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Budget: Key points delivered
SINGAPORE: Singapore's Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam delivered his Budget Speech on Friday in Parliament.
Among the significant moves include focusing on reducing the country's dependence on foreign workers, focusing on improving productivity, giving Singapore companies incentives to hire older workers and raising the compulsory Central Provident Fund (CPF) contributions for older workers.
Beyond these business initiatives, Mr Tharman also announced a slew of measures on the social front to help deal with income inequality and build what he called "an inclusive society".
These covered the elderly, the lower income and the disabled.
The Singapore government is also doubling its expenditure on healthcare from S$4 billion to S$8 billion over the next five years.
As part of measures to restructure the economy, Mr Tharman announced significant reductions in the maximum proportion of foreign workers whom Singaporean companies can hire in the manufacturing and services sectors.
These will take effect from July 2012 and be phased in over two years.
"We have no alternative but to slow down the growth of our foreign workforce," Mr Tharman said.
To help companies cope with this cut, which could lead to rising labour costs, Mr Tharman announced several schemes to help
small and medium enterprises (SMEs) manage the transition.
These include a new one-off SME cash grant and an enhanced Special Employment Credit to encourage employers to hire older Singaporean workers.
The credit is a cash payout of the percentage of wages for workers aged 50 and above, given to employers.
In social policies S$3.6 billion will be set aside over the next five years for the GST Voucher scheme.
This will become a permanent feature of the Singapore Budget, and essentially will give cash, top-ups to national heath savings schemes and utility rebates for the lower income.
These vouchers fully offset the GST that the lower half of retiree households pay on their expenses.
Another key change is the national pension savings scheme, the CPF, which will see contribution rates of workers aged between 50 and 65 years old be raised by between 2.5 and 0.5 per cent.
The aim is to have the CPF contribution rates for workers aged between 50 and 55 raised by six percentage points eventually, to 36 per cent.
Mr Tharman said: "We will have to watch how the employment market develops before making any further moves."
To help the elderly unlock their assets, there will be a S$20,000 Silver Housing Bonus, to help those over 55 who sell their flats and move to smaller units receive cash for their day-to-day expenditure.
Net sales proceeds will have to be pumped back into their CPF accounts, which will be matched dollar-for-dollar by the government, up to $20,000.
To deal with a key issue of improving the public transport system, the government will pump in S$1.1 billion to ramp up bus capacity and improve service levels, by adding 800 more buses on the roads by 2016.
"Our mission is to build an inclusive society and a stronger Singapore," Mr Tharman said.
"A whole array of social and economic strategies is aimed at achieving this defining goal.
"It means upgrading our economy and developing deeper skills, so that we can sustain growth, create better jobs in every vocation and enable Singaporeans to earn better incomes.
"It means doing more to help children from poorer homes overcome early disadvantages, find their strengths and develop to their fullest potential, so that we keep social mobility up."
- CNA/wk
Budget: Key points delivered
SINGAPORE: Singapore's Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam delivered his Budget Speech on Friday in Parliament.
Among the significant moves include focusing on reducing the country's dependence on foreign workers, focusing on improving productivity, giving Singapore companies incentives to hire older workers and raising the compulsory Central Provident Fund (CPF) contributions for older workers.
Beyond these business initiatives, Mr Tharman also announced a slew of measures on the social front to help deal with income inequality and build what he called "an inclusive society".
These covered the elderly, the lower income and the disabled.
The Singapore government is also doubling its expenditure on healthcare from S$4 billion to S$8 billion over the next five years.
As part of measures to restructure the economy, Mr Tharman announced significant reductions in the maximum proportion of foreign workers whom Singaporean companies can hire in the manufacturing and services sectors.
These will take effect from July 2012 and be phased in over two years.
"We have no alternative but to slow down the growth of our foreign workforce," Mr Tharman said.
To help companies cope with this cut, which could lead to rising labour costs, Mr Tharman announced several schemes to help
small and medium enterprises (SMEs) manage the transition.
These include a new one-off SME cash grant and an enhanced Special Employment Credit to encourage employers to hire older Singaporean workers.
The credit is a cash payout of the percentage of wages for workers aged 50 and above, given to employers.
In social policies S$3.6 billion will be set aside over the next five years for the GST Voucher scheme.
This will become a permanent feature of the Singapore Budget, and essentially will give cash, top-ups to national heath savings schemes and utility rebates for the lower income.
These vouchers fully offset the GST that the lower half of retiree households pay on their expenses.
Another key change is the national pension savings scheme, the CPF, which will see contribution rates of workers aged between 50 and 65 years old be raised by between 2.5 and 0.5 per cent.
The aim is to have the CPF contribution rates for workers aged between 50 and 55 raised by six percentage points eventually, to 36 per cent.
Mr Tharman said: "We will have to watch how the employment market develops before making any further moves."
To help the elderly unlock their assets, there will be a S$20,000 Silver Housing Bonus, to help those over 55 who sell their flats and move to smaller units receive cash for their day-to-day expenditure.
Net sales proceeds will have to be pumped back into their CPF accounts, which will be matched dollar-for-dollar by the government, up to $20,000.
To deal with a key issue of improving the public transport system, the government will pump in S$1.1 billion to ramp up bus capacity and improve service levels, by adding 800 more buses on the roads by 2016.
"Our mission is to build an inclusive society and a stronger Singapore," Mr Tharman said.
"A whole array of social and economic strategies is aimed at achieving this defining goal.
"It means upgrading our economy and developing deeper skills, so that we can sustain growth, create better jobs in every vocation and enable Singaporeans to earn better incomes.
"It means doing more to help children from poorer homes overcome early disadvantages, find their strengths and develop to their fullest potential, so that we keep social mobility up."
- CNA/wk
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