SINGAPORE: The 2019 Budget remains an "expansionary" one, with Finance Minister Heng Swee Keat announcing a Bicentennial Bonus and measures to help Singaporeans with healthcare costs.
He also set out details for the much-anticipated Merdeka Generation Package, which will cost the Government S$8 billion in all.
What do the measures announced on Monday (Feb 18) mean for Singaporeans and Singapore businesses?
Here’s a quick overview:
1. THANKS, MERDEKA GENERATION
As expected, the Finance Minister fleshed out the previously announced Merdeka Generation Package, which he called a “gesture of our nation’s gratitude” for those who played a critical role in Singapore’s development.
The five key benefits announced were:
- A S$100 top-up to Merdeka Generation seniors’ PAssion Silver cards
- Medisave top-ups of S$200 for five years
- Community Health Assist Scheme (CHAS) subsidies and discounts at polyclinics, public specialist outpatient clinics
- MediShield Life premium subsidies
- A S$1,500 incentive to join CareShield Life
2. AN “EXPANSIONARY” BUDGET THIS YEAR
Like the previous financial year, the Government’s budget position for FY2019 remains expansionary, with a basic deficit of S$7.1 billion expected.
This is excluding government top-ups to funds and Net Investment Returns Contribution from past reserves.
On the whole, a deficit of S$3.5 billion or 0.7 per cent of GDP is predicted, with increased spending expected for defence, education and health.
3. NOT EXACTLY A “HONG BAO”, BUT STILL A BONUS
Last year, the Finance Minister ended his Budget speech on a prosperous note, announcing a one-time “hongbao” for Singaporeans aged 21 and above.
In a similar vein, a S$1.1 billion Bicentennial Bonus was announced to commemorate Singapore’s bicentennial this year.
This includes GST vouchers and a personal income tax rebate of 50 per cent (capped at S$200 per taxpayer), for income earned in 2018.
Younger Singaporeans will get additional top-ups to their Edusave and Post-Secondary Education Accounts, while eligible older Singaporeans can look forward to a one-off CPF top-up.
Lower wage workers will also get more in Workfare Income Supplements.
4. HEALTHCARE IN FOCUS
Healthcare was a key focus, with more money earmarked for premium subsidies and other forms of support.
With another S$3.1 billion set aside this year, a total of S$5.1 billion will be put into a new Long-Term Care Support Fund, to fund CareShield Life subsidies and ElderFund.
In addition, CHAS subsidies will be enhanced:
- CHAS coverage will be extended to all Singaporeans for chronic conditions, regardless of income
- Lower to middle-income Singaporeans who are CHAS Orange cardholders will also see subsidies extended to include common illnesses
- Subsidies for complex chronic conditions will also be increased
5. MORE SUPPORT FOR WORKERS, BUSINESSES…
Measures worth S$1 billion were also announced to help local companies build “deep” capabilities. Firms can look forward to “customised” assistance in overcoming business challenges and scaling up.
For workers, there will be new Professional Conversion Programmes relating to blockchain, embedded software and pre-fabrication, while there will be extended wage support for older workers.
However, there will be a lower foreign worker ratio in the services sector, with Mr Heng saying that “relying on more and more foreign workers is not the long-term solution”.
6. … BUT LESS FUN FOR HOLIDAYMAKERS
There was bad news for holidaymakers, with the announcement of less GST import relief and a reduced alcohol duty-free concession.
Travellers who spend fewer than 48 hours outside Singapore will have to start paying GST on goods bought overseas worth more than S$100, down from the previous S$150 allowance. This change takes place with effect from midnight, Tuesday.
Those who like their booze duty-free should also take note – from Apr 1, travellers will only be able to buy 2 litres of duty-free alcohol, down from the current 3 litres.
7. DOUBLED DUTY ON DIESEL
Mr Heng also announced that the excise duty on diesel fuel has been increased from S$0.10 to S$0.20 per litre with immediate effect, as part of measures to restructure diesel taxes.
At the same time, the annual special tax on diesel taxis will be permanently reduced by S$850, while the special tax on diesel cars will be cut by S$100.
However diesel buses ferrying schoolchildren will get additional cash rebates of up to S$3,200 over three years.
Commercial diesel vehicles will get a 100 per cent road tax rebate for one year, and partial road tax rebate for another two years.