Budget 2022: What the measures mean for a large family

SINGAPORE — In recent months, homemaker Suriyani Muhamad Buang, 53, has had to make adjustments to reduce her household expenses as inflation pushed up the prices of an array of things, from food to electricity.

One kilogram of prawns, which used to cost about S$8 has doubled in price, she said. A packet of grapes has also gone up from about S$3 to S$5 at the supermarket.

And with prices set to rise further in the coming months ahead of the Goods and Services Tax (GST) hike next year, the mother of six children aged between 16 and 30 has started tightening her belt. 

“I’ve been looking for cheaper alternatives. I buy things like bath products and detergents at heartland shops instead of the supermarkets,” said Madam Suriyani. 

Even after those measures, about half of her lorry driver husband’s salary goes to monthly expenses, which can go up to about S$1,000 a month. Utility bills, conservancy charges and other household-related charges for her four-room public housing flat have remained stable at about S$800 a month.

While she gets by with the help of her four working children who contribute “a bit” monthly, Mdm Suriyani said the family lives pay cheque to pay cheque and she usually has to scrimp to save. 

“It has been difficult… Most prices have increased — food, bus fares, even COE (Certificate of Entitlement) for motorcycles,” she said, adding that the COE increase affected her husband, Mr Abu Bakar Abdul Rahim, 57, who owns a motorcycle. 

Acknowledging such cost-of-living concerns, Finance Minister Lawrence Wong on Friday (Feb 18) announced immediate support for households, which include providing them with S$100 Community Development Council vouchers each. These vouchers can be used at participating heartland merchants and hawkers.

This was welcomed by Mdm Suriyani, who said the heartland shops she frequents have recently accepted CDC vouchers. 

“Even the shop at my void deck accept the vouchers so it’s really convenient,” she added. 

In his Budget speech, Mr Wong also announced that the GST will go up from 7 per cent to 8 per cent on Jan 1 next year, and to 9 per cent on Jan 1, 2024. 

To help Singaporeans with the impact of this rise, Mr Wong said all Singaporeans aged 21 and above will receive cash payouts of up to S$1,600, which will be distributed over the next five years.

These payouts are part of the enhanced Assurance Package, now worth S$6.6 billion, that was first announced in 2020 to cushion the impact of the GST hike.

“For the majority of Singaporean households, the offsets from the Assurance Package will cover at least five years of additional GST expenses,” the minister said. “For lower-income households, they will receive much more — with offsets covering about 10 years’ worth of additional GST expense.”

Mdm Suriyani said such payouts “feel like a yearly bonus” to her as a homemaker, and may not effectively defray the rising GST cost in the next five years. 

“GST is charged in a lot of our daily expenditure… it’s a bit here and a bit there. So when the Government gives us a one-time payout, I’m not sure most Singaporeans will put it aside specifically to pay GST.”

Mr Wong on Friday also introduced a new scheme to provide support to businesses which intend to increase the salaries of lower-wage workers here, such as Mdm Suriyani’s husband. 

Called the Progressive Wage Credit Scheme, the Government will co-fund 50 per cent of pay increases made this year and next year, 30 per cent of pay increases in 2024 and 2025, and 15 per cent of pay increases in 2026.

Mdm Suriyani said while this is a good incentive for companies, there is a chance the company her husband works for might not take it up.

“It’s not a sure thing so I don’t know how it will affect my family. But if his company decides to increase his pay because of this, it’s good, especially since his increment in the last three decades (of his employment) has been very modest,” she said.

Despite these initiatives, Mdm Suriyani said she is bracing herself for further increases to the cost of living and plans to recalculate her family’s expenses and make necessary adjustments. 

“I am lucky because my children are already working now and they can help (with the family’s finances) a bit. If they were all still in school, it would have definitely been a struggle for us.”

HOW THE BUDGET BENEFITS FAMILIES

For families like Mdm Suriyani, they will be receiving a series of cash payouts, GST vouchers and rebates, as part of the S$6.6 billion Assurance Package announced by Mr Wong on Friday.

The Ministry of Finance (MOF) also provided an illustration of how the Budget measures will benefit families, such as a three-generational one with two school-going children and a retiree living in a five-room public housing flat.

MOF said the family could receive S$6,740 over five years, offsetting about seven years of GST increase.

The amount comprises:

• Cash payout: S$3,700
• Additional GST voucher-U-Save: S$390
• GST voucher in cash (Senior's Bonus): S$900
• Medisave top-up: S$1,350
• CDC vouchers: S$400

The estimated increase in GST that the family would incur per year is S$907, said MOF.