Deputy Prime Minister Heng Swee Keat in his Budget 2020 statement said that the budget is our strategic financial plan that will chart a steady path for Singapore to advance as a united country amid the uncertainties.
DPM Heng, who is also the Finance Minister, unveiled an S$83.6 billion Budget that not only prepares Singaporeans to deal with near-term challenges, but also to thrive in the new decade. This is despite an overall budget deficit of $10.9 billion for FY2020. However, with the fiscal prudence of the Government, DPM Heng assured the House that there is no draw on past reserves.
He said the Government will grow the economy and transform enterprises, care for Singaporeans at every stage of their lives, build a sustainable Singapore, and work together with fellow Singaporeans to build a home they can call their own.
Below are the seven key highlights of the Budget:
#1: $4 billion Stabilisation and Support package
The special Stabilisation and Support Package will help workers and enterprises to weather the near-term uncertainties caused by COVID-19.
The Government will help workers stay employed by helping companies to defray wage costs in two ways. The first is through a Jobs Support Scheme that aims to help companies retain local workers.
The second is an enhancement of the Wage Credit Scheme, which supports enterprises embarking on transformation efforts and encourages them to share productivity gains with workers in the form of wage increases.
#2: $6 billion Assurance Package when GST is raised
DPM Heng announced that the Government will not raise Goods and Service Tax in 2021.
There will be a need to raise GST by 2025 and the Government will provide a $6 billion Assurance Package when the GST rate is raised to cushion the increase in GST rate.
Under the Assurance Package for GST, every adult Singaporean will receive a cash payout of $700 to $1,600 over five years. The majority of Singaporean households will receive offsets to cover at least five years’ worth of additional GST expenses incurred. Lower income households will receive offsets of about 10 years’ worth of additional GST expenses incurred.
#3: $8.3 billion package to grow the economy
To grow the economy, the Government will allocate a total of S$8.3 billion over the next three years to enable stronger partnerships, deepen enterprise capabilities and develop its people.
The Government will also support working Singaporeans by providing a one-off SkillsFuture Credit top-up of S$500 for every Singaporean aged 25 years and above, a new SkillsFuture Enterprise Credit for employers, and a new SkillsFuture Mid-Career Support Package for locals in their 40s and 50s.
The Government will introduce a Senior Worker Support Package to encourage lifelong learning and employability.
#4: $1.6 billion Care and Support Package
On caring for Singaporeans, the Government will provide a $1.6 billion Care and Support Package for households to help them cope with their household expenses during this period of uncertainty.
The package includes Workfare special payments, grocery vouchers for needy households, S$100 PAssion Card top-ups for Singaporeans aged 50 and above this year, and a further S$100 cash payout for every adult Singaporean with at least one Singaporean aged 20 and below this year.
#5: Enhanced Silver Support scheme
The Government will also support and enable our seniors and help them prepare for retirement. Under the Silver Support Scheme, the Government will raise the quarterly cash payouts by 20 per cent, and introduce a new payout tier to provide smaller payouts to some seniors who do not qualify for the scheme currently.
To help Singaporeans to save for their retirement, the Government will introduce a matched retirement savings scheme from 2021 to 2025 for lower- to middle-income Singaporeans aged 55 to 70 who have not been able to set aside the prevailing BRS.
Under the scheme, the Government will match every dollar of cash top-up made to their CPF Retirement Account, up to an annual cap of S$600.
#6: $1 billion for research in Urban Solutions and Sustainability
To sustain Singapore’s success for future generations, Mr Heng said that we would need to address climate change.
Mr Heng said that the Government is piloting innovative solutions such as NEWSand to reduce carbon footprint. It would also spend close to $1 billion for research in Urban Solutions and Sustainability.
The Government will also update its commitment to the Paris Agreement and take another step towards its vision of a low-carbon, sustainable future.
To achieve this, the Government will phase out internal combustion engine (ICE) vehicles and ensure all vehicles run on cleaner energy by 2040.
#7: Extending Our Singapore Fund (OSF)
On partnering Singaporeans to build the country’s future, Mr Heng said the Government will top up the Our Singapore Fund (OSF), which provides funding for ground-up efforts in the social sector and extend it beyond 2020 to support more ground-up initiatives that Singaporeans are passionate about, across a wider range of sectors.
In closing his speech, Mr Heng said he is confident that that we will grow our economy and transform our enterprises, creating opportunities for Singaporeans as one Singapore.
“Our nation has built up the capital – financial, human and social – to go this distance. The Singapore spirit is strong and growing. Together, we will advance, as One Singapore.”