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#SGBudget2019: Gov expenditure to increase in key areas such as defence & security, technology & enterprise, and social spending

In a bid to manage the ever-growing threats of cybersecurity breaches and terrorism in the Southeast Asian region, as well as to mitigate the negative effects of a globalised economy and workforce, the Singapore Government will increase its expenditure in key areas such as defence and security, technology and enterprise, and social spending to uplift the livelihoods of Singaporeans.

Finance Minister Heng Swee Keat, in presenting the Singapore Budget 2019 in Parliament on Monday (18 Feb) listed the following measures in managing contemporary challenges faced by Singaporeans and the nation as a whole:

Managing cybersecurity and terrorism threats through strengthening defence and security measures

  • Incorporating digital defence as an additional pillar to Total Defence in tandem with the Smart Nation vision;
  • Establishing a Home Team Science & Technology agency by the Ministry of Home Affairs to combat online disinformation and cyber-terrorism; and
  • Allocating 30 per cent of the Government’s total expenditure to buttress defence, security, and diplomacy efforts.

Encouraging economic growth, particularly the scaling – minimising costs and maximising profits – of enterprises and firms, through innovation and technological developments

For companies:

  • Providing customised assistance to local firms via Scale-up SG Strategy and Innovation Agents Programme;
  • Offering better financing options via SME Co-Investment Fund III (additional $100m to set-up fund), Enterprise Financing Scheme, and the extension of SME Working Capital Loan Scheme for two more years; and
  • Using technological tools via the extension of the SMEs Go Digital Programme and Automation Support Package (ASP) for two more years.

For employees:

  • Upskilling and reskilling workers together with labour unions;
  • Creating new and improved Professional Conversion Programmes (PCPs) to help workers catch up with new areas of economic growth;
  • Extending the Career Support Programme for two more years.
  • Managing the influx of foreign labour supply into Singapore by:
    – Reducing the services sector Dependency Ratio Ceiling (DRC) in two steps, from 40 % to 38 % on 1 January 2020, and to 35 % on 1 January 2021;
    – Enhancing funding support under Enterprise Development Grant & Productivity Solutions Grant, which will be extended until the financial year 2022 to help firms adjust to meet changes; and
    – Deferring the increase in Foreign Worker Levy rates for the Marine Shipyard and Process sectors.

Research and innovation:

  • Channelling $4.6bil into supporting Singaporean workers over the next 3 years in terms of innovation;
  • Establishing a Centre of Innovation in Aquaculture at Temasek Polytechnic to ensure sustainability and readiness of local food sources;
  • Establishing a Centre of Innovation in Energy; and
  • The merging of current local and overseas internships into a single Global Ready Talent Programme.

Social spending, featuring: Workfare Bicentennial Bonus, Merdeka Generation Package, MediSave top ups

In line with the Government’s aim to uplift the livelihoods of Singaporeans, particularly the elderly, vulnerable people, and low-income earners, the following measures were suggested:

  • Enhancing the Workfare Income Supplement (WIS) scheme for the bottom 20% of Singaporean workers using approximately $1bil annually, which entails:
    1. Raising the qualifying income cap from the current $2,000 to $2,300 per month starting January next year;
    2. Increasing the maximum annual payouts by up to $400, with older workers receiving higher increases, e.g. Workers aged 60 and earning $1,200 a month will now receive $4,000 per year from WIS, or almost 30% of their wages;
  • Raising cash assistance rates for the ComCare Long-Term Assistance scheme;
  • Allocating S$5.1 bil into a new Long-Term Care Support Fund, which will become the source of CareShield Life subsidies and other long-term care support measures such as ElderFund; and
  • Providing a MediSave top-up of S$100 annually for the next 5 years for Singaporeans aged 50 and above in 2019 who do not receive Merdeka Generation Package (MGP) or Pioneer Generation Package (PGP).

The MGP will cover around 500,000 Singaporeans born in the 1950s and obtained citizenship by 1996, and those born in 1949 or earlier and obtained citizenship by 1996 but do not receive the PGP. Seniors eligible for the package will receive:

  • Additional MediShield Life premium subsidies for life, starting from 5% of their MediShield Life premiums;
  • MediSave top-ups of $200 annually, starting this year until 2023;
  • $100 top-up to their PAssion Silver EZ-Link cards;
  • A participation incentive of $1,500 for joining CareShield Life, effective 2021; and
  • Special CHAS (Community Health Assist Scheme) subsidies and other additional subsidies for outpatient care for life.

Lower to middle-income Singaporeans who are CHAS Orange cardholders will receive subsidies for common illnesses, and CHAS will be extended to serve all Singaporeans for chronic conditions regardless of income level.

A CPF top-up of up to $1,000 for eligible Singaporeans aged 50 to 64 years old is also expected to be rolled out this year.

The top up aims to benefit around 300,000 senior citizens of the aforementioned age range who have less than $60,000 of retirement savings in their CPF accounts.

The top-up will be credited into the Special Account for members aged 50 to 54, and the Retirement Account for members aged 55 to 64.

Mr Heng noted that “the majority of these recipients will be women”, as “many of them left the workforce early, and took up important roles as mothers, caregivers, or housewives”.

“As a result, they had fewer years to build up their savings. This top-up is a way to recognise their contributions and to help them save more,” he added.

Workfare Bicentennial Bonus:

In conjunction with the Government’s decision to commemorate 200 years of Stamford Raffles’ arrival in Singapore, $200m will be channelled into a Bicentennial Community fund for the purpose of $-for-$ matching for donations to IPCs.

$1.1bil will be allocated to Singaporeans as a Workfare Bicentennial Bonus, and Singaporeans will receive an additional 10% of the WIS payment for work done last year, with a minimum payment of $100.

“This will be given in cash,” said Mr Heng.

Public transport: Vouchers for low-income families

This year, the Government intends to channel an additional $10mil into the Public Transport Fund “to continue helping commuters in need with their transport expenses”.

Public Transport Vouchers will be distributed to lower-income families as a part of the effort to reduce the commuting expenses of lower-income families.

Public housing: Rebates for service charges for HDB residents 

A Service and Conservancy Charges (S&CC) rebate, which will cost $132mil, will be given to eligible HDB households.

Approximately 930,000 Singaporeans residing in will receive between one and a half, and three and a half (1.5 to 3.5) months.

In concluding the presentation of Budget 2019, Mr Heng gave the assurance that the Government is “investing to keep Singapore safe and secure”.

“We are restructuring our economy to enable our businesses and workers to thrive. We are building a more caring and inclusive society, and we are building Singapore as a global city and a home for all.

“Budget 2019 lays out this Government’s approach to build a strong, united Singapore. We nurture our young, take care of our seniors, expand opportunities for our people to be at their best, and to live in a liveable, endearing home, secure and globally connected,” he said.