singapore Business Federation, as well as citizens from all walks of life for your valuable feedback. Your inputs matter. They have helped
B. SOLIDARITY BUDGET
B1. The primary aim of this Solidarity Budget is to take further steps to save jobs and protect the livelihoods of our people during this temporary period of heightened measures. We will also help businesses preserve their capacity and capabilities, to resume activities when the circuit breaker is lifted.
B2. I will also provide direct cash in hand for households, to help tide families through this difficult period.
B3. All of us will be affected by these necessary circuit breaker measures – some more than others. To reach as many as we can, as fast as possible, the enhanced measures in the Solidarity Budget are broad-based.
Support for Firms and Workers
B4. First, we will support our businesses to retain their workers, and to stay viable. In my Ministerial Statement on 26 March in this House, I mentioned the 3 Cs of support for firms’ immediate needs – cash, cost and credit. I will increase support in all three areas.
Enhanced Jobs Support Scheme
B5. Many firms cannot operate at all, or can only operate at a much reduced level in the coming weeks. But they should still retain and pay their workers. I will enhance the Jobs Support Scheme to support them in doing so. This will help our workers keep their jobs, and enable businesses to resume operations quickly when the circuit breaker is lifted.
a. I announced earlier in the Resilience Budget that the Jobs Support Scheme will subsidise 25% of the first $4,600 of gross monthly wages for all local employees. I provided higher levels of wage subsidy for sectors that are more directly hit by the outbreak – 50% for firms in the food services sector, and 75% for the aviation and tourism sectors.
b. With the latest development, almost every business and every worker will be directly affected in the coming weeks.
B6. I will therefore enhance the Jobs Support Scheme for the month of April. In this Solidarity Budget, I will raise the wage subsidy for all firms to 75% of gross monthly wages, for the first $4,600 of wages paid in April 2020, for each local employee. The details are in the annex. [See Annex B-1.]
B7. Let me take this opportunity to clarify that for this, and for the earlier Resilience Budget, the wage cap of $4,600 does not mean that workers earning more than $4,600 do not qualify.
a. Rather, it means that this wage subsidy applies to every one of our over 1.9 million local employees.
b. But regardless of how much they earn, the maximum subsidy to the firms will be 75% of $4,600 per person, which is $3,450.
c. The salary limit of $4,600 is based on our median wage level of full-time employed residents.
B8. I understand the cash needs of businesses are very pressing in this difficult period. Hence, our agencies have been working very hard, to bring forward the first Jobs Support Scheme payout from May to April 2020.
a. The enhanced payout for April wages will be paid in this tranche.
b. Firms on GIRO and PayNow will start receiving the first Jobs Support Scheme payout next week.
c. Firms which are not on GIRO or PayNow will receive their payouts by cheque, starting about a week later.
B9. The aim of this strong support is to directly reduce firms’ wage costs, to help them retain their workers. I expect firms to make use of this Jobs Support Scheme to continue paying your workers and refrain from putting workers on no-pay leave during this period, or worse, retrenching them. We will monitor the situation carefully together with our tripartite partners, and take action where needed.
Further Measures to Ease Labour Costs
B10. Many employers also hire foreign workers on work permits and S-passes. In the same spirit, employers should take care of these workers who will also face difficulties during this circuit breaker period. By taking care of their workers, our firms can resume operations quickly once the heightened measures are lifted.
B11. To ease the labour costs of such firms during these four weeks:
a. I will waive the monthly Foreign Worker Levy due in April. This will reduce their cost, and relieve the pressures on their cash flow.
b. To help them preserve their business structure and quickly resume operations, we will also provide employers with a Foreign Worker Levy Rebate of $750 for each work permit or S pass holder, based on previous levies paid in 2020.
i. This will help employers pay and take care of the upkeep of their workers, and prepare their workforce to restart when the circuit breaker is lifted.
ii. Employers will receive the rebate as early as 21 April 2020.
B12. The Government recognises that firms have been paying Foreign Worker Levies in normal times. So in these exceptional times, we are temporarily redirecting resources back to the firms, to enable them to provide support for their foreign workers.
B13. The Minister for Manpower will share more details.
Further Support for Rental Costs
B14. To further support businesses with costs, we are taking additional steps to make sure that our measures flow down to businesses.
B15. I earlier announced a Property Tax Rebate of up to 100% for non-residential properties, for the tax payable in 2020. This rebate is to help businesses deal with the impact of COVID-19. For most properties, the 100% Property Tax Rebate works out to slightly more than one month of rent.
a. The Minister for Law will introduce a Bill tomorrow to let businesses and individuals defer certain contractual obligations, such as paying rent, repaying loans, or completing work, for a period.
b. This Bill will also ensure that property owners pass on the Property Tax Rebate in full, to tenants, as PM mentioned in his address.
B16. The Government will also continue to lead by example in supporting tenants. I will increase the rental waiver for industrial, office and agricultural tenants of Government agencies to 1 month, up from the 0.5 month’s rental waiver I announced at the Resilience Budget.
a. Stallholders in hawker centres managed by NEA or NEA-appointed operators will continue to enjoy three months of rental waivers, while commercial tenants will continue to receive two months of rental waivers.
Enhanced Financing Support
B17. I have touched on the first 2 Cs – cost and cash flow. The third C is credit. To provide additional support on credit, I will further enhance financing support for enterprises so that viable businesses can continue to have access to credit despite the uncertainty.
a. I will increase Government’s risk share of loans made under the Temporary Bridging Loan Programme; the Enterprise Financing Scheme – SME Working Capital Loan; and Enterprise Financing Scheme – Trade Loan from 80% to 90% for loans initiated from 8 April 2020 until 31 March 2021.
B18. Last week, MAS, together with the financial institutions, also introduced a package of measures to help SMEs with temporary cash flow difficulties. For example:
a. SMEs can now opt to defer principal payments on their secured term loans till the end of the year. More than $40 billion of SMEs’ existing loans are likely to qualify for this relief.
b. Banks and finance companies may also apply for low-cost funding through a new MAS Singapore Dollar facility, for new loans granted under the Enterprise Financing Scheme SME Working Capital Loan and Temporary Bridging Loan Programme. If they do so, they must commit to pass on the savings to their borrowers.
B19. The economy needs support and intervention in many different forms to go through this rough patch. I urge all businesses, landlords, financial institutions and industry players to do your part, in channelling the government’s support measures to firms, workers and households.
Enhanced Self-Employed Person Income Relief Scheme (SIRS)
B20. The enhancements I have just announced are to help workers who are employed by businesses to stay employed.
B21. For self-employed persons, we have put in place the Self-Employed Person Income Relief Scheme, or SIRS, to provide direct cash assistance.
B22. This is the first time that we are providing direct cash support to self-employed persons on such a large scale. They are a very diverse group, with different working hours and work arrangements. Some do this as full-time jobs, while others do this as part-time, to supplement their income. Some have been contributing CPF, while others have not.
B23. Since the announcement on 26 March, the Minister for Manpower, NTUC Secretary-General and I, as well as our Government agencies, have received feedback from various self-employed persons whose livelihoods have been affected. During this circuit breaker period, more will see a further drop in income.
a. For instance, there are self-employed persons who are engaged in some employment work to supplement their incomes.
b. Another group of self-employed persons bought an Executive Condominium some years ago. Their income is now severely affected by the pandemic, and they still have to support multiple family members’ daily needs or medical bills.
B24. After considering the appeals, we will broaden the support for self-employed persons. I will make two enhancements.
a. First, I will extend SIRS to automatically include self-employed persons who also earn a small income from employment work.
b. Second, I will raise the current Annual Value threshold up from $13,000 to up to $21,000, to include those who live in some condominiums and other private properties.
c. The other criteria remain unchanged.
d. With these enhancements, a total of about 100,000 self-employed persons will automatically be eligible for the scheme, and will receive three payments of $3,000 each, starting from May 2020.
B25. On the other hand, many have shared their views that SIRS is overly generous. Some have asked – why do we allow self-employed persons with annual Net Trade Income of up to $100,000 to qualify.
a. As I explained earlier, self-employed persons are a very diverse group. Some are own account workers, like taxi drivers, who engage in a trade or business but do not employ any paid workers. Others are sole proprietors, who own small businesses that have employees and a network of business relations.
b. In these extraordinary times, many such self-employed persons are hard-hit. I hope that by our helping them, they too can help others in their networks, and their workers, and we keep the spirit of enterprise alive.
c. In the spirit of tripartism, NTUC Secretary-General Ng Chee Meng has also agreed to step up and help administer the application and appeals for SIRS, and support self-employed persons in need.
B26. Our approach now is to build up a network of support for as many as possible, as quickly as possible.
a. Let me reiterate that those who do not need this and do not qualify, should not come forward to appeal for and abuse the support – otherwise, you undermine public confidence and take up unnecessary resources.
B27. But done right, together, we can help many self-employed persons who are hard hit. MOM will work closely with NTUC, to start processing appeals for SIRS as soon as possible.
Enhanced Support for Households
B28. I have spoken about our support for firms and workers. I will also provide timely support for households, to ensure that no household stands alone during this difficult period.
Solidarity Payment
B29. All adult Singaporeans will receive a one-off Solidarity Payment of $600 in cash.
a. I will bring forward $300 from the Care and Support – Cash payout that I announced earlier. On top of this, I will provide an additional $300, bringing the total to $600 for every adult Singaporean, aged 21 and above.
b. For the majority of Singaporeans who have provided their bank account details to the Government, the Solidarity Payment will be credited directly into their bank accounts by 14 Apr 2020. The rest will receive the payment by cheque, to be issued in stages later, starting from 30 Apr 2020.
B30. Other cash payouts under the Care and Support Package, which were earlier announced, will be brought forward to Jun 2020, instead of Aug 2020. These include:
a. The remaining $300 or $600 from the higher tiers of the Care and Support –Cash payout,
b. The additional $300 payout for each parent with at least one child aged 20 and below, and
c. The $100 PAssion Card top-up, which will be given in cash, for Singaporeans aged 50 and above. Details are in the annex. [See Annex B-2.]
B31. Not everyone will need these cash payouts. I am very encouraged that many have written to me, my Ministerial colleagues and MPs, that they do not need the cash payouts, and suggest that we give these to those who need the cash more. I thank fellow Singaporeans for your thoughtfulness.
B32. I urge those who can, to donate to charities on the Giving.sg website or the Community Chest’s Courage Fund, or to directly share it with others.
B33. For those who still need more support, please approach our Social Service Offices and Community Centres, to apply for new schemes such as the Temporary Relief Fund and the upcoming COVID-19 Support Grant, which is available from May 2020, as well as existing ComCare assistance.
B34. Some Singaporeans will also be emotionally affected or distressed in this period. So besides financial support, let us provide emotional and mental health support to our people.
a. Our community mental health support services will continue to provide care and support for clients through phone consultations, or home visits for those who may need more support.
b. Over the weekend, MSF announced that we will set up a 24/7 National Care Hotline. In this time of need, I am glad that mental health professionals and trained volunteers have stepped forward to offer their help in setting up the new hotline. Thank You!
C. FISCAL IMPLICATIONS
C1. These additional measures will cost $5.1 billion, with
a. $4 billion for the additional support for businesses and workers, and
b. $1.1 billion for the Solidarity Payment.
C2. The President had earlier given her in-principle support for the Government to draw up to $17 billion from Past Reserves to fund some of the measures in the Resilience Budget, to save jobs and businesses.
C3. I also told Members then that I was prepared to propose to the President further draws on Past Reserves should it be necessary.
C4. With the significantly stricter pre-emptive measures needed to protect Singaporeans and our families, it is now necessary for us to propose a further draw on Past Reserves. These measures will impact our workers and businesses severely; additional support will be required to save jobs, preserve capabilities, and provide immediate direct assistance to Singaporeans to help them tide through this exceptional and difficult period.
a. Therefore, I have sought and obtained the President’s in-principle support to draw on an additional $4 billion from Past Reserves.
b. Specifically, this will be used to fund the enhanced Job Support Scheme, the enhanced Temporary Bridging Loan Programme and Enterprise Financing Scheme, and the Solidarity Payment to Singaporeans. Details are in the annex. [See Annex C-1.]
c. The remaining $1.1 billion will be funded from the fiscal space of this term of Government.
C5. To effect the additional spending for the measures that I have announced today, I intend to seek Parliament’s approval at the Committee of Supply to increase the supplementary estimates that were presented to Parliament on 26 March this year. I will subsequently seek Parliament’s approval to introduce a Revised Supplementary Supply Bill, on a Certificate of Urgency, that caters for the additional sums required.
C6. Taken together, the Government’s response to COVID-19 will total $59.9 billion, or about 12% of GDP. The Overall Budget Deficit for FY2020 will increase to $44.3 billion or 8.9% of GDP. Details are in the annex. [See Annex C-2.]
C7. This is an unprecedented budget, for extraordinary times. The situation remains highly fluid and uncertain. The Government stands ready to provide further support, should it become necessary.
D. CONCLUSION
D1. Mr Speaker, Sir, before I conclude, allow me to say a few words in Mandarin.
D2. 为阻断病毒的传播，我们在接下来的一个月内加强安全距离措施。除了提供必要服务的工作场所和主要经济领域的行业以外，其它的工作场所将从明天起关闭。
a. 随着本土感染病例不断增加，如果我们不进一步加强防范，疫情会迅速恶化，而导致整个医疗体系无法负荷。
b. 我们的当务之急是保障国人的安全，金钱没了，日后还可以再赚。但如果失去了健康或生命,就只能留下遗憾。
c. 因此, 为了大家的安全和健康，国人一定要遵守防疫措施。
D3. 这些措施将对企业的日常运作和国人的日常生活造成严重的影响。为了给予国人更多援助，除了之前宣布的两个预算案，我将提呈额外总值51亿元的“同舟共济预算案”。这是政府在短短两个月内公布的第三个预算案，是空前的。主要目的是，保住我们的企业，帮助它们保住员工的工作，让大家能够挺过这个非常时期，坚持下去。
a. 为此，我将把四月雇佣补贴计划的薪金补贴比例从百分之25调高至百分之75。有关调整将涵盖所有行业。
b. 我们也将立法规定业主把产业税回扣全额转给租户。
c. 我们也将提高政府工业，办公室以及农业租户的租金回扣，从半个月增加到1个月。
d. 另外，我们也会采取进一步措施，通过企业融资计划和过渡性贷款计划，协助企业继续获得信贷，让它们能够经营下去。
e. 我们也将放宽自雇人士收入补贴计划的合格条件，涵盖从事兼职工并从中赚取一点薪水的自雇人士。自雇人士居住的房产只要年值在2万1千元或以下，也可以获得现金补贴。
D4. 在这期间，许多聘请外籍劳工的企业将无法开工。为帮助这些企业应付人力成本，并确保它们能继续照顾外籍劳工，我们将豁免四月的外劳税。我们也会为企业提供额外的外劳税回扣。每一位工作准证及S准证持有者，回扣为750元。
D5. 同时，为了减轻许多家庭这个月的生活负担，所有成年国人将获得一次性的600元“同舟共济”现金补贴。
a. 我之前宣布国人会在“关怀与援助配套”下获得现金补贴。
b. 现在，我会从这份补贴中，先发放300元，并加上额外的300元。
c. 也就是说，每名成年国人将能提早获得总值600元的“同舟共济”现金补贴。
D6. 我之前提过，如果有必要，政府会动用更多储备金来资助新措施。我已取得哈莉玛总统原则上的支持，动用储备金来资助今天所宣布的新措施。
D7. 这一个月对许多企业来说，十分艰难。我希望这些新的措施能帮助我们的企业撑过这个时期。在这个非常时期，我们也必须继续关怀彼此，尤其是关心身边的年长者和弱势群体。我们也要注意健康、个人卫生，养成好习惯。只要国人上下一心，保持健康，再由政府通过预算案帮助大家保工作，保企业，保未来，新加坡最终能走出困境，战胜疫情，越战越勇。
D8. Mr Speaker, Sir, I will now conclude in English.
D9. This is a generational crisis with no precedent. We have brought all our resources and administrative capacity to bear, to mount a national effort for our workers, businesses, and families – to protect both lives and livelihoods.
D10. We have the plans, and the financial resources to carry out these plans without burdening future generations with the bill. We are grateful to our founding generation for their foresight and discipline. The key now is how we pull together, in solidarity, as a nation to implement these plans, and make adjustment as the situation continues to evolve.
a. COVID-19 is testing nations worldwide, and revealing more about governments, more about each society, our identity, and the values that hold each of us together.
b. Though the pandemic is global, the impact on each country depends greatly on the different actions and responses of each government and their people.
c. Trust and confidence of our people in the government are critical. Our people must understand what we are facing and support what we are doing.
i. This is why we have been forthcoming and transparent with Singaporeans.
ii. We are honest about the uncertainties and challenges ahead, and honest about the price we need to pay for what we need to do.
d. We have been able to take bold and swift actions because we have the trust of Singaporeans, painstakingly built up over the years by delivering for Singaporeans.
D11. With the circuit breaker in place for the next one month, everyone will have to adjust and adapt not just our physical routines, but our mindsets and habits.
a. As Minister Lawrence Wong said, every person is, in fact, on the frontline. Every Singaporean can make a difference in slowing down the spread of the virus today.
b. To keep out the virus, every one of us must play our part. Be socially responsible – by staying home, staying safe, and staying healthy. Each and every one of us must do our best to stem the escalating infections, to prevent our healthcare system from being overwhelmed.
c. As we do so, we must keep our spirits up, and look out for each other, especially our seniors and the more vulnerable. Our government agencies, as well as many volunteers, are contributing their best to care for our vulnerable groups. We may not be able to physically visit our extended families and close friends, but we can stay in touch, and connect through phone or video.
D12. I am confident that we can, and will, pull close together as a nation, even as we physically distance ourselves to save lives.
D13. Let us unite, demonstrate our Resilience, stay United and press on in Solidarity. Together, we will emerge stronger from this!
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Socialist ideals…
I suggest a 3% Sales Tax to be charged on expensive and branded goods with retail price that exceeds S$1000 for each equipment or goods [not on services, and not on F&B].
Will the Opposition, the learned, rich and powerful support the Sales Tax and put their money where their mouth is?
The Sales Tax Law should guarantee the transfer of this new Sale Tax, a kind of wealth tax, to a special fund and the Govt should be accountable to ensure that the full amount collected will be employed every year in enhancing health care, the Com.Fund, Unemployed Fund, and the Silver Support Scheme.
The 3% Sales Tax could even make it unnecessary to increase the GST by 2% points.
I believe the rich will not begrudge paying the 3% Sales Tax when buying a branded merchandise or expensive equipment that costs more than S$1000 as it serves a good social cause for the benefit of society thus making Singapore more cohesive, stable, progressive and peaceful for all.
The GST and the Sale Tax systems will be a dual indirect consumption tax regimes and will be the vanguard in the Govt’s fiscal arsenal to reduce the widening income gap between the rich and the poor, and the accumulation of massive wealth by the rich.
Not many countries have the political will to find the means to successfully counter the social unhappiness over income gap and the lopsided wealth in the hands of a few as against the majority.
Singapore should be the first to set these trailblazing paths and panaceas for others to emulate in addressing these hot burning social issues, which unless contained could ultimately cause the collapse of the capitalistic system due to the increasing unhappiness over the income gap and lop-sided wealth between the rich and the poor.
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Total Assets of Singapore: S$1174b as at 31st March 2019:
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2020 Budget – my 34 suggestions sent to the Govt
How much more funding can the Govt allocate in the 2020 Budget?
Has the PAP Government become too successful for their own good where they find it difficult to match up with the expectations of Singaporeans, and have to leave it to the opposition to show them how to deploy the funds to make the society more cohesive and comprehensive?
I hope MOF Heng Swee Keat will include one or two of my suggestions in the 2020 Budget, which he will present in Parliament on 18th Feb 2020.
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In addition to the items mentioned by PM Lee in his NY Message 2020, what will be the other game changers and policy changes [please below for 16 items] that the 4G leaders will introduce to transform Red Dot over the next 10 years that other countries will want to emulate or find it difficult to catch up?
The amounts and figures in my recommendations are not cast in stones.
The suggestions are in seven categories:
Corporate
Individual – personal income tax, etc.
Medical and Health
Taxation
Social Issues
Others
Notes and Reference
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CORPORATE:
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Provide more incentives with tax credit/tax relief of S$100,000 for SME companies to research into and manufacture robots and automation machines.
Encourage companies to use robotics and automation machines in their operations and production for better productivity using less labour.
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This must include training employees in SMEs to be knowledgeable with computerisation to achieve work efficiency, and how to prevent hacking.
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Preventing hacking must be part of a total strategy to ensure continuous production chains are not disrupted, and for the survival/wellbeing of the SMEs.
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All these need funding and a clear direction for Red Dot to be a Smart Nation with our Total Defence as the core strategy for the continuous and uninterrupted wellbeing of our economy where big companies and small SMEs can thrive freely and be protected from hacking.
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- SMEs’ CPF contributions.Give a one-off rebate of 10% on the total employer CPF contribution paid by the SMEs in the year 2019. To qualify, the SMEs has to be privately owned, i.e. not owned by any PLC, and has a 2019 sales turnover not exceeding S$5m generated from sales to unrelated third-party clients.
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INDIVIDUAL – PERSONAL INCOME TAX, ETC:
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- Personal Income Tax Relief.
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Increase the cap on personal income tax relief to S$100,000.
This is the total amount of personal income tax relief an individual can claim.
Give a one-off special tax rebate of 10% on the tax payable, cap at S$5000 for those whose tax payable is below S$50,000.
- Estate Duty.
Reinstate estate duty with revised conditions, and use it to fund education needs in child-care centres, pre-school, primary and secondary schools for students from the lower-income groups.
Cap the estate duty tax at $500,000.
Place the estate duty in an Education Trust with dollar-to-dollar backing by the Govt.
See Note: 1
Give a further grant of S$30m to the kid-start programme, which is to help parents pay for development programmes for their children up to the age of six.
Give free education up to university level to students who are from families whose total household income is less than S$60,000 per year.
Give S$500 to each primary and secondary student.
Reference:
https://tankoktim.wordpress.com/2018/06/01/reinstate-estate-duty-tax-to-reduce-inequality/
.
- Workfare Income Supplement–
Extend WIS payments to those above 60 years old by crediting S$200 per month from the WIS into the CPF accounts of the elderly based on the 4% difference in CPF contribution, which has been reduced from the employer’s CPF contribution.
Make it worthwhile and attractive for employers to employ the elderly.
Reduce the employers’ CPF contribution, and the Govt to top it up by crediting it to the elderly persons’ CPF account from the WIS fund.
Increase the Workfare Income Supplement to minimum $2400 and cap at $4800 per year.
To qualify for the WIS, the person’s earned income shall not exceed $28,000 per year.
See Note: 2
Reference:
https://tankoktim.wordpress.com/2015/08/30/minimum-wage-policy-wage-income-supplement-policy-both-should-work-side-by-side/
.
- Workfare Income Supplement.
Increase the cash portion payment to 50% and credit the other 50% into the CPF account of the lower-income groups.
See Note: 3
In addition to the Workfare Income Supplement, give a household supplement of S$1200 to each Singaporean residential household so long as that residence has an elderly folk aged above 70 years of age.
Reference:
https://tankoktim.wordpress.com/2015/08/30/minimum-wage-policy-wage-income-supplement-policy-both-should-work-side-by-side/
.
MEDICAL AND HEALTH:
.
- Stay Fit Fund.
Set up the Fund to encourage all Singaporeans to stay fit by giving 20-day hospital bed credit at age 70.
Credit every Singaporean now above 70 years of age with 20 days of non transferable C class ward stay in a public hospital.
Reference:
.
- MediShield Life, and Medifund.
.
The Govt should waive the current year 2020 insurance premium for MSL, and credit the amount to the person’s CPF Medisave Account.
This is on condition the person is above 60 and have paid 90% portion of his medical claim in 2019.
Based on the recent case of the $4.50 payment by MSL, the “minimum compassionate approach” should be the waiver of the insurance premium in 2020.
The premium amount waived should not exceed and be limited to the 90% amount paid by the claimant.
At the end of each year, the Govt Medifund should transfer to and reimburse MSL the total disbursed premium-waived amount.
Singaporeans know that not many individuals qualify to get funding from Medifund and it is harder than trying to put an elephant through the eye of a needle.
- Medical costs.
Bring costs down. Poly clinics built at high costs should open till 10pm three times a week for certain medical treatment especially those that use high-tech medical equipment [dental, lab tests, scanning, etc] as time is money on sunken-investment costs.
It is not about having more doctors up to 10pm.
A one-shift operation is not enough.
Public library is a good example of opening at night and not end at 5pm daily.
.
TAXATION:
.
- GST Rebates
Give GST Rebate of $800 to every family with household income of less than S$28,000 per year. This will make spending of $1000 per month [$12,000 per year] of each household on basic necessities become GST tax free.
Give GST Rebate Vouchers to all Singaporeans so long as the person does not earn more than S$28,000 annually and does not own any property.
The address on the I/C and property annual value should not be taken into account to decide eligibility.
- Sales Tax.
The rich, powerful and learned including top politicians with tummy full, sleep in the best of beds, travel in style, etc., when they champion socialist ideals for the lower-income groups and the elderly, will they put their money where their mouth is by asking the Govt to have a 3% Sales Tax on expensive and branded goods/equipment [not on F&B, food, drinks and services]?
The Sales Tax will be in addition to the GST, making it a dual system of indirect consumption tax.
There will be refund of the Sales Tax to tourists at the exits when they leave with the equipment.
See Note: 4
.
- Property Tax. Impose additional levy of 10% on the property tax payable on all properties with annual value above S$40,000;
.
Property Tax. Remove property tax on all HDB shops and HDB hawker stalls in HDB central area, and in wet markets. This will be one of the steps to reduce cost of living by 25%.
.
- Road Tax. Impose additional $2000 road tax on all cars with on-the-road price of more than S$300,000.
.
- Payroll Tax.
Pay ministers’ and MPs’ salaries by having a 1% payroll tax, which shall be paid by public-listed companies on their total annual group payroll not exceeding $10m.
Maximum payroll tax payable by each PLC shall be capped at $100,000.
A tax rebate should be given on the tax payable to mitigate the payroll tax liability of the PLCs.
It is time to have this 1% payroll tax to counter the discontent over ministers’ salaries, which should not be paid from general taxation, but from a specific tax, a payroll tax on PLCs.
We know that higher pay comes with higher responsibility and will be hard to address with moral justification when there is any public outcry on issues that affect a big section of the population.
When both sides [PAP vs Opposition] contest/compete and come up with better policies [social, financial, economic, development, etc] at the GE, it can only benefit the country and Singaporeans even more. And it is not a bad thing.
The nation and Singaporeans will be the winners with better government policies.
How to win the hearts and minds of voters?
Reference:
https://tankoktim.wordpress.com/2014/03/28/payroll-tax-should-we-bring-payroll-tax-back/
and,
https://tankoktim.wordpress.com/2015/09/25/aim-to-win-hearts-of-all- singaporeans/
.
- The Govt should give S$10,000 per year to the 250,000 lower-income household families, and it should be credited into the head-of-the family’s CPF account.
Total S$2.5b to come from the 3% Sales Tax on expensive goods and equipment. If 3% is not enough, set it higher at 5%.
Please see Note: 4.
The S$10,000 should go into the CPF account of Singaporeans for their housing, and for their retirement needs.
If it is given in cash, it will be easy money comes, easy money goes, and for some, more will end in the 4D booths.
SOCIAL ISSUES:
.
- Silver Support Scheme.
Revise the Silver Support Scheme to give up to $400 cash per month to elderly Singaporeans aged 65 and above, who have total household income of not more than $60,000 per year.
The SSS is to address the concerns of rising COL for those above 65 in the lower income group who have insufficient CPF retirement minimum sum, in need of social welfare assistance, and are renting HDB public housing.
.
- Merdeka Generation Package.
Set up a S$5b Fund and credit S$200 per year to the MediSave account of Singaporeans born between 1stJan 1950 and 9thAugust 1965.
Like the PG system, I believe the Govt will set up a similar system for the Merdeka Generation to pay all including the super rich. All are treated equal in the PG system. There is no opting out system.
.
- CPF Compassion Fund.
Set up a CPF Compassion Fund.
See Note: 5.
Allow all to withdraw their CPF money on reaching 55 if they choose to, or at anytime after 55.
There should be a joint-funded CPF Compassion Fund [with dollar-to-dollar backing by the Govt] to address the needs of those who fall into the cracks ending homeless and in poverty.
Set up the CPF Compassion Fund by pooling $18,000 [10% of the amount withdrawn, and cap at S$18,000] from each CPF member if they choose to withdraw $181,000 at age 55 or at anytime after age 55.
The S$181,000 Minimum Sum Scheme shall remain for those who do not want to withdraw their CPF at age 55.
The details should be worked out as to who should be allowed to draw from the CPF Compassion Fund when in financial hardship and despair, and fix the monthly assistance amount. I suggest S$500 per month.
Reference:
.
- Community Silver Trust.
Increase the S$1billion Community Silver Trust to S$1.5 billion. Set the target to increase this Trust to S$10 billion by 2030.
The Govt should encourage more voluntary welfare organizations in the health and social services sectors to draw funds from this Trust to build up their capabilities and programmes in intermediate and long-term care of the elderly.
See Note: 6.
Reference:
https://tankoktim.wordpress.com/2011/02/21/my-letter-to-the-media-govt-on-the-new-s1b-community-silver-trust/
.
- Counter-Inflation Fund (CIF).
To counter the higher cost of living, set up a permanent and transparent Counter-Inflation Fund (CIF).
See Note: 7.
Reference:
https://tankoktim.wordpress.com/2011/02/22/my-letter-in-bt-make-it-a- counter-inflation-fund-instead/
Set up a Counter-Inflation Fund with seed-money of S$1 billion to pay every wage earner below 60 years of age [those earning less than $60,000 per year] a sum of $1000 when the inflation rate has gone above 4 per cent in any year.
Elderly Singaporeans aged 60 and above, who have total household income of less than $60,000 per year, shall also qualify for the grant of S$1000.
.
- Counter-Unemployment Fund (CUF).
Set up a permanent and transparent Counter-Unemployment Fund (CUF) with funds from the additional foreign worker levies, which should not be credited into the government’s Consolidated Fund.
See Note: 8.
Reference:
https://tankoktim.wordpress.com/2013/03/11/policy-proposals-on-4-key-issues-in-ge-2011/
The Govt should transfer 10% of the foreign workers levy to set up the Counter Unemployment Fund. MOF should work out the details of the amount and the eligibility criterion in giving support to those who have been retrenched or unemployed.
.
- CPF Trust.
Govt should set up a Trust for CPF members to participate in funding by giving loans to SMRT to purchase buses/trains. SMRT shall pay an assured reasonable interest rate of return to the Trust.
The interest rate shall be at a discount of 10% of commercial bank interest rates.
Reference:
https://tankoktim.wordpress.com/2013/03/04/set-up-cpf-trust-to-let-public-share-in-smrt-profits/.
.
- Population growth.
Set up 24-hour crèches or child-care centres to encourage couples to have babies.
See Note: 9.
Give an additional S$5000 cash grant to help defray the cost of childbirth delivery expenses and pay in full the medical charges when a baby is born with congenital issues.
Pay S$6000 per year to a child born with down syndrome or congenital deficiency.
This is to help relieve the stress on parents and make it become an incentive to encourage more parents to have their 2ndor 3rdchild.
.
- Population TFR. Encourage youth to marry non-Singaporean to boost the birthrate.
See Note: 10.
Reference:
https://tankoktim.wordpress.com/2013/03/26/should-we-let-in-more-foreigners-how-to-increase-the-trf-by-1
.
- Adult Education Fund.
Set up the Fund to encourage life-long training and re-training.
Increase SkillsFuture Credit to $1000 for adult education for Singaporeans to upgrade their skills and abilities.
An initial credit of S$500 was given to all above 25. It is time to raise the grant to S$1000 per year.
.
- HDB’s Proximity Grant.
Use the Proximity Grant for HDB housing to encourage all the old-folk homes to transfer the destitute nearer to their relatives for them to stay in the same district close-by to facilitate regular visits by those who are related to them.
Making each HDB town centre unique ‘for bonding in a village-like living condition’ will not be enough unless it is filled with people to make it happen and be vibrant.
Let us not forget the old aged homes and the inmates, who should be part of the community and not far from HDB town centres.
- HDB Public Housing
Not to have completed HDB flats unoccupied for too long. Time is money.
Allow Singaporeans, especially the first time buyers [those not successful in the balloting process, and after the flat selection process is over] to re-apply to select the HDB flats even in the matured estate if the flats have not been taken up after three rounds of flat selection by other first-time buyers.
.
- HDB public housing–
Guarantee return of the CPF money [principal only, with no accrued interest] that still remains on the flat [i.e. CPF money that has not been credited back to the CPF account] on expiry of the 99th year, and cap the guaranteed CPF amount to be returned at S$100,000.
There will be only a few who will have CPF money in the HDB flat on the 99thyear, or a few persons who have lived to a ripe old age of 100 to qualify for this scheme.
.
- Cost of living.
Keep COL down. Set a target to reduce it by 25%.
See Note: 11.
Reference:
https://tankoktim.wordpress.com/2018/08/14/reduce-cost-of-living-rather-than-income-gap/
.
- Land Transport
Build a ring expressway going around the central catchment areas of the three reservoirs, Seletar, Peirce and MacRitchie.
Convert and upgrade the existing expressways into a ring system.
Build a new direct MRT line from Sembawang, Yishun, Ponggol, Pasir Ris, to Changi Airport.
- Security
To enhance security, install more CCTV cameras at all key areas and hot spots.
Give tax rebates to encourage more business establishments to install CCTV cameras in and around their premises.
Set target to double the present number of CCTV cameras.
OTHERS:
- National Reserves. – Cap it at 250% of GDP.
The Govt should set a limit for the NR. Some will ask whether is it wise to set a limit.
Reference:
https://tankoktim.wordpress.com/2018/03/05/national-reserves-cap-it-at-250-of-gdp/
Is the sky the limit for our NR? What should the NR be in 2030, 2065, 2100?
NR went up from zero in 1965 to S$1 trillion in 2019.
Should NR go up double to S$2 trillion by 2065?
Will the population go up by 100% too by 2065?
Why cap NR at 250% of GDP?
Higher capping level means at the expense of current Singaporean taxpayers.
Higher means depriving the lower-income from enjoying the fruits today, and with no hope for the higher fruits to drop on their lap in the future.
250% cap on present day GDP of S$400 billion = S$1 trillion in National Reserves.
In the future, if the GDP goes up say to S$500 billion, the NR will be managed [by the use of NIRC and state land proceeds, etc. for long-term infrastructure development not for current year expenditure spending] for the NR to be kept below S$1.25 trillion [250% of GDP of S$500 billion].
- NIRC is transferred at 50% to the current year Budget.When there is annual surplus at budget year-end, the surplus should be transferred at 50% too and not at 100% to the National Reserves.
The other 50% should be transferred to the permanent trust funds, e.g. Community Silver Trust, GST Rebate Fund, Medisave Fund, Pioneer Generation Fund, Merdeka Generation Fund, Transport Fund, Education Fund, etc., for the benefit of the present generations.
.
- Ministry of Transport. MOF is a huge ministry. MOT should become two ministries, land only in one ministry, and another for air and sea.
.
==================================
.16 items [List of Govt policies for review and changes]:
NOTES AND REFERENCES:
NOTES AND REFERENCES:
Note: 1
Estate Duty
Reinstate Estate Duty tax with a twist to serve a specific purpose.
Let us have Estate Duty tax as an extra revenue source to be placed in a ‘Counter Inequality Fund’ for the MOE to use the funds for child-care centres, pre-schools, primary and secondary education of children from the lower-income groups, with one main emphasis, that is to address our society’s Inequality Syndrome.
For privacy of estate duty filing and declaration, the beneficiaries of the estate who voluntarily pay the full sum of S$500,000 will not have to file estate duty returns and that will save administrative workload on estate duty tax filling and tax collection. [Note: On 3rdJan 2019, China announced this form of taxation on next-of-kin’s inheritance].
.
.
I hope no one will find fault but welcome the Estate Duty tax when it is brought back with the altruistic and specific intention for the sake of Singapore’s wellbeing and future.
.
Even when the total collection from Estate Duty might be a few millions, It would mean on average a few thousands of dollars for each student for the MOE to help those from the lower-income groups.
.
Sharing:
https://tankoktim.wordpress.com/2018/06/01/reinstate-estate-duty-tax-to-reduce-inequality/
==========
Note: 2
Workfare Income Supplement– extend it to those above 60 years old.
Sharing:
https://tankoktim.wordpress.com/2015/08/30/minimum-wage-policy-wage-income-supplement-policy-both-should-work-side-by-side/
For the Workfare Income Supplementary policy to be more inclusive, I hope the Government will top up the wages of those over 60 years.
.
This will encourage more elderly to stay in the workforce when employers find it affordable and worth their while to employ them due to the 4% reduction in employer’s CPF contribution, and lower wages compared with those below 60 years of age.
.
I suggest the Government credit S$200 per month from the WIS into the CPF accounts of the elderly based on the 4% difference in CPF contribution, and set the eligible wage limit for this group at not exceeding S$5000 per month.
.
I hope the new enhancement of the WIS policy will benefit the greater whole to become new game changers. The enhancement must be financially sustainable.
Note: 3
Workfare Income Supplement– increase the cash portion
PROF TOMMY KOH SAID AT THE ST’S PUBLIC FORUM: “If you’re willing to increase the cash component of the Workfare Income Supplement, then we are in business.”
.
Question is how much [how many %] of the WIS component should be paid in cash and not to be credited to the CPF account. Should it be 70:30?
.
I hope some MPs will ask questions on this in Parliament for the rationale to decide the cash component percentage.
Sharing:
https://tankoktim.wordpress.com/2015/08/30/minimum-wage-policy-wage-income-supplement-policy-both-should-work-side-by-side/
===========
Note: 4.
Sales Tax
Additional Sales Tax on big-ticketed items:
Prof Tommy Koh at the recent ST public forum asked the Govt to give more to the poor, and I hope he agrees we should not forget to give handouts to those over 80 years of age too.
We know the Govt will miss some in the handout exercise when the elderly staying in a private residence with their children or alone will not qualify due to the I/C address. The annual value of private property should not be used as a qualifying criteria when the person does not own a property, and does not have annual earned income of more than S$28,000.
Will the rich, the powerful and the learned including the rich politicians who champion socialist ideals for greater equality for the lower-income groups be prepared to pay more taxes?
I propose the following funding sources:
a] impose an additional 3% Sales Tax on retail expensive branded goods and equipment [not on F&B, food and drinks, and services] with retail sale price exceeding S$1000 for each equipment.
Use the collection to pay WIS to those in the lower-income groups, those above 60 years of age who continue to work, and free public transport for those over 70 years of age.
Cap the additional Sales Tax at $30,000.
If 3% is not enough, set it at 5%.
The Sales Tax and the GST will be a dual systems of indirect consumption tax.
The tourists will receive Sale Tax refund in full at the exits where they leave Singapore with the equipment.
b] re-instate Estate Duty but cap tax at S$500,000 to pay for child-care centres, pre-school, primary and secondary education for children from the lower-income groups.
For privacy of declaration, when the beneficiaries voluntarily pay the full sum of S$500,000, they will not have to file estate duty returns and that will save administrative workload on estate duty tax filing and the collection of estate duty tax.
[Note: On 3rdJan 2019, China announced this form of taxation on next-of-kin’s inheritance].
c] Govt should top up [a] and [b] by dollar-to-dollar backing to set up a trust to pool and manage the funds in perpetuity.
PROF TOMMY KOH SAID AT THE ST’s PUBLIC FORUM:
“My third point is I want every worker to earn a living wage. I’m not wedded to the minimum wage, you know, it’s just a means to an end.”
.
“If Progressive Wage Model, and Workfare Income Supplement can work, by all means. I have no ideological commitment to one instrument versus another, I’m interested in the outcome.”
.
“My dream is I want a Singapore that is prosperous, just and equitable. I want a Singapore in which every working man and woman can live in dignity.”
.
MY COMMENTS to the above:
.
Hope the Govt will set up a WIS Trust Fund with money from:
.
a] charge additional 3% Sales Tax on all retail purchases on all expensive and branded goods/equipment [not on F&B, food and drinks, and services] that are worth more than S$1000 in retail price for each equipment.
.
b] Government should give dollar-to-dollar backing by topping up the Sales Tax collections.
Pay 100% in cash to those in the lower income groups, each person to get 40% of take-home pay, and cap it at S$500 per month.
.
Paying from this Fund will mean:
.
a] foreign workers are not given the WIS; It will encourage Singaporeans to work.
.
b] the payment of WIS is not a direct distribution of the GDP;
.
c] the payment of WIS will not jack up the wage bills on employers as WIS is not paid by the employers.
.
d] WIS will not jack up retail prices by employers as it does not affect their total cost of production or affect their bottom profit line.
.
e] WIS will not cause cost of living to rise due to retailers of food and services jacking up prices as WIS is not paid by the employers.
.
f] The next tier of workers [up the ladder or the moving escalator of employment] above the lower-income groups will not demand for more pay rises nbas WIS is paid by the government not by the employers.
Sharing:
===========
Note: 5
CPF Compassion Fund
Sharing:
The Minimum Sum was not in the original CPF scheme when it was introduced some 50 or more years ago.
The MS came about based on the report of the late Mr Howe Yoon Chong on concerns of a fast ageing Singaporean population.
I hope the Govt will set up a CPF Compassion Fund [CCF] to unlock the contentious MS issue financially and politically..
The Govt should focus on the following and decide:
a] what amount should the CPF members withdraw at age 55 from the retiring account, should it be the entire amount [which was in the original scheme of the CPF]?
b] or should half the amount be withdrawn at age 55 and the balance half at age 65? Or, should it be withdrawn in three equal amounts at age 55, 65 and 75?
c] place 10% of the withdrawn amount [total amount of the 10% retained by the CPF Board not to exceed $18,000] in my proposed ‘CPF Compassion Fund”, which should be set up by CPF Board.
d] should the amount retained in the CCF be capped at $18,000, or less?
e] should the Govt fund it by dollar-to-dollar matching to double the CCF amount to make this new Fund financially feasible? If dollar-to-dollar matching is financially onerous, what other amount is comfortable to the Govt to top up the CCF?
f] should the Govt give a $300 cash monthly subsistence [or more?] from the CCF to the destitute, those who have squandered their CPF money, are homeless, and have no cash or any form of physical asset? Is S$300 per month too high or too low? What should be the amount?
g] should the Govt allow those who reach 85, but have not claimed the monthly subsistence as a destitute from the CCF, to ask for their contributions [the 10% retained by the CPF Board] to be returned to them from the CCF? Should the age be set at 85 or should it be at 80?
h] or should the Govt keep the contributions [the 10% retained by the CPF Board] in the CCF for the benefit of the rest of the society when a CPF member dies before 85 or after 85? Or, should the CPF Board pay the contributions to the nominee or next-of-kin of the deceased CPF member?
i] should there be an option for the CPF members to opt out not to join the CCF but be in the MS scheme? This will mean that the CPF members want the CPF Board to apply the MS scheme [wef the MS would be $181,000] on them.
Note: 6
Community Silver Trust
Sharing:
https://tankoktim.wordpress.com/2011/02/21/my-letter-to-the-media-govt-on-the-new-s1b-community-silver-trust/
I am glad the Government has not forgotten the passion and compassion of its democratic socialist ideals upon which independent Singapore was set up in 1965.
The setting up of the Community Silver Trust in 2011 was a major breakthrough in caring for Singaporeans in the long run, as it is not a welfare system that will open up the Pandora’s Box clouded with financial uncertainties.
In his Budget Statement 2011 in Parliament yesterday 18 Feb 2011, Finance Minister Tharman Shanmugaratnam said he believes the commitment of S$1 billion by the Government would hopefully spur a much higher level of private funding over the next 10 years.
He added that he would like to encourage philanthropists and others in the community to come forward, participate, and help develop new and better care services together with our VWOs, as the Government believes such institutions could be relied upon to bring the passion, expertise, and resources needed to help the elderly and disabled without the need for the Government’s direct intervention.
I hope the new trust will remain in perpetuity and additional funds would be allocated from future budgets when we have more good years to build on this initial S$1 billion base to become one of our major institutions for the benefit of our people.
I hope the Govt will increase the Community Silver Trust’s initial funding of S$1 billion in 2011 to S$10 billions by 2038.
I hope the Govt will allocate S$500m in the 2020 Budget to increase the Trust from S$1b to S$1.5b.
Note: 7
Counter-Inflation Fund [CIF]
The MOF should transfer funds from the Counter Un-employment Fund [please see Note 8 below] to the Counter-Inflation Fund [CIF] for disbursement to lower-income Singaporeans once a year [including those ‘unemployed’].
This will help mitigate the people’s concerns about there being too many FWs here.
Clearly, when the government disburses money and more money to Singaporeans, it will help allay their concerns.
The money from the additional FWs’ levy is not government’s money in the first place.
It is money collected by the government to control the inflow of FWs, who have displaced the locals. [Some have remained under-employed or unemployed for whatever personal reasons.]
Sharing:
https://tankoktim.wordpress.com/2011/02/22/my-letter-in-bt-make-it-a-counter-inflation-fund-instead/
Note: 8.
Counter-Unemployment Fund [CUF]
I suggested the CUF in my letter ‘Policy proposals on four key issues in general election” published by BT on 19 April 2011.
More on what I wrote is at this link:
Sharing:
https://tankoktim.wordpress.com/2013/03/11/policy-proposals-on-4-key-i ssues-in-ge-2011/
Let us set up a permanent and transparent Counter-Unemployment Fund [CUF] with funds from the additional FWs’ levies, which should not be kept in the Government’s Consolidated Fund.
Note: 9.
Population Growth
24-hour crèches or child-care centres
The Govt’s intention to make pre-school more affordable and of good quality is laudable but will not be enough to help encourage Singaporeans to have more babies.
The crux of the matter is the period before the child enters pre-school. Unless 24-hour crèches or child-care centres are made easily accessible, of good quality and affordable, Singaporeans will still hesitate in having more babies. Half-hearted and inadequately funded policies will not bring the intended result.
All other complicated monetary and elitist Govt policies [involving many stakeholders with vested interest] have failed in reversing the trend of low fertility.
The Govt should promote and support having professionally run 24-hour creches in all HDB estates, especially located near to the 1, 2 and 3-room flats. This is one of the ways to encourage more Singaporeans to have more babies.
Sharing the link:
https://tankoktim.wordpress.com/2013/01/22/339/
Note: 10
Population TFR
Sharing:
https://tankoktim.wordpress.com/2013/03/26/should-we-let-in-more-foreigners-how-to-increase-the-trf-by-1/
Govt should provide monetary incentives to encourage our young to marry foreigners.
We should encourage our youths [young men] to marry people from around the nearby countries.
The Govt should have policies to encourage them to meet, fall in love and marry.
We should not hesitate to grant the spouse PR status, and when a child is born to give the spouse Singapore citizenship.
This will help our population to grow by encouraging our youths to marry but not always marrying among Singaporeans.
Our policies should discourage our youths marrying among Singaporeans as the 1.2 TFR will not increase.
It will still remain at 1.2 when locals marry locals unless our young marry foreigners.
Note: 11.
Cost of Living
Keeping cost of living down [e.g. keeping hawker retail prices down for the benefit of the lower-income groups] and the purchasing power of money [wages of the poor] up will be the hallmark of good and capable governance.
.
If this is not achieved and maintained, it will bring the opposite result, and that will be eroding purchasing power of money due to rising COL.
.
This will have impact on the lower-income or overwhelm some in making ends meet.
When the gap between rich and poor widens, it will become untenable and will make governing becomes indeed ungovernable.
Sharing:
https://tankoktim.wordpress.com/2018/08/14/reduce-cost-of-living-rather-than-income-gap/
=end=
========
2020 Budget Speech by MOF Heng Swee Kiat in Parliament on 18th Feb 2020
Contents
BUDGET 2020 ADVANCING AS ONE SINGAPORE
- RESPONDING TO CHALLENGES IN A NEW DECADE…………………………………………………………. 3 Economic Outlook…………………………………………………………………………………………………………3Dealing with the Immediate Challenges …………………………………………………………………………. 3Stabilising and Supporting our Economy in the Near-Term ………………………………………………. 4Maintaining Sound Finances to Respond to Uncertainties ……………………………………………….. 7Navigating Long-Term Structural Shifts ………………………………………………………………………….. 8Advancing as One Singapore ……………………………………………………………………………………….. 10
- GROWING OUR ECONOMY, CREATING OPPORTUNITIES FOR OUR PEOPLE……………………….. 12 Singapore as a Global-Asia Node of Technology, Innovation, and Enterprise …………………… 12Enabling Stronger Partnerships ……………………………………………………………………………………. 13Partnerships with the World ……………………………………………………………………………….. 13Partnerships within Singapore …………………………………………………………………………….. 14Deepening Enterprise Capabilities ……………………………………………………………………………….. 15 Starting Up…………………………………………………………………………………………………………16 Growing ……………………………………………………………………………………………………………. 16 Transforming Further …………………………………………………………………………………………. 17Developing Our People ……………………………………………………………………………………………….. 18 Pre-Employment Training – Tertiary Education ……………………………………………………… 18 Working Years – SkillsFuture ……………………………………………………………………………….. 19 Working Years – SkillsFuture Mid-Career Support Package………………………………………21 Supporting Lifelong Learning and Employability……………………………………………………..23 Foreign Worker Policy ………………………………………………………………………………………… 24Summary ……………………………………………………………………………………………………………………25
- CARING FOR SINGAPOREANS, BUILDING AN INCLUSIVE HOME………………………………………. 27 Supporting Families …………………………………………………………………………………………………….27 Pre-school Years ………………………………………………………………………………………………… 28 Primary to Pre-University School Years………………………………………………………………….28 Higher Education Years ………………………………………………………………………………………. 28 Overall Education Benefits ………………………………………………………………………………….. 29 Housing Affordability…………………………………………………………………………………………..29 Care and Support Package for Households ……………………………………………………………. 30
Enabling Seniors………………………………………………………………………………………………………….31Strengthening the Giving Culture …………………………………………………………………………………. 34Summary ……………………………………………………………………………………………………………………36
- SUSTAINING SINGAPORE’S SUCCESS FOR OUR FUTURE GENERATIONS ……………………………. 37 Addressing Climate Change …………………………………………………………………………………………. 37 Supporting International Effort to Fight Climate Change ………………………………………… 37 Managing our Carbon Constraints ………………………………………………………………………..37 A Resilient Vehicular Tax Structure ………………………………………………………………………. 39 Building a Sustainable Singapore, Together……………………………………………………………40 Long-Term Adaptations to Climate Change …………………………………………………………… 41Securing Our Home …………………………………………………………………………………………………….. 41A Fiscally Sustainable Singapore …………………………………………………………………………………..43 Other Tax Changes ……………………………………………………………………………………………..44Budget Position ………………………………………………………………………………………………………….. 44
- PARTNERING SINGAPOREANS TO BUILD SINGAPORE TOGETHER ……………………………………. 46
- CONCLUSION ……………………………………………………………………………………………………….. 49
A. RESPONDING TO CHALLENGES IN A NEW DECADE
- A1. Mr Speaker, Sir. I beg to move, that Parliament approves the financial policy of the Government for the Financial Year 1st April 2020 to 31st March 2021.
- A2. This year, we usher in a new decade – one marked by tectonic shifts in our operating environment, and major uncertainties.
Economic Outlook
- A3. Singapore’s economy grew by a modest 0.7% in 20191. This is the weakest growth since the 2008 Financial Crisis.
- A4. Just as the global economy was beginning to recover, the Coronavirus Disease 2019, or COVID-19, outbreak hit us.
- A5. The outbreak will certainly impact our economy.
- The tourism and aviation industries are most directly affected. Visitor arrivals to Singapore and air traffic through Changi have declined, and with it, hotel occupancy rates.
- The virus outbreak has also disrupted supply chains and created ripple effects on other sectors, especially now that our economy is so much more integrated withChina’s.
- A6. The Ministry of Trade and Industry (MTI) has downgraded the GDP forecast from between 0.5% to 2.5%, to between -0.5% and 1.5%.
- However, the duration and severity of this outbreak and the impact on the global economy are still unclear.
- While MTI’s baseline is for GDP growth to come in at 0.5% for the full year, we must be prepared that the economic impact may be worse than we projected.
Dealing with the Immediate Challenges
A7. Our immediate concern is to protect you and your families. We will put in every effort to slow down the spread of the virus.
a. Our frontline agencies have been fighting and containing the outbreak. I will set aside an additional $800 million in this Budget to support these efforts. The bulk of this will go to the Ministry of Health. This is on top of the substantial resources already committed each year to public health.
1 Source: Economic Survey of Singapore 2019, Ministry of Trade and Industry.
b.
Let me, on behalf of the Government, express our gratitude to all our frontline officers who have been working tirelessly, day and night, over weekends, in our fight against the outbreak. You have exemplified the resilience and indomitable
spirit of our people.
But please take care of yourselves.
c. I am confident that together, we will stay strong, and get through these trying times.
A8. With these uncertainties, I know Singaporeans are understandably very concerned about the impact on our businesses and jobs.
a. I will introduce two special packages, with a total budget of $5.6 billion.
- The first is the Stabilisation and Support Package. This will stabilise the economy and support our workers and enterprises, by helping workers to stay in their jobs and enterprises with cash flow. I will give additional help to sectors more directly affected by the outbreak.
- Households will be impacted by the slowdown too. In every Budget, we always provide support to families. But in view of the current situation, we will have a special Care and Support Package, to provide additional, timely help to more households with cost of living. The less well-off will get more help.
Stabilising and Supporting our Economy in the Near-Term
- A9. First, let me elaborate on how we will help our workers and enterprises to weather the near-term economic uncertainties.
- A10. Our foremost concern is jobs. We want to help our workers retain their jobs, and use any lull period to upgrade their skills, andbe ready when the upturn comes. As NTUC Secretary-General Ng Chee Meng and his union leaders said, ‘Every worker matters’.
- A11. I will therefore provide a Stabilisation and Support Package, amounting to $4 billion.
- A12. To help our workers stay employed, I will support enterprises by defraying their wagecost, through two schemes.
a. I will introduce a Jobs Support Scheme to help enterprises retain their local workers. For every local worker in employment, I will offset 8% of the wages, up to a monthly wage cap of $3,600, for three months.
i. This payment will be given to employers by the end of July this year.
ii. With over 1.9 million local employees in Singapore, this will cost the Government $1.3 billion and benefit all enterprises and their local employees.
b. For enterprises that have invested in raising productivity, I urge them to continue to upgrade and to share the gains with their workers. Hence, I will enhance the Wage Credit Scheme to support wage increases for Singaporean workers.
- Currently, the Wage Credit Scheme co-funds wage increases for Singaporean employees earning a gross monthly wage of up to $4,000.
- I will raise the monthly wage ceiling from $4,000 to $5,000, for qualifying wage increases given in 2019 and 2020, so that more Singaporean employees will benefit.
- I will also raise the Government co-funding levels for 2019 and 2020 qualifying wage increases by five percentage points, to 20% and 15% respectively.
- With these enhancements, another $1.1 billion will go to about 90,000 enterprises, to benefit more than 700,000 Singaporean employees.
A13. The Stabilisation and Support Package will also provide economy-wide support to help enterprises with cash flow.
- First, I will grant a Corporate Income Tax Rebate for Year of Assessment 2020, at a rate of 25% of tax payable, capped at $15,000 per company. This rebate will benefit all tax-paying companies, and cost about $400 million.
- I will also enhance several tax treatments under the corporate tax system for one year. For instance, I will allow enterprises a faster write-down of their investments in plant and machinery, and renovation and refurbishment, incurred for Year of Assessment 2021. This will put more cash in the hands of our enterprises.
i. For example, hotels can now take advantage of this lull period to carry out upgrading work, and be better prepared for the upturn.
c. To help enterprises access working capital more easily, I will also enhance theEnterprise Financing Scheme’s Working Capital Loan component for one year. I will raise the maximum loan quantum from $300,000 to $600,000, and increase our risk-share on these loans to 80%, from the current 50% to 70%. With the large part of the risks taken up by the Government, I trust that our financial institutions will do their part to support viable SMEs.
d. We will also support tenants and lessees of government-managed properties, including those under JTC, HDB, SLA, STB, and SDC. They can approach our agencies to discuss options for more flexible rental payments such as instalment plans. Each request will be assessed individually, taking into account theenterprise’s circumstances.
A14. Sectors directly affected by COVID-19 will get additional support. These five sectors are: tourism, aviation, retail, food services, and point-to-point transport services.
- To help employers in these sectors retain and reskill workers:
- We will enhance support under the Adapt and Grow initiative for this year, specifically through redeployment programmes in the tourism, aviation, retail, and food services sectors. For these sectors, we will extend the funding period for reskilling from three months to a maximum of six months.
- Together with the Jobs Support Scheme, we will support employers in these sectors to retain and train more than 330,000 local workers. These workers can make full use of the down time for training and upskilling, to prepare for the recovery.
- We will also help affected sectors with their operating costs and cash flow. For the tourism sector:
- I will grant a Property Tax Rebate of 30% for the year 2020, for the accommodation and function room components of licensed hotels and serviced apartments, and prescribed Meetings, Incentives, Conventions, and Exhibitions (MICE) venues. International cruise and regional ferry terminals will receive a 15% Property Tax Rebate, and the Integrated Resorts will receive a 10% Property Tax Rebate.
- For enterprises in the tourism sector, we will be working with Participating Financial Institutions to introduce a Temporary Bridging Loan Programme for a year, with a loan quantum of up to $1 million and interest rate capped at 5%. The Government will take on 80% of the risk of the loan. This will provide more cash flow on top of the enhanced working capital loan I announced earlier.
- For the aviation sector:
- We will implement a suite of measures, comprising rebates on aircraft landing and parking charges, assistance to ground handling agents, and rental rebates for shops and cargo agents at Changi Airport.
- I will also grant a 15% Property Tax Rebate for Changi Airport.
- To support commercial establishments in the food services and retail business:
i. The Government will take the lead. NEA will provide a full month of rental waiver to stallholders in NEA-managed hawker centres and markets. Other Government agencies, like HDB, will provide half a month of rental waiver to its commercial tenants.
ii. To support establishments that operate in private property, I will also grant a15% Property Tax Rebate for qualifying commercial properties. I strongly urge landlords to pass this on to their tenants by reducing rentals.
e. The Ministry of Transport has announced a Point-to-Point Support Package. I am heartened to know that many taxi and private hire car operators have come out strongly to support the initiative by matching the Government’s contribution. This spirit of partnership is what we need to weather this challenging period together.
- A15. Details of the Stabilisation and Support Package are in the Annex. [See Annex A-1.] The Ministers in charge of the various measures will share further details in due course.
- A16. We will continue to monitor the situation closely. If needed, we can and are prepared to do more.
- A17. I will speak about the Care and Support Package for households later in my speech.
Maintaining Sound Finances to Respond to Uncertainties
A18. The COVID-19 outbreak is a stark reminder of the continued importance of maintaining a sound fiscal footing to deal with surprises and unexpected scenarios.
a. In particular, we are able to mount a decisive response to support Singaporeans and workers through uncertain times only because of good long-term planning.
- A19. I announced in 2018 that we plan to raise the GST by two percentage points, to 9%, sometime from 2021 to 2025. This is to raise recurrent revenues to meet our growing recurrent spending, particularly for healthcare.
- A20. After reviewing our revenue and expenditure projections, and considering the current state of the economy, I have decided that the GST rate increase will not take effect in 2021. In other words, the GST rate will remain at 7% in 2021.
- A21. However, we will not be able to put off the increase indefinitely. In fact, this outbreak has reinforced the importance of continued investment in our healthcare system, including the capability to deal with outbreaks. And we will still require recurrent sources of revenue to fund our recurrent spending needs in the medium term.
- A22. Thus, the GST increase will still be needed by 2025.
a. We will assess carefully the appropriate time for the increase. But rest assured we will provide Singaporeans sufficient lead time.
A23. I want to assure everyone that when we raise the GST rate, we will ensure that our taxes and transfers system remains progressive.
A24. We will continue to absorb GST on publicly-subsidised healthcare and education.
- A25. And just as we have done in the past, we will provide an Assurance Package when the GST rate is raised. This will be a $6 billion package for Singaporeans, to cushion the increase as we transition to the higher GST rate.
- GST is paid by all in Singapore, including foreigners visiting and working here. But the Assurance Package will benefit Singaporeans.
- The majority of Singaporean households will receive offsets to cover at least fiveyears’ worth of additional GST expenses incurred.
- Lower-income households will receive much more. Those living in 1- to 3-room HDB flats will receive offsets equivalent to about 10 years’ worth of additional GSTexpenses incurred.
- A26. Under the Assurance Package for GST, every adult Singaporean will receive a cash payout of $700 to $1,600 over five years.
a. To illustrate, a family of four with a combined income of $6,000 living in a 4-room HDB flat can receive about $7,000 in offsets over five years in total. This includes cash of about $4,000.
- A27. Over and above the transitional support, we already have the permanent GST Voucher or GSTV scheme. It defrays GST for lower- to middle-income Singaporeans. When the GST is raised, I will enhance the permanent GST Voucher scheme. I willmaintain the Government’s public commitment to:
- Fully offset the GST for the lower half of retiree households;
- Significantly offset the GST for the upper half of retiree households; and
- Offset about half of the GST for lower-income households with no elderly persons.
- A28. This is the Government’s way of ensuring our system of taxes and transfers remainsprogressive and supports Singaporeans through the change, while enabling us to fund our future needs in a sustainable way.
- A29. To meet this commitment, I will set aside $6 billion for the Assurance Package in theGSTV Fund in this year’s Budget.
Navigating Long-Term Structural Shifts
A30. Even as we navigate our near-term challenges, we must maintain our focus on thelonger term, and on Singapore’s future.
- A31. I have spoken about the accelerating structural shifts in the world in my previous Budget speeches:
- First, the decline in support for globalisation;
- Second, the shift in global economic weight towards Asia, which brings new opportunities;
- Third, the rapid advancement of technology, and more recently, the risk of a technologically bifurcated world; and
- Finally, our own transition to an ageing society, which presents challenges and opportunities.
- A32. We must understand these shifts, and their deep implications, as we chart our future together as one Singapore.
- A33. After the Second World War, nations experienced several decades of growth and prosperity.
- Trade barriers fell, and global trade grew rapidly.
- Technological advances transformed people’s lives beyond recognition.
- A34. Prosperity gave governments the resources to establish comprehensive safety nets and welfare programmes. These included unemployment benefits, pensions, and healthcare, among others.
- A35. But at the same time, globalisation and technology created winners and losers, and widened income inequalities between the skilled and unskilled.
- A36. There are growing sentiments that globalisation and the multilateral system have failed.
a. As a result, nations are turning inwards. Protectionism and nativism are on the rise.
- A37. An ageing population, disruption to jobs, and slowing economic growth are adding to fiscal pressures.
- Yet it is politically untenable to cut back on social benefits.
- When governments issue debt to fund social spending, they impose a growing debt burden on the next generation.
- A38. This is happening at a time when the global economy is experiencing weaker growth and dampened sentiment.
a. Central banks have lowered interest rates to unprecedented levels.
b. In addition, asset purchases by central banks have resulted in abundant liquidity and raised concerns over the formation of asset bubbles.
c. In fact, with limited fiscal space, and ultra-low or even negative interest rates, governments and central banks are much less able to mount stabilisation measures.
A39. On the strategic front, the friction in the US-China relationship is a major source of tension and uncertainty, affecting global economic growth.
- The recent Phase One trade deal between them has headed off an immediate escalation. But it will not resolve the underlying strategic competition. This involves political systems, ideologies, and values, and goes way beyond trade and technology.
- On present trends, US-China tensions will recreate geopolitical fault lines, and portend a bifurcated global order.
Advancing as One Singapore
- A40. I have sketched out the global structural shifts, economic uncertainties, and strategic tensions. I trust Members will see that we are entering a very challenging time. But we can, and we will pull through.
- A41. To deal with these major shifts, we need a capable government, working closely with our people, and a good plan.
- A42. As a city-state, we are small, but nimble.
- We are a trusted node for trade and investment between Asia and the world. This is because of our political stability, commitment to rule of law and multilateralism, ease of doing business, and strong intellectual property protection regime, among others.
- As a multicultural society, we have welcomed diversity and embraced openness. Our diversity has made us stronger, and more valuable to the world.
- A43. Our biggest asset is our exceptional people.
a. We have come together and weathered many past storms, like the Global Financial Crisis, SARS, and now, the ongoing COVID-19 outbreak.
A44. Budget 2020 is our strategic financial plan to prepare Singapore and Singaporeans to meet these challenges and seize new opportunities.
A45. This Budget, I will lay out our plans in four areas:
- First, to grow our economy, transform our enterprises, to create opportunities for our people.
- Second, to care for and nurture Singaporeans at every stage of their lives, to build a caring and inclusive society, where no one is left behind.
- Third, to build a liveable and sustainable Singapore in the face of climate change,secure our sovereignty as an independent nation, and ensure our fiscal sustainability.
- And fourth, to mobilise Singaporeans to work together in this journey, to build a nation and a home we will always call our own.
B. GROWING OUR ECONOMY, CREATING OPPORTUNITIES FOR OUR PEOPLE
B1. Let me start with growing our economy and transforming our enterprises.
Singapore as a Global-Asia Node of Technology, Innovation, and Enterprise
- B2. The structural changes I described earlier bring both opportunities and challenges.
- Technology and innovation will drive our productivity and our next phase of growth.
- Amidst declining support for globalisation, most of Asia remains committed to free trade and economic integration.
- The Asian economies have strong growth drivers, and are projected to account for half of global GDP by 20402.
- B3. Singapore is well-positioned to make the most of these structural changes. We recognised these changes early, and made an early start on economic transformation. We set up the Future Economy Council, or FEC, in 2017, and now have 23 Industry Transformation Maps, or ITMs.
a. Our restructuring is bearing fruit.
i. In the last three years, overall productivity, as measured by real value-added per actual hour worked, rose by 2.6% per year. This is an improvement over the 2.2% per year growth in the preceding three-year period3.
- Our enterprises are also entering new markets, and doing business globally.
- Singapore Business Federation’s 2019 National Business Survey shows that 8 in 10 enterprises have an overseas presence, up from 7 in 10 the previous year, despite global uncertainties.
- Their spirit of enterprise augurs well for the future.
- Overall, these efforts at enterprise transformation have translated into good wage growth.
i. Between 2016 and 2019, real median income for Singaporeans grew by 3.7% per year, up from 3.2% per year in the preceding three years4.
2 Source: “Asia’s Future is Now”, McKinsey Global Institute, July 2019.
3 Source: Ministry of Trade and Industry, Department of Statistics.
4 Median gross monthly income of full-time employed Singapore citizens including employer CPF contribution. Source: Ministry of Manpower.
- B4. Two years ago, I set out our vision of Singapore as a Global-Asia node of technology, innovation, and enterprise.
- Our economy will be one driven by innovation and digitalisation.
- Singapore will serve as a launch pad for multi-nationals and regional corporates to access Asia, and for Asian enterprises to go global.
- Our enterprises will compete on value, and reach new customers.
- And these enterprises will be powered by a skilled, adaptable and Asia-ready workforce.
- B5. To support this vision, in this Budget, I will introduce a set of measures to drive ourTransformation and Growth strategy. There are three key thrusts:
- First, enabling stronger partnerships.
- Second, deepening enterprise capabilities.
- Third, developing our people.
- B6. Including sums allocated in previous years, I am allocating a total of $8.3 billion over the next three years to enable Transformation and Growth.
Enabling Stronger Partnerships
B7. Let me begin with the first thrust of our Transformation and Growth effort, which is to enable stronger partnerships:
- With the world, to expand our economic space, and
- Within Singapore, to build on our work through the FEC and ITMs.
Partnerships with the World
- B8. As a small, open economy, we must continue to strengthen partnerships with theworld.
- B9. We have an extensive network of economic linkages, including Free Trade Agreements, International Investment Agreements, and Avoidance of Double Taxation Agreements.
a. For example, Minister Indranee signed our latest Avoidance of Double Taxation Agreement with Indonesia earlier this month.
- B10. Beyond economic connectivity, we are enhancing our digital connectivity to create new value.
- Singapore Customs is connecting our Networked Trade Platform with the customs portals of our trading partners.
- Just last month, we concluded our first Digital Economy Agreement with Chile and New Zealand. It will foster interoperability, and address frontier issues like artificial intelligence governance, to enable more trade.
- B11. The digitalisation of finance will also open up new ways of doing business.
- Between 2015 and 2019, annual investments in FinTech (Financial Technology) have risen six-fold to over $1 billion.
- Players from different domains and around the region are coming together to bid for MAS’s digital banking licences.
Partnerships within Singapore
- B12. To make the most of our global links, we must strengthen partnerships withinSingapore to bring good ideas to global markets.
- B13. Under our Research, Innovation and Enterprise 2020 Plan, we are sustaininginvestment into promising ideas.a. These include artificial intelligence, industrial robotics, urban solutions and sustainability, and the biomedical sciences, among others.
- B14. Through partnerships among the Government, industry and the research community,
we are turning these ideas into new businesses with global potential.
- For instance, Singapore was one of the first cities to allow autonomous vehicle, or AV, testing on public roads. Many AV players have set up here, testing their technologies with the National University of Singapore and Nanyang Technological University, seeking to win the global race.
- In the biomedical industry, the number of startups has doubled from 2014. More than 300 biomedical startups are now bringing discoveries from bench to bedside, and looking to export them to the region.
- In fact, our research institutes are part of the global fight against COVID-19, developing diagnostic kits already in use here and sent to China. This is one of the fruits of our long-term investments in research and innovation.
- B15. Within each industry, we need to strengthen partnerships to deepen industry-wide capabilities. Even as our enterprises compete to differentiate themselves, they must come together to solve common challenges.
- B16. Trade Associations and Chambers or TACs play an important role.
a. For example, the Container Depot and Logistics Association (Singapore) is developing an electronic payment system that can help depot operators and transport companies save time and cost. Details are in the Annex. [See Annex B- 4.]
- B17. To sustain the good progress, we will enhance our support for TACs to scale up and raise the capabilities of their industries.a. Enterprise Singapore will launch a pilot Executive-in-Residence programme, to fund more than 10 TACs covering all sectors of the economy, to hire experienced executives and provide expert advice to enterprises in their industries.
- B18. Likewise, Merchants’ Associations play a critical role in upgrading heartlandenterprises, such as what the Chong Pang City Merchant and Hawker’s Association has done.
a. This year, Enterprise Singapore will launch a new Heartland Enterprise Upgrading Programme to support Merchants’ Associations to drive transformation ofheartland enterprises. [See Annex B-1].
Deepening Enterprise Capabilities
- B19. I have covered how we are deepening partnerships. The second thrust of our Transformation and Growth is to deepen capabilities, at every stage of an enterprise’sgrowth. From starting up, to growing, to transforming further.a. Our enterprises must be the incubators of innovation, the crucibles for skills upgrading, and the creators of good jobs for our people.
- B20. Many of our enterprises are deepening their capabilities – by innovating, digitalising, and venturing overseas.
- These include smaller companies like Yong Leng Trading Company, a local provider of sealing solutions for industrial customers, and PDS International, a developer and distributor of personal protective equipment. By adopting digital platforms, they have accessed new markets, raised revenues, and reduced costs.
- Larger local companies are also transforming. Goldbell Group, an industrial vehicle leasing company, launched an in-house accelerator, while Moveon, an optics manufacturer, partnered our research institutes to develop enhanced production
technologies for micro-optical systems. More details are in the Annex. [See Annex B-4.]
B21. We will enhance our support to enterprises, at each stage of their growth, to deepen their capabilities in an enterprise-centric way.
Starting Up
- B22. Let me begin with startups. Our startup ecosystem is vibrant.a. There are about 3,800 technology startups in Singapore, and about 150 venture capital funds investing in startups here and in the region.b. Our startup ecosystem is ranked in the top 15 globally in the Global Startup Ecosystem report5.
- B23. Startup SG helps startups get their ideas off the ground.
- It provides holistic support, including co-investments, mentorship, and physical space.
- Through co-investment schemes like Startup SG Equity, we have catalysed over $560 million in private sector funding over the last four years.
- B24. This year, we will improve support for deep-tech startups.
- Deep-tech startups are those in emerging technology areas such as pharmbio and medtech, advanced manufacturing, and agri-food tech. They have high potential to be competitive and stimulate innovation in their sectors.
- But these startups need larger investments, longer gestation periods, and face higher risks. Investors are hence less prepared to invest in deep-tech startups.
- To catalyse investment into deep-tech startups, I will set aside an additional $300 million under the Startup SG Equity. We expect this to draw in more than $800 million of private funding over the next 10 years. This will give deep-tech startups better access to capital, expertise and industry networks. [See Annex B-1.]
Growing
B25. Beyond startups, many enterprises, both new and established, are seeking to grow. We have been supporting them, through schemes such as:
a. The SMEs Go Digital programme; and
5 Source: “Global Startup Ecosystem Report 2019”, Startup Genome.
b. The Market Readiness Assistance grant.
B26. This year, we will enhance support for these enterprises through an Enterprise Grow Package. This Package aims to help enterprises identify business needs, adopt pre- approved digital technologies, and take the first steps to enter new markets.
- First, we will launch the GoBusiness platform, a single touchpoint for enterprises to transact with Government digitally.
- Second, we will drive greater adoption of digital technology. We will expand the SMEs Go Digital programme. Across all 23 ITM sectors, we will have Industry Digital Plans or equivalents, and enable enterprises to access pre-approved digital solutions.
- Third, to help more enterprises enter new markets, we will enhance the Market Readiness Assistance grant by expanding the funding support and coverage, to include, for example, FTA consultancy. [See Annex B-1].
Transforming Further
- B27. We must continue to support the growth of our enterprises, and as they mature, drive deeper transformation.
- Today, through the Enterprise Development Grant, or EDG, Enterprise Singapore provides integrated support for enterprises to innovate and internationalise.
- For enterprises to transform, they need to strengthen their leadership and management capabilities.
- B28. This year, we will introduce an Enterprise Transform Package, with a focus on leadership.
- Enterprise Singapore will launch the Enterprise Leadership for Transformation Programme, to support business leaders of promising small and medium enterprises in achieving the next bound of growth.
- Over the next three years, we aim to support business leaders of 900 enterprises in business transformation, with training and mentorship.
- We will work with Institutes of Higher Learning or IHLs, banks, and industry experts, and facilitate collaboration.
- In tandem, we will continue to broaden transformation through the EDG, byexpanding its reach. In FY2020, we expect to support about 3,000 projects through the EDG, an increase of more than 10% from the number today.
- Enterprise Singapore will launch the Enterprise Leadership for Transformation Programme, to support business leaders of promising small and medium enterprises in achieving the next bound of growth.
Developing Our People
- B29. The third thrust of our Transformation and Growth effort is to develop our people,so as to enable our people to access good jobs, earn good wages, and stay employable.
- B30. Economic growth is a means to a better life for our people. We must nurture every Singaporean to their fullest potential.
- B31. The Government’s promise to Singaporeans is this: regardless of your starting point, as long as you are willing to learn, we will support you to learn throughout life – in pre-employment, in your working years, and as we pursue lifelong learning and employability.
- B32. We will bring in different partners, including IHLs, enterprises, and the labour movement, to help you do so.
Pre-Employment Training – Tertiary Education
- B33. Let me begin with the role of our IHLs.
- B34. Our IHLs provide a strong foundation in learning, and have partnerships with industry. IHLs and the industry have distinct roles, and by aligning these to keep learning relevant, students can secure good jobs.
a. Employment rates are high, and starting salaries have increased.
b. We develop Singaporean talent in partnership with enterprises under the Singapore-Industry Scholarship scheme. Many of them have graduated and are developing their careers with leading enterprises like ST Engineering and Micron.
- B35. Our local students are well-prepared to thrive in other countries and cultures, including in Asia.a. About half of all local IHL students today gain experience abroad, through programmes such as internships, exchanges, and service learning or study trips.
- B36. In my pre-Budget dialogue with youth leaders, I was struck by their understanding of the importance of learning new skills and exploring new opportunities. They look forward to overseas exposure and postings in the region.
- B37. To support our local students to acquire cross-cultural skills and understand our region better, we will set ourselves a “70-70” target – 70% of local IHL graduates to have an overseas experience, and 70% of this group to have exposure to ASEAN, China, or India:
a. To achieve this target, we will introduce a new Asia-Ready Exposure Programmeto support local youths’ visits to cities in ASEAN, China, or India. We will also enhance support for internships under the Global Ready Talent Programme.
Working Years – SkillsFuture
- B38. Beyond pre-employment education, we must also support our people who are already at work.
- With shorter technology cycles and more intense global competition, skills acquired when we are young need to be constantly refreshed.
- Career transitions will be more common, even the norm.
- B39. Our SkillsFuture movement seeks to enable our people to learn, develop new skills, and stay employable.
- Five years after the launch of SkillsFuture, we have made good progress.
- The training participation rate has risen, from 35% in 2015, to 49% in 2019.
- As of end 2019, the SkillsFuture Credit has helped more than half a million Singaporeans pick up new skills and develop new interests.
- This includes Mr Koh Wui-Tek, a FinTech executive who applied his learning in project management to serving his clients, as well as Madam Juriah Jahaya, a certified trainer who deepened her people development skills.
- Singaporeans are also upskilling and accessing good jobs in growth sectors, with the support of employers.
- Younger Singaporeans are undergoing on-the-job training while getting a qualification.
- Singaporeans who have been working for some time have adapted and grown their skills.
- One good example is Ms Nur Hidayah Binte Abu Bakar, whom I met at WSG last year. After leaving the electronics industry, Ms Hidayah joined AETOS Holdings as an Auxiliary Police Officer. She went through the tough training as part of the Professional Conversion Programme. Today, she not only earns more, and has a clearer career pathway, but she is also helping to keep Singapore safe. [See Annex B-4.]
- Five years after the launch of SkillsFuture, we have made good progress.
- B40. I am very encouraged by the efforts made by Singaporeans to acquire new skills, in the midst of the major structural changes in the global economy. To further support
them in this journey, the Government will invest in the Next Bound of SkillsFuture. There will be three elements in this:
- First, enabling the individual;
- Second, enhancing the role of our enterprises; and
- Third, a special focus on mid-career workers.
- B41. First, to support Singaporeans to continue learning, I will provide a one-off SkillsFuture Credit top-up of $500 for every Singaporean aged 25 years and above6.
- The top-up will be available for use from 1st October 2020.
- Unlike the earlier $500 credit which had no expiry date, this top-up will expire in about five years, by end-2025. This is to encourage Singaporeans to take action early to learn new skills, and to make the best use of this period of economic slowdown. [See Annex B-2.]
- B42. Second, we want to enhance the role of enterprises in developing their staff.a. Enterprises know best the skills needed for their business to transform, and can play a key role in helping their workers learn and apply new skills. By investing in their staff, they build a stronger workforce, which can in turn help enterprises succeed. So, we must strive to achieve this virtuous cycle.b. A good example is Containers Printers, a local food packaging company. It has adopted digital technology and trained its workers to take on higher value-added roles like real-time monitoring of production.c. In our unique tripartite model, the labour movement plays a crucial role. We cannot keep jobs, enterprises, or even industries that are no longer viable. Instead, we refresh, retrain, and rejuvenate for the long term.
i. For example, the United Workers of Electronics and Electrical Industries, and Thales, a French technology leader, have set up a Company Training Committee. Management staff and union members are working together to develop training plans and deepen skills, so that workers can take on better jobs. On my visit to Thales, I was very heartened to hear how its employeesare upskilling and contributing to Thales’ transformation. This is a good example of how unions and enterprises can work together to keep workers up to date as enterprises transform. [See Annex B-4.]
B43. Let me outline five measures to enhance the role of our enterprises in the Next Bound of SkillsFuture.
6 As at 31 December 2020.
- First, I will introduce a new SkillsFuture Enterprise Credit to encourage employers to embark on the transformation of their workforce and enterprise in tandem. Employers can use this enterprise credit to defray 90% of out-of-pocket costs of business transformation, job redesign, and skills training. The SkillsFuture Enterprise Credit, at $10,000 per enterprise, will benefit over 35,000 enterprises, most of which will be SMEs.
- Second, we will also provide more support for job redesign. The Productivity Solutions Grant supports enterprises to adopt pre-approved digital solutions and equipment. We will expand the Productivity Solutions Grant to include job redesign consultancy services.
- Third, we will work with large anchor enterprises to support training for their sectors and value chain partners. Anchor enterprises are supported by many SMEs. By helping to raise the skills of workers in these SMEs, the entire supply chain benefits. We aim to partner up to 40 of such anchor enterprises to benefit 4,000 SMEs over the next five years.
- Fourth, our IHLs will work with more enterprises to enable local students to learn in a real work setting, through SkillsFuture Work-Study Programmes. We will nowmore than double the capacity of these programmes by 2025. Our aim is to make this a mainstream pathway, with 12% of each cohort going through these pathways, up from 3.5% today.
- Fifth, as more enterprises train their workers, we will deepen workplace learning capabilities. MOE launched the National Centre of Excellence for Workplace Learning, or NACE, at Nanyang Polytechnic in July 2018. MOE will expand NACE to two more IHLs over the next few years, and aim to benefit over 1,200 enterprises, especially our SMEs.
B44. In
Working Years – SkillsFuture Mid-Career Support Package
B45. The third element in the Next Bound of SkillsFuture is a special focus on mid-career workers currently in their 40s and 50s.
- Born in the 1960s and 70s, they grew up in a time when our economy was just starting to take off.
- When they started work, it was normal, even celebrated, to stay with one job, in one company, for life.
line with our focus on the role of industry in SkillsFuture, we will also recalibrate Government funding towards training providers and courses with a stronger link to job and wage outcomes.
c. As enterprises restructure, the nature of jobs has changed. Many have adapted to these changes, picked up new skills, and even switched careers.
- Ms Ng Lee Chun, 50, is one of them. After leaving her previous job, WSG helped her to secure a logistics role with ST Logistics. Through the Professional Conversion Programme for Supply Chain Professionals, ST Logistics sent her for training for this role.
- Some workers in their 40s and 50s have not seen any job or career changes since leaving school, or had the chance to upskill earlier. But they are now facing greater competition, from younger workers and workers overseas. I understand their anxiety.
- At the same time, with broader global shifts, exciting jobs will emerge. Our mid- career workers can seize these opportunities and do better for themselves and their families. The Government will do more to support them.
B46. We will introduce a new SkillsFuture Mid-Career Support Package for locals in their 40s and 50s, to help them stay employable and move on to new jobs or new roles. We aim to double the annual job placement of locals in their 40s and 50s, to around 5,500, by the year 2025. To reach this goal:
- We will increase the capacity of reskilling programmes. These will include the Professional Conversion Programme under the Adapt and Grow initiative, career transition programmes delivered by Continuing Education and Training Centres, or CET Centres, like IHLs, and sector-specific programmes like the TechSkills Accelerator Company-Led Training for ICT jobs.
- In tandem, our employers must step up to recruit, retain and retrain our local mid-career workers. We will support them to do so.
- I will provide a hiring incentive to employers who hire local jobseekers aged 40 and above through a reskilling programme. For each eligible worker, the Government will provide 20% salary support to the employer for six months, capped at $6,000 in total.
- In parallel, we will streamline our manpower schemes, including support for hiring and retention, to maximise their impact.
- To improve access to reskilling programmes, I will also provide a special SkillsFuture Credit top-up of $500 to every Singaporean aged 40 to 60 in 2020. This will be over and above the top-up that I announced earlier.
i. This additional credit can be used for selected reskilling programmes at CET Centres.
ii. Like the broad-based top-up, this additional credit will expire in about five years, to encourage early action.
- Apart from Government support, we will assemble a group of volunteer Career Advisors from professional communities. These advisors will provide peer-level support and career guidance to local workers in navigating professional pathways.
- We hope that all these initiatives will provide meaningful support to those in their 40s and 50s, to further their careers with confidence.
Supporting Lifelong Learning and Employability
B47. Lifelong learning and contribution does not stop at the 40s and 50s.
a. As the Chinese say, “活到老,学到老”. You are never too old to learn.
B48. As our people live longer, we will provide more support to help them remain active,
and contribute to our society and economy.
- Many seniors have told us that they want to continue working, and learning. Besides saving more for retirement, it is about a sense of agency and purpose, and staying active and connected.
- The Government has strongly supported enterprises that employ our seniors,
i. Through the Special Employment Credit or SEC, and the Additional SEC or ASEC, and WorkPro.
c. For our seniors who wish to work longer, earn more, and save more, PM hadannounced at last year’s National Day Rally that we are raising the Retirement andRe-employment Ages. We are also increasing CPF contribution rates for workers aged 55 to 70.
B49. To ease in these changes for employers and workers, I will introduce a Senior Worker Support Package comprising four measures.
- First, I will refashion SEC and ASEC into a Senior Employment Credit, which will take effect from 2021. Like SEC and ASEC, this Senior Employment Credit will provide employers with wage offsets when they hire Singaporean workers aged 55 and above, with the support levels tapering down over time as the Retirement and Re-employment Ages are gradually raised.
- Second, when employer CPF contribution rates go up in 2021, we will provide employers with a CPF Transition Offset for the year, to offset half of the increase in employer contributions.
c. Third, we will introduce the Senior Worker Early Adopter Grant to support enterprises that raise their own Retirement and Re-employment ages ahead of the legislated changes.
- Fourth, we will introduce the Part-Time Re-employment Grant to support and encourage enterprises to formalise part-time re-employment provisions. [See Annex B-3.]
- In short, even as we support workers’ aspirations to work longer, we hear employers’ concerns. As part of our unique tripartite system, the Government has stepped up to support both our workers and our enterprises.
B50. Even for seniors who choose to retire, but wish to continue to learn and stay active, the $500 SkillsFuture Credit top-up that I just announced will support this. Retirees can use this to deepen their interests, or even explore a whole new area – be it cooking or coding.
Foreign Worker Policy
- B51. For many years now, foreign workers have been part of our workforce. With our declining local labour force growth, foreign workers are a necessary complement. But we must regulate the inflow carefully, in a way that creates opportunities for our locals.
- B52. One area of particular concern is S Passes. These are skilled jobs, many of which can be done by locals, such as polytechnic diploma holders. We created the S Pass category because despite our best efforts, we are not producing enough of such skilled locals. S Passes enable enterprises to top up their workforce with more skilled workers, and to recruit workers with particular skills that locals may lack. But S Passes should not be a means by which enterprises hire low-cost foreign workers, when qualified locals are available.
- B53. Last year, we announced cuts for the Dependency Ratio Ceiling, or DRC, and S Pass sub-DRC thresholds for the Services sector. This was to manage manpower growth, and encourage our enterprises to restructure and reskill our local workers.
- B54. We have been monitoring the manpower growth closely.
a. The number of S Pass holders in the Construction, Manufacturing, Marine Shipyard, and Process sectors is growing, by 3.8% per year over the last two years. The number could increase significantly over the next few years, as the Construction and Marine Shipyard sectors recover, and the Process sector begins work on projects in the pipeline.
B55. However, the growth in S Pass holders must be sustainable. The Government has been working closely with industry and educational institutions to build up a pipeline of
local manpower, including mid-career workers. We want them to have fair opportunities to grow, while supporting the manpower needs of enterprises.
- B56. Therefore, this year, we will take further steps. We will reduce the S Pass sub-DRCs of the Construction, Marine Shipyard, and Process sectors from 20% to 15%.
- We will phase in the cuts in two steps. The first step from 20% to 18% on 1st January 2021, and subsequently to 15% on 1st January 2023.
- We are announcing the changes about a year ahead, to give time for enterprises to adapt.
- B57. Given the economic uncertainties, we will not reduce the S-Pass sub-DRC for the Manufacturing sector at this point. But we do want manufacturing companies to make the effort to recruit local skilled workers and technicians too. Therefore, when conditions allow, we intend to tighten the S Pass sub-DRC for Manufacturing too.
- B58. At the same time, we recognise potential concerns of enterprises about the availability of skilled manpower in these sectors.
- To help you find skilled local graduates looking to embark on their careers, and older local professionals looking for new careers, SSG and WSG will work with you to improve matching.
- Enterprises that have specific needs can continue to apply for additional manpower flexibilities in exceptional cases, through schemes such as the Lean Enterprise Development Scheme.
- B59. In view of the economic conditions, I will maintain the foreign worker levy rates for all sectors for 2020. [See Annex B-2.]
Summary
- B60. Mr Speaker Sir, the Government appreciates the concerns of our workers and enterprises. In the immediate term, we are facing headwinds with the shocks and uncertainties. But in the medium term, we are facing deep structural shifts in the global economy. We have to tackle both challenges head-on.
- B61. The Government will support our enterprises and workers with the near-term challenges, through the Stabilisation and Support Package for workers and enterprises.
- B62. To tackle medium-term challenges, our Transformation and Growth strategy will support efforts to deepen enterprise capabilities, develop our people, and forge stronger partnerships, through our tripartite structure.
- B63. By positioning Singapore as a Global-Asia node of technology, innovation, and enterprise, we can ride on the next wave of structural changes resolutely.
- B64. The respective Ministers will provide more details of the schemes I have mentioned in this section later.
C. CARING FOR SINGAPOREANS, BUILDING AN INCLUSIVE HOME
- C1. Mr Speaker, Sir, a vibrant economy provides good jobs and opportunities for Singaporeans, and allows families to do well.
- C2. It also gives us the resources to support our people with their needs, to build a caring and inclusive home.
- C3. Our tax and spending policies reflect our values.
c.
a. b.
Over the past decade, we have significantly increased our social spending.
Between 2010 and 2019:
- We tripled our healthcare expenditure from $4 billion to about $12 billion a year, to meet the growing needs of our seniors and to ensure that every Singaporean has access to affordable and quality healthcare.
- We increased our investments in education, from $10 billion to about $13 billion, so that all Singaporeans will have the best chance to fulfil their fullest potential.
- We increased the expenditure on national development from $2.4 billion to$3.6 billion, with the bulk of this going into subsidies on public housing, so that every Singaporean household can have a home to call their own.
Last year, we gave out about $1.1 billion in cash to Singaporeans who need more help. The payouts were provided through structural schemes such as ComCare for the vulnerable, Workfare Income Supplement for lower-wage workers, GST Voucher – Cash for lower-income Singaporeans, and Silver Support for the vulnerable elderly.
- C4. This social spending reflects our commitment to invest in our people, to give every citizen a stake in our society, to care for our seniors, and to provide more help to those with less.
- C5. This Budget, we will continue to care for Singaporeans in the following ways:
- First, we will build on our efforts to support our families.
- Second, we will support and enable our seniors in their retirement years.
- Third, we will promote a stronger giving culture.
Supporting Families
C6. I will first touch on how we will further support our families.
Pre-school Years
C7. Good education provides a strong foundation for children to grow, realise their aspirations, and continue a journey of lifelong learning. We have committed todecisive shifts in the Government’s support for early childhood development. We are determined to give every child, regardless of circumstances, a good start in life.
a. As PM announced at the National Day Rally last year, we will step up efforts to improve the affordability, accessibility, and quality of pre-school services.
b. We have significantly enhanced pre-school subsidies and made them available to more families from this year.
c. We will also increase the share of government-supported pre-school places from just over 50% today, to 80% by around 2025.
d. Overall, we are doubling our support for our young in their pre-school years.
- In 2018, the Government spent about $1 billion on the early childhood sector.
- Within the next few years, this will double to over $2 billion per year.
Primary to Pre-University School Years
- C8. In the primary to pre-university school years, education is already heavily subsidised for Singaporeans. Primary school is free for all Singaporeans, while the secondary school fee is $5 a month. Students pay only a few dollars of miscellaneous fees.
- C9. For students from lower-income families, we will provide further help.
a. We will enhance the MOE Financial Assistance Scheme by raising the annualbursary quantum for pre-university students, from $900 to $1,000.
i. We will also increase transport subsidies for all students, and school meals
subsidies for secondary school students.
C10. The enhanced Financial Assistance Scheme will cost an additional $9 million per year,
or a total of $52 million per year. Higher Education Years
C11. We announced that we would enhance bursaries for diploma and degree holders last year. These bursaries are on top of subsidies that are provided to all Singaporeans.
- Starting from Academic Year 2020, students from lower- and middle-income families in the polytechnics and autonomous universities can benefit from higher bursaries.
- We will also enhance bursaries for full-time ITE students from Academic Year 2020. Students from households who qualify under the lowest income tier for the bursaries will now receive 100% fee subsidy on top of the cash bursary. Students from low- and middle-income households will also benefit from an increase in the cash bursary quantum by up to $200 a year.
C12. The cost of bursaries for higher education will rise from $148 million per year to$198 million per year.
Overall Education Benefits
- C13. A good education lays a strong foundation for a better future. This is why this Government has been providing significant education subsidies for each child.
- C14. A Singaporean child will receive over $180,000 of education subsidies in total by the time he turns 16. This includes about $50,000 in Government subsidies over five years when they enrol in a full-day childcare programme with one of the Anchor Operators.
- C15. For those who come from less-privileged backgrounds, there are additional subsidies for pre-school, bursaries, and other financial assistance schemes.
- C16. This substantial investment is how we maximise every child’s potential, regardless offamily circumstances.
a. This is a promise that I, as a former Education Minister and now Finance Minister, am committed to keep.
Housing Affordability
C17. When Singaporeans are ready to start a family and own a home, we make sure that there is good access to quality and affordable housing.
a. Last year, MND consolidated existing housing grants into the Enhanced CPF Housing Grant.
- With the Enhanced Housing Grant, first-time flat buyers can now enjoy up to$160,000 in housing grants.
- The monthly household income ceilings for subsidised flats and executive condominiums were raised to $14,000 and $16,000 respectively. We expect around 16,000 HDB households to benefit from these enhancements each year.
Care and Support Package for Households
- C18. The Government has made significant moves to help Singaporeans manage major expenditures in life, through structural subsidies in education, housing, and healthcare.
- C19. This year, with the economic slowdown and the uncertainties of the COVID-19 outbreak, we are mindful that many families are facing greater pressures. During myfellow MPs’ and my own walkabouts, people often tell us that they are worried about job security and rising expenditures.
- C20. To help all Singaporeans with their household expenses during this period of uncertainty, I will provide a comprehensive Care and Support Package for households, amounting to about $1.6 billion.
- All Singaporeans aged 21 and above in 2020 will receive a one-off cash payout of $300, $200 or $100, depending on their income.
- The annual GST Voucher – U-Save provides rebates to help HDB households with their utilities expenses. This year, I will double the amount of U-Save rebates through a one-off GST Voucher – U-Save Special Payment to all eligible HDB households. This will help to free up cash for other household expenses.
- In addition, I will extend the Service and Conservancy Charges Rebate by another year. Eligible HDB households will receive rebates of between one and a half, and three and a half months.
- Lower-income Singaporeans will get additional help with their daily living expenses.
- In October 2019, we announced the Workfare Transport Concession Schemeand the Public Transport Voucher to help cushion the transport fare increase for lower-income households.
- To further offset daily living expenses for lower-income workers, I will provide a Workfare Special Payment. Singaporeans on Workfare will receive 20% more for work done in 2019, with a minimum payment of $100. This will be given in cash.
- I will also help needy Singaporeans more directly. They will receive Grocery Vouchers worth $100 each year in 2020 and 2021, for use at major supermarkets. This directly helps needy households with one of their major cost of living items – food.
- There will be additional help for families taking care of children and elderly parents.
- I will provide a further $100 cash payout for every adult Singaporean with at least one Singaporean child aged 20 years and below this year.
- I will provide an additional GST Voucher – U-Save rebate for larger households with five or more members, to help them with their utilities bills. Together with the U-Save Special Payment I mentioned earlier, larger households can receive a total of 2.5 times their regular U-Save rebates this year. These households can receive up to $1,000 in U-Save rebates, depending on their flat type.
- I will also provide a $100 top-up to the PAssion Card to all Singaporeans aged 50 years and above this year, including the Pioneer Generation and Merdeka Generation seniors. This can be used to pay for groceries, activities and facilities at Community Clubs, and more. Those who do not currently have a PAssion Card can get one for free to receive the top-up.
- Our Self-Help Groups have also been working closely with the community to help needy families and children. To enable them to do more, I will provide a$10 million grant to them over two years so that they can help more families.
- The Community Development Councils or CDCs have also played an important role in partnering the community to strengthen bonds and help vulnerable groups.
- Each CDC has its set of local assistance schemes to meet local needs, and programmes that allow community members to help those with extra needs.
- I will provide $20 million for the CDCs to do more, and better meet the needs of their residents through local initiatives.
C21. Together, the Care and Support Package will provide a young family with about $1,300. A 3-Generation family can receive more – about $1,800. More details are provided on the slide and in the Annex. [See Annex C-1.]
Enabling Seniors
- C22. Let me now move on to the second area, which is to support and enable our seniors.
- C23. Singaporeans are living longer. Our life expectancy at birth is close to 85 years, the longest in the world. This is a good thing!
- C24. Singapore will not just be a great place to raise a family, but a great place for seniors to live a life of purpose, dignity, and contribution.a. The Community Networks for Seniors is now a national programme, with 650 active ageing nodes to engage our seniors.
- C25. We must see ageing as a positive force, and turn this phase of life into a time of opportunity.
- C26. Ageing with confidence includes having financial assurance in retirement.
- This can be achieved through a combination of individual effort, family, community, and Government support.
- Over the years, we have strengthened the four pillars of our social security system– home ownership, CPF, healthcare assurance, and income from Workfare and Silver Support. We have also been enhancing the ComCare schemes, which support Singaporeans who are unable to work and have little or no family support.
- C27. The CPF is a major scheme to enable Singaporeans to save enough for their retirement years. We need to keep on updating and improving our CPF policies over time, so that they remain appropriate for each cohort.
- We have been adjusting the Basic Retirement Sum, or BRS, regularly, in line with rising income levels. Since 2017, household incomes per capita have risen by an average of 4.1% per year (in nominal terms), while the BRS has increased by 3% per year. The BRS is currently $90,500 for the cohort turning 55 this year.
- We will continue to adjust the BRS by the same 3% per year for the next two cohorts. The BRS will be $93,000 for cohorts turning 55 in 2021, and $96,000 for those turning 55 in 2022. These modest continuing adjustments are necessary for the payouts to keep up with basic retirement expenses.
- With continuing wage growth, each successive cohort has been able to save more. We expect 7 in 10 actively employed persons from these two cohorts to be able to set aside their BRS, significantly more than the 4 in 10 about a decade ago.
- More details are in the Annex. [See Annex C-2.]
- C28. Even as more seniors are prepared for retirement, one group of current seniors may not be able to meet their retirement needs.
- When they were younger, they earned less than working Singaporeans do today, even after adjusting for inflation.
- Some may have earned lower wages for most of their working lives.
- Others may have stopped working early to take care of family members.
- We are in a fortunate position that most of our seniors have housing assets that they can use to support their retirement, if they wish.
C29. We will do more to help Singaporeans tap their housing assets for retirement by enhancing the Silver Housing Bonus and the Lease Buyback Scheme.
a. The Minister for National Development will provide more details.
- C30. The CPF is a good retirement scheme, based on personal savings. It provides Singaporeans with very favourable, risk-free interest rates on their savings. Many Singaporeans want to top up their own, their spouse’s, or parents’ CPF accounts. In 2019, such voluntary cash top-ups added up to about $1 billion. We would like to encourage more to do so, particularly those whose CPF balances are on the low side.
- C31. To help those with less CPF savings to save more, I will introduce a Matched Retirement Savings Scheme from 2021 to 2025.
- Lower- to middle-income Singaporeans aged 55 to 70 who have not been able to set aside the prevailing BRS will be eligible.
- Under this scheme, the Government will match every dollar of cash top-up made to their CPF Retirement Account, up to an annual cap of $600. This is a way of encouraging and augmenting family support for our seniors with fewer means in retirement. About 435,000 Singaporeans will be eligible.
- C32. While the CPF is a good scheme, for a small segment of the elderly population, it will not be enough. Some had low incomes during their working years, and currently have little or no family support. We created the Silver Support Scheme to complement the CPF for this group, and give them more financial security in retirement. The scheme is now almost five years old and a review is timely.
- C33. Silver Support currently provides cash payouts to the bottom 20% of Singaporeans aged 65 and above, with some support for those slightly above the bottom 20%.
- I will raise the quarterly cash payouts by 20%. For individuals living in smaller flats, this means that the cash payouts will increase from $750 to $900 per quarter.
- I will also broaden the eligibility criteria of Silver Support. I will expand the threshold for lifetime wages and per capita household income to cover more seniors. There will also be a new payout tier to provide a smaller payout to seniors whose monthly household incomes per person are above $1,300 but not exceeding $1,800 – these seniors do not receive Silver Support today.
- There is no need to apply – eligible seniors will be notified by CPF Board and start receiving payouts under the enhanced scheme from December 2020.
- C34. Overall, we expect about 100,000 more seniors to benefit from the enhanced Silver Support in 2021. The cost of Silver Support will nearly double, from today’s $330million, to around $620 million in 2021.
a. More details are provided in the Annex. [See Annex C-3.]
C35. Here is an illustration of how the matched savings, right-sizing, and enhanced Silver Support can add up to help a retired 65-year old couple to more than double their retirement income.
a. I will pause here for members to take a look at the example. More details are provided in the Annex. [See Annex C-4.]
- C36. These enhancements underscore the Government’s commitment to provide seniorswith greater assurance in retirement, and reflect the values we hold dear, such as taking care of our parents and seniors. They will also complement the other schemes for our seniors, such as the Pioneer Generation Package and Merdeka Generation Package.
- C37. We will also help seniors stay active and contribute to the community.
- C38. Many senior volunteers find that volunteering gives them purpose, keeps them socially connected, and promotes active ageing. The community also benefits from their wealth of experience and skills.
a. There is Mr Victor Lim, a 70-year-old retiree, who spent 40 years in the MedicalImaging and IT industry, and now volunteers at IMDA’s Digital Readinessprogrammes. There is also Mdm Leong Su Yin, one of the oldest members of RSVP, who has been volunteering for over 20 years.
Strengthening the Giving Culture
- C39. Our success in taking care of every Singaporean, from pre-school to retirement, is only possible with the support of our community partners.
- C40. This brings me to the third strategy, Strengthening the Giving Culture.
a. When we harness and rally greater participation and resources from thecommunity, we can better support those in need. - C41. The Government will continue to support the community in building a stronger giving culture.
- Last year, I announced the Bicentennial Community Fund, which provides dollar-for-dollar matching for donations made to Institutions of a Public Character. This is on top of the 250% tax deduction provided for donations made to IPCs.
- One of the potential beneficiaries is the Daughters Of Tomorrow Limited, which helps disadvantaged women gain new skills and find employment. The organisation plans to use the Bicentennial Community Fund to develop staff and volunteers, and build their in-house fundraising capabilities.
a. This year, the Ministry of Social and Family Development and National Council of Social Service will set up the Community Capability Trust to fundraise and support our social service sector partners in enhancing their capabilities and capacities to serve the community.
- For a start, together with Tote Board, we will provide $200 million to the trust in FY2020, and match up to $150 million in funds raised over the next 10 years. In total, we will commit up to $350 million for the Community Capability Trust.
- This will provide a pool of funds that our Social Service Agencies can tap on to transform themselves for the future. I hope they will make good use of this to strengthen their organisational capabilities, become more productive, and enhance their service infrastructure, in partnership with MSF and NCSS.
- Just like how our efforts in the Industry Transformation Maps have positioned our enterprises and economy for the future, the Community Capability Trust will equip Social Service Agencies to bring the social sector forward.
- More details are provided in the Annex. [See Annex C-5].
- C42. There is much value to be gained when a community comes together in support of a cause.a. I am happy to see the success of the movements like The Purple Parade, The Purple Symphony, and Runninghour. These are ground-up initiatives that support inclusion and celebrate the abilities of persons with special needs, through activities like music and sport.
- C43. Everyone can play a part to build an inclusive society from their hearts, in ways big and small.
- C44. Many enterprises have also built inclusive workspaces for persons with disabilities, or PwDs.
- C45. To support the employment of PwDs, the SEC and the ASEC schemes provide wage offsets for employers hiring Singaporean PwDs earning below $4,000 per month. At the last Budget, we extended the SEC and ASEC until end of 2020.
a. We have received good feedback on the schemes in supporting PwD employment.
b. In 2018, more than 5,700 employers hiring over 8,600 Singaporean PwDs benefited from SEC.
C46. This Budget, we will introduce the new Enabling Employment Credit, or EEC, to provide stronger support for employers of PwDs.
a. The new EEC will replace the current SEC and ASEC schemes for PwD employment.
b. It will be available for five years, from 2021 to 2025, at a cost of about$31 million per year. To ensure that the EEC remains helpful for PwDs to find employment and remain in the workforce, the Government will review the EEC after two years and make adjustments if necessary.
C47. This Budget, I will also top up three funds that provide targeted help for the elderly and the lower-income.
- I will provide top-ups of $750 million to the ElderCare Fund, $500 million to the ComCare Fund, and $200 million to the MediFund.
- These funds provide a safety net for the low-income, by helping them to meet their daily expenses and healthcare fees.
Summary
- C48. The respective Ministers will provide more details of the schemes I have mentioned in this section later.
- C49. Mr Speaker Sir, Budget 2020 supports the Government’s long-term strategy of building a caring and inclusive society.
- We will continue to support our families, through the enhancements to our education and housing schemes, and the Care and Support Package for households.
- We will enable our seniors by promoting active ageing and providing financial assurance in their retirement years.
- We will also partner the community to build a stronger giving culture, so we can better support those in need.
- This is our continued effort to improve the lives of our people and our future generations. We must continue to work together to build a society where opportunities are available to every Singaporean, at every stage of life.
D. SUSTAINING SINGAPORE’S SUCCESS FOR OUR FUTURE GENERATIONS
- D1. Let me move on to how we can sustain Singapore’s success for generations to come.
- D2. Our pioneers set out to build a high quality living environment, even when they had to attend to pressing economic and security challenges. They left us a legacy of a clean, green, and liveable environment.
- D3. As the Chinese saying goes, “前人种树,后人乘凉”. The generation that planted the seeds does not fully benefit from their toil, but they care to do this, for futuregenerations to reap the fruits.a. In the same spirit, we must plant the seeds to secure a better future for generations to come.
- D4. By thinking long-term, by confronting major challenges, and by investing for our future, we have beaten the odds. Three major challenges we must continue to confront are: climate change, security, and fiscal sustainability.
Addressing Climate Change
- D5. To build a liveable and sustainable home, we must address climate change. As a low-lying island nation, rising sea levels threatens our very existence.
- D6. So what can we do as a small island nation?
Supporting International Effort to Fight Climate Change
- D7. First, we must continue to support global efforts to combat global problems. Singapore must continue to do our part as a responsible member of the international community. Singapore plays an active role at the UN Framework Convention on Climate Change. Besides representing our interests, Team Singapore is regarded as an honest broker, helping to build bridges and consensus.
- D8. This year, we will update our commitment to the Paris Agreement and take a further step to chart our vision for a low-carbon, sustainable future Singapore.
a. The Minister in the Prime Minister’s Office will elaborate on this later.Managing our Carbon Constraints
D9. Second, we must manage our transition to a low-carbon, low-emissions economy.
a. We must turn our carbon constraints into a strength, just like how we have turned our water vulnerabilities into an area of strength, with radical innovations in
NEWater and desalination. Today, Singapore is a global hub of water research and innovation.
D10. The circular economy – turning waste into a resource that can be reused in the production cycle – is one way we can reduce our carbon footprint, and open up new opportunities.
a. NEA will soon begin a field trial to use NEWSand, made from incineration ash, in road construction along Tanah Merah Coast Road.
- D11. We will do more to develop new ideas and solutions. We are committing close to $1 billion for research in Urban Solutions and Sustainability. The research will focus on renewable energy, cooling Singapore, and carbon capture, among others.a. As climate change is global, innovative solutions created here can be commercialised, turning our constraints into a strength.
- D12. More broadly, we have to manage our greenhouse gas emissions, by putting in place the right incentives, tax structures, and regulations.
- We introduced a carbon tax in 2019, and supported enterprises in improving energy efficiency.
- We introduced and enhanced the Minimum Energy Performance Standards to raise the energy efficiency of energy-intensive household and industrial appliances.
- D13. The domestic transport sector contributes a significant amount of greenhouse gas emissions. Vehicles with internal combustion engines, or ICEs, also contribute to pollution, adversely affecting our health and quality of life.
- Many major cities have already set ambitious goals to phase out ICE vehicles and shift to cleaner technologies.
- Car manufacturers are actively developing cleaner engine technologies such as hybrids and electric vehicles, or EVs, and are exploring new areas such as hydrogen fuel cells.
- D14. As a small city-state, we are able to, and have strong reason to stay abreast of these major technological changes.
a. For both public health and climate change reasons, we should progressively phase out the use of ICE vehicles towards cleaner alternatives, such as hybrids and EVs. We will set a long-term strategic goal for Singapore to achieve this.
D15. Our vision is to phase out ICE vehicles and have all vehicles run on cleaner energy by 2040. To promote this, we will have three measures in this Budget.
- D16. First, we will enhance incentives to encourage the adoption of cleaner and more environmentally friendly vehicles.
- In 2018, we introduced the Vehicular Emissions Scheme for cars and taxis. Under the scheme, car buyers and taxi operators who choose cleaner car models can receive an upfront rebate of up to $20,000 and $30,000 respectively.
- We have seen promising results from the scheme. More car buyers and taxi operators are choosing environmentally friendly engines such as electric hybrids.
- Therefore, we will introduce a similar scheme called the Commercial Vehicle Emissions Scheme for light goods vehicles. The Minister for the Environment and Water Resources will announce the details at the COS.
- For cars and taxis, I will provide an EV Early Adoption Incentive.
- Those who purchase fully electric cars and taxis will receive a rebate of up to 45% on the Additional Registration Fee, capped at $20,000.
- This incentive will be implemented for three years, from January 2021.
- We will also revise the road tax methodology for cars to better reflect the current trends in vehicle efficiency from January 2021. This will lead to an across-the-board reduction in road tax for EVs and some hybrids. [See Annex D-1].
- D17. Second, we will expand the public charging infrastructure for EVs.
- Today, there are about 1,600 charging points island-wide.
- We will work with the private sector to step up the deployment of chargers in public carparks. By 2030, we aim to deploy up to 28,000 chargers at our public carparks island-wide.
- D18. Lastly, the Government will take the lead. We will progressively procure and use cleaner vehicles to do our part for the environment.
- D19. Here we are placing a significant bet on EVs, and leaning policy in that direction because it is the most promising technology. It also requires a significant increase in demand to justify the infrastructure investment. This is a significant undertaking involving multiple agencies.
A Resilient Vehicular Tax Structure
- D20. The transition towards EVs will have a major impact on tax revenues.
- D21. Fuel excise duties today yield around $1 billion per year, and are significant contributors to government revenues. They are also a form of mileage tax, which
discourages excessive driving, especially in private cars, and thus helps to reduce road congestion.
D22. But EVs do not pay fuel excise duties. Therefore, we will need to update our vehicular tax structure to preserve these two considerations.
- Ideally, we would like to implement a usage-based tax on EVs as an alternative to fuel excise duties.
- But the technology to do this properly on EVs is the Next Generation ERP System, and distance-based charging using ERP is still several years away.
- In the interim, we will impose a lump-sum tax that will be built into the road tax schedule for EVs to partly account for the loss in fuel excise duties.
- This lump-sum tax will be phased in over three years starting from January 2021, with the full quantum implemented by January 2023. [See Annex D-1].
- Total road tax, after the revision in methodology and the new lump-sum tax, will be higher for some EV models.
D23. However, EV buyers can expect to enjoy substantial cost savings because of the significant EV Early Adoption Incentive.
Building a Sustainable Singapore, Together
- D24. I spoke about policy measures that the Government will put in place to reduce emissions. But the Government alone cannot address the threat of climate change. Therefore, mobilising all of us in this effort is the third thrust of our climate change strategy.
- D25. Robert Swan, the first person to have walked to the North and South Poles, once said, “The greatest threat to our planet is the belief that someone else will save it.”
- D26. To deal with climate change, we have to foster a climate of change in our community– where everyone, whether as an individual, as a business leader, or as a community leader, makes conscious decisions to lower our carbon footprint.
- D27. One such decision by individuals is our choice of household appliances.
a. To encourage households to purchase energy-efficient household appliances, we will introduce incentives to help lower-income households with the cost of these appliances.
D28. Outside our homes, we earlier announced plans to add more greenery to our HDB estates.
a. New housing developments will have around 45% to 60% green cover.
b. Residents are contributing through the community garden movement. Today, more than 36,000 gardening enthusiasts are nurturing over 1,500 community gardens island-wide. These gardens keep our shared neighbourhood vibrant, and bring people closer together.
D29. To make sustainable living a key feature of our HDB estates, we will have a new HDB Green Towns Programme. It will have three key focus areas: reducing energy consumption, recycling rainwater, and cooling our HDB towns.
Long-Term Adaptations to Climate Change
- D30. I spoke about how we are committing to global efforts, managing our carbon constraints, and building a sustainable Singapore, together. We must try hard and we will do our part. But the course of climate change depends on the commitment of all nations. The risk of rising sea levels remains significant. So our fourth strategic thrust is to prepare our island for rising sea levels.a. The Minister for the Environment and Water Resources will elaborate on our immediate plans at the COS.
- D31. PM mentioned at the National Day Rally last year that climate change adaptation might cost $100 billion or more over 100 years. This is a major fiscal outlay in the coming years – so it is right and prudent that we set aside resources for this.
- I will set up a new Coastal and Flood Protection Fund, with an initial injection of $5 billion. I will top it up subsequently whenever our fiscal situation allows.
- We must have the resolve to deal head-on with the existential threat of rising sea levels. Just as our pioneers planted the trees for us to enjoy, we must protect our island for future generations to come.
- D32. Our food security may also come under threat, as imported supplies come under strain from climate change or geopolitical tensions. To improve our food resilience, the Minister for the Environment and Water Resources will provide more details of our‘Grow Local’ strategy at the COS.
Securing Our Home
D33. In uncertain times, there are many calls on our budget. However, we cannot take our peace, prosperity, and stability for granted.
a. As a small city-state, we are particularly vulnerable to volatilities in our external environment.
b. Securing our home remains a high priority in our Budget and must be funded adequately. It is imperative that we continue to invest in our external, internal,cyber, and data security, to keep Singapore and our families safe and secure.
- D34. Diplomacy and deterrence are the twin pillars of maintaining Singapore’s sovereignty.
- We strive to build good relations with our neighbours and international partners, and to promote a rules-based world order.
- A strong Singapore Armed Forces supports our diplomatic efforts and ensures that other countries take Singapore seriously. We must be ever ready to defend our interests should negotiations fail.
- We must continue to draw a credible deterrence, by maintaining our military and technological edge, in a prudent manner that stretches every defence dollar.
- D35. Back home, we are committed to protecting our safety and our way of life.
- Our Home Team agencies will continue to enhance the operational readiness of their officers, leverage technology, and build partnerships with the community.
- Singaporeans share a strong conviction to look out for each other and to partner the Home Team to prevent and deal with terror threats and crisis, through the SGSecure movement.
- D36. We must also be prepared to deal with cyber threats, as digitalisation becomes more pervasive. Our cyber capabilities have been raised significantly, with the setting up of the Cyber Security Agency, or CSA, in 2015, and the passing of the Cybersecurity Act in 2018.
- CSA is preparing measures for the next level of cybersecurity, as we adopt more advanced technologies such as Artificial Intelligence, Cloud, and the Internet of Things.
- All of us, in the Government, enterprises and as individuals, will need to stay vigilant and strengthen our cyber and data security capabilities.
- D37. Data security is also a vital prerequisite and key enabler of Singapore’s Digital Economy. It is key to preserving trust in a digitally-connected world.
- We enacted the Personal Data Protection Act in 2012, and the Public Service has adopted comprehensive measures to secure and protect citizens’ data.
- As we embark on initiatives to realise our Smart Nation ambitions, we must continue to enhance our cyber capabilities.
- D38. I will set aside $1 billion over the next three years to build up the Government’s cyber and data security capabilities, to safeguard citizens’ data and our criticalinformation infrastructure systems.
- D39. The respective Ministers will provide more details of the schemes to confront the challenges of climate change and security.
A Fiscally Sustainable Singapore
- D40. As we lay out our plans for our economy, people, and environment, we must ensure these plans are fiscally sustainable, so that we have the resources to deal with future needs and challenges.
- D41. We must continue to plan our finances based on long-term structural drivers.
- Revenue flows are difficult to project accurately – we can end up having more, or less.
- In this term of government, we happen to have more, mainly due to exceptional Statutory Board contributions from MAS, and increased stamp duty collections.
- We used some of the unexpected surpluses to save ahead for anticipated needs, and shared some of the surpluses with Singaporeans.
- But we must not count on such revenue surprises to keep happening.
- We must anticipate long-term spending needs and be disciplined to raise revenues ahead of time, so that we can continue to provide quality public services to all Singaporeans.
- At the same time, we must be mindful of the uncertainties and downside risks to our revenue.
- Revenue flows are difficult to project accurately – we can end up having more, or less.
i. There are ongoing discussions to revise international tax rules under the Base Erosion and Profit Shifting project, and we are actively participating in them.
D42. Our fiscal strategy must also be equitable.
- Major long-term infrastructure is lumpy, and requires hefty upfront investments. But once built, they benefit many generations of Singaporeans.
- Borrowing for such developments allows us to distribute the cost equitably across current and future generations, without the need for sharp increases in taxes.
c. However, we must remain disciplined about our use of borrowing. We should continue to pay for recurrent needs, like healthcare expenditure, through recurrent revenues such as taxes.
- Our fiscal discipline has helped us to be among a select group of countries with a triple-A credit rating.
- This in turn lowers the borrowing costs of enterprises and households, and promotes a virtuous cycle of economic growth.
D43. We must also maintain our fiscal posture and leave enough to deal with unexpected shocks and longer-term challenges.
- The Constitution requires us to run a balanced budget over each term of government. We are being prudent to preserve fiscal buffers, to ensure that we have the wherewithal to stand our ground and bounce back quickly if the tide turns against us.
- This is how we have been able to respond decisively to fight the COVID-19 outbreak, and support Singaporeans and our workers.
- And at the same time, to be able to set aside an Assurance Package for GST to help Singaporeans in the years ahead.
- The accumulated surpluses at the end of the term of government becomes part of our past reserves, which are invested. Today, the Net Investment Returns Contribution from our reserves is the biggest component of our revenue. This is remarkable for a country with no natural resources of any kind.
Other Tax Changes
D44. I am making further changes to our tax system to strengthen its resilience while maintaining competitiveness. The details are in the Annex. [See Annex D-1.]
Budget Position
- D45. Let me summarise our overall budget position.
- D46. For FY2019, we expect an overall budget deficit of $1.7 billion, or 0.3% of GDP. The deficit is $1.8 billion lower than the $3.5 billion deficit forecasted a year ago. This is due mainly to lower-than-expected expenditures arising from unforeseen project delays.
- D47. When we exclude the Government’s top-ups to funds and Net Investment Returns Contribution from our reserves, we expect a basic deficit of $5.1 billion, or 1.0% of GDP.
- D48. In the coming year, the Singapore economy faces considerable uncertainty, because of heightened risks in the global economy, and the rapidly evolving COVID-19 outbreak. Hence, for FY2020, our budget position will be more expansionary, with a larger basic deficit of $12.3 billion. This, together with the Stabilisation and Support Package, will impart a considerable fiscal boost to the economy to address near-term concerns.
- D49. On the whole, we expect an overall deficit of $10.9 billion or 2.1% of GDP. [See Annex D-2.]
- D50. With our fiscal prudence since the beginning of this term of government, we have sufficient accumulated fiscal surplus to fund the overall deficit in FY2020. There is no draw on past reserves.
E. PARTNERING SINGAPOREANS TO BUILD SINGAPORE TOGETHER
- E1. Mr Speaker Sir, we will face more complex challenges ahead, but we are in this for the long haul. We can succeed only if we work together.
- E2. Our ongoing fight against the COVID-19 outbreak is a testament to how we can work together.
- Our healthcare workers and frontline officers are giving their all to keep us safe, and care for those who are unwell.
- And others – community groups, enterprises, and many volunteers have stepped forward. Everyone has something to offer, and every action makes a difference.
- E3. This is the spirit of the Singapore Together movement, which I launched last June – to build a democracy of deeds, mobilise the creative energies and commitment of Singaporeans, find common cause, and beat the odds together, to build our future Singapore.
- E4. We made a concerted effort to involve Singaporeans and stakeholders in our strategic deliberations and budgeting process.
a. Over the course of the Budget 2020 consultations, my colleagues and I met almost 1,000 leaders from different parts of society, including our unions, enterprises, social sector, and youths.
E5. It was a very enriching experience for everyone, and I thank every participant. Some of you will recognise your ideas in the Budget.
- For example, we enhanced the internationalisation support schemes after receiving feedback from TACs such as the Singapore Manufacturing Federation and the Association of Banks in Singapore.
- We provided more resources to support our people to take action to reduce carbon footprint, after several youth leaders I met suggested this.
E6.
- E7. Many Singaporeans are coming up with, and acting on, ideas to make Singapore a better place.
- E8. The youth movement has been particularly strong.
I also thank the talented students from Nanyang Polytechnic for the artistic
illustrations in my slides today.
- In the area of climate change, youths like Ms Cheryl Lee and her team in the Singapore Youth for Climate Action have been organising activities to encourage youth to take action through simple lifestyle choices.
- Ms Rohini D/O Ravindran is also contributing to the community, by conducting photography and videography sessions for lower-income youth, to develop their problem-solving skills and build a good foundation for them to excel.
- E9. In 2016, we set up the Our Singapore Fund, or OSF, to provide funding support for ground-up efforts in the social domain.
- Since then, the OSF has committed nearly $4.3 million to support over 240 ground- up projects in culture, heritage, arts, and sports.
- One example is Progress NEST started by Mr Akram Hanif, to support children from low-income families.
- E10. Through these partnerships, we have been able to do more and do better. And we are committed to making partnerships an integral part of how we will build our future Singapore.
- E11. I will set aside $250 million to give greater momentum to our partnership efforts.
- I will top up the OSF and extend the Fund beyond 2020 to support more ground- up initiatives that Singaporeans are passionate about, across a wider range of domains. [See Annex C-5.]
- The Government is committed to expanding and scaling up successful ground-up projects, such as those supported by the OSF.
- The Ministry of the Environment and Water Resources will also be launching anSG Eco Fund to support partnerships with the community and enterprises in our sustainability efforts.
- E12. Channelling the energies of our people to key causes requires us to identify the challenges of our time.
- These challenges are multi-faceted and multi-dimensional, but they are ultimately about how Singapore remains exceptional in an increasingly complex world.
- The solutions will also come in all shapes and forms, from all levels of society –from government policies to individual efforts on the ground. We must overcome these challenges and find solutions together.
- E13. The Government will work with agencies and key stakeholders to identify major societal challenges. This will help us focus our collective efforts on the challenges that matter, and allow us to galvanise good ideas and solutions from the public.
- E14. We have issued several national innovation challenges to date, in the areas of energy, land and liveability, ageing, urban mobility, and AI-enabled healthcare.
- For example, our AI Healthcare Grand Challenge is drawing strong interest here, and with partners from France and Germany.
- Under the National Innovation Challenge in Ageing, we sought ideas to combine different technologies to enable ageing in place, and deployed these solutions at a precinct level.
- While we are only in our initial phases, we have learnt useful lessons, and seen encouraging results.
- E15. We will issue more specific challenges to encourage ground-up participation. These include challenges in the social sector, where we have built many community partnerships to better support children from low-income and vulnerable families, and promote youth mental well-being, amongst other things.
- E16. The respective Ministers will provide more details of the schemes I have mentioned in this section later.
- E17. I am excited about the prospect of stronger government-citizen partnerships in overcoming these challenges, and look forward to the results that these partnerships will yield.
- E18. As this Budget has many measures, MOF has prepared a booklet summarising the measures, which I hope colleagues will find useful. With your permission, Mr Speaker, may I ask the Clerks to distribute these to all Members of this House.
F. CONCLUSION
- F1. Mr Speaker, Sir, let me say a few words in Mandarin before I conclude in English.
- F2. 2019 冠状病毒的传播,为全球增添了很多不确定因素。病毒无国籍,防控无国界。
- 多个国家的政府、国际组织、科研以及医疗人员,也都在积极加强合作。
- 中国采取了一系列高效有力措施,中国抗炎早日成功将对中国和全世界有所 帮助。
- F3. 当前形势对我国的经济带来了广泛的影响。一些行业已经受到冲击。国人也担 心他们的就业前景。我可以理解。
- 为了减轻企业以及国人所面对的压力,我将推出 40 亿元的“经济稳定与援 助配套”。
- 为了协助国人应付家庭开销,我也将推出16亿元的“关怀与援助配套”。
- 新加坡有足够的资金应对眼前的挑战。这是因为我们居安思危,未雨绸缪,
把这届政府的财政盈余储备起来,应对不时之需。
- F4. 我国是否能够克服这次的挑战,将取决于国人是否能够互相扶持,维护社会凝 聚力。在面对许多未知时,大家难免会感到忧虑。但是,我们绝对不能出现恐 慌。大家要好好照顾自己的个人卫生,并为我们周边的人着想。同时,我们也 可以采取实际行动,帮助有需要的群体。
- F5. 财政预算案是一个长期的战略规划,确保新加坡可以持续发展,国人可以过上 更美好的生活。我们在克服短期挑战的同时,也必须着眼应对长期的结构性转 变,并把握这些转变所带来的机遇。
- 首先,我们必须继续推动企业转型,为国人创造更多机会。 所谓学无止境, 我们将通过“技能创前程计划”,鼓励国人在人生的每一个阶段,终生学习, 终生受用。我们也将推出“技能创前程中年转业援助配套”帮助中年人,掌 握新技能,胜任新工作。
- 第二,我们会一起打造一个具有爱心和包容心的社会。我刚宣布消费税在2021 年将保持在百分之七。但为了应付不断增加的开支,如医疗保健,我们 还是需要在 2025 年或之前调高消费税。消费税上调时,我们将继续帮助低 收入家庭,为他们提供更多援助。我将推出 60 亿元的“定心与援助配套”, 并且加强现有的永久性消费税补助券计划。
c. 第三,我们要继续推动国家建设,维护新加坡的安全与稳定,并确保我们拥 有可持续的财政体系。这是我们对子孙后代的承诺。尤其是应对气候变化,我将拨款 50 亿元设立新的“海岸及洪水防护基金”。
d. 第四,我们将与国人风雨同舟,携手建设我们的国家,打造属于我们的家园。
- F6. 所谓幼有所教、弱有所扶、老有所养、我们希望新加坡不仅是个养儿育女的好
地方,也是一个让年长人士过上有意义、有尊严生活的温馨家园。
- 我们将改进现有的乐龄补贴计划,协助低收入年长人士应付开销,让他们的 退休生活更有保障。
- 另外,我们将推出退休户头配对填补计划,帮助那些公积金存款不多的国人 填补他们的公积金储蓄。
- 我们也鼓励年长国人保持身心活跃,过上充实的退休生活。
- F7. 当今,全球局势不稳定,各国也面对结构性的转变。从长远来看, 应付突如其 来的病毒只是我们前进道路上的其中一个挑战。我们不能为此而停滞不前,必 须一起朝着共同的目标不断前进。正如“群策群力,共创未来”运动一样,只 要我们集思广益,携手同心,我们一定能排除万难,共创更美好的新加坡。
- F8. I will now conclude in English.
- F9. Mr Speaker Sir, There are deep structural shifts taking place in the world today, coupled with near-term concerns over economic uncertainties and the COVID-19 outbreak. All nations, big or small, will have to devise strategies and mobilise their people to navigate these changes and turbulence.
- F10. Singaporeans have enjoyed more than half a century of stability and prosperity because we have seized the opportunities from an increasingly open and interconnected world. Every decade or so, when a test comes, we have rallied and passed it together.
- F11. In this Budget, I have outlined our plans not only to help our people deal with near-term challenges, but also to better enable Singaporeans of all ages to thrive in the new decade.
- The Stabilisation and Support Package, costing $4 billion, will help viable enterprises, and our workers during these uncertain times.
- Our Transformation and Growth effort, costing $8.3 billion over three years, will support our longer-term plans to position Singapore as a Global-Asia node of technology, innovation, and enterprise.
c. The Care and Support Package, costing $1.6 billion, will support our households and alleviate concerns over cost of living. This is on top of the structural social subsidies given to Singaporeans in healthcare, education, and housing.
d. We will continue to take steps towards climate change mitigation and adaptation,to ensure that in the decades ahead, our children and children’s children will havea safe and liveable Singapore.
- F12. I am confident that together, we can ensure that Singapore remains exceptional.
- As one Singapore, we will Grow our economy and transform our enterprises, creating opportunities for Singaporeans.
- As one Singapore, we will Care for and nurture Singaporeans at every stage of their lives, to build a caring and inclusive society.
- As one Singapore, we will Build a liveable and sustainable Singapore in the face of climate change, Secure our sovereignty as an independent nation, and ensure our fiscal sustainability.
- And as one Singapore, we will work Together with fellow Singaporeans, to build a nation and a home we will always call our own.
- F13. Our nation has built up the capital – financial, human, and social – to go the distance. The Singapore spirit is strong and growing. Together, we will advance, as One Singapore.
- F14. Mr Speaker, Sir, I beg to move.
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