Wrapping up Budget 2014 – Thank You for your views and suggestions!
We would like to say a big 'Thank you' to all who have contributed their views and suggestions for Budget 2014.
Since the launch of our public consultation exercise on 22 Nov 2013, we have received over 1,300 suggestions! We would like to share how some of your thoughts and ideas have helped shape Budget 2014.
Support for SMEs, Helping Businesses Grow and Internationalise
Many found the Productivity and Innovation Credit (PIC) scheme useful, with several calling for the PIC to be extended beyond 2015, and for more focused support for SMEs. There were also calls to ease business regulations to encourage entrepreneurship, and for more incentives to encourage local companies to venture overseas.
In Budget 2014, the Government announced that the PIC scheme would be extended for 3 years, until YA2018, to provide continuing support for businesses as they restructure. PIC will also be enhanced for qualifying SMEs, with the expenditure cap for each qualifying activity raised from $400,000 to $600,000 from YA2015. To further support innovation, there will be extensions to the R&D schemes and writing down allowance for the acquisition of Intellectual Property Rights.
To encourage SMEs to pilot emerging technology solutions, a new 3-year ICT for Productivity and Growth Programme (IPG) was announced in Budget 2014. It will subsidise companies for the adoption of worthy ICT-based productivity solutions, as well as support SMEs for the installation and take-up of broadband services.
To help small businesses, the Government will raise our risk share for loans to young SMEs under the Micro-Loan Programme, which has already provided 3,500 loans to SMEs over the past 2 years.
We will also put an additional $150 million under the Co-Investment Programme to further catalyse growth capital for promising enterprises.
The Government will double the maximum loan quantum to $30 million per firm under the Internationalisation Finance Scheme to help local companies expand overseas. We will also provide more support under the Global Company Partnership Programme to help our companies build capabilities to break into new overseas markets.
Support for the Vulnerable, Aged and Needy, and Cost of Living
Many contributors asked for more help to assist the vulnerable, aged and needy. Suggestions included providing subsidies for consumable items, and improving the awareness of the available assistance schemes.
Some contributors also hoped that the GST Voucher scheme would continue, so as to help Singaporeans cope with the rising cost of living. Many felt the need for greater support for single parents and middle-income sole breadwinners, whilst others asked for more financial assistance for children from needy families, as well as opportunities to help them discover and develop their areas of interest.
Singaporeans can look forward to the following special measures for 2014, which provide additional support for Singaporean households this year:
- GST Voucher – Cash: Seniors’ Bonus of $100 to $250 for Singaporeans aged 55 years and above this year, based on Annual Value of home and Assessable Income.
- GST Voucher – U-Save Special Payment of $90 to $260 to all HDB households, based on flat type.
- Service and Conservancy Charges (S&CC) rebates of one to three months for all HDB households, based on flat type
We are also introducing new and enhanced schemes to support needy families and persons with disabilities. Subsidies for the Early Intervention Programme for Infants and Children (EIPIC) for children with special needs will be enhanced so that more middle-income households can benefit. Transport for persons with disabilities will be made more affordable through higher subsides for those who require dedicated transport services to special education and care services. Taxi services subsidies will also be provided to those who are unable to take public transport or dedicated transport services. Finally, handicapped dependant (spouse, sibling, child) reliefs will be increased by $2,000.
In order to ensure that our students have every opportunity to advance through education regardless of background, the Kindergarten Fee Assistance Scheme (KiFAS) will give more fee assistance to low income families, and extend support to middle-income families too. KiFAS will also be extended to all pre-schools with Anchor Operator status as well as MOE kindergartens.
Bursaries at universities, polytechnics and ITE will be significantly increased to benefit students from two-thirds of all Singaporean households.
Honouring Our Pioneer Generation
There were many good suggestions to recognise our Pioneer Generation. We would like to thank everyone for your ideas, such as providing regular financial assistance, and ensuring the Pioneer Generation has good access to healthcare in their old age.
The Pioneer Generation Package introduced in Budget 2014 seeks to honour our Pioneer Generation and assure them of affordable healthcare. We have about 450,000 Pioneer Generation Singaporeans, and they will receive these benefits for life:
- Annual Medisave top-ups of $200 to $800 from Jul 2014, with older cohorts receiving more.
- Outpatient Care (effective Sep 2014)
- Additional 50% off subsidised bills at Specialist Outpatient Clinics (SOCs) and polyclinics.
- Community Health Assist Scheme (CHAS) benefits for all in the Pioneer Generation.
- Disability Assistance of $1,200 a year for those with moderate to severe functional disabilities.
- MediShield Life premium subsidies (end-2015) when MediShield Life is ready
- Special subsidies for MediShield Life premiums starting from 40% at age 65, and rising to 60% at age 90.
Through a combination of premium subsidies and Medisave top-ups, we intend to fully cover the MediShield Life premiums of Pioneers aged 80 and above in 2014. For members of the Pioneer Generation who are younger, for example, aged 70 in 2014, we will cover half the current premiums if they are already on MediShield. Those not on MediShield today will be brought onto MediShield Life, and can expect to pay less than the current MediShield premiums, while enjoying the benefits of MediShield Life.
Preparing for an Ageing Population
Many felt more could be done to improve the quality of life for our Seniors, and called for more help to be given to them on all fronts including jobs, healthcare, transport and day-to-day living needs. There were also active discussions on CPF contribution rates for our silver workforce.
To keep outpatient care affordable for the lower- and middle-income groups, the subsidies at Specialist Outpatient Clinics will be raised from Sep 2014 for lower- and middle-income Singaporeans, benefiting 400,000 patients.
In addition, Singaporeans aged 55 years and above in 2014, excluding those already covered by the Pioneer Generation Package, will receive Medisave top-ups of $100 to $200 annually, over the next 5 years. Elderly patients will also be allowed to use a portion of their Medisave more flexibly across a range of outpatient treatment, on top of the existing Medisave withdrawal limits for specific chronic conditions and other treatments.
With effect from January 2015, the CPF employer contribution rates for all workers will increase by 1 percentage point, to be allocated to their Medisave Accounts. In addition, workers above 50 to 55 years will receive an additional 1 percentage point to their Special Account, and workers above 55 to 65 years will receive an additional 0.5 percentage point. Workers above 50 - 55 years will also contribute an additional 0.5 percentage points to their Ordinary Account.
To help employers adjust, Government will provide employers with a 0.5 percentage point increase in the Temporary Employment Credit, and up to 0.5 percentage point increase for the Special Employment Credit (SEC). These credits will be for one year.
Lastly, parent and handicapped parent reliefs will be enhanced by up to $3,000 from YA2015. Individuals staying with their elderly dependents will get more.
There were many suggestions pertaining to taxes, namely in the areas of personal taxes, good and services tax (GST), property tax, and corporate tax. These include income tax rebates to help middle-income Singaporeans cope with rising costs, lower GST for basic goods and essential public services like healthcare and education whilst imposing higher taxes on items such as tobacco and alcohol, lowering property tax for owner-occupied properties so as not to penalise asset-rich Singaporeans, especially retirees, and pegging the corporate tax rebate to the percentage of Singaporean employees hired in the company.
We have given serious considerations to all these suggestions. For Budget 2014, we decided to raise duties for tobacco and alcohol, with most other taxes remaining unchanged. To combat the trend of rising smoking prevalence, especially amongst youths aged 18 to 25, excise duties for cigarettes and manufactured tobacco products have been raised by 10% with effect from 21 February 2014. We also increased the excise duty rate of all liquor types by 25% from 21 February 2014 to keep pace with inflation, as the last hike in liquor duties was in 2004. In addition, betting duty rates on lotteries will be raised from 25% to 30% of gross bets from 1 July 2014.
We appreciate your views in helping to shape Budget 2014. Your feedback has been invaluable to us in improving our public policies with the aim of building a more inclusive and stronger Singapore. Although the Budget views and suggestions exercise has ended, we encourage you to continue providing us feedback through the various REACH channels.
Submit your feedback to REACH through the following channels:
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Last updated 11 Mar 2014