SINGAPORE — During his Budget 2023 speech on 14 February, Deputy Prime Minister Lawrence Wong announced a suite of support measures to help Singaporeans cope with inflation.
Singaporeans will receive higher cash payouts under the Goods and Services Tax (GST) Voucher scheme and Assurance Package to help offset higher inflation and cushion the impact of the increased GST rates.
The cash payout will increase from S$500 to S$700 this year and to S$850 from next year for eligible Singaporeans residing in homes with an annual value of S$13,000 or below.
Mr Wong, who is also Finance Minister, said that the enhanced GST Voucher cash payouts will benefit around 1.5 million adult Singaporeans annually. The Assurance Package’s cash payouts will also be increased for eligible Singaporeans.
The government will also provide a one-time cost-of-living special payment disbursed in June, ranging from S$200 to S$400, depending on the recipient’s annual assessable income.
In addition, eligible households will receive S$300 in Community Development Council (CDC) vouchers in January 2024.
The enhancements to the GST Voucher scheme and Assurance Package, along with these measures, will provide comprehensive help for most Singaporean households, covering their increased spending due to inflation and the higher GST rate, said Mr Wong.
The enhancements to the Assurance Package will cost S$3 billion and raise government expenditure on the package to S$9.6 billion.
Eligible Singaporeans aged 55 and above will receive a cost-of-living seniors’ bonus of between S$200 and S$300 in June. The U-Save rebates will also be doubled over the next three tranches of disbursement in April, July, and October, providing eligible households with up to S$760 in U-Save rebates in 2023.
Additionally, households with children will receive a top-up in their Child Development Account (CDA) or Edusave or Post-Secondary Education account, ranging from S$300 to S$400.
Mr Wong noted that the government’s commitment to the enhancements reflected the challenging period of higher prices that Singaporeans face, but he also expressed concerns that it was not fiscally sustainable to rely heavily on government support to cope with inflation.
Despite the current inflation surge moderating, Mr Wong emphasized that inflation may stabilize at a higher trend level than in the last few decades, both globally and in Singapore.
He noted that the country did not have much influence over the global inflation picture but emphasized that the best strategy to cope with inflation is to improve productivity and competitiveness, which will result in higher worker earnings that can make up for the higher prices.
He stressed the importance of economic restructuring and transformation, helping businesses raise productivity, and workers upgrade their skills.