SG Budget 2017
*SINGAPORE ’16 GROWTH WAS AT LOWER END OF POTENTIAL GROWTH: HENG
*SINGAPORE TO ADDRESS CYCLICAL WEAKNESSES IN MARINE, PROCESS
*SINGAPORE TO DEFER MARINE, PROCESS SECTOR WORKER LEVY INCREASES
*SINGAPORE TO DEFER SOME FOREIGN WORKER LEVY INCREASES 1 MORE YR
*SINGAPORE TO BRING FORWARD S$700M OF PUBLIC INFRA PROJECTS
*SINGAPORE TO BRING FORWARD PROJECTS TO START IN FY17, FY18
- The Government will strengthen the support for the “Adapt and Grow” initiative, which was launched last year to help workers looking to take on new jobs.
- Wage and training support provided under the Career Support Programme, the Professional Conversion Programme and the Work Trial Programme will be increased.
- An “Attach and Train” initiative will be introduced for sectors that have good growth prospects, but where companies may not be ready to hire yet.
- Industry partners can send participants for training and work attachments, which will increase the chances of these workers to find a job in the sector later.
- An additional sum of up to $26 million a year will be committed from the Lifelong Learning Endowment Fund and the Skills Development Fund to support these initiatives.
-The Wage Credit Scheme will continue to help firms cope with rising ages. More than $600 million are expected to be paid out to businesses next month. About 70% of this amount will be to SMEs.
- The Special Employment Credit will continue to provide employers with support for the wages of older workers till 2019. More than $300 million, which will benefit 370,000 workers, will be paid out in FY2017.
- The SME Working Capital Loan will continue to be available for the next two years.
*SINGAPORE TO ENHANCE CORPORATE INCOME TAX REBATE
-SME Working Capital Loan, where the Government co-shares 50% of the default risk for loans of up to $300,000 per SME, has seen good take-up. More than $700m of loans have been catalysed by this scheme — that works out to 2,000 or so SMEs that have benefited.
- The Government will enhance the Corporate Income Tax (CIT) Rebate by raising the cap from $20,000 to $25,000 for YA2017. The rebate will remain at 50% of tax payable.
- The CIT rebate will be extended for another year to YA2018, at a reduced rate of 20% of tax payable, capped at $10,000.
- The enhancement and extension will cost an additional $310 million over YA2017 and YA2018.
*SINGAPORE MEASURES TO GIVE BUSINESSES SUPPORT OF >S$1.4B
*SINGAPORE EMPLOYMENT CREDIT INCLUDES WAGE OFFSETS
*SINGAPORE TO EXTEND ADDITIONAL SPECIAL EMPLOYMENT CREDIT
*SINGAPORE TO RAISE RE-EMPLOYMENT AGE TO 67 FROM 65
*SINGAPORE TO EXTEND CORPORATE INCOME TAX REBATE ANOTHER YEAR
- The Additional Special Employment Credit will be extended till end-2019. This helps to extend the employability of older Singaporeans.
- This extension will benefit about 120,000 workers and 55,000 employers, and will cost about $160 million.
- These measures will give businesses support of over $1.4 billion over the next year.
*SINGAPORE TO HAVE PROGRAM TO HELP SMES BUILD DIGITAL CAPABILITY
The Government will introduce the SMEs Go Digital Programme to help SMEs build digital capabilities. It will have three components:
- SMEs will get step-by-step advice on the technologies to use at each stage of their growth through the sectoral Industry Digital Plans.
- Sectors where digital technology can significantly improve productivity — Retail, Food Services, Wholesale Trade, Logistics, Cleaning and Security — will start first.
SMEs will get in-person help at SME Centres and a new SME Technology Hub to be set up by the Info-communications Media Development Authority.
- SMEs that are ready to pilot emerging ICT solutions can receive advice and funding support.
- Singapore’s capabilities in data and cybersecurity will be strengthened.
- More than $80 million will be made available for these programmes.
The second way to strengthen Singapore’s enterprises is to support firms in their broader efforts to tap on innovation and technology, Mr Heng says. The Ministers for Trade and Industry will elaborate on the various measures available at A*Star and other agencies.
The third way is to help enterprises scale up globally, Mr Heng says. The Government will commit up to $600 million in Government capital for a new International Partnership Fund. The Fund will co-invest with Singapore-based firms to help them scale-up and internationalise, he explains.
*SINGAPORE TO COMMIT UP TO S$600M FOR INT’L PARTNERSHIP FUND
*SINGAPORE FUND TO COINVEST WITH LOCAL FIRMS TO INTERNATIONALIZE
*SINGAPORE TO CATALYZE PRIVATE CROSS-BORDER PROJECT FINANCING
The International Partnership Fund could be game-changing for local companies looking to grow through acquisitions overseas. The Government will co-invest with them in acquisition targets, to the tune of up to $600m in all.
Looks like an upcoming boom in M&A deals!
There remain gaps in financial markets for project finance in the region, he says. “The Government will enhance its schemes to bridge these gaps, by catalysing private finance and sharing risks with financial institutions.”
- IE Singapore’s Internationalisation Finance Scheme will be enhanced.
- Private cross-border project financing to smaller Singapore-based infrastructure developers will be catalysed, by co-sharing the default risk of lower quantum non-recourse loans.
- The Government will also catalyse financing for projects undertaken by larger firms in higher-risk developing markets, by providing a share of the needed sovereign risk insurance coverage.
- A Global Innovation Alliance will be set up for Singaporeans to gain overseas experience, build networks and collaborate with their counterparts in other innovative cities.
- It will have three programmes: the Innovators Academy, which will enable tertiary students to build connections and capabilities overseas; Innovation Launchpads in elected overseas markets will be established, which will create opportunities for entrepreneurs and business owners to connect with mentors, investors and service providers; Welcome Centres, which will link innovative foreign companies with Singapore partners to co-innovate, test new products in Singapore and expand in the region.
- The Alliance will be initially launched in Beijing, San Francisco and various Asean countries.
- The SkillsFuture Leadership Development Initiative will support companies to groom Singaporean leaders by expanding leadership development programmes.
- The Government will set aside $100 million to build capabilities under the Global Innovation Alliance and Leadership Development Initiative.
*SINGAPORE TO SPUR INNOVATION VIA REGULATORY SANDBOXES
Regulatory sandboxes for toddler start-ups to “play” with the rules: useful for fostering innovation and creativity in enterprise, rather than always being told what you can’t do before you learn what you can.
*SINGAPORE TO TOP UP NATIONAL RESEARCH FUND BY S$500M
*SINGAPORE TO TOP UP NATIONAL PRODUCTIVITY FUND BY S$1B
*SINGAPORE SETTING ASIDE S$2.4B OVER 4 YEARS FOR CFE STRATEGIES
- The Government will top up the National Research Fund by $500 million, to support innovation efforts.
- The National Productivity Fund will be topped up by another $1 billion, to support industry transformation.
- $2.4 billion will be set aside over the next four years to implement the CFE strategies.
Public Sector Construction Productivity Fund: rather dull name for quite an exciting idea. Basically means that govt agencies don’t have to always choose the lowest-cost offer when they tender for construction projects. They can tap on this fund to select a more innovative and productive solution — but one that might have been more expensive because of its newness and lack of scale.
*SINGAPORE TO IMPLEMENT CARBON TAX ON GREENHOUSE GAS EMISSIONS
*SINGAPORE AIMS TO IMPLEMENT CARBON TAX FROM 2019
*SINGAPORE LOOKING AT CARBON TAX RATE OF S$10-S$20/TON
Tax will generally be applied upstream, for example, on power stations and other large direct emitters, rather than electricity users,
Revenue from tax will help to fund measures by industries to cut emissions:
Impact of carbon tax on most businesses and households should be modest
Singapore to create price signal to incentivise industries to reduce emissions, complementing regulations:
A carbon tax of $10-$20/tCO2e works out to a increase of US$3.50–7 per barrel increase in crude oil prices.
Also equal to rise in electricity prices of 0.43–0.86 cents/kWH or abt 2 to 4 per cent rise in electricity prices.
That’s according to the National Climate Change Secretariat.
How will households be affected by a carbon tax?
It would translate into an increase in electricity bill of $1.70 to $3.30 per month for a median household in a 4 room flat paying $72 a month now, according to the secretariat.
Would this costs be kept at the level of power stations, what happens when the electricity market is liberalized in 2018?
*SINGAPORE TO GIVE ROAD TAX REBATE TO COMMERCIAL DIESEL VEHICLES *SINGAPORE TO INTRODUCE VEHICULAR EMISSIONS SCHEME
*SINGAPORE NEW EMISSIONS SCHEME TO REPLACE CARBON-BASED SCHEME
*SINGAPORE NEW EMISSIONS SCHEME TO CONSIDER 4 MORE POLLUTANTS *SINGAPORE NEW EMISSIONS SCHEME TO RUN FOR 2 YEARS FROM JAN ’18 *SINGAPORE TO GIVE ROAD TAX REBATE TO COMMERCIAL DIESEL VEHICLES *SINGAPORE TO INTRODUCE VEHICULAR EMISSIONS SCHEME
*SINGAPORE NEW EMISSIONS SCHEME TO REPLACE CARBON-BASED SCHEME *SINGAPORE NEW EMISSIONS SCHEME TO CONSIDER 4 MORE POLLUTANTS *SINGAPORE NEW EMISSIONS SCHEME TO RUN FOR 2 YEARS FROM JAN ‘18
*SINGAPORE TO RAISE WATER PRICES BY 30% IN 2 PHASES FROM JULY
*SINGAPORE SAYS WATER SUPPLY COSTS HAVE RISEN
*SINGAPORE TO INTRODUCE WATER CONSERVATION TAX ON NEWATER
To be increased by 30% in two phases beginning this July.
For 3/4 of businesses, increase will be less than $25 per month when increase fully phased in next July. For 3/4 of households, increase will be less than $18. Help will be given to lower and middle income households.
“Today, we impose a Water Conservation Tax on potable water, to promote conservation. To encourage the conservation of NEWater among industrial users, we will also impose a Water Conservation Tax on NEWater, which will be 10% of the NEWater tariff, starting from July 1, this year,” he announces.
*SINGAPORE TO RAISE SUBSIDIES FOR 1ST-TIME BUYERS OF RESALE HDB *SINGAPORE TO RAISE SUBSIDIES FOR SOME BUYERS OF STATE HOUSING
With immediate effect, the CPF Housing Grant will be increased from $30,000 to $50,000 for couples who purchase 4-room or smaller resale flats, and from $30,000 to $40,000 for couples who purchase 5-room or bigger resale flats.
Together with Additional CPF Housing Grant and Proximity Housing Grant, a couple can now receive a total of up to $110,000 in housing grants when buying a resale flat, depending on the location, type and their income.
Other eligible first-timers will also benefit from some grant enhancement.
Under measures for Pre-school sector, Mr Heng announces
Provide more support for those with infants, that is, children under 18 months of age. Currently, about 4,000, or 8% of all infants are enrolled in centre-based infant care.
To meet growing demand, the capacity of centre-based infant care will be increased to over 8,000 places by 2020.
The Minister for Social and Family Development will give more details at the COS. The SMS in charge of Population issues at PMO will also speak about efforts to keep Singapore a Great Place for Families.
For Post-Secondary Education Institutions (PSEIs), Mr Heng announces:
Annual bursary amounts for those attending PSEIs will be increased.
The amount of increase will be up to $400 for undergraduate students, up to $350 for diploma students, and up to $200 for ITE students. For ITE students, existing bursaries already more than cover their course fees.
The PSEI bursaries will be extended to more families by revising the income eligibility criteria. About 12,000 more Singaporean students are expected to benefit, bringing the total number of beneficiaries to 71,000.
In total, PSEI bursaries will increase from about $100 million to $150 million per year. The MOE (Higher Education and Skills) will provide more details at the COS.
*SINGAPORE TO BOOST GST REBATES FOR SOME HOUSEHOLDS
To assist households with their expenses Minister Heng announces an increase in the GST voucher — U-Save Rebate for eligible HDB Households, by an amount ranging from $40 to $120, depending on flat type. This increase will be permanent.
Families living in 1- and 2- room HDB flats will receive $380 of U-Save rebates each year compared to $260, while families living in 3- and 4-room HDB flats will receive $340 and $300 per year respectively, compared to $240 and $220.
Taking into account these higher U-Save rebates, 75% of all HDB households will see an average increase of less than $12 in their monthly water expenses. 1-and 2-room HDB households will on average have no increase in their water expenses.
About 880,000 HDB households will benefit. Cost to government = An additional $71 million per year.
*SINGAPORE TO GIVE ONE-OFF CASH SPECIAL PAYMENT TO POOR
*SINGAPORE SPECIAL CASH PAYMENT TO BENEFIT >1.3 MLN SINGAPOREANS *SINGAPORE TO EXTEND REBATES FOR CONSERVANCY CHARGES
A one-off GST Voucher — Cash Special Payment of up to S200 will be provided to eligible recipients to help lower income households with expenses. This is in addition to the regular GST Voucher- Cash. In total, eligible Singaporeans can receive up to $500 in cash for 2017.
The or Heng now speaks about the extension and increase of Service and Conservancy Charges rebate:
The rebate will be extended and raised by 0.5 months for the financial year 2017.
Rebate of 1.5 to 3.5 months will be provided to eligible HDB households. 1- and 2-room HDB households will receive a total of 3.5 month of rebates, while 3- and 4-room households will receive 2.5 months of rebates.
About 880,000 HDB households will benefit. Cost to the government = $120 million.
one-off special payment will cost about $280 million and benefit more than 1.3 million Singaporeans.
*SINGAPORE TO GIVE PERSONAL TAX REBATE OF 20% OF TAX PAYABLE
*SINGAPORE TAX REBATE IS FOR YEAR OF ASSESSMENT 2017
*SINGAPORE TO GIVE >S$850M IN ADDITIONAL SUPPORT TO HOUSEHOLDS
Personal Income Tax Rebate of 20 % of tax payable, capped at $500, for tax residents for income earned in 2016.
This will give households a reduction in tax bills this year.
Cost to the government = $385 million.
Total support to households = Over $850 million.
In total, additional support of over $850 million will be provided this year to help households.
A $1.5 billion top up will be made to the GST Voucher Fund to support the increase in U-Save announced earlier and other future GST Voucher payments.
Medifund will also be topped up by $500 million, bringing the total fund size to $4.5 billion.
In addition, ComCare Fund, which supports families and individuals in need, will be topped up by $200 million.
Speaking about measures to foster a caring and inclusive society, he says, all of us can play a part in our communities. He speaks about how the support for persons with disabilities and people with mental health conditions will be increased.
The Enabling Masterplans are 5-year national plans to support persons with disabilities and their caregivers, Mr Heng says.
The Third Enabling Masterplan, which was put together by a committee of private and public sector representatives, will be launched.
A Disability Caregiver Support Centre will be set up to support caregivers.
Including existing initiatives, around $400 million per year is expected to be spent on initiatives supporting persons with disabilities.
The Minister for Social and Family Development will elaborate at the COS.
For persons with mental health conditions, including dementia, voluntary welfare organisations (VWOs) will be resourced to set up more community-based teams to support those in need, as well as educate the public on mental health issues.
MOH will provide mental health care services in polyclinics, as part of its broader effort to improve the delivery of care within the community.
The wider community will also be involved, and the number of Dementia Friendly Communities will be expanded.
As part of Community Mental Health efforts, an additional $160 million in the next five years will be spent.
The MOH will provide more details during the COS.
The Budget also aims to strengthen community bonds, Mr Heng says.
Over the next 5 years, additional funding — up to $100 million in total, will be provided to further develop the capabilities of VWOs and charities.
More details will be provided by the Minister of Social and Family Development during COS.
To make it easier for all Singaporeans to participate in sports, over $50 million has been set aside to support community sports.
The Sports-In-Precinct Programme will be enhanced so that more Singaporeans can play sports near their homes.
The SportsCares Programme will also be enhanced.
To help aspiring athletes reach their full potential, an additional $50 million in grants over 5 years will be committed.
On top of that, $50 million will be provided to match sports donations dollar-for-dollar.
The Minister for Culture, Community and Youth will provide more details at the COS.
Like sports, cultural activities build bonds among the people, Mr Heng says. The Cultural Matching Fund will be topped up by $150 million.
*SINGAPORE SEES SPENDING NEEDS RISING RAPIDLY IN COMING YEARS
*SINGAPORE SEES SPENDING NEEDS RISING IN HEALTHCARE, INFRA
*SINGAPORE TO APPLY PERMANENT 2% DOWNWARD SHIFT TO BUDGET CAPS
*SINGAPORE BUDGET CAP ADJUSTMENT IS FOR ALL MINISTRIES FROM FY17
A permanent 2% downward adjustment will be applied to the budget caps of all Ministries and organs of state from financial year 2017 onwards, to emphasise the need to stay prudent and effective.
*SINGAPORE IMPLEMENTING STANDARDS IN SUPPORT OF BEPS PROJECT
*SINGAPORE STUDYING HOW TO ADJUST GST SYSTEM AMID GLOBAL TREND
*SINGAPORE WILL HAVE TO RAISE TAX RATES OR HAVE NEW TAXES LONG TERM
HSK says govt has to “strengthen revenue base” especially as spending needs increase.
Tiered Additional Registration Fees (ARF) for Motorcycles: Today, all motorcycles incur the same ARF at 15% of their open market value (OMV), he says.
A small but rising number of buyers are buying expensive motorcycles — their motorcycles have OMVs similar to those of small cars.
Just as tiers were introduced to the ARF in 2013 to improve progressivity, two more tiers will be introduced for more expensive motorcycles.
The ARF for motorcycles with OMV up to $5,000 will remain at the current 15%.
The next $5,000 of motorcycle OMV will be subject to an ARF rate of 50%.
The remaining motorcycle OMV beyond $10,000 will be subject to an ARF rate of 100%
Based on today’s registration trends, more than half of new motorcycle buyers will continue to pay the current ARF rate of 15%
The tiered ARF will apply to motorcycles registered with COEs obtained from the second Feb COE bidding exercise onwards.
The MOT will cease the contribution of motorcycle COE quota to open category COE quota.
HSK says: “We will have to raise revenues through new taxes or raise tax rates. We are studying the options carefully. We must make these decisions in good time, to ensure that our future generations remain on a sustainable fiscal footing.”
Looks like we’ve escaped a rise in GST or personal income tax this year… but it’s likely just a matter of time.
*SINGAPORE REVISES FY16 OVERALL BUDGET SURPLUS TO S$5.2B
*SINGAPORE SAYS FY2017 BUDGET `REMAINS EXPANSIONARY’
*SINGAPORE SEES FY2017 OVERALL BUDGET SURPLUS OF S$1.9B
Overall budget position; For FY2016, a budget surplus is expected of $5.2 billion, or 1.3% of GDP. A basic deficit of $5.6 billion or 1.4% of GDP is expected. FY2016 was hence an expansionary budget.
In FY2017, the budget remains expansionary. Ministries’ expenditures are expected to be $3.7 billion, or 5.2%. higher than in FY2016.
Overall, a smaller budget surplus of $1.9 billion, or 0.4% of GDP is expected.