Budget 2014: A Quick Summary

 

With a healthy surplus of S$3.9b, Deputy Prime Minister Tharman Shamugaratnam rolled out this year’s budget with observably higher social spending.

The Pioneer Generation’s package is the boldest delivery of the Government’s commitment to honour the work of “Pioneer Singaporeans”, those who were at least 16 years old during 1965.

Special attention to elderly workers (the result of intensive lobbying by the NTUC) had been given.

Property owners and agents were keen to watch for news about easing of cooling measures in the property sector, however the DPM reminded Singaporeans it was still too early to ease these measures.

Here are some of the components of the Budget:

* Singapore expects an overall budget deficit of S$1.2 billion ($948.80 million) for fiscal 2014/15, around 0.3 percent of GDP

* S$9 billion to be set aside for “Pioneer Generation” fund to help pay for package of measures to help elderly citizens with health care costs for the rest of their lives

* Expects spending needs to grow significantly in next 10 to 15 years

* For fiscal 2013/14, the overall budget surplus is expected to be S$3.9 billion, 1.1 percent of GDP

ECONOMY

* Growth this year is expected to be 2-4 percent

* Inflation expected to rise in 2014 due to higher wages and business costs

* The DPM reinforces the message that wage increases can only be sustained if productivity is raised

BUSINESS

* Budget 2014 will strengthen support for early adopters of new technologies

* To extend 50 percent tax deduction on qualifying R&D expenditure for another 10 years

* Government to set aside extra S$150 million to invest in growth-oriented Singapore SMEs

* To help firms expand overseas by raising size of loans companies can take under the Internationalisation Finance Scheme from the current S$15 million to S$30 million

PROPERTY

* Says rounds of property-cooling measures are working, and it’s too early to start relaxing them

EDUCATION

* Lifelong Learning Endowment Fund to be topped-up by S$500 million to bring size to S$4.6 billion

* KiFAS will be open to all anchor operators and MOE kindergartens More generous subsidies for lower and middle income house holds

* Enable more students to qualify for bursaries, by raising monthly per capita household income

* Tertiary bursaries will be enhanced and extended to more households

Healthcare
* Permanent subsides for MediShield Life Premiums

* Subsidies at specialist outpatient clinics for lower and middle income Singaporeans raised to 60% and 70% respectively

* CPF Employer Medisave rates up 1% for all workers

* One year Temporary Employment Credit to help employers offset 0.5% of wage increase

FOREIGN WORKERS AND PRODUCTIVITY

* Government will make efforts to encourage construction sector to retain skilled workers and stop over-reliance on foreign workers

* Levy for basic-skilled or R2 work permit holders to rise to S$700 from S$600 in July 2016

* To continue to monitor growth of foreign manpower in other sectors

* Government will increase risk-share in Microloans to young companies to 70%

HEALTHCARE

* To raise subsidies for lower and middle income Singaporeans visiting Specialist Outpatient Clients to 70 percent and 60 percent respectively from 50 percent

* To raise Central Provident Fund (CPF) Medisave employer contribution rate by 1 percentage point for all workers from January 2015, businesses to get support during transition

SUPPORT FOR ELDERLY

* “Pioneer Generation” package to assure citizens who were aged at least 16 in 1965 get affordable healthcare for the rest of their lives

* Package estimated at costing just over S$9 billion

* Will get discounted outpatient care, top ups to their Medisave accounts, and subsidies for the new national MediShield Life insurance system

* To raise CPF contribution rates for workers aged 50 to 55 by 1.5 percentage points, 1 percentage point from the employer and 0.5 percentage points from the employee

* Will raise employer contribution rate for those aged 55 to 65 by 0.5 percentage points

PERSONS WITH DISABILITIES

* Handicapped Dependant Relief enhanced by $2000

* New subsidies for persons with disabilities taking either dedicated transport or taxis.

* Parent and handicapped relief will be increased by $3k

* Government will allow sharing of parent and handicapped relief as they recognise it is the responsibility of the entire household

* Higher subsidies for Early Intervention Programme for Infants and Children

TAX CHANGES

* Excise duty on tobacco to rise by 10 percent

* Liquor excise duty rate to rise by 25 percent on all liquor types

* Betting duty rates on lotteries to rise to 30 percent from 25 percent

 

 

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