Budget 2023: Singaporeans to receive one-off special payment of up to $400, GST vouchers to be increased to up to $700
The Assurance Package will also be increased by between $300 and $650 for eligible Singaporeans until 2026.
The Government is handing out more support for Singaporeans to tide through the rising cost of living.
This was announced by Deputy Prime Minister and Minister of Finance Lawrence Wong during his Budget 2023 speech – named Moving Forward in a New Era – on Tuesday (Feb 14).
Mr Wong had announced that the Budget would be a “Valentine’s Day present for Singaporeans”.
In 2022, Singapore’s economy grew by 3.6 per cent. Unemployment fell to 2.8 per cent in December, below pre-pandemic levels. Global inflation was about 9 per cent, compared to Singapore’s 4.1 per cent.
Still, Singapore is expecting a deficit of $2 billion – roughly 0.3 per cent of Singapore’s GDP – for FY2022.
The Budget 2023 will focus on three key areas: Growing the economy by equipping workers with relevant skills, proving a fuller range of opportunities for everyone to advance in life; Strengthening the social compact and providing better support for families, seniors and vulnerable groups; and Building up collective resilience so that Singapore can bounce back from external shocks and setbacks.
Here are the key things to take note from Mr Wong’s Budget statement in Parliament:
Cushioning impact of inflation
To help Singaporeans to tide over inflation, the GST cash voucher amount will be increased in 2023 and 2024.
Those living in a home with an annual value of $13,000 and below will receive $700 in 2023, and $850 in 2024. This is compared to $500 in 2022.
For those living in a home with annual values of above $13,000 and up to $21,000, the cash voucher amount will be raised to $350 in 2023 and $450 in 2024, compared to $250 this year.
The Assurance Package cash will also be increased by between $300 and $650 for eligible Singaporeans. This means that adult Singaporeans will receive between $700 and $2,250 in total over the next five years.
All Singaporean households will also receive $300 in CDC vouchers in January 2024.
A one-off Cost of Living Special Payment, between $200 and $400, will be given to each eligible adult Singaporean.
However, Mr Wong warned that it is not fiscally sustainable for Singaporeans to rely so heavily on Government support every year. The best strategy is to be more productive and competitive, so workers can earn more and the increase in earnings can make up for higher prices, he said.
“We’ve done it many times before, through many crises. Each time, we emerged with a stronger economy and a more united people. And I am confident we will do it again,” says Mr Wong.
Boost for aspiring homeowners and families
A key issue that arose from the Forward Singapore exercise is housing. From 2023, families with children and married couples aged 40 and below who are first-time homebuyers will be entitled to an extra ballot for their Build-to-Order (BTO) flat applications.
The CPF Housing Grant for resale flats will also be increased.
Those buying a four-room or smaller resale flat will get an additional $30,000 in grants, while those buying five-room or larger flats will get an additional $10,000.
Put together with the Proximity Housing Grant, eligible families can receive up to $190,000 when purchasing a resale flat.
For those looking to start a family, the Baby Bonus cash gift for all eligible Singaporean children born from Tuesday will be increased by $3,000. First and second-born children will receive $11,000 in total, while the third child will receive $13,000.
The cash will be disbursed over a period of time, including $9,000 in the first 18 months and $400 every six months from when the child is two years old till six-and-a-half years old. The contributions by the Government to the Child Development Account (CDA) will be increased too.
Paternity leave will also be doubled from two weeks to four weeks, while unpaid infant care leave will be extended by six days per parent per year.
Changes to CPF contributions
Platform workers below the age of 30 – such as those working with food delivery platforms or ride-hailing companies – will receive support to help cushion the impact of having their take-home pay adjusted because of CPF contributions.
For lower-income platform workers earning $2,500 or less a month, there will be a CPF transition support to offset part of the workers’ share of the year-on-year increase in their contribution rates in the first four years of implementation. More details will be provided during the Ministry of Manpower’s Committee of Supply debate.
The CPF monthly salary ceiling will be raised to $8,000, from the current $6,000, by 2025. This is done to help middle-income Singaporeans to save more for their retirement and keep pace with rising salaries. It will be done over four years to allow employers and employees to adjust to the changes.
Help for workers
Workers will receive help with optimised training and job placement. Mr Wong said there is a need for labour market intermediaries in this aspect because workers may not know what training programmes to go for, and employers may be unfamiliar with such a landscape.
These intermediaries, or job-skills integrators, will be appointed to work with industry, training and employment facilitation partners.
They are expected to: Engage enterprises to understand the manpower and skills gap in the sector; Work with training providers to update existing training programmes or develop new ones that will close the skills gap; Work closely with employment facilitation agencies, get buy-in from industry partners and unions, and identity individuals with the right aptitude.
They must also ensure that training translates into better employment and earning prospects.
DPM said that this will be trialled in the precision engineering, retail and wholesale trade sectors.
Separately, lower-wage workers will also continue to get career progression and wage support through the Progressive Wage Model.
Car, Property and Tobacco Tax to be increased
The Government will increase the taxes for properties, cars and tobacco.
For property taxes, the Buyer’s Stamp Duty, which applies to all purchases or receipt of gifts of immovable properties in Singapore, will be adjusted marginally higher for higher-value residential and non-residential properties.
“The portion of the value of the property in excess of $1.5 million and up to $3 million will be taxed at 5 per cent, while that in excess of $3 million will be taxed at 6 per cent,” said Mr Wong. This is up from the current 4 per cent rate.
These changes are expected to affect 15 per cent of residential properties. The Additional Conveyance Duties regime will also be adjusted accordingly.
Cars with an open market value of more than $40,000 will be expected to pay higher Additional Registration Fee (ARF) – rates to better differentiate between the higher-end cars. The ARF rates will be increased to 320 per cent, from 220 per cent. Preferential ARF rebates will also be capped at $60,000 to avoid providing excessive rebates to more expensive cars when it is deregistered.
Additionally, a 15 per cent increase in tobacco excise duty will be implemented immediately.
In total, this is expected to raise about $800 million in additional revenue for the Singapore Government per year.