Here we are again.
In the space of two hours and six minutes on 18th February, Finance Minister Heng Swee Keat announced the Budget 2019 – a breakdown of how the government plans to use our nation’s funds for the year ahead.
Naturally, this is a hot-button topic, and as with every other year, financial analysts all over Singapore and news sites have been dissecting the budget plan and sharing their insights.
As Minister Heng mentioned, this was a very lengthy speech and if you have not been keeping up with the news, delving into two hours’ worth of content and technical jargon might be a daunting task – especially if the news feels largely unrelatable to you.
In this article, we have picked out and summarised the details from the Budget that will directly affect you. You can thank us later.
Building a Strong, United Singapore
The theme for Budget 2019 is “Building a Strong, United Singapore”.
With a tight fiscal year forecasted by the government for the year ahead– the government has projected an overall budget deficit of S$3.5 billion for 2019 – Singaporeans will need to stay resolute and united through the year.
Aside from an increase in the total expenses of government ministries, money being used for the Merdeka Generation Package and the Community Health Assist Scheme (CHAS) are the main contributors to the projected deficit.
Minister Heng goes on to preach about the importance of not borrowing money to offset our expenditures; citing that doing so is “not the Singaporean way”.
“Singapore must not do this, as such borrowing shifts the burden of paying for today’s needs onto future generation”.
But aside from this, Budget 2019 generally foreshadowed a positive year ahead for almost everyone.
In 2018, our economy performed strongly and grew by 3.2 per cent – resulting in an excess of S$2.1 Billion.
If you are unfamiliar with the High-Speed Rail (HSR) situation with Malaysia, the project has been postponed for two years, and this has resulted in a significant amount of extra cash flow in our GDP.
The postponement of the project has contributed heavily to the extra $2.1 Billion, and you are about to find out why we ought to thank Malaysia for this.
Money for everyone
The government has decided to reward us all with some money. They intend to do so with the following benefits:
As we are approaching the 200th year of modern Singapore, the government has pledged S$1.1 billion as a bonus for families; with the aim to assist the low-income families.
The benefits are as follows:
• On top of the annual GST Voucher Payment, lower-income Singaporeans can expect to receive another S$150 to S$300 through the GST Voucher scheme – depending on the financial status of their family.
• Every Singaporean will enjoy 50% in personal income tax rebates for the Year of Assessment in 2019, subject to a cap of S$200.
• Students in both primary and secondary schools will receive S$150 in Edusave top-ups.
• Students aged 17 to 20 will receive either S$250 or S$500 in their Post-Secondary Education Accounts (PSEA) – depending if their family’s annual income exceeded S$13,000 in 2018.
• If you worked and received the WorkFare Income Supplements in 2018 will receive an additional 10% as Workfare Bicentennial Bonus. This payment will range from S$100 to a maximum of S$360 in cash; based on work status and age.
• Alongside the Bicentennial Bonus cash and various top-ups, Singapore households will also enjoy an additional year of Service and Conservancy Charges (S&CC) rebates.
• Singaporeans aged 50 to 64 who have less than S$30,000 or between S$30,000 to S$60,000 in their CPF accounts will receive a one-time CPF top-up between S$300 to S$1,000.
Do you now see why we should all be thankful to our lovely neighbours?
Expansion of Community Health Assist Scheme (CHAS)
The CHAS currently allows Singaporeans from lower- and middle-income households to receive subsidies for medical and dental care at clinics, hospitals, and dental clinics all over Singapore.
Presently, the government has agreed to enhance the scheme; ensuring that regardless of income, the CHAS now covers every Singaporean for chronic conditions. Higher subsidies will be given for severe chronic conditions and subsidies will even be dispensed for common illnesses to CHAS Orange cardholders – this was previously only applicable to CHAS Blue and Pioneer Generation members.
Rise in GST
Lastly, for the not-so-positive news.
Minister Heng mentioned during the previous Budget that there are plans on increasing the GST to 9%. Heng addressed this again this year; indicating that this would be implemented somewhere between 2021 to 2025. It is important to note that the government will attempt to ease the impact of the increase with the bonuses mentioned above and by augmenting the permanent GST Voucher scheme for lower-income households.
On top of that, the GST Import Reliefs for travellers will be tightened.
Travellers who spend less than 48 hours outside Singapore, the relief cap will be reduced from $150 to $100 – while those who spend 48 hours or more outside of Singapore will see the relief reduced from $600 to $500. The GST Import Reliefs will likely affect folks who travel regularly to Malaysia for shopping.
Also, alcohol duty-free concessions for travellers will be tightened from 3 litres to 2 litres from 1st April 2019.
So there you have it: an extremely summarised version of Budget 2019.
TLDR; Everyone can expect bonus cash from the government, extended subsidies for medical expenses, a hike in GST in the coming years, and less alcohol when returning home from the airport. Praise Malaysia!