Highlights: Finance Minister Heng Swee Keat delivers Budget 2018

Highlights: Finance Minister Heng Swee Keat delivers Budget 2018

HSK Budget SS 7
Finance Minister Heng Swee Keat delivering the Budget 2018 statement.

SINGAPORE: Finance Minister Heng Swee Keat delivered the 2018 Budget statement in Parliament on Monday (Feb 19).

Mr Heng announced a one-off "hongbao" for Singaporeans as well as a potential hike in the Goods-and-Services tax

He added that the Government will enhance the Proximity Housing Grant to give more support to family members who want to live with or near each other. 

Businesses will continue to receive support in terms of managing costs with the extension of two measures - the Wage Credit Scheme, as well as the Corporate Income Tax rebate. 

Follow us on Twitter and Facebook for the highlights of #SGBudget2018 or go to Channelnewsasia.com's Budget 2018 site for all the latest stories.

5.30pm: The Budget speech has ended

From GST to a hongbao giveaway, here are the main takeaways from the 2018 Budget.

For a brief recap of the key points, read the 8 things you need to know about the Budget.

Catch up on all the coverage at Channelnewsasia.com's Budget 2018 site.

5.27pm: Hongbao for Singaporeans: SG Bonus

Mr Heng says all Singaporeans aged 21 and above will get a “hongbao” of S$100 to S$300, depending on their income. This is to share this year's Budget surplus.

This will cost the Government S$700 million.

Read more here.

budget 20199 infographic - sg bonus

5.25pm: Bumper Budget surplus

The overall Budget surplus is S$9.6 billion for FY2017, up from S$1.9 billion forecast a year ago. 

The increase is due to exceptional Statutory Board contributions (mainly from MAS) and Stamp duties.

This is the highest in absolute terms in the last 30 years but not as a percentage of GDP.

5.24pm: GST on imported services - but not physical goods

GST will be introduced on imported services, such as consultancy and marketing services from overseas suppliers, apps and music downloaded from overseas from 2020.

The excise duty on all tobacco products will also be raised by 10 per cent from today.

Read more here.

5.22pm: Buyer's Stamp Duty for residential properties raised

The marginal rate is to go up to 4 per cent for properties with a value of more than S$1 million. 

Read more here.

5.15pm: GST hikes - but not now

The Government plans to raise GST by 2 percentage points to 9 per cent sometime from 2021 to 2025.

The exact timing will depend on the state of the economy, how much expenditures grow and how buoyant existing taxes are.

Mr Heng expects it to be "earlier rather than later" in the period.

This is to support recurrent healthcare, security and social spending so that every generation pays its share.

The GST voucher scheme will be enhanced and there will be an offset package to help Singaporeans adjust, says Mr Heng.

Read more here.

gst rates around the world

5.11pm: Ministries' block budget growth caps to be reduced

"I will further moderate the pace of ministries' budget growth," says Mr Heng.

The growth of ministries’ block budgets are to be reduced from 0.4 times to 0.3 times of GDP growth. This comes after a 2 per cent reduction to their budget caps last year.

5.08pm: Infrastructure, security spending to go up

Projects over the next decade include the expansion of the rail network, Jurong lake District, Punggol Digital District, Woodlands North Coast as well as Changi Airport Terminal 5, Tuas Port and the KL-Singapore High-Speed Rail.

Singapore will also invest more in security to keep Singapore safe, Mr Heng says.

5.04pm: Sound fiscal footing but spending to rise

Singapore kept on a “sound fiscal footing” this decade but needs to plan ahead to meet its growing spending needs, Mr Heng says.

The demands on families and government will rise as the population ages. By 2030, the number of elderly will double to 900,000. Within the next decade, healthcare spending will overtake education.

4.57pm: Tax deductions for donations

A 250-per-cent tax deduction for donations to charities that are Institutions of a Public Character will be extended for three more years, until 2021.

Government will increase support to five Community Development Councils, annual matching grant cap will go up from S$24 million to S$40 million.

The Business and IPC Partnership Scheme will be extended for three more years as well. 

Read more here.

4.51pm: Community support for seniors

Budget 2018 file - elderly 6
File photo of elderly woman in Singapore. (Photo: Christy Yip)

Community Networks for Seniors, a scheme to help the elderly stay active and engaged with the community, will be expanded nationwide by 2020.

Social and healthcare services for seniors will be consolidated under the Health Ministry.

The Pioneer Generation Office will be renamed the Silver Generation Office (SGO). SGO will be merged with the Agency for Integrated Care.

Read more here.

4.47pm: Foreign domestic worker levy to rise

The levy will be raised from S$265 to S$300 for the first foreign domestic worker and to S$450 for the second foreign domestic worker without levy concession. To take effect from Apr 1, 2019.

Employers who are currently paying a S$60 concessionary rate will continue to pay the same amount, Mr Heng said. Families that need help caring for young children under the age of 16, the elderly, or relatives with disabilities qualify for this concessionary rate. 

Read more here.

4.45pm: Extension of S&CC rebate

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The increased rebate for conservancy fees will be extended for another year.

Read more here.

4.43pm: Enhanced Proximity Housing Grant

Proximity Housing Grant for families buying a resale flat to live with their parents to increase to S$30,000; this also extends to singles, who will get S$15,000.

The grant for those buying a resale flat near their parents or children continues to be S$20,000. For singles, they will now get S$10,000.

Also, the "within 2km" criterion will be doubled to "within 4km".

Read more here.

sg budget proximity housing grant gfx

4.40pm: More support for education

  • Annual Edusave contributions by Government to increase from S$200 to S$230 for primary school students, and from S$240 to $290 for secondary school students.
  • Increased support to students from lower-income families by raising bursary amount for pre-university students from S$750 to S$900
  • More meals for secondary school students under School Meals Programme

Read more here.

4.39pm: Next up: A caring and cohesive society 

Children Singapore
Children playing in the sand on a beach in Singapore. Photo: Gaya Chandramohan)

Mr Heng says he will talk about how the Government can better support Singaporeans and their families, strengthen partnerships between the Government and the community and encourage a spirit of giving in Singaporeans.

4.26pm: Mid-Budget speech break

The Budget statement will resume after a short break.

4.20pm: Additional U-Save for households for three years

Government expects to collect carbon tax revenue of nearly S$1 billion in the first five years. Funds will be set aside to enhance support for companies to improve energy efficiency.

Eligible HDB households will each get S$20 more a year to cover the expected average increase in electricity and gas expenses arising from the carbon tax.

Read more here.

4.17pm: Carbon tax

The new carbon tax is set at S$5 per tonne of carbon-dioxide-equivalent (tCO2e) of greenhouse gas emissions for facilities that produce more than 25,000 tCO2e in a year.

The first payment will be in 2020, based on emissions in 2019. It is to be increased to S$10 to S$15 per tCO2e by 2030. 

This is lower than the S$10 to S$20 per tCO2e previously expected.

Read more here.

4.10pm: Beyond the economy

Mr Heng is moving on to how Singapore can become a smart, green and liveable city. 

"Today, Singaporeans enjoy the comforts of a modern city, along with clean air, clean water and verdant spaces."

He mentions how otters have returned to Singapore's waterways.

4.05pm: A new Infrastructure Office

The Office will bring together local and international firms for infrastructure projects, to tap on opportunities in Asia - for example, China's Belt & Road Initiative, Japan and India's Asia-Africa Growth Corridor.

4pm: More initiatives for innovation

HSK Budget SS 3
Finance Minister Heng Swee Keat delivering the Budget 2018 statement.

  • The National Robotics Programme will be expanded to the built-environment sector, especially construction
  • A new Enterprise Development Grant will combine IE Singapore and SPRING's existing grants, with up to 70 per cent co-funding
  • Tax deduction for internationalisation to be doubled
  • Also, a Capability Transfer Programme to support skills transfer from foreign specialists to Singaporeans

Read more here.

3.51pm: Aviation and Maritime Transformation

Mr Heng announces a new Aviation and Maritime Transformation Programme

Airport and seaport will become platforms for companies to develop test and use new technologies. The Government will fund up to S$500 million for the two programmes.

3.50pm: "Tinder" for innovation

An Open Innovation Platform will be piloted by IMDA - a virtual crowd-sourcing platform where companies can list specific challenges that can be addressed by digital solutions.  

The companies will then be matched with ICT firms and research institutes, to co-develop solutions.

Read more here.

3.48pm: Incentives to boost innovation

As the Productivity and Innovation Credit (PIC) expires, Mr Heng says that existing grants to support adoption of off-the-shelf technologies will be streamlined into a single Productivity Solutions Grant or PSG.

There will be up to 70 per cent funding support for companies to adopt productivity-enhancing tech or solutions.

Other measures:
- More tax deductions on licensing payments for commercial use of intellectual property (IP)
- More tax deduction for IP registration fees and expenses incurred on R&D

3.46pm: "Make innovation pervasive throughout our economy"

HSK Budget SS 2
Finance Minister Heng Swee Keat delivering the Budget 2018 statement.

Mr Heng raises the example of concrete and cement company Pan-United, which has developed a new type of flexible concrete which can cushion the landing of aircraft. 

It's "a concrete example of how innovation can help a firm cement its position as a market leader", he says.

3.42pm: Corporate Income Tax rebate 

The rebate for companies will be raised to 40 per cent of tax payable, capped at S$15,000 for YA2018.

For YA2019, it will be 20 per cent of tax payable, capped at S$10,000.

This will benefit all tax-paying firms, especially smaller ones, Mr Heng says.

3.41pm: Wage Credit Scheme to be extended

The scheme will be extended for three more years until 2020. The scheme co-funds wage increases for Singapore employees up to a gross monthly wage of S$4,000.

Co-funding will be 20 per cent for 2018, 15 per cent for 2019 and 10 per cent for 2020.

Read more here.

3.39pm: The way forward - 4 main themes

To address the coming shifts, Mr Heng lays out four areas of focus for the Budget:
- To develop a vibrant and innovative economy
- To build a smart, green and liveable city
- To foster a caring and cohesive society
- To plan ahead for a fiscally sustainable and secure future

3.33pm: Mr Heng highlights 3 major shifts in the coming decade

- A shift in global economic weight towards Asia
- The emergence of new technologies
- Ageing population

3.28pm: Good news for the Singapore economy

Mr Heng starts on a positive note as he talks about the Singapore economy's better-than-expected growth in 2017. 

GDP grew 3.6 per cent, up from 2.4 per cent in 2016.

Productivity growth was also stellar at 4.5 per cent value-added per actual hour worked - the highest figure since 2010.

3.08pm: Finance Minister Heng Swee Keat arrives

Mr Heng waves as he arrives at Parliament House, holding the traditional briefcase.

HSK arriving for budget
Minister for Finance Heng Swee Keat arrives in Parliament to deliver Budget 2018. (Photo: Gaya Chandramohan) 

2.36pm: Where you can tune in for Budget 2018 coverage

Finance Minister Heng Swee Keat will be delivering this year's Budget in about an hour.

Mediacorp will broadcast the 2018 Budget statement live on Channel NewsAsia, 938Now, channelnewsasia.com, Channel NewsAsia Facebook and Toggle.

You can also go to Channelnewsasia.com's Budget 2018 site for all the latest stories.

Channel NewsAsia's Facebook page will also carry Mr Heng's speech live.

2pm: What can you expect from Budget 2018?

This year's Budget could provide more clarity on tax hikes as the Government strikes a balance between increasing spending on social needs and fiscal sustainability.

A bumper Budget surplus is also expected on the back of stronger economic growth.

Channel NewsAsia's Tang See Kit takes a look at five issues that could be in the spotlight for Budget 2018.

Source: CNA/hm