Budget 101: What are the major initiatives from recent Budgets?
17-Feb-2022 Intellasia |
On Friday (February 18), Finance minister Lawrence Wong will deliver the 2022 Budget statement in Parliament.
Wong said that the statement will address “more immediate issues” such as cost of living and provide support for sectors facing difficulties due to Covid-19.
This is the third year in which the government will be delivering a Budget during the Covid-19 pandemic.
The last two years’ Budgets already featured initiatives to help households and businesses tide over the impact of the global health crisis.
TODAY takes a look at key initiatives from the 2020 and 2021 Budgets.
This Budget was presented in February 2020 against the backdrop of the Covid-19 outbreak. It was followed by three other supplementary Budgets introduced in March, April and May that year.
It was only the second time the government had tapped the national reserves to fund the initiatives, the first being in 2009 in the wake of the global financial crisis.
The government announced in August and October 2020 additional support for households, workers and firms.
1. Assurance Package
The S$6 billion package was targeted at helping to cushion the impending increase in the Goods and Services Tax (GST) rate from 7 to 9 per cent. It promised all adult Singaporeans cash payouts of between S$700 and S$1,600 over five years, with the aim of delaying the effect of the GST rate increase by at least five years.
Households in one to three-room flats received payouts to offset 10 years’ worth of added expenses due to the increase.
In delivering his Budget statement, former Finance minister Heng Swee Keat said that the planned GST increase will not take place in 2021 given the economic impact of the Covid-19 outbreak but will be raised by 2025.
Last December, prime minister Lee Hsien Loong said that the government has to “start moving” on the planned increase as Singapore’s economy recovers from the Covid-19 crisis.
2. Care and Support Package
Under the S$1.6 billion package, Singaporeans received cash payments of between S$300 and S$900 to cope with household expenses due to the uncertainty brought about by the pandemic.
Grocery vouchers worth S$300 were also handed out to those living in one and two-room Housing and Development Board (HDB) flats under the package that year.
The vouchers, which could be used at supermarkets such as NTUC FairPrice and Giant, were subject to a spate of thefts from letterboxes at HDB blocks when the first tranche was disbursed in October 2020.
3. SGUnited Jobs and Skills Package
The S$2 billion package aimed to create 100,000 jobs, traineeships and skills training opportunities to help people secure jobs.
The package, which was extended the next year, comprised various programmes such as SGUnited Jobs, SGUnited Traineeships, SGUnited Mid-Career Pathways and SGUnited Skills.
In 2021, 12,000 training places were taken up under SGUnited Skills and SG United Mid-Career Pathways programmes, as shown in an update by government agency SkillsFuture Singapore last month.
4. Job Support Scheme
The S$1.3 billion scheme was rolled out to help businesses cope with labour costs and supported more than 1.9 million resident employees.
It saw the government forking out 8 per cent of the wages of these workers, up to S$3,600 monthly for three months.
5. Environmental initiatives
The 2020 Budget also saw several new initiatives to nudge Singaporeans to adopt sustainable habits. Key measures included those that encouraged the early adoption of electric vehicles.
Buyers of such vehicles were offered a rebate of up to 45 per cent on the additional registration fee, capped at S$20,000.
The government also announced that it would expand the public charging infrastructure for electric vehicles from 1,600 in 2020 to about 28,000 by 2030.
The following year’s budget saw the extension of several schemes introduced in 2020, along with other new measures to support households and businesses.
The government also drew from the national reserves for the second year in a row.
1. Household Support Package
The S$900 million package was intended to support low and middle-income families through GST vouchers and Community Development Council vouchers.
For instance, eligible Singaporeans received a one-off cash payment of S$200 for their GST voucher on top of the regular payment disbursed every August.
All Singaporean households also received S$100 worth of vouchers each to be used at participating neighbourhood shops and hawker centres to thank them for their “sense of solidarity” during the pandemic.
2. Covid-19 Resilience Package
The S$11 billion package aimed to address Singapore’s immediate needs to safeguard public health and to provide targeted support to workers and sectors that were still under stress from the economic pressures of the pandemic.
Part of the package (S$4.8 billion) was dedicated to public health and safe reopening measures such as expanding the nation-wide vaccination programme and maintaining existing precautionary measures, contact tracing system, testing regime and safe-distancing requirements.
Another part of the package was to support the extension of initiatives introduced the previous year, such as the Jobs Support Scheme and the SGUnited Jobs and Skills Package.
Another S$1.2 billion was set aside to support sectors hard-hit by the pandemic, such as the aviation, arts and culture, and sports sectors.
3. Environmental initiatives
Building on the previous year’s target to encourage electric vehicle adoption among motorists, Heng announced that the government will further waive the minimum Additional Registration Fee of S$5,000 for this form of transport, and commit S$30 million over the next five years for electric vehicle-related initiatives such as measures to improve charging provision at private areas.
Separately, Heng also said that Singapore will review the “trajectory and level” of its carbon tax and announce the outcome at the 2022 Budget.
Singapore’s carbon tax rate has been set at S$5 per tonne of greenhouse gas emissions from 2019 to 2023.
The government has said that this would be increased to between S$10 and S$15 per tonne by 2030.