What you need to know about Budget 2021
People wearing face masks at Marine Parade Food Centre on Sep 14, 2020. (Photo: Try Sutrisno Foo)
SINGAPORE: After an unprecedented year in which Singapore experienced its worst recession since independence, the global battle against COVID-19 remains far from over.
Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16) announced that Budget 2021 will shift “from containment to restructuring” as Singapore’s economy continues to reopen.
Budget 2021, with the theme Emerging Stronger Together, combines measures to help families, workers and businesses weather the COVID-19 crisis in the immediate term, with measures to accelerate structural adaptations for the long term.
What does this mean for Singaporeans and local businesses? Here’s a rundown:
MORE MONEY FOR FAMILIES
A new S$900 million Household Support Package will provide immediate relief to all Singaporean families, particularly lower- and middle-income households and those with children.
The package will consist of:
- For lower- and middle-income households: A one-off GST Voucher special payment of S$200 in cash, and a special GST Voucher U-Save payment amounting to an additional 50 per cent rebate, or between S$120 and S$200
- For families with children: An additional top-up of S$200 for each Singaporean child under 21 through his or her relevant education account
- For all households: S$100 worth of Community Development Council (CDC) Vouchers, to be used at participating heartland shops and hawker centres
- For families living in Housing and Development Board (HDB) flats: An extension of the service and conservancy charges rebate. The rebate will offset between one-and-a-half and three-and-a-half months of the charges, depending on their HDB flat type
MORE SUPPORT TO PRESERVE JOBS
As part of the Government’s S$11 billion COVID-19 Resilience Package, the Jobs Support Scheme (JSS) will be extended for sectors that continue to be hard-hit by the pandemic.
Top of the list are the aviation, aerospace and tourism sectors, which will have wage support extended by six months, from April until September. Support will taper down from 30 per cent to 10 per cent in the last three months.
Support for firms in the retail, arts and culture, food services and built environment sectors will also be extended until June. Other sectors that are generally recovering will continue to receive support until March.
The JSS extension will cost S$700 million.
MORE FUEL IN THE TANK FOR AVIATION SECTOR
Aside from jobs retention, businesses in the worst-hit sectors will also receive support to help them preserve capabilities and make an eventual recovery.
With recovery in global air travel expected to take some time still, the Government will put S$870 million towards the aviation sector.
Some of these measures include a 10 per cent landing charge rebate for all scheduled passenger flights landing in Singapore for airlines, and a 50 per cent rebate on rental paid for ground handling companies’ lounges and offices within Changi Airport and Seletar Airport terminal buildings.
READ: Budget 2021 – S$24 billion to transform businesses and workers over next three years
MORE #SGUNITED OPPORTUNITIES
The SGUnited Jobs and Skills Package will get a S$5.4 billion boost to support the hiring of 200,000 locals and provide up to 35,000 training opportunities this year.
The bulk of this, or S$5.2 billion, will go towards extending the Jobs Growth Incentive that provides wage support for new local hires.
But if you need more support before landing a job, you can continue to draw on the SGUnited schemes for skills training, traineeships and mid-career pathways.
RECOGNISING NURSES AND HEALTHCARE WORKERS
COVID-19 has put the contributions of Singapore’s healthcare workers in the spotlight. But beyond the pandemic, the sector is set to grow as the population ages.
This Budget introduces salary enhancements for nurses and other healthcare workers, such as support care staff, for their "exemplary commitment" during the COVID-19 pandemic.
The salary boost will apply to workers across public healthcare institutions, publicly-funded community hospitals and long-term care service providers.
ENCOURAGING ADOPTION OF ELECTRIC VEHICLES
If you’ve been thinking about trading in your car for a greener option, there are even more reasons to do so now.
READ: Budget 2021 – More incentives to encourage early adoption of electric vehicles
Singapore will accelerate its drive for early adoption of electric vehicles with a more ambitious target of 60,000 charging points deployed at public car parks and private premises by 2030, up from a previous target of 28,000.
Changes to registration fees and road tax will be introduced to narrow the cost differential between electric cars and internal combustion engine cars.
To catalyse partnership between the public and private sectors, the Government will also put aside S$30 million over the next five years for electric vehicle-related initiatives.
READ: Budget 2021 – Govt to review 'trajectory and level' of carbon tax; outcome at next year's Budget
Mr Heng, who is also the Finance Minister, announced an increase in petrol duty rates by up to S$0.15 per litre for premium petrol with immediate effect.
To ease the transition for Singaporeans, especially those who rely on their vehicles for their livelihood, Mr Heng also announced a slew of road tax rebates, including a 15 per cent road tax rebate for one year for all taxis and private hire cars using petrol.
GOING GREEN
Following the announcement of the Singapore Green Plan 2030 last week, Mr Heng identified three fronts on which the Government intends to lead the green charge in his Budget speech.
READ: Here’s what life could look like when the new Green Plan is realised in 2030
Firstly, on technology, S$60 million will go towards a new Agri-Food Cluster Transformation Fund to support technology adoption in the food sector and improve Singapore’s food resilience.
On capital, the Government will issue green bonds on select public infrastructure projects, with up to S$19 billion worth of such projects identified as a start.
One such project will be the Tuas Nexas development combining waste and water treatment facilities.
Thirdly, on the “actions of our people” front, the public sector will lead by example and commit to more ambitious sustainability goals under its GreenGov.SG initiative, said Mr Heng.
GST HIKE NOT THIS YEAR, TO HAPPEN BY 2025
The timeline for Singapore’s Goods and Services Tax (GST) hike has been keenly watched since it was first announced in 2018 that the tax will increase from 7 to 9 per cent.
The tax increase will not take effect this year, instead it will happen sometime between 2022 and 2025, and “sooner rather than later”, said Mr Heng on Tuesday.
It is needed to meet Singapore’s rising recurrent needs, in particular healthcare spending, he added.
But there will be some relief when the tax is eventually raised, in the form of a S$6 billion Assurance Package.
This will effectively delay the effect of the GST increase for a majority of households "by at least five years", said Mr Heng.
ONLINE SHOPPERS TAKE NOTE
Singapore will extend GST to imported low-value goods with effect from Jan 1, 2023.
This will help to ensure a level playing field for local businesses to compete with overseas counterparts, especially as e-commerce sales grow, said Mr Heng.
Singapore cleared 21.2 million low-value goods through air cargo checkpoints last year – double the amount cleared in 2019, as more turned to online shopping amid COVID-19 safe distancing and travel restrictions.
