Named Emerging Stronger Together, Budget 2021 is designed to help Singapore continue its recovery from the pandemic.
A slew of packages and measures to help Singaporeans as we continue to emerge stronger from the COVID-19 pandemic was announced in Parliament by Deputy Prime Minister and Finance Minister Heng Swee Keat on Tuesday (Feb 16).
In 2020, Singapore had its largest overall budget deficit since independence at $64.9 billion, with the Government committing nearly $100 million through five Budgets to weather the impact of COVID-19. The measures rolled out were estimated to have saved or created 155,000 jobs on average over 2020 to 2021, said Mr Heng.
He added that Singapore’s economy is expected to bounce back by four to six per cent in the 2021 financial year, but also cautioned that as a small, open economy, Singapore’s economic recovery is contingent on how the global situation plays out.
The country has to adapt nimbly to the wide range of possible outcomes, he said.
Named “Emerging Stronger Together”, Budget 2021 is designed to help Singapore continue its recovery from the COVID-19 pandemic.
Over FY2020 and FY2021, the expected draw on Past Reserves is up to $53.7 billion, including $11 billion this year.
Here are some key announcements made by Mr Heng in Budget 2021:
Families will get more help with their expenses, thanks to a new $900 million Household Support Package.
Eligible HDB households will receive a GST Voucher – U-Save special payment of between $120 and $200. Service and conservancy charges rebate for eligible households will also be extended for another year.
Those eligible for the GST Voucher – Cash will also receive an additional one-off special payment of $200.
An additional top-up of $200 per child will be given for Singaporean children below 21 years old, through the Child Development Account, Edusave Account or Post-Secondary Education Account.
Singaporean households will receive S$100 worth of Community Development Council (CDC) vouchers per household to use at participating shops and hawker centres.
The CDC will be given a grant of S$150 million to resource this, said Mr Heng. He added that he hopes the vouchers can bring more business to hawkers and heartland shops.
The planned increase of the GST rates won’t take place this year. In Budget 2018, it was announced that GST will be increased to nine per cent, up from the current seven per cent.
However, Mr Heng warned that Singapore will not be able to put off the increase for too long.
“We have to make the move some time during 2022 to 2025, and sooner rather than later, subject to the economic outlook,” said Mr Heng, who added that Singapore will be unable to meet its rising recurrent needs and that it is “not tenable” for the Government to run persistent budget deficits outside periods of crisis.
When the GST rate is increased, an Assurance Package, for which the Government has set $6 billion aside for, will help to cushion the impact.
This would effectively delay the effect of the GST rate increase for the majority of Singaporean households by at least five years.
The offset will be higher for lower-income Singaporeans living in three-room HDB flats or smaller. They will receive about 10 years’ worth of additional GST expenses incurred.
GST will be extended to low-value goods costing up to $400 from Jan 1, 2023 to ensure a level playing field for local businesses to compete effectively.
Currently, low-value goods imported via air or post are currently not subject to GST to facilitate clearance at the border. In contrast, GST is paid on such goods bought in Singapore. Several jurisdictions, including Australia, New Zealand and the European Union, have implemented or announced plans to implement the equivalent of GST on such goods, said Mr Heng.
Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers and the Inland Revenue Authority of Singapore will continue to work with the industry to ensure smooth implementation for the change.
Mr Heng announced the COVID-19 Resilience Package worth $11 billion to help address Singapore’s immediate needs to safeguard public health and reopen safely.
About $4.8 billion will go towards public health and safe reopening measures. Mr Heng added that the package will also support workers and businesses where needed and it will have targeted support for sectors still under stress.
In the aviation sector, the Government will provide $870 million in cost assistance measures.
The package also includes $133 million for the COVID-19 Driver Relief Fund, which will help taxi and private hire car drivers affected by the pandemic to defray business costs.
The package will also fund the COVID-19 Recovery Grant, which supports workers who lost their jobs or experienced significant income lost. The grant has been open for applications since Jan 18, 2021 and more than 4,000 applications have been approved.
The Jobs Support Scheme (JSS), introduced last year when COVID-19 hit, will be extended to protect jobs and help firms retain local workers.
For firms in aviation, tourism and aerospace sectors, they will continue to receive 30 per cent support for wages paid from April 2021 to June 2021 and 10 per cent support for wages paid from July 2021 to September 2021.
Those in the retail, arts, food services, built environment sectors and other Tier 2 sectors will receive 10 per cent support for wages up till June 2021. Those in Tier 3A will receive support for wages up to March 2021.
The JSS extension will cost $700 million.
About $5.4 billion will be allocated to a second phase of the Jobs and Skills package. Last year, $3 billion was allocated.
This year, $5.2 billion will be allocated to the Jobs Growth Incentive, which will subsidise wages for local hires. Last year, about 110,000 local job seekers were hired within the first two months of the scheme.
The additional money allocation will help extend the hiring window till the end of September this year.
This means that companies hiring eligible locals will be given up to 12 months of wage support from the month of hire, while mature workers, people with disabilities and ex-offenders will be given more support – up to 18 months of enhanced wage support, said Mr Heng.
The Government is targeting to support the hiring of another 200,000 locals this year, and provide up to 35,000 traineeship and training opportunities.
The Arts and Culture Resilience Package and Sports Resilience Package will also be extended to support businesses and self-employed persons in these sectors.
About $45 million will be set aside for the extension of and enhancements to these packages. More details will be announced by the Ministry of Culture, Community and Youth at a later date.
The salaries of nurses and other healthcare workers, such as support staff, will be enhanced.
This will apply to workers across public healthcare institutions, as well as publicly funded community hospitals and long-term care service providers.
Mr Heng also thanked healthcare workers for their “exemplary commitment” in the fight against COVID-19. More details about the enhancement will be announced by the Ministry of Health during the Budget Debate.
Community Link (ComLink), which has helped about 1,000 families since it was introduced in 2019, will become a nationwide programme supporting 14,000 families with children over the next two years.
One of the Ministry of Social and Family Development’s (MSF’s) key initiatives to help families with children who are living in rental housing, it will help needy families to offset living expenses with grocery vouchers and back-to-school items.
To provide holistic support to more families, Budget 2021 will provide resources to MSF to expand ComLink significantly.
The Government is also looking to pilot an Inclusive Support Programme to support children with special needs.
Mr Heng noted that children under seven years old with developmental needs can benefit from a differentiated approach to help them learn better.
The pilot will integrate the provision of early intervention and early childhood services for children who require up to medium levels of early intervention support. It will also allow children with developmental needs already attending pre-school to be more meaningfully engaged alongside other children, as well as benefit all children and help them develop social skills and learn social inclusion.
16-year-old Aizil Yazid wants to carry on the legacy of his father, Singapore football icon Yazid Yasin
Imposter syndrome and how to overcome it
Essential Filipino cuisines and where to try them in Singapore
What Is Clubhouse, the new social media platform everyone is talking about?
DOTA 2, Netflix producing original anime series based on the popular game
Singaporean man proposes to chicken-loving girlfriend with KFC bouquet
What is ADLV and here’s where you can get their products
How Singaporeans are hunting for the elusive BB Loh
Five things to do this weekend (Feb 19-21)
Interesting background music to put on for your next work or study session