Highlights of Singapore budget for fiscal 2014/15
WRITTEN BY REUTERS
FRIDAY, 21 FEBRUARY 2014 18:24
The following are highlights of Singapore's budget for the 2014/15 fiscal year starting in April.
Singapore's electorate has become increasingly angry over the high cost of living and a wide gap between rich and poor, prompting the long-ruling People's Action Party (PAP) to re-set its goals and focus on providing more affordable healthcare and extra support measures to the less well off.
The government is on a long-running programme to try to increase the productivity of Singaporean workers and reduce the country's reliance on foreign labour, whose presence riles some citizens.
Singapore, the Asia base for many Western companies and banks, has large current account surpluses and huge reserves, giving it ample room to boost spending on social services and help local firms.
The budget is being presented in parliament on Friday by Finance Minister Tharman Shanmugaratnam.
BUDGET FORECASTS
* Singapore expects an overall budget deficit of $1.2 billion for fiscal 2014/15, around 0.3% of GDP
* $8 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 $3.9 billion, 1.1% of GDP
ECONOMY
* Growth this year is expected to be 2-4%
* Inflation expected to rise in 2014 due to higher wages, business costs
* Tharman says wage increases can only be sustained if productivity is raised
TAX CHANGES
* Excise duty on tobacco to rise by 10%
* Liquor excise duty rate to rise by 25% on all liquor types
* Betting duty rates on lotteries to rise to 30% from 25%
HELP FOR BUSINESSES
* Says budget 2014 will strengthen support for early adopters of new technologies
* To extend 50% tax deduction on qualifying R&D expenditure for another 10 years
* Government to set aside extra $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 $15 million to $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 $500 million to bring size to $4.6 billion
* Support for lower income households on Kindergarten fees
* More students to qualify for bursaries for higher education, to benefit students from two thirds of Singaporean households
FOREIGN WORKERS AND PRODUCTIVITY
* No more moves to tighten foreign worker inflows for economy at large, but 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 $700 from $600 in July 2016
* To continue to monitor growth of foreign manpower in other sectors
HEALTHCARE
* To raise subsidies for lower and middle income Singaporeans visiting Specialist Outpatient Clients to 70% and 60% respectively from 50%
* 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 $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
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