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SINGAPORE: The government will give S$2.6 billion worth of support for households and community welfare organisations. Speaking in Parliament on Thursday, Finance Minister Tharman Shanmugaratnam believes this will do more for Singaporeans than a GST rate cut.
Last year, the rising cost of living weighed heavily on many Singaporeans' minds. Now, the fear is of reduced incomes and the possibility of job losses. So the government is extending measures to put more cash in their pockets.
For a start, GST Credits will be doubled this year, with more for the low-income and the elderly.
2.4 million eligible Singaporeans will receive their first payouts on March 1 on top of what they will receive in July under the original Offset Package announced in 2007. The Senior Citizens' Bonus will also be doubled.
This will cost the government an additional S$580 million. Another S$457 million will be spent on helping Singaporeans with their taxes.
Individual tax payers will pay 20 per cent less income tax this year, but this will be capped at S$2,000. So if a person has to pay a tax of S$5,000, he will only need to pay S$4,000 after the rebate.
The rebates are for tax payable this year, on income earned in 2008. Tax payers will also have more time to pay up their taxes - from the existing 12 months to 24 months. This is aimed at helping those who have lost their jobs or who are facing job losses.
Home owners will receive a 40 per cent property tax rebate. This only applies to owner-occupied homes.
Rebates will also be given on HDB rents and service and conservancy charges. These come on top of existing measures announced previously such as U-Save, which helps families with their utilities.
The finance minister explained why these measures are preferable to a GST rate cut. He said: "Keeping the GST unchanged has afforded substantial benefits for households. But more importantly, the distribution of benefits favours low and middle-income households. This is the right strategy for the times."
For first-time home buyers, the government will increase their additional CPF Housing Grant to S$40,000 and allow households earning up to S$5,000 to qualify.
As in previous years, money has been set aside to help society's most vulnerable. Another S$200 million will be added to Eldercare Fund and Medifund, two programmes that provide subsidised healthcare for low-income Singaporeans.
The government will also increase its public assistance rate for single-person households by S$30 a month, bringing the rate for these individuals to $360. - CNA/vm
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