Are you familiar with the word ‘budget’? You may have heard your parents speak about the household budget and some challenges that surround it. Budgets are related to income and expenditure. Households, nations, companies and international organizations all have budgets. The national budget gets a lot of attention as it impacts the lives of all the citizens. There could be a tax hike, a new scholarship scheme for students, a novel allowance for the elderly and a lot more – all of which can have a wide impact on society.
On 18 February 2020, Singapore’s government unveiled the national budget for the year.
Do you know what the main announcements and far-reaching schemes in this year’s budget were? Let’s take a look at a few of them.
Support for households and citizens – $1.6 billion care and support package
In the wake of the coronavirus outbreak, increased household expenses and an anticipated hike in the GST the government has announced a $1.6 billion care and support package to help out the nation’s households, with special emphasis on the lower-income households.
1) Grocery Vouchers
Singaporeans above the age of 21 and living in one or two-room HDB flats will receive a grocery voucher worth $100 each for two years.
2) One-off cash payment
Depending upon their income and owned property, all Singaporeans will get a one-time cash payout of $300, $200 or $100. Parents with children aged 20 or below will receive an additional $100.
3) Special payment for low-income workers
Both low wage employees and self-employed persons aged 35 and above will receive payments ranging from $100 to $720.
4) PAssion card top-up
All Singaporeans aged 50 and above will get a top-up of $100 on their PAssion cards.
5) Additional GST vouchers plus Service and Conservancy charges
Eligible HDB households will get double their usual GST Vouchers during the period from April 2020 to March 2021.
Eligible households in HDB flats will also get benefits to cover 1.5 and 3.5 months of Service and Conservancy charges.
Helping out our workers and businesses
The coronavirus outbreak and various other international issues have caused a lot of problems for the business. Thus in order to help them out in improving business and ensure that they do not have to let go of their employees, the government has announced a number of steps.
1) Government to pay 8% of employee wages (Jobs Support Scheme)
The Government will pay 8 percent of the wages of Singaporean and permanent resident employees (up to a maximum of $3,600 per employee monthly) for three months. This will help $1.9 million people keep their jobs.
2) Wage incredible support for 700,000 employees (Wage Credit Scheme)
In order to encourage companies to increase wages for employees the government is increasing its contribution to wage increase by 5% to 20% for payouts meant for 2019 and 15% for payouts meant for 2020. This will benefit 700,000 employees across 90,000 enterprises.
3) Corporate tax rebate
The government has announced a corporate tax rebate amounting to 25% of the total tax that a company may have to pay (with a maximum rebate of $15,000) for the tax assessment in 2020.
4) Special help for sectors affected by the coronavirus
Tourism, aviation, retail, food services, and point-to-point transport services are the five sectors that have been hit the hardest by the coronavirus outbreak.
Property tax rebates of 15% or 30% have been announced for many establishments.
The duration of governmental support for reskilling employees in these sectors has been increased. Around 330,000 local workers will benefit from this.
Initiatives have been announced to help companies get loans in a more easy manner.
Initiatives in education
1) $100 more for students from low-income families
The financial assistance for pre-university students from low-income families has been hiked from $900 to $1,000.
2) 100% fee subsidy
Full-time Institute of Technical Education (ITE) students from the lowest-income families will get a 100% afee subsidy from Academic Year 2020.
3) Increased spending
The cash bursary for students from low- and middle-income households, is set to witness an increase of up to $200 a year.
The share of government-supported pre-schools will be around 80 percent by 2025
All students will get higher transport subsidies while secondary school students will get more school meal subsidies
Support for the middle-aged and the elderly
The government has increased its wage support to employers who hire employees aged 55 and above. It has also increased contributions to the Central Provident Fund for the employees.
A one-off SkillsFuture credit top-up of $500 will be provided to every Singaporean above the age of 25. Those aged between 40-60 will get another top-up of $500.
Employers will also get $10,000 under the new SkillsFuture Enterprise Credit towards expenses meant for reskilling their workforce.
Employers that hire people aged 40 and above will get 20 percent salary support for six months, capped at $6,000.
Initiatives for the future
1) Towards future economic growth
The government is going to invest around $8.3 billion over the next three years to support the growth of Singapore’s economy.
This will include an additional $300 million to promote Singaporean deep-tech start-ups.
2) Combating climate change
Singapore is taking the fight against climate change in a serious manner and has announced a number of measures related to this in the budget. These include:
A coastal and flood protection fund with an initial investment of $5 billion.
Green Towns Programme in HDB flats to adopt environment-friendly practices such as saving energy and recycling rainwater.
Tax benefits and 45% rebate on the registration fees for electric vehicles (EVs).
Phasing out vehicles with internal combustion engines by 2040.
This year’s budget promises a lot for our people and is visionary in its approach. It can help our nation excel further and combat the new challenges thrown up by the world.
On a side note, let’s think about how budgeting affects us. After this article how many of you think the terms – “Finance”, “Budget” and “Schemes” are big words to digest now?
Well, they might sound so for now. But a few years down the road, these words are going to be a relatively major part of your everyday lives. So, what better time to get started with these topics than now? 🙂
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