| Bumper $6.4b surplus allows Govt to make cash gifts, with more for those most in need | |||
| By Lydia Lim, Senior Political Correspondent | |||
This year's Budget comes stuffed with personal income tax rebates of up to $2,000, cash gifts all round in the form of Growth Dividends, and top-ups to Medisave. The bounty is made possible by a bumper budget surplus of $6.45 billion from last year, thanks to excellent economic growth and a buoyant property market. Mr Tharman said that this good growth did not happen by chance. Rather, it was due to 'broad-ranging efforts to restructure the economy, labour market and fiscal system'. 'This is not a story of an old economy growing quickly, but of a new economy emerging out of the old. 'It is about how we are attracting new and cutting-edge investments, capitalising on opportunities in new growth industries and markets abroad, upgrading our workers' skills and competing at an advantage,' he said.
Children from lower- and middle-income families will also get the biggest top-ups to their post-secondary education accounts. Older Singaporeans aged 51 and above will receive top-ups of up to $450 to their CPF Medisave accounts, to help with medical bills and higher insurance premiums. There will be more help for society's neediest too. They will benefit from higher Public Assistance payouts, a $400 million injection into the ElderCare Fund for older folk needing long-term care, and $200 million top-ups each to the MediFund and Comcare Fund, to help the poor with medical bills, jobs and their children's needs. Mr Tharman identified two key challenges going forward: helping lower-income workers cope with continued pressures on their wages and helping people save more for retirement. Lower- and middle-incomers nearing retirement will also receive a special sign-on bonus of up to $4,000 when they join the new CPF Life annuities scheme. While handing out hongbao to boost people's incomes and help them cope with rising costs, the Budget also took the long view and focused on measures to develop the capabilities of people and enterprises. Mr Tharman set his sights high. The target was to help foster a future where Singapore stayed 'in the top league of global cities for years to come'. Businesses will gain from tax deductions and incentives tied to research and development done here, and more liberal tax exemptions for start-ups. But contrary to expectations, there were no further cuts to personal income tax rates though Mr Tharman did finally abolish estate duty. Mr Tharman also addressed a top worry for many - inflation. He gave the assurance that the Government has in place strategies to ensure that Singapore continues to have lower inflation than the rest of the world over the medium term. 'We have achieved that for many years now, and will keep it that way in future. The Government is also helping lower-income Singaporeans and those in need directly with the immediate problems they face,' he said. The most fundamental strategy is to keep the economy competitive, because education and training, new investments, job creation and good income growth are 'the best offset to global inflation', he added. MP Inderjit Singh, who chairs the Government Parliamentary Committee for Finance and Trade and Industry, said the Budget went a long way to address inflation worries for lower- and lower-middle income Singaporeans. But businesses would be disappointed, he added, as they were looking to the Government for help to address cost increases that they find difficult to cope with. Economists and tax consultants said that with such healthy surpluses, Singapore is well positioned to further trim tax rates if there is a need. | |||
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