SINGAPORE — On the heels of Singapore relaxing the final few Covid-19 controls at the start of the week, Deputy Prime Minister and Finance Minister Lawrence Wong announced on Tuesday (Feb 14) that the Government will spend about S$104.2 billion to reposition Singapore for a “new era” of global development.

The budget will be used to grow the economy, equip workers and build up the country’s collective resilience, while taking immediate action to help families and vulnerable Singaporeans cope with higher inflation.

In his two-hour speech, Mr Wong said that the Government expects a budget deficit of about S$0.4 billion this year — or about 0.1 per cent of the country’s gross domestic product.

There will be no need for any draw on past reserves in this year’s budget, he added.

The following are some of the key announcements from Budget 2023.

HELP WITH INFLATION, HIGHER GST

1. ENHANCED ASSURANCE PACKAGE: All Singaporeans aged 21 and above will receive cash payouts distributed every December between 2022 and 2026 The total amount they will receive during this period ranges from S$700 to S$2,250, depending on their income and property ownership. About 2.9 million adult Singaporeans will benefit from this.

This is part of a S$3 billion enhancement to the Assurance Package, of which S$1.4 billion was announced last November. The package was introduced in 2020 to cushion the impact of the GST increase.

2. ONE-OFF SUPPORT MEASURES: Eligible Singaporeans aged 21 and above will receive between S$200 and S$400 in June. An extra one-off cash payment of between S$200 and S$300 will be given to eligible seniors aged 55 and above from June this year. The Central Provident Fund (CPF) MediSave accounts of eligible Singaporeans aged 20 and below, or 55 and above, will also be topped up with S$450 every February from 2023 to 2025. 

3. VOUCHERS FOR HOUSEHOLDS: Another S$300 worth of Community Development Council Vouchers will be given to households in January next year. Those eligible for the GST Voucher – U-Save rebates for utility bills will get double the regular amount this year.

SUPPORT FOR FAMILIES

1. ENHANCED BABY BONUS CASH GIFT: To support young couples looking to start or expand their families, the cash payout from the Baby Bonus cash gift will go up by S$3,000 for all Singaporean children born from Feb 14, 2023. The payout will be staggered further: Parents will get up to S$9,000 in payouts during the first 1.5 years of their child’s life; and S$400 every six months from when the child is two years old to 6.5 years old.

Parents of children born from Oct 1, 2022 to Feb 13, 2023 will receive the S$3,000 Baby Support Grant, which was first introduced during the Covid-19 pandemic, in the second half of this year.

2. MORE MONEY FOR CHILD DEVELOPMENT ACCOUNT: Each Singaporean aged six years and under will receive a one-off S$400 top-up to their Child Development Account — a co-savings scheme used to offset preschool and healthcare expenses of children — from September.

The Government will give added support by raising the initial amount deposited into this account from S$3,000 to S$5,000, and it will increase the limit by which they match the savings of parents’ for their first and second child.

3. MORE PATERNITY LEAVE: Government-paid paternity leave will be doubled from two to four weeks for parents with children born from Jan 1, 2024. However, this extra two weeks will not be mandatory for employers to provide.

4. TAX RELIEF FOR WORKING MUMS: The tax relief for eligible working mothers will move from a percentage of the mother’s earned income to a fixed dollar relief system, and will apply to women who have qualifying children born or adopted from 2024 onwards. Changes to the Working Mother's Child Relief will mean that eligible working mothers will be able to claim S$8,000 in annual relief for their first child, S$10,000 for their second child, and S$12,000 each for their third and subsequent children.

5. HIGHER CHANCES TO GET BUILD-TO-ORDER FLATS: The Ministry of National Development and the Housing and Development Board said that they will introduce a new sub-category of first-time applicants for public housing that comprise families with children, and young married couples aged 40 and below. More details will be announced during the debate on the Budget in Parliament.

6. ENHANCED GRANTS FOR RESALE FLATS: To help first-timer families buy a resale flat, the CPF Housing Grant will be increased, with those getting smaller flats to receive a higher amount. Together with the Proximity Housing Grant, eligible families may receive up to S$190,000 worth of grants when getting a resale flat on or after April 1 this year. Eligible singles will also be given more support based on the size of the resale flat.

SUPPORT FOR WORKERS

1. CPF FOR PLATFORM WORKERS: Platform workers who are aged under 30, such as those working for food delivery and ride-hailing firms, will need to make compulsory CPF contributions along with their employers. Those earning under S$2,500 a month will get transitional support in the first four years, with more details to be announced during the upcoming Committee of Supply debate for the Ministry of Manpower. 

2. CPF CHANGES FOR OLDER WORKERS: Adjustments will be made to the CPF savings of older workers, with the next increase in CPF contribution rates coming in 2024. Employers are expected to get some form of help to alleviate the increase in business costs. 

Seniors on the Retirement Sum Scheme will see their minimum CPF monthly payout increase to S$350 a month. Aside from older workers, middle-income Singaporeans will have their CPF monthly salary ceiling raised progressively from S$6,000 to S$8,000 in 2026. 

3. JOBS-SKILLS INTEGRATORS: To better match the training skills that workers get to the skills needed by employers, “jobs-skills integrators” will be intermediaries connecting industry players with training institutes. For a start, these “middlemen” will begin to train workers in the precision engineering, retail and wholesale trade industries. More details will be released during the Ministry of Education’s debate on its budget.

4. MORE SUPPORT FOR VULNERABLE WORKERS: There will be new measures and enhancements to existing initiatives for senior workers, lower-wage workers, ex-offenders and workers with disabilities. For example, the Progressive Wage Model will be expanded to more sectors, and a time-limited wage offset will be introduced to encourage firms to hire ex-offenders.

ATTRACTING INVESTMENTS

1. EXPAND SCHEMES: A total of S$4 billion will be set aside for the National Productivity Fund — which was established in 2010 to support a wide range of measures for businesses to improve productivity and continue training workers — to attract anchor quality investments in Singapore. Other expanded schemes will include the SME Co-Investment Fund to invest in small- and medium- enterprises, and the Singapore Global Enterprises initiative.

2. FINANCIAL BACKING: Businesses will be able to qualify for greater tax deductions of 400 per cent for spending on activities related to innovation, including research and development, and SkillsFuture-approved training courses. This is part of a new Enterprise Innovation Scheme, which will also allow firms to convert 20 per cent of their total qualifying expenditure into a cash payout of up to S$20,000.

TAX CHANGES

1. RAISED BUYER'S STAMP DUTY RATE: The tax rates paid by those who buy a residential and non-residential property in Singapore will be raised.  These apply to portions of property value above S$1.5 million for residential units and S$1 million for non-residential properties. This will generate another S$500 million in revenue a year.

2. ADJUSTED ADDITIONAL REGISTRATION FEE FOR CARS: This fee will be adjusted to better differentiate higher-end cars, with luxury cars being taxed at a higher rate. The Preferential ARF rebate will also be capped at $60,000 to avoid providing excessive rebates to more expensive cars when they are de-registered.

3. TOBACCO PRODUCTS: Excise duty on all tobacco products will go up by 15 per cent to discourage the consumption of such products.