SINGAPORE — The Singapore government has announced that a new S$1.5 billion support package will be provided to Singaporean households to deal with rising cost of living in the city state.
Presented by Deputy Prime Minister Lawrence Wong, who is also the Finance Minister on Friday, the announced package consists of:
- A special cost-of-living payment of up to S$500 in December for 2.5 million eligible adult Singaporeans. The payment will be made together with the GST Assurance Package cash payout that was announced at Budget 2022.
- Additional S$100 Community Development Council (CDC) Voucher for every Singaporean household. This is on top of the S$200 CDC vouchers announced during the Budget 2022. A total of S$300 of such vouchers will be given out in January.
- 600,000 Public Transport Voucher (PTV) of S$30 for resident households with less than S$1,600 monthly income.
On top of the handouts, the Ministry of Education will also increase the income eligibility thresholds for financial assistance schemes to defray school expenses for more students from January 2023. It will also enhance the bursary quantum for full-time Institute of Technical Education (ITE) students.
There is also an additional subsidy of about S$200 million in 2023 allocated to cover the 10.6%-point fare increase that will be carried over to future fare review exercises.
Mr Wong said the latest measures have been designed with two groups of Singaporeans in mind, who have been affected by higher inflation — The lower-income Singaporeans and elderly retirees with no income from work.
This builds on the support measures announced in Budget 2022, April 2022 and June 2022 to offset the impact of the upcoming one percentage point hike in Goods and Service Tax from 7 to 8 per cent on 1 Jan 2023.
This new package, together with earlier rounds of support measures rolled out this year, will fully cover the increase in cost of living for lower-income households on average, and more than half of the increase in cost of living for middle-income households on average this year, said the Ministry of Finance (MOF).
MOF said there will be no draw on past reserves for the new support package. The package will be funded from the better-than-expected fiscal out-turn in the first half of FY2022.
The Singapore government had earlier announced an increase of two per cent to the Goods and Service Tax (GST) on 23 February this year.
The delayed GST hike is touted to bring in about 0.7 per cent of Singapore’s gross domestic product in revenue annually — about S$3.5 billion — when the full hike is in place in 2024.
The increased revenue is said to go towards supporting healthcare expenditure and to take care of senior citizens while other areas of social spending rise as well.
Workers’ Party, the leading Opposition political party in Singapore, however had earlier argued in Parliament against the GST hike at a time of heightened inflation risk and voiced other options for revenue generation.
