Wrapping up Budget 2012 Feedback Exercise
Thank you for responding enthusiastically to our call for your views for Budget 2012. Beginning with the pre-budget dialogue session on 16 Nov 2011, we have since received more than 1,800 suggestions and feedback for Budget 2012. Your thoughts and ideas have helped in shaping Budget 2012, and we are grateful to you for sharing them with us.
Helping our Seniors Live Long, Live Well
Many of you have suggested ways to help improve the quality of life for the elderly - keeping healthcare affordable, and helping them remain financially independent in their golden years. Suggestions included the setting up of more subsidised eldercare facilities, as well as creating more job opportunities for older workers.
Budget 2012 provides a significant package for the elderly - to enable them to stay at work, unlock the savings in their homes and provide better and more affordable healthcare support. This will help older Singaporeans age with dignity and grace, and give them peace of mind and a greater sense of security in their golden years. These measures include:
- Higher CPF Contribution Rates for Older Workers
- Higher Earned Income Tax Relief for Older Workers (doubled for workers 55 and above)
- The Silver Housing Bonus and Enhanced Lease Buyback scheme (up to $20,000 bonus)
- Enhanced subsidies in Community Hospitals, nursing homes, day care and rehabilitation facilities, and home-based care packages for the lower and middle income
- Grant for hiring a foreign domestic helper ($120 grant per month)
- Permanent GST absorption for all subsidised patients using long term care services
- $2,000 subsidy to install elderly-friendly features at home, under the Enhancement for Active Seniors (EASE) Programme
- Extended MediShield coverage to aged 90, and one-off Medisave top-ups
Uplifting Low Income Families
Many also had concerns that we should help make it more affordable to raise families in Singapore, especially for the lower-income families. Suggestions included providing more childcare subsidies and more rebates for utilities. Budget 2012 provides greater support to help lower-income families with their children’s education through:
- Enhanced pre-school subsidies with a new per-capita household income criterion
- Raising the household income ceiling for the Ministry of Education’s Financial Assistance Schemes (FAS) (from $1,500 to $2,500 per month) and the Student Care Fee Assistance (SCFA) scheme (to $3,500 per month)
Many have asked the Government to lower the GST, or exempt GST for basic necessities. However, lowering GST or a multi-rate GST will only result in giving more money back to wealthier groups, as the rich in general spend more and thus pay more GST. This is counterproductive in our efforts to help the lower-income group. Singapore already has a progressive fiscal system, where lower-income Singaporeans get more benefits compared to the taxes they pay, with the better-off paying more taxes. 80% of our income taxes are in fact paid by the top 10% of households. To further enable lower-income Singaporeans to cope with the cost of living, and provide continuing assurance that GST does not hurt the poor, a permanent GST Voucher scheme was introduced in Budget 2012.
This GST Voucher comprises 3 components – cash, Medisave top-ups and U-Save. The GST voucher will fully offset the GST expenditure for the lower half of retiree households, and offset about half of the GST expenditure for lower-income families. The amount each Singaporean will get will be based on both their income and the Annual Value (AV) of their homes.
For Persons with Disabilities
Some feedback contributors also asked for additional help for families with Special needs children, to help them with their educational needs and medical costs. Budget 2012 provides a stronger helping hand for Singaporeans with disabilities, at each stage of their lives:
- Improved access to Special Education (SPED) schools and enhanced support for children with special needs in mainstream schools
- Extension of Workfare Income Supplement (WIS) to all Persons with Disabilities (PWDs) and Special Employment Credit (SEC) to employers that hire PWDs of all ages
- Doubling of Handicapped Earned Income Tax Relief
- Alignment of adult care subsidies for Singaporeans with disabilities with those for the elderly
Helping SMEs Make the Transition to a Higher Productivity Workforce
Many suggestors also hoped for more measures to help our local SMEs, such as more training subsidies, and grants to offset rental and labour costs. Budget 2012 introduced several measures to help our SMEs to restructure, attract local workers and grow.
SMEs can benefit from a one-off SME cash grant, at 5% of revenues in YA2012, capped at $5,000, and enhanced training support through higher course subsidies and increases in the absentee payroll cap (enhanced training support is also available for self-employed persons). To encourage employers to attract and retain older workers, a further increase to the Special Employment Credit (SEC), earlier introduced in Budget 2011, was made. All employers of Singaporean workers aged above 50 years old, and earning up to $4,000 per month will receive the SEC.
Following suggestions from business groups, we have also made further enhancements to the Productivity and Innovation Credit (PIC) scheme in Budget 2012. The key changes include:
- Increasing the cash payout from 30% to 60%, for up to $100,000 of firms’ PIC expenditures per Year of Assessment;
- Quarterly cash payouts from 1 July 2012 to help businesses with their cashflow;
- Making it easier for companies to claim PIC benefits on in-house training by removing the need for external certification for in-house training costs of up to $10,000 per year.
Many contributors asked the Government to improve the public transport infrastructure, so as to give Singaporeans a more affordable and reliable public transport system. To significantly improve bus service levels and reduce crowding and waiting times, the Government has injected $1.1 billion to provide funding for 550 buses. This is a subsidy for public transport commuters to benefit from substantial improvements in service levels, which would otherwise require significant fare increases if left to the public bus operators to implement. Public bus operators will add another 250 buses to meet expected ridership growth.
Feedback not addressed in Budget 2012
Population and birth-rate
There were several suggestions on how to increase Singapore’s total fertility rate, such as by providing more subsidies and parent-care leave. At the Committee of Supply Debates for Population 2012, it was announced that the age for using the Child Development Account (CDA) was extended upwards to 12, and the approved uses of the CDA have also been expanded.
Developing a sustainable population strategy is a critical issue, given our aging population, and a shrinking citizen workforce. The National Population and Talent Division (NPTD) in the Prime Minister’s Office will be working with other agencies and engaging members of the public on population issues, and incorporating these inputs in a white paper on Population which will be released at the end of the year.
Several contributors had suggested that more help be given to Singaporeans to pursue higher education, through increased intake at the local universities, more subsidies for part-time courses, or relaxing the use of CPF for studies at private institutions. In Budget 2011, we had increased the subsidies for Singaporean adults who wish to upgrade themselves through their first degree or diploma on a part-time basis. The Committee on Education Pathways beyond 2015, chaired by Minister of State Lawrence Wong, is studying how to provide more opportunities to Singaporeans to obtain a university education, while maintaining quality. The Committee aims to finalise its recommendations by end 2012.
We appreciate your views in helping to shape Budget 2012. Your feedback is invaluable to us in improving our public policies with the aim of building a more inclusive and stronger Singapore. Although the Budget feedback process has ended, we encourage you to continue to provide us feedback through REACH channels.
Submit your feedback to REACH through the following channels:
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