Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam delivered a budget that hopes to build a fair and equitable society on Friday.
Details on a “Pioneer Generation” package which was announced by Prime Minister Lee Hsien Loong earlier this month was unveiled. In addition, more help for students from lower- and middle-income households will be provided through subsidies and tertiary education bursaries
For SMEs (Small Medium Enterprises) Productivity and Innovation Credit (PIC) scheme will be extended for another three years to year of assessment 2018, at a cost of S$3.6 billion.
For the ordinary folks, the GST vouchers and U-save package were dished out.
“”Budget 2014 demonstrates the government’s commitment towards addressing feedback from all segments of society. We applaud the government’s efforts to expand our social safety network for those in need.”
“This year’s Budget is focused on the right areas: improving productivity and encouraging innovation. Only Singapore companies with strong brands can fully capitalise on the rapid growth in Asia,” said Tham Sai Choy, chairman of KPMG Asia-Pacific and managing partner at KPMG in Singapore.
Ms Amy Ang, Partner, Financial Services Tax, Ernst & Young Solutions LLP said “The government is taking steps to strike a balance between pushing for economic growth while maintaining social equality and stability. This is an important recognition by the Government as otherwise, sustained growth is not possible.”
On the whole, Singapore is expected to have an overall surplus of S$3.9 billion for FY2013, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said.
The surplus is attributed to a few factors, including temporary delays in implementation of public infrastructure projects. The surplus is 1.1 per cent of GDP, and higher than the S$2.4 billion, or 0.7 per cent of GDP, surplus a year ago.
Revenues were also boosted by higher vehicle quota premium collections.
Singapore should see a tighter budget position in the coming years as the stronger fiscal surplus was due mainly to cyclical factors, which would not last, Mr Tharman Shanmugaratnam said.
Going forward, the global outlook for 2014 is “uncertain”, according to Mr Tharman Shanmugaratnam.
“The advanced economies are gradually recovering, while the emerging economies are slowing. However, the odds are against a sharp slowdown in the global economy,” he added.
In 2014, the Ministry of Trade and Industry (MTI) expects the Singapore economy to grow by 2-4 per cent.
The Singapore economy grew by 4.1 per cent in 2013, up from 1.9 per cent a year earlier, supported by a gradually improving external environment and strong domestic construction growth]
MTI expects the Singapore economy to grow by 2 per cent to 4 per cent in 2014, said Mr Tharman Shanmugaratnam.
Some 675,000 Singaporeans aged 55 and above will receive a one-off Goods and Services Tax (GST) Voucher of up to S$250.
Those with assessable income of up to S$26,000 in 2013 will receive S$250 if the annual value of their homes is up to S$13,000, or S$100 if the annual value is from S$13,001 to S$21,000.
This is a special GST Voucher that will effectively double the GST Voucher – Cash that they usually receive, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam.
In addition, approximately 800,000 HDB households will also receive a one-off GST Voucher – U-Save Special Payment, which will also be paid out on top of the regular GST Voucher – U-Save payments.
“The announcement of the Cash Seniors Bonus and the U-Save Special Payment continues the government’s use of the GST voucher scheme to deliver funds to the lower income group to help them cope with higher healthcare and living costs,” said Koh Soo How, Partner, PwC Singapore.
The move was also welcomed by the men on the street.
“I like the GST vouchers; it is a great gesture by the government to defray the cost of living,” said Business Development Manager Sunny Lie.
The amount they will get depends on the type of flat they dwell in.
Further, 170,000 Singaporeans who are supporting their parents can enjoy further tax relief in YA2015.
Currently, the relief can only be claimed by one child, but this will be changed to allow sharing of parent relief.
For those living with their parents, parent relief increases from S$7,000 to S$9,000
Parent relief will increase from S$4,500 to S$5,500 for those who do not live with their parents.
Likewise relief will increase from S$11,000 to S$14,000 for those living with a handicapped parent.