Singapore Budget 2022
Singapore is now rebuilding the economy for the better for all Singaporeans
The pandemic hit Singapore like other countries in the world. The first few months of the pandemic struck the worst, with cases of infection affecting every business, workers, and children. Everyone has to adapt and adjust to apply the health and safety restrictions implemented by the government. The path was never easy, and the government was thankful for the Singaporeans and those who are living in Singapore who did their best to follow the protocols and get their vaccinations against Covid19. Singapore is now rebuilding its resources to stabilize its economy as we see the end of the pandemic.
Last year, the economy rebounded strongly, and the government looks forward to a steady recovery this year. The hard work of everyone is now paying off, but still, the global economy is vulnerable to pandemic-related risks and other disruptions.
Today, Singapore has more vaccinated individuals, improved public health defenses, and strengthened stability. We are almost in the third year, battling the pandemic taught us a lot, especially the needs of every household, senior, worker, and business.
On February 18, the speech for the budget in 2022 by Minister of Finance Mr. Lawrence Wong from the Parliament Palace. He discussed the Support for the Recovery from Covid19, New Capabilities, Investing into People, Renewing and Strengthening Social Impact, Green Transition, and Resilient Tax System.
Support for the Recovery from Covid19
The three packages, such as the $500 Million Jobs and Business Support Package, $560 Million Household Support Package, and Support for Businesses, will help them recover temporarily from the pandemic's effect.
The SMEs were significantly affected by the pandemic due to the Covid19 restrictions. The eligible sector will receive $1,000 per local employee and cap up to $10,000 on each firm. On the other hand, for local proprietors, in partnership with the eligible sectors, SFA licenses hawkers, coffee shops stallholders, and market that does not hire local employees will receive a $1,000 payout. Meanwhile, the workers who are still in a struggle facing their income loss can apply for the COVID19 Recovery Grant, which will ease their financial status until the end of the year.
The Job Growth Incentive is open for those facing difficulty in finding jobs like mature workers who have not been working for more than six months, people with disabilities (PWDs), and ex-offenders. To improve the labor market, they can apply the Job Growth Incentive by six months to December 2022.
Aside from this, the aviation sector will also receive extended assistance to ensure the safety of the public health and airports while preserving its capabilities. These sectors need significant support to help them survive in the current period, where prices increase.
a. $560 Million Household Support Package
The package will have double GST Vouchers-U Save rebates for eligible households until the end of the year and receive up to $285 rebates. A home with children 21 years old below will receive a $200 top-up into Child Development Account, Edusave Account, or Post-Secondary Education Accounts. In addition, a $100 CDC will be distributed to all Singaporean households for their daily expenses and used in participating hawkers and shops.
b. Support for Businesses
Due to the higher rates of electricity and materials, the cashflows in business raised concerns. To provide them, the Temporary Bridging Loan will extend the Trade Long Scheme along with the revised parameters from April until September 2022. The access for project loans will extend to domestic construction for a year, starting from April 1 to March 31, 2022.
a. Digital Capabilities
The government will be investing in digital capabilities and services, such as upgrading the broadband infrastructure and increasing the broadband into 6G and other future technologies. The digital transactions will be able to offer safe and hassle-free. A $200 million will focus on digital capabilities in business and workers.
As the years pass, the government's expenditure increases to sustain the needs and ensure the future. The government has to go through the innovation, research, and development capabilities for the upcoming years.
To sustain R&D Foundations $25 Billion to be given for their Research, Innovation, and Enterprise or the RIE2025 strategy and provide more support in local firms undertaking R&D's activity.
It will also support collaborations by increasing the capacity of centres to provide research and innovation support to SMEs. This innovation will be on agri-Tech, construction, food manufacturing, precision engineering, and retail.
c. Local Enterprises
$600 million worth to expand their ranges under the PSG and raise SMEs' productivity. Singapore Global Enterprises will assist local enterprises with the initiative to invest in overseas markets, fostering partnerships and innovation.
A Singapore Global executive programme will help enterprises attract and nurture future leaders in the industry and overseas, mentorship, and peer support networks.
Aside from this assistance, an M&S Loan Programme will help them with their financial needs through the Enterprise Financing Scheme, expanding from April to March 2026. The Trade Loan will maintain in 70% risk-share.
Climate change is a global crisis that increases each year, and it needs movement. It includes achieving net-zero emissions of carbon by or around mid-century. To accomplish the net-zero, the price of carbon will increase soon. The current carbon price is $5 per ton and remains until 2023 but will increase to $25 per tonne in 2024 and 2025 and will be $45 per tonne in 2026 1st 2027.
A Singapore Green Plan 2030 will launch to support the green transition. By 2040, the internal combustion vehicles will be phased out and provide electric vehicle (EVs) adaptation.
Renewing Social Impact
a. Uplift Lower Wage Income
The Progressive Wage Credit Scheme or PWCS will provide the lower-wage income household to uplift them. Under the wage, the salary will increase between 2022 to 2016. The funding rate for workers who earn $2,500 will be 50% in two years and 30% for the next two years before tapers to 15%. The PWCS will start in a $2 billion fund this year and provide a wage increase in the next few years.
[i]b. Enhance Workfare Income
Workers will benefit from Workfare that will rise from $2,300 to $2500 per month, which will begin in January 2023.
Younger workers aged 30 to 34 can start saving for their housing and retirement and receive a $2,100 annual payout. While 35 to 44 years old will have a $3,000 and 45 to 59 years old will be $3,600 as the maximum annual payout.
The highest payout into 60 and above will receive an annual of $4,200 along with PWDs regardless of their age.
c. Retirement Adequacy
The contribution rates for workers aged from 55 to 70 years old will be increased under the recommendation of Tripartite Workgroup on Older Workers this year and provide a CPF Transition Offset this year. They will increase for the next few years.
TheCPF Basic Retirement Sum (BRS) will rise by 3.6 % per year in five cohorts aged 55 from 2023 to 2027. While a person that set-asides BRS when they turned 55 in 2017 will receive a $1,000 payout monthly when they are aged 65 years old. These payouts will continue for the rest of their lives.
d. Invest in Children
Low-income families will provide by Fresh Start Housing Scheme to help them purchase a home. It will also support them towards homeownership. It will help children to provide additional support in conditions at home.
KidSTART programme will also provide upstream for the eligible families with young children. Under the program, parents and caregivers will support the development of shields at home, preschool, and community.
The GST rate and offset Measures
GST increase won't be 9% and delayed. The GST hike will slowly increase this year to 8%, increasing to 1% next year and another 1% increase in January 2024.
On the other hand, the government will be implementing offset measures or the Assurance package. The package includes additional expenses in the eligible household for five years, while lower incomes will be worth ten years. Every senior will get $700-$1600 as their cash payouts, and the seniors included on less-well will have their additional payments between S$600-S$900 from 2023 until 2025.
Singaporeans under 21 years old and older than 50 years old will have a $450 Medisave top-up. There will also be a permanent GST Vouchers scheme for the higher income threshold in a higher cash quantum of S$500.