The Singapore Budget 2020 was delivered by Deputy Prime Minister and Minister for Finance, Mr Heng Swee Keat, on 18 February 2020. Here are five things that you need to know.
Table of Contents
1. SGD6.4b will be set aside to address COVID-19
Since the the first suspected case of coronavirus in Singapore on 4 January 2020, the virus has been affecting the day to day life of locals.
As such, the government will be dedicating S$6.4 billion to help alleviate the situation. Out of which, S$800 million will go into supporting frontline agencies in their efforts to contain the outbreak. This is on top of the resources already committed to public health.
In addition, a S$4 billion Stabilisation and Support Package will also be rolled out to stabilise the Singapore economy, help workers stay in their jobs, and aid enterprises with cash flow. Sectors directly affected by the outbreak will also receive additional help.
The Care and Support Package, which amounts to S$1.6 billion, will give households additional and timely help with living expenses during the slowdown from the coronavirus. S$10 million from the package will also be directed to self-help groups who have been working closely with the community to aid needy families and children.A historic projected deficit of S$10.9 billion, the highest in a decade, is expected as a result of the efforts aimed at cushioning the repercussions caused by the coronavirus.
2. Lifelong learning incentives will be improved
Lifelong learning has always been a focus for Singapore, a country who prioritises her people as a key resource.
There will be a one-off S$500 SkillsFuture credit top up for Singaporeans aged 25 years old and above. With an aim to double the annual job placement of locals in their 40s and 50s to around 5,500 by 2025, those aged 40 to 50 years old will get an additional top up of S$500. Under the new SkillsFuture Enterprise Credit, employers will get S$10,000 to defray out-of-pocket costs of business transformation, job redesign, and skills training by 90 per cent. This is expected to help about 39,000 firms.
A new SkillsFuture Mid-Career Support Package will also be introduced to increase the capacity of reskilling programmes, provide hiring incentives for employers that hire & reskill jobseekers who are over 40 years old, as well as give peer-level support and career guidance through a group of volunteer Career Advisors.
3. Start ups and SMEs will receive enhanced support
S$8.3 billion has been allocated for Singapore’s economic transformation and growth over the next three years. An additional S$300 million will be slated for Startup SG Equity, which provides financing for early-stage, tech start ups. Under the Startup SG Equity scheme, the government either co-invests with qualified third-party investors into start ups, or invests in funds through fund-of-funds approach.
This is expected to attract over S$800 million of private funding over the next decade and give deep-tech start ups better access to capital, expertise and industry networks. Deep-tech start ups refer to those in emerging technology areas such as medtech, advanced manufacturing and agri-food.
An Enterprise Leadership for Transformation Programme will be introduced to support business leaders of promising small and medium-sized enterprises (SMEs). This aims to groom business leaders of 900 companies over the next three years with training and mentorship.
The GoBusiness platform, which is a portal that streamlines transactions between companies and the government, will also be launched.
The SMEs Go Digital programme which was first announced at the 2017 Budget to help SMEs build digital capabilities, will be expanded to include the 23 sectors covered by the Industry Transformation Maps, up from the current 10 sectors. Some new sectors include healthcare, food manufacturing, adult and early childhood education.
4. Singaporeans aged 21 years and above will get a one-off cash payment of up to S$300
As part of the S$1.6 billion Care and Support Package for households, Singaporeans with an assessable income of up to S$28,000 for the year of assessment (YA) 2019 will get a S$300 payout. Those earning between S$28,001 and S$100,000 will get S$200, and those who earn above S$100,000 or own more than one property will get S$100.
Over a span of five years, adult Singaporeans will receive cash payouts between S$700 and S$1,600.
5. GST increase will not happen in 2021
The hike in GST by two percentage points from 7 per cent to 9 per cent will not happen next year. Instead, it will take place by 2025. The GST increase will help increase the government’s revenue due to an expected increase in recurrent spending, particularly in healthcare, as Singapore copes with an ageing population.
A S$6 billion package will be introduced when the GST rate is raised to cushion the increase. Most Singaporean households will also be getting offsets to cover at least five years’ worth of extra GST expenses. Singaporeans living in one- to three-room HDB flats will get offsets amounting to around 10 years’ worth of additional GST expenses.
View disclaimer notice here.
- All new Property-Backed Investment with Guaranteed Returns - August 21, 2020
- How Diversification Can Help to Minimise Risks in P2P Lending - June 17, 2020
- An Overview of P2P Lending in Singapore - June 14, 2020