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from straitstimes.com:
Singapore Budget 2021: Follow ST’s live coverage on DPM Heng’s speech on Feb 16
SINGAPORE - This year's Budget, which will be unveiled by Deputy Prime Minister and Finance Minister Heng Swee Keat on Tuesday (Feb 16), comes as Singapore has spent about a year tackling the Covid-19 pandemic and the subsequent economic fallout.
Mr Heng has said that helping workers and firms adapt, innovate and grow will be a key priority for Budget 2021 - his sixth Budget speech.
The Government will also continue to support workers and businesses, especially those in hard-hit sectors, he said.
Find out how and why the Budget matters to you with The Straits Times, which will be offering live coverage of this year's announcements as they are delivered in Parliament from 3pm.
Real-time updates
Our live show, starting at 2.55pm, will have a live stream of Mr Heng's speech. Get instant, bite-size updates on our special live blog on straitstimes.com.
Watch video highlights of the speech, and read in-depth analyses on what the Budget means for you on our various platforms.
Stay updated through our Facebook and Twitter accounts, as well as our Telegram channel, and visit our microsite for more reports.
Special-edition newsletter
Get Budget highlights and a summary of key announcements delivered to your e-mail inbox right after the speech. Sign up now for the special-edition newsletter.
Live show
At 7.30am on Tuesday, tune in to Money FM 89.3 as ST associate editor Vikram Khanna talks about what to expect from the Budget.
After the Budget speech ends, join ST associate editor Ven Sreenivasan and a panel of industry experts on ST's Facebook, YouTube and Twitter channels, as they discuss the key announcements with host Michelle Martin.
The discussion, titled "Budget 2021: Resetting Singapore", will be simulcast on Money FM 89.3.
Readers can also look out for Web specials, explainers and interactive graphics on our website, as well as Budget special reports in the print edition of ST on Wednesday.
Roundtable discussion
A roundtable discussion, organised by ST and UOB, will be held a day after the Budget.
The panel will comprise Mr Desmond Choo, assistant secretary-general of the National Trades Union Congress and an MP for Tampines GRC; Mr Douglas Foo, president of the Singapore Manufacturing Federation and vice-chairman of the Singapore Business Federation; UOB economist Barnabas Gan; and Professor Hoon Hian Teck, dean of Singapore Management University’s School of Economics and a Nominated MP.
It will be moderated by Mr Khanna.
Highlights will be broadcast on ST's Budget microsite next Sunday.
Singapore Budget 2021: Follow ST’s live coverage on DPM Heng’s speech on Feb 16
SINGAPORE - This year's Budget, which will be unveiled by Deputy Prime Minister and Finance Minister Heng Swee Keat on Tuesday (Feb 16), comes as Singapore has spent about a year tackling the Covid-19 pandemic and the subsequent economic fallout.
Mr Heng has said that helping workers and firms adapt, innovate and grow will be a key priority for Budget 2021 - his sixth Budget speech.
The Government will also continue to support workers and businesses, especially those in hard-hit sectors, he said.
Find out how and why the Budget matters to you with The Straits Times, which will be offering live coverage of this year's announcements as they are delivered in Parliament from 3pm.
Real-time updates
Our live show, starting at 2.55pm, will have a live stream of Mr Heng's speech. Get instant, bite-size updates on our special live blog on straitstimes.com.
Watch video highlights of the speech, and read in-depth analyses on what the Budget means for you on our various platforms.
Stay updated through our Facebook and Twitter accounts, as well as our Telegram channel, and visit our microsite for more reports.
Special-edition newsletter
Get Budget highlights and a summary of key announcements delivered to your e-mail inbox right after the speech. Sign up now for the special-edition newsletter.
Live show
At 7.30am on Tuesday, tune in to Money FM 89.3 as ST associate editor Vikram Khanna talks about what to expect from the Budget.
After the Budget speech ends, join ST associate editor Ven Sreenivasan and a panel of industry experts on ST's Facebook, YouTube and Twitter channels, as they discuss the key announcements with host Michelle Martin.
The discussion, titled "Budget 2021: Resetting Singapore", will be simulcast on Money FM 89.3.
Readers can also look out for Web specials, explainers and interactive graphics on our website, as well as Budget special reports in the print edition of ST on Wednesday.
Roundtable discussion
A roundtable discussion, organised by ST and UOB, will be held a day after the Budget.
The panel will comprise Mr Desmond Choo, assistant secretary-general of the National Trades Union Congress and an MP for Tampines GRC; Mr Douglas Foo, president of the Singapore Manufacturing Federation and vice-chairman of the Singapore Business Federation; UOB economist Barnabas Gan; and Professor Hoon Hian Teck, dean of Singapore Management University’s School of Economics and a Nominated MP.
It will be moderated by Mr Khanna.
Highlights will be broadcast on ST's Budget microsite next Sunday.
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from msn news:
Heng Swee Keat thanks wife for understanding he has to work on V-Day
Singapore—Sometimes love means having to make a great many sacrifices, which perhaps the spouses of public servants know all too well.
On Sunday (Feb 14), Finance Minister Heng Swee Keat penned an appreciation post to his wife, who has had to put up with his busy schedule amid this festive Chinese New Year and Valentine’s Day season.
Mr Heng, who is also Singapore’s Deputy Prime Minister, is in the middle of what for him may be the busiest time of the year, preparing the country’s annual budget.
On most years, putting the budget together is serious business indeed.
And during a pandemic, with all the stressors on the economy, we can only imagine that a great deal of hard work has been done behind the scenes by Mr Heng and his team at the Ministry of Finance (MOF), leading up to Budget Day on Tuesday, Feb 16.
Last year, due to the pandemic, the Government rolled out five Budgets to boost the economy and extend aid to those affected.
In January, Mr Heng quipped at the The Straits Times Global Outlook Forum that he wished that for this year, there will be only one Budget.
And so, while the rest of us were likely celebrating (albeit more low-key this year) Chinese New Year, and enjoying romantic dinners with our significant others, the Minister wrote in a Facebook post that he enjoyed no such luxury.
“During one of my recent walkabouts, I met a second-generation stallholder selling flowers in the market. She showed me the beautiful roses she brought from overseas for Valentine’s Day. They were beautiful, and so I ordered some for my wife.”
He also thanked the MOF officers and those from other Government agencies who have also had to work over the long holiday weekend.
“A big thank you to all and your loved ones!,” he wrote.
And this busyness during a festive time, apparently, happens regularly.
“Budget Day usually takes place around mid-February, so that we can complete the entire process in time for the Financial Year, which starts on 1 April. But the consequence is that Budget preparations often overlap with Valentine’s Day, and Chinese New Year in some years,” Mr Heng explained, before greeting everyone.
“I hope that everyone can spend some time with your loved ones, and express your love for people in your life, today and every other day!
Happy Valentine’s Day!”
Mr Heng, 59, has been married to Ms Chang Hwee Nee since 1988. Ms Chang is the CEO of the National Heritage Board. They have two children.
Heng Swee Keat thanks wife for understanding he has to work on V-Day
Singapore—Sometimes love means having to make a great many sacrifices, which perhaps the spouses of public servants know all too well.
On Sunday (Feb 14), Finance Minister Heng Swee Keat penned an appreciation post to his wife, who has had to put up with his busy schedule amid this festive Chinese New Year and Valentine’s Day season.
Mr Heng, who is also Singapore’s Deputy Prime Minister, is in the middle of what for him may be the busiest time of the year, preparing the country’s annual budget.
On most years, putting the budget together is serious business indeed.
And during a pandemic, with all the stressors on the economy, we can only imagine that a great deal of hard work has been done behind the scenes by Mr Heng and his team at the Ministry of Finance (MOF), leading up to Budget Day on Tuesday, Feb 16.
Last year, due to the pandemic, the Government rolled out five Budgets to boost the economy and extend aid to those affected.
In January, Mr Heng quipped at the The Straits Times Global Outlook Forum that he wished that for this year, there will be only one Budget.
And so, while the rest of us were likely celebrating (albeit more low-key this year) Chinese New Year, and enjoying romantic dinners with our significant others, the Minister wrote in a Facebook post that he enjoyed no such luxury.
However, the day did not go without a loving gesture from Mr Heng, who also posted a photo of the bouquet of flowers he sent his wife.
“During one of my recent walkabouts, I met a second-generation stallholder selling flowers in the market. She showed me the beautiful roses she brought from overseas for Valentine’s Day. They were beautiful, and so I ordered some for my wife.”
He also thanked the MOF officers and those from other Government agencies who have also had to work over the long holiday weekend.
“A big thank you to all and your loved ones!,” he wrote.
And this busyness during a festive time, apparently, happens regularly.
“Budget Day usually takes place around mid-February, so that we can complete the entire process in time for the Financial Year, which starts on 1 April. But the consequence is that Budget preparations often overlap with Valentine’s Day, and Chinese New Year in some years,” Mr Heng explained, before greeting everyone.
“I hope that everyone can spend some time with your loved ones, and express your love for people in your life, today and every other day!
Happy Valentine’s Day!”
Mr Heng, 59, has been married to Ms Chang Hwee Nee since 1988. Ms Chang is the CEO of the National Heritage Board. They have two children.
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from straitstimes.com:
Budget 2021: S'pore to impose GST on low-value goods bought online imported by air or post
SINGAPORE - Low-value goods bought online and imported by air or post will be subject to the goods and services tax (GST) from Jan 1, 2023.
GST will also be extended to imported non-digital services for consumers, such as those involving live interactions with overseas providers of fitness training, counselling and tele-medicine.
This will help to level the playing field for local businesses to compete effectively, said Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16).
Low-value goods that are worth $400 or less and imported via air or post are currently not subject to GST to facilitate clearance at the border, but the tax is paid on such goods bought here.
All goods imported via land or sea are already taxed, regardless of value.
DPM Heng said: "One aspect of a fair and resilient tax system is ensuring a level playing field for our local businesses vis-a-vis their overseas counterparts. This is especially relevant, as e-commerce for sales of goods and services is growing."
He noted that other jurisdictions such as Australia, New Zealand and the European Union have already implemented or announced plans to put in place the equivalent of GST on such goods.
"Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers," he added.
This new taxation will be effected through the Overseas Vendor Registration regime, which requires overseas suppliers and electronic marketplace operators that make significant sales of digital services to local consumers to register for GST.
These registered suppliers and operators will then charge GST on their sales of low-value goods that are delivered over air or post to local consumers.
Shoppers will have to pay the GST when they buy from these overseas suppliers, just as they will be charged when they buy such items from local businesses.
Meanwhile, local GST-registered businesses here will have to self-account for GST when they import such goods as well and pay the tax.
GST was already extended to cover all imported digital services in Budget 2018 and kicked off from Jan 1 last year.
These include video and music streaming services, apps, software and online subscription fees.
Budget 2021: S'pore to impose GST on low-value goods bought online imported by air or post
SINGAPORE - Low-value goods bought online and imported by air or post will be subject to the goods and services tax (GST) from Jan 1, 2023.
GST will also be extended to imported non-digital services for consumers, such as those involving live interactions with overseas providers of fitness training, counselling and tele-medicine.
This will help to level the playing field for local businesses to compete effectively, said Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16).
Low-value goods that are worth $400 or less and imported via air or post are currently not subject to GST to facilitate clearance at the border, but the tax is paid on such goods bought here.
All goods imported via land or sea are already taxed, regardless of value.
DPM Heng said: "One aspect of a fair and resilient tax system is ensuring a level playing field for our local businesses vis-a-vis their overseas counterparts. This is especially relevant, as e-commerce for sales of goods and services is growing."
He noted that other jurisdictions such as Australia, New Zealand and the European Union have already implemented or announced plans to put in place the equivalent of GST on such goods.
"Overseas suppliers of goods and services will be subject to the same GST treatment as local suppliers," he added.
This new taxation will be effected through the Overseas Vendor Registration regime, which requires overseas suppliers and electronic marketplace operators that make significant sales of digital services to local consumers to register for GST.
These registered suppliers and operators will then charge GST on their sales of low-value goods that are delivered over air or post to local consumers.
Shoppers will have to pay the GST when they buy from these overseas suppliers, just as they will be charged when they buy such items from local businesses.
Meanwhile, local GST-registered businesses here will have to self-account for GST when they import such goods as well and pay the tax.
GST was already extended to cover all imported digital services in Budget 2018 and kicked off from Jan 1 last year.
These include video and music streaming services, apps, software and online subscription fees.
- Joined
- Jul 14, 2008
- Messages
- 89,028
- Points
- 113
from straitstimes.com:
Budget 2021: $11 billion set aside to fight Covid-19, $24 billion to help Singapore emerge stronger from crisis
SINGAPORE - Against a backdrop of global uncertainty amplified by the pandemic, Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16) delivered a Budget finely balanced between providing immediate help to sectors under stress, and investing in Singapore's long-term future.
The $107 billion plan - the first full Budget in the Government's new term - includes an $11 billion Covid-19 Resilience Package. This will help safeguard public health and support the workers and businesses that need help, with extra money going towards the hardest-hit sectors.
Job seekers also got a helping hand, with another $5.4 billion set aside for a fresh injection into the SGUnited Jobs and Skills Package. This will support the hiring of 200,000 locals and provide up to 35,000 traineeship and training opportunities this year.
In addition, Mr Heng pledged to allocate $24 billion across the next three years to enable Singapore's firms and workers to emerge stronger from the crisis.
The country's investments to equip its people to seize opportunities and help its businesses innovate are what distinguish it from others, said Mr Heng, who is also Finance Minister.
"While last year's Budgets were tilted towards emergency support in a broad-based way, this year's Budget will focus on accelerating structural adaptations," he added in a relatively compact speech that lasted just over two hours.
"In the face of major changes, we must move from just counter-cyclical fiscal and monetary stabilisation policies, to structural economic policies to equip our businesses and workers with deep and future-ready capabilities."
On the topic of Singapore's reliance on foreign manpower, the minister said foreigners with the right expertise are a welcome complement to Singaporeans in areas where the country is short on skills. But foreign worker quotas will be tightened in the manufacturing sector, where the local workforce has to deepen its skills.
"The way forward is neither to have too few or no foreign workers, nor to have a big inflow," Mr Heng said. "We have to accept what this little island can accommodate."
Meanwhile, the salaries of nurses and other healthcare workers, who have been on the forefront of the fight against Covid-19, will be enhanced, he added.
He also announced a $900 million Household Support Package, aimed at lower- to middle-income households.
Under the package, eligible households will get goods and services tax (GST) vouchers, U-Save Special Payments, and service and conservancy charge rebates. All Singaporean households will also get $100 in Community Development Council vouchers, to be used at participating heartland shops and hawker centres.
And in line with Singapore's long-term goal to become a more sustainable society, measures will be introduced to encourage the adoption of electric vehicles, with green bonds to be issued on select public infrastructure projects.
All these measures mean that Singapore will see a Budget deficit of $11 billion, or 2.2 per cent of its gross domestic product. This marks the second consecutive year with a Budget deficit, following last year's deficit of $64.9 billion.
Running a fiscal deficit to support targeted relief is warranted in the immediate term, given the unprecedented impact of Covid-19, Mr Heng said.
But Singapore's recurrent spending needs in areas such as healthcare will continue to rise, and the country must meet these needs in a "disciplined and sustainable way".
"Hence, beyond this crisis, we must return to running balanced budgets," he said. "It was fiscal prudence and discipline that allowed us to accumulate our national reserves, which has enabled us to respond decisively to this crisis."
Singapore will tap its reserves to fund the $11 billion Covid-19 Resilience Package, Mr Heng said. But he pointed out that the nation expects to utilise only $42.7 billion of past reserves for last financial year, against the $52 billion that had been provided for.
This means the total expected draw over this financial year and the last is expected to amount to $53.7 billion - a net increase of $1.7 billion from what Singapore expected to draw from its reserves to respond to the crisis.
President Halimah Yacob has given her in-principle support for this draw, he added.
Singapore's spending needs mean that the impending GST hike, slated to take place sometime between next year and 2025, will happen "sooner rather than later".
The exact timing of the hike will depend on Singapore's economic outlook, Mr Heng said, adding that the country will not be able to meet its rising recurrent needs without the increase.
He reiterated that $6 billion has already been set aside under last year's Budget to defray the impact of this tax hike on the majority of Singaporean households by at least five years.
Petrol duties have also been raised for the first time in six years, and take place with immediate effect. These are intended to encourage Singaporeans to reduce their vehicle usage as part of Singapore's push towards a more sustainable future. However, road tax rebates of between 15 and 100 per cent - depending on the type of vehicle - have been put in place to cushion the impact of this increase.
From January 2023, GST will also be extended to low-value goods under $400 bought online and imported by air or post in order to ensure a level playing field for local businesses to compete effectively.
In order to finance long-term infrastructure that will benefit both current and future generations, the Government will also issue new bonds totalling up to $90 billion under a law to be tabled in Parliament later this year.
Mr Heng said Singapore expects that its revenues will be able to support projected expenditure from all proposed measures as the economy recovers.
But this assumes the global Covid-19 situation comes under control by next year, he said. If things do not go according to plan, the Government will seek the President's consideration to tap past reserves to support Singapore's economic investments.
"We have carefully thought through the different scenarios. While we expect recovery in Singapore and globally, there is a wide cone of uncertainty," he added.
"Even if the economic and fiscal situation turns out to be worse than expected, we must still press on to invest in new areas, so as to ride on the structural changes, transform and emerge stronger as an economy, and as a people."
6 ways to emerge stronger
In his Budget statement on Tuesday, Deputy Prime Minister and Finance Minister Heng Swee Keat outlined six ways in which Singapore can emerge stronger from the crisis. Rei Kurohi and Prisca Ang capture his key points.
1. Boosting Covid-19 defences
Tackling the pandemic remains a key area of focus, and an $11 billion Covid-19 Resilience Package will focus on immediate and ongoing recovery efforts.
Of this sum, $4.8 billion goes towards public health and safe reopening measures, including testing, clinical management and contact tracing, and vaccination for everyone living in Singapore.
Another $700 million goes to extending the Jobs Support Scheme to help firms retain workers, but with support gradually tapering off.
The hardest-hit sectors, like aviation and tourism that now get 50 per cent wage support, will see this lowered to 30 per cent for April to June, and 10 per cent for July to September. Sectors like food services and retail, currently getting 30 per cent support, will see this reduced to 10 per cent for April to June.
The worst-hit sectors will continue to get more targeted support to preserve their capabilities, with an extra $870 million for the aviation sector.
Taxi and private-hire car drivers will be supported by the $133 million set aside for the Covid-19 Driver Relief Fund, and $45 million will be set aside for the extension of the Arts and Culture Resilience Package and the Sports Resilience Package.
2. Ramping up business innovation
Economic transformation is key to creating jobs and opportunities for Singaporeans, and $24 billion will be allocated over the next three years to help businesses and workers recover.
A key focus is restoring physical connectivity, and investments will be made in on-arrival testing and biosafety systems, such as the Notarise and Verify systems being developed by GovTech with the private sector to verify Covid-19 test results and vaccination records.
Businesses will also get support with innovating and collaborating beyond Singapore's shores through government investments in three platforms.
A pilot Corporate Venture Launchpad will co-fund corporates building new ventures, and an Open Innovation Platform will match companies and public agencies with solution providers and co-fund the prototyping of new systems, such as for monitoring workers' health. The Global Innovation Alliance will be enhanced to catalyse partnerships with major global innovation hubs, with the network of 15 cities currently growing to more than 25 over the next five years.
A Singapore Intellectual Property Strategy 2030 is also being developed to support businesses in commercialising their innovations.
The Government will also step up risk-sharing arrangements with providers of capital and give grants to support businesses to innovate, transform and scale up. Start-ups can tap enhanced support; mature enterprises, including SMEs, will get help co-funding the adoption of digital solutions and new technologies; and large local firms will be able to tap a new funding platform - that the Government and Temasek will each invest $500million in - to transform and expand.
3. Helping workers hone skills
An additional $5.4 billion will be allocated for the second tranche of the SGUnited Jobs and Skills Package to support the hiring of 200,000 locals this year and provide up to 35,000 training opportunities.
Of this, $5.2 billion goes to extending the Jobs Growth Incentive hiring window to end-September, to support companies in growth sectors, with more for those hiring mature workers, persons with disabilities and former offenders.
The SGUnited Skills, Traineeships and Mid-Career Pathways programmes will also be extended till March 31, 2022.
A new Innovation and Enterprise Fellowship Programme will support about 500 fellowships in areas like cyber security, artificial intelligence and health technology over the next five years.
Salaries will also be enhanced for nurses and other healthcare workers, and government support for wage increments for locals will be supported with the extension of the Wage Credit Scheme for a year.
The Capability Transfer Programme that supports the transfer of skills from foreign to local workers will also be extended till end-September 2024.
And to help the manufacturing sector skill up, the sub-dependency ratio ceiling for S Passes in the sector will be reduced from 20 to 18 per cent from January 2022 and to 15 per cent from January 2023.
4. Strengthening social cohesion
A $900 million Household Support Package will continue short-term relief for eligible households, including a one-off GST Voucher - Cash Special Payment of $200 in June, and a GST Voucher - U-Save Special Payment of $120 to $200 in April and July, or an additional 50 per cent, for eligible HDB households.
Service and conservancy charges rebates will also be extended for another year.
In addition, every Singaporean child below 21 will get a one-off $200 top-up to their Child Development Account, Edusave Account or Post-Secondary Education Account.
All Singaporean households will also get $100 in Community Development Council (CDC) vouchers to be used at heartland shops and hawker centres.
Looking further ahead, over $200 million more will go to supporting companies that raise their retirement and re-employment ages above the prevailing statutory ages, and that offer part-time employment to older workers who request it.
ComLink - which helps low-income families in rental housing - will be expanded significantly over the next two years to cover 14,000 families, up from 1,000 now. An Inclusive Support Programme will provide early intervention support for children with special needs.
To encourage charitable giving, the 250 per cent tax deduction for donations will be extended by two years, and $20 million will be set aside for a new Change for Charity Grant to match donations raised by businesses that encourage customers to donate while making purchases.
Another $50 million will be set aside for a matching grant for the CDC Care and Innovation Fund, to support bottom-up initiatives that address community needs.
5. Building a sustainable home
Following the launch of the Singapore Green Plan 2030 last week, $60 million will be set aside for a new Agri-Food Cluster Transformation Fund to lift productivity and food resilience.
Another $30 million will be set aside over the next five years to incentivise the switch to electric vehicles, including the installation of 60,000 charging points at public carparks and private premises by 2030. Electric cars will be made more affordable with the lowering of the additional registration fee floor from $5,000 to $0 from January 2022 to December 2023. Road tax bands will also be adjusted.
Petrol duties will also be raised by 15 cents per litre for premium grade petrol to 79 cents a litre, and by 10 cents a litre to 66 cents a litre for intermediate grade petrol.
The Government will take the lead on sustainability, by committing public agencies to more ambitious goals under the GreenGov.SG initiative, and issuing green bonds on select public infrastructure projects. Up to $19 billion worth of public sector green projects have been identified, including Tuas Nexus which will integrate waste and water treatment facilities.
A new Enterprise Sustainability Programme will also be launched to help enterprises use resources more efficiently and develop new green products and solutions.
Singaporeans with ideas for sustainable development are also encouraged to step forward and the Government will support ground-up projects.
6. Managing our finances
While this Budget will see an $11 billion draw on past reserves for FY2021 to fund the Covid-19 Resilience Package, the Government does not expect to use $9.3 billion of the $52 billion draw previously approved for FY2020.
Therefore, the total expected draw on the reserves over the two financial years totals $53.7 billion - or an additional $1.7 billion over what it expected to draw to respond to the crisis.
But Singapore's fiscal situation is expected to be tighter in the years ahead, and a few measures will be needed.
The hike in goods and services tax (GST) rate from 7 per cent to 9 per cent will be needed between 2022 and 2025, and sooner rather than later, subject to the economic outlook, if Singapore is to meet rising recurrent spending needs, especially in healthcare. Its impact will, however, be cushioned by the $6 billion Assurance Package announced in last year's main Budget.
At the same time, GST will have to be paid on lower-value goods bought online and imported by air or post from Jan 1, 2023, to ensure a level playing field for local businesses.
The Government also intends to issue new bonds under a proposed Significant Infrastructure Government Loan Act (Singa) to finance major, long-term infrastructure investments that benefit current and future generations, such as MRT lines and infrastructure to protect against rising sea levels like tidal walls. The borrowing limit will be set at $90 billion as a safeguard.
And if the need arises, should the economic and fiscal situation turn out worse than expected, the Government will seek the President's consideration to use past reserves to support economic investments in new areas, as this will enable Singapore to ride on structural changes, transform and emerge stronger.
Budget 2021: $11 billion set aside to fight Covid-19, $24 billion to help Singapore emerge stronger from crisis
SINGAPORE - Against a backdrop of global uncertainty amplified by the pandemic, Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16) delivered a Budget finely balanced between providing immediate help to sectors under stress, and investing in Singapore's long-term future.
The $107 billion plan - the first full Budget in the Government's new term - includes an $11 billion Covid-19 Resilience Package. This will help safeguard public health and support the workers and businesses that need help, with extra money going towards the hardest-hit sectors.
Job seekers also got a helping hand, with another $5.4 billion set aside for a fresh injection into the SGUnited Jobs and Skills Package. This will support the hiring of 200,000 locals and provide up to 35,000 traineeship and training opportunities this year.
In addition, Mr Heng pledged to allocate $24 billion across the next three years to enable Singapore's firms and workers to emerge stronger from the crisis.
The country's investments to equip its people to seize opportunities and help its businesses innovate are what distinguish it from others, said Mr Heng, who is also Finance Minister.
"While last year's Budgets were tilted towards emergency support in a broad-based way, this year's Budget will focus on accelerating structural adaptations," he added in a relatively compact speech that lasted just over two hours.
"In the face of major changes, we must move from just counter-cyclical fiscal and monetary stabilisation policies, to structural economic policies to equip our businesses and workers with deep and future-ready capabilities."
On the topic of Singapore's reliance on foreign manpower, the minister said foreigners with the right expertise are a welcome complement to Singaporeans in areas where the country is short on skills. But foreign worker quotas will be tightened in the manufacturing sector, where the local workforce has to deepen its skills.
"The way forward is neither to have too few or no foreign workers, nor to have a big inflow," Mr Heng said. "We have to accept what this little island can accommodate."
Meanwhile, the salaries of nurses and other healthcare workers, who have been on the forefront of the fight against Covid-19, will be enhanced, he added.
He also announced a $900 million Household Support Package, aimed at lower- to middle-income households.
Under the package, eligible households will get goods and services tax (GST) vouchers, U-Save Special Payments, and service and conservancy charge rebates. All Singaporean households will also get $100 in Community Development Council vouchers, to be used at participating heartland shops and hawker centres.
And in line with Singapore's long-term goal to become a more sustainable society, measures will be introduced to encourage the adoption of electric vehicles, with green bonds to be issued on select public infrastructure projects.
All these measures mean that Singapore will see a Budget deficit of $11 billion, or 2.2 per cent of its gross domestic product. This marks the second consecutive year with a Budget deficit, following last year's deficit of $64.9 billion.
Running a fiscal deficit to support targeted relief is warranted in the immediate term, given the unprecedented impact of Covid-19, Mr Heng said.
But Singapore's recurrent spending needs in areas such as healthcare will continue to rise, and the country must meet these needs in a "disciplined and sustainable way".
"Hence, beyond this crisis, we must return to running balanced budgets," he said. "It was fiscal prudence and discipline that allowed us to accumulate our national reserves, which has enabled us to respond decisively to this crisis."
Singapore will tap its reserves to fund the $11 billion Covid-19 Resilience Package, Mr Heng said. But he pointed out that the nation expects to utilise only $42.7 billion of past reserves for last financial year, against the $52 billion that had been provided for.
This means the total expected draw over this financial year and the last is expected to amount to $53.7 billion - a net increase of $1.7 billion from what Singapore expected to draw from its reserves to respond to the crisis.
President Halimah Yacob has given her in-principle support for this draw, he added.
Singapore's spending needs mean that the impending GST hike, slated to take place sometime between next year and 2025, will happen "sooner rather than later".
The exact timing of the hike will depend on Singapore's economic outlook, Mr Heng said, adding that the country will not be able to meet its rising recurrent needs without the increase.
He reiterated that $6 billion has already been set aside under last year's Budget to defray the impact of this tax hike on the majority of Singaporean households by at least five years.
Petrol duties have also been raised for the first time in six years, and take place with immediate effect. These are intended to encourage Singaporeans to reduce their vehicle usage as part of Singapore's push towards a more sustainable future. However, road tax rebates of between 15 and 100 per cent - depending on the type of vehicle - have been put in place to cushion the impact of this increase.
From January 2023, GST will also be extended to low-value goods under $400 bought online and imported by air or post in order to ensure a level playing field for local businesses to compete effectively.
In order to finance long-term infrastructure that will benefit both current and future generations, the Government will also issue new bonds totalling up to $90 billion under a law to be tabled in Parliament later this year.
Mr Heng said Singapore expects that its revenues will be able to support projected expenditure from all proposed measures as the economy recovers.
But this assumes the global Covid-19 situation comes under control by next year, he said. If things do not go according to plan, the Government will seek the President's consideration to tap past reserves to support Singapore's economic investments.
"We have carefully thought through the different scenarios. While we expect recovery in Singapore and globally, there is a wide cone of uncertainty," he added.
"Even if the economic and fiscal situation turns out to be worse than expected, we must still press on to invest in new areas, so as to ride on the structural changes, transform and emerge stronger as an economy, and as a people."
6 ways to emerge stronger
In his Budget statement on Tuesday, Deputy Prime Minister and Finance Minister Heng Swee Keat outlined six ways in which Singapore can emerge stronger from the crisis. Rei Kurohi and Prisca Ang capture his key points.
1. Boosting Covid-19 defences
Tackling the pandemic remains a key area of focus, and an $11 billion Covid-19 Resilience Package will focus on immediate and ongoing recovery efforts.
Of this sum, $4.8 billion goes towards public health and safe reopening measures, including testing, clinical management and contact tracing, and vaccination for everyone living in Singapore.
Another $700 million goes to extending the Jobs Support Scheme to help firms retain workers, but with support gradually tapering off.
The hardest-hit sectors, like aviation and tourism that now get 50 per cent wage support, will see this lowered to 30 per cent for April to June, and 10 per cent for July to September. Sectors like food services and retail, currently getting 30 per cent support, will see this reduced to 10 per cent for April to June.
The worst-hit sectors will continue to get more targeted support to preserve their capabilities, with an extra $870 million for the aviation sector.
Taxi and private-hire car drivers will be supported by the $133 million set aside for the Covid-19 Driver Relief Fund, and $45 million will be set aside for the extension of the Arts and Culture Resilience Package and the Sports Resilience Package.
2. Ramping up business innovation
Economic transformation is key to creating jobs and opportunities for Singaporeans, and $24 billion will be allocated over the next three years to help businesses and workers recover.
A key focus is restoring physical connectivity, and investments will be made in on-arrival testing and biosafety systems, such as the Notarise and Verify systems being developed by GovTech with the private sector to verify Covid-19 test results and vaccination records.
Businesses will also get support with innovating and collaborating beyond Singapore's shores through government investments in three platforms.
A pilot Corporate Venture Launchpad will co-fund corporates building new ventures, and an Open Innovation Platform will match companies and public agencies with solution providers and co-fund the prototyping of new systems, such as for monitoring workers' health. The Global Innovation Alliance will be enhanced to catalyse partnerships with major global innovation hubs, with the network of 15 cities currently growing to more than 25 over the next five years.
A Singapore Intellectual Property Strategy 2030 is also being developed to support businesses in commercialising their innovations.
The Government will also step up risk-sharing arrangements with providers of capital and give grants to support businesses to innovate, transform and scale up. Start-ups can tap enhanced support; mature enterprises, including SMEs, will get help co-funding the adoption of digital solutions and new technologies; and large local firms will be able to tap a new funding platform - that the Government and Temasek will each invest $500million in - to transform and expand.
3. Helping workers hone skills
An additional $5.4 billion will be allocated for the second tranche of the SGUnited Jobs and Skills Package to support the hiring of 200,000 locals this year and provide up to 35,000 training opportunities.
Of this, $5.2 billion goes to extending the Jobs Growth Incentive hiring window to end-September, to support companies in growth sectors, with more for those hiring mature workers, persons with disabilities and former offenders.
The SGUnited Skills, Traineeships and Mid-Career Pathways programmes will also be extended till March 31, 2022.
A new Innovation and Enterprise Fellowship Programme will support about 500 fellowships in areas like cyber security, artificial intelligence and health technology over the next five years.
Salaries will also be enhanced for nurses and other healthcare workers, and government support for wage increments for locals will be supported with the extension of the Wage Credit Scheme for a year.
The Capability Transfer Programme that supports the transfer of skills from foreign to local workers will also be extended till end-September 2024.
And to help the manufacturing sector skill up, the sub-dependency ratio ceiling for S Passes in the sector will be reduced from 20 to 18 per cent from January 2022 and to 15 per cent from January 2023.
4. Strengthening social cohesion
A $900 million Household Support Package will continue short-term relief for eligible households, including a one-off GST Voucher - Cash Special Payment of $200 in June, and a GST Voucher - U-Save Special Payment of $120 to $200 in April and July, or an additional 50 per cent, for eligible HDB households.
Service and conservancy charges rebates will also be extended for another year.
In addition, every Singaporean child below 21 will get a one-off $200 top-up to their Child Development Account, Edusave Account or Post-Secondary Education Account.
All Singaporean households will also get $100 in Community Development Council (CDC) vouchers to be used at heartland shops and hawker centres.
Looking further ahead, over $200 million more will go to supporting companies that raise their retirement and re-employment ages above the prevailing statutory ages, and that offer part-time employment to older workers who request it.
ComLink - which helps low-income families in rental housing - will be expanded significantly over the next two years to cover 14,000 families, up from 1,000 now. An Inclusive Support Programme will provide early intervention support for children with special needs.
To encourage charitable giving, the 250 per cent tax deduction for donations will be extended by two years, and $20 million will be set aside for a new Change for Charity Grant to match donations raised by businesses that encourage customers to donate while making purchases.
Another $50 million will be set aside for a matching grant for the CDC Care and Innovation Fund, to support bottom-up initiatives that address community needs.
5. Building a sustainable home
Following the launch of the Singapore Green Plan 2030 last week, $60 million will be set aside for a new Agri-Food Cluster Transformation Fund to lift productivity and food resilience.
Another $30 million will be set aside over the next five years to incentivise the switch to electric vehicles, including the installation of 60,000 charging points at public carparks and private premises by 2030. Electric cars will be made more affordable with the lowering of the additional registration fee floor from $5,000 to $0 from January 2022 to December 2023. Road tax bands will also be adjusted.
Petrol duties will also be raised by 15 cents per litre for premium grade petrol to 79 cents a litre, and by 10 cents a litre to 66 cents a litre for intermediate grade petrol.
The Government will take the lead on sustainability, by committing public agencies to more ambitious goals under the GreenGov.SG initiative, and issuing green bonds on select public infrastructure projects. Up to $19 billion worth of public sector green projects have been identified, including Tuas Nexus which will integrate waste and water treatment facilities.
A new Enterprise Sustainability Programme will also be launched to help enterprises use resources more efficiently and develop new green products and solutions.
Singaporeans with ideas for sustainable development are also encouraged to step forward and the Government will support ground-up projects.
6. Managing our finances
While this Budget will see an $11 billion draw on past reserves for FY2021 to fund the Covid-19 Resilience Package, the Government does not expect to use $9.3 billion of the $52 billion draw previously approved for FY2020.
Therefore, the total expected draw on the reserves over the two financial years totals $53.7 billion - or an additional $1.7 billion over what it expected to draw to respond to the crisis.
But Singapore's fiscal situation is expected to be tighter in the years ahead, and a few measures will be needed.
The hike in goods and services tax (GST) rate from 7 per cent to 9 per cent will be needed between 2022 and 2025, and sooner rather than later, subject to the economic outlook, if Singapore is to meet rising recurrent spending needs, especially in healthcare. Its impact will, however, be cushioned by the $6 billion Assurance Package announced in last year's main Budget.
At the same time, GST will have to be paid on lower-value goods bought online and imported by air or post from Jan 1, 2023, to ensure a level playing field for local businesses.
The Government also intends to issue new bonds under a proposed Significant Infrastructure Government Loan Act (Singa) to finance major, long-term infrastructure investments that benefit current and future generations, such as MRT lines and infrastructure to protect against rising sea levels like tidal walls. The borrowing limit will be set at $90 billion as a safeguard.
And if the need arises, should the economic and fiscal situation turn out worse than expected, the Government will seek the President's consideration to use past reserves to support economic investments in new areas, as this will enable Singapore to ride on structural changes, transform and emerge stronger.
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from straitstimes.com:
Budget 2021: GST on imported low-value goods will raise revenue, but implementation remains to be seen
SINGAPORE - The introduction of goods and services tax (GST) on low-value goods purchased online and imported by air or post will raise "a lot more" revenue for the Government, said experts.
However, how it will be implemented remains to be seen, as there are many factors to consider, such as getting overseas players to register, noted a panel of three discussing the Budget announcements.
The live session jointly hosted by The Straits Times and Money FM 89.3 was moderated by the radio station's presenter Michelle Martin, following the Budget speech by Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16).
DPM Heng, who is also Coordinating Minister for Economic Policies and Minister for Finance, had announced that from Jan 1, 2023, low-value goods - worth $400 or less - bought online and imported by air or post will be subject to GST.
GST will also be extended to imported non-digital services for consumers, such as those involving live interactions with overseas providers of fitness training, counselling and tele-medicine.
Mr Harvey Koenig, tax partner at KPMG, said the pandemic has led to many more people going online to make purchases, instead of buying from brick-and-mortar shops.
"So if you take a snapshot a year ago versus what we could see going forward, we could see there's a lot more (to be gained) through taxing all these low-value goods," he said.
However, questions remain over the implementation of this arrangement, as overseas vendors will have to be registered to account for the GST.
Another question is whether it would be sufficient to make up for the deficit, or whether other additional sources of revenue will have to be explored by the Government.
DPM Heng said in his speech that the national Budget for financial year 2021 will have an expected deficit of $11 billion.
UOB senior economist Alvin Liew said the shift towards online purchases had already been happening, and the pandemic merely hastened the trend.
He said the implementation of GST on the low-value goods bought online was "inevitable".
"If you look at retail sales, there's a growing chunk of it that is online," he said, noting that the GST implementation will also level the playing field for retailers who rely on their physical presence.
However, he said whether or not the move will actually help such retailers remains to be seen, as the online business landscape will only grow and expand further.
Mr Koenig questioned the target of the move: "Also, when we talk about how this will be imposed on the sellers, would there be a level playing field on that front? Are you going to do this for the bigger players, or for the smaller players as well?"
ST Associate Editor Ven Sreenivasan noted that the GST for online goods might make people reconsider buying things online, as it may raise overall costs considerably.
"If you are going to buy a $400 item and pay $28 in GST, you may think twice, as it suddenly becomes more expensive," he said.
He, too, felt it remains to be seen whether brick-and-mortar shops will benefit from this move, and whether they could still go on to pivot and innovate to improve their businesses.
Separately, Mr Sreenivasan also said it was "ironic" that while the Government was setting aside $133 million in the Covid-19 Driver Relief Fund, it was also raising petrol duties.
It is "bittersweet" for those affected, he said.
Mr Liew said the raising of petrol duties was part of Singapore's wider push towards a cleaner society, in accordance with its Green Plan.
Apart from taxi and private-hire drivers, he said businesses such as logistics companies will have their livelihoods impacted by the increase in the cost of resources needed in their line of work, but he noted that the grant might offset this to some degree.
Budget 2021: GST on imported low-value goods will raise revenue, but implementation remains to be seen
SINGAPORE - The introduction of goods and services tax (GST) on low-value goods purchased online and imported by air or post will raise "a lot more" revenue for the Government, said experts.
However, how it will be implemented remains to be seen, as there are many factors to consider, such as getting overseas players to register, noted a panel of three discussing the Budget announcements.
The live session jointly hosted by The Straits Times and Money FM 89.3 was moderated by the radio station's presenter Michelle Martin, following the Budget speech by Deputy Prime Minister Heng Swee Keat on Tuesday (Feb 16).
DPM Heng, who is also Coordinating Minister for Economic Policies and Minister for Finance, had announced that from Jan 1, 2023, low-value goods - worth $400 or less - bought online and imported by air or post will be subject to GST.
GST will also be extended to imported non-digital services for consumers, such as those involving live interactions with overseas providers of fitness training, counselling and tele-medicine.
Mr Harvey Koenig, tax partner at KPMG, said the pandemic has led to many more people going online to make purchases, instead of buying from brick-and-mortar shops.
"So if you take a snapshot a year ago versus what we could see going forward, we could see there's a lot more (to be gained) through taxing all these low-value goods," he said.
However, questions remain over the implementation of this arrangement, as overseas vendors will have to be registered to account for the GST.
Another question is whether it would be sufficient to make up for the deficit, or whether other additional sources of revenue will have to be explored by the Government.
DPM Heng said in his speech that the national Budget for financial year 2021 will have an expected deficit of $11 billion.
UOB senior economist Alvin Liew said the shift towards online purchases had already been happening, and the pandemic merely hastened the trend.
He said the implementation of GST on the low-value goods bought online was "inevitable".
"If you look at retail sales, there's a growing chunk of it that is online," he said, noting that the GST implementation will also level the playing field for retailers who rely on their physical presence.
However, he said whether or not the move will actually help such retailers remains to be seen, as the online business landscape will only grow and expand further.
Mr Koenig questioned the target of the move: "Also, when we talk about how this will be imposed on the sellers, would there be a level playing field on that front? Are you going to do this for the bigger players, or for the smaller players as well?"
ST Associate Editor Ven Sreenivasan noted that the GST for online goods might make people reconsider buying things online, as it may raise overall costs considerably.
"If you are going to buy a $400 item and pay $28 in GST, you may think twice, as it suddenly becomes more expensive," he said.
He, too, felt it remains to be seen whether brick-and-mortar shops will benefit from this move, and whether they could still go on to pivot and innovate to improve their businesses.
Separately, Mr Sreenivasan also said it was "ironic" that while the Government was setting aside $133 million in the Covid-19 Driver Relief Fund, it was also raising petrol duties.
It is "bittersweet" for those affected, he said.
Mr Liew said the raising of petrol duties was part of Singapore's wider push towards a cleaner society, in accordance with its Green Plan.
Apart from taxi and private-hire drivers, he said businesses such as logistics companies will have their livelihoods impacted by the increase in the cost of resources needed in their line of work, but he noted that the grant might offset this to some degree.
- Joined
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Deities. Chinks pray to deities when they want good fortune, of course must show sincerity no?
Imitation is the most sincere form of flattery.
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from straitstimes.com:
Singapore hopes to balance its Budget as economy picks up: DPM Heng
SINGAPORE - Singapore has a good chance of balancing its budget during this term of government if economic recovery goes as expected, said Deputy Prime Minister Heng Swee Keat on Sunday (Feb 21).
He noted that the trajectory of the recovery will depend on the course of the pandemic, but with vaccination exercises taking place globally, there is hope for the economy to gain strength in 2021.
The Government hopes to balance its budget over the next four to five years especially since it has drawn significantly on past reserves - a total of $53.7 billion since last year, said Mr Heng, who is also Finance Minister. "But I'm hoping that as businesses resume, as income resumes, we can get back to a balanced budget," he added.
After having to present five Budgets last year as the pandemic unfolded, he hoped he will have to do only one this year, which would be a sign that the situation has stabilised. But the Government is ready to react should there be a need to, he said.
Speaking on a Channel 5 programme, Mr Heng addressed questions on this year's Budget, focusing on themes such as Singapore's green ambitions and support for businesses and workers.
Increasing the goods and services tax (GST) rate from 7 per cent to 9 per cent will support government revenues in the coming years, especially as recurrent spending in areas like healthcare is expected to go up as Singapore's population ages, he said.
Mr Heng pointed out that the Ministry of Health is receiving the highest allocation of funds among all ministries this year, and its allocation will continue to grow as healthcare needs will rise.
In his Budget speech on Feb 16, Mr Heng said the GST hike will take place between 2022 and 2025, and sooner rather than later.
On Sunday, he reminded Singaporeans of measures in place to cushion the impact of this hike, citing the $6 billion Assurance Package committed in Budget 2020, that would see adult Singaporeans receiving cash payouts of between $700 and $1,600 over five years.
The payouts would be equivalent to not paying the hike in GST for 10 years for the lowest 20 per cent of households, and five years for the average household, he said.
Singapore's system of taxes and benefits is a progressive one, Mr Heng added, citing how in 2020, the top 20 per cent of Singaporean households paid 56 per cent of taxes and received 11 per cent of benefits, while the lowest 20 per cent of households paid 9 per cent of taxes and received 27 per cent of the benefits. "Our system has been designed over the years to tilt our support... to those with greater needs, and we continue to observe this principle," he said.
He added that income inequality measured by the Gini coefficient, which the Government had been tracking since 2000, was at a historic low last year due to massive transfers.
Mr Heng also highlighted how rebates have been put in place to help offset the costs motorists incur with the recent petrol duty hike.
Those who rely on their vehicles for a living get rebates which are equivalent to not paying the rise in petrol duty for a year, while other motorists will get support of about two-thirds their expected cost rise.
Mr Heng said Singapore and its people must always be prepared for change, but said that the future is full of promise.
"What we must do is to come together, put our minds together, our hearts together, our hands together and say, well, how do we work together to seize these opportunities," he said.
"There will be many, many new opportunities that will come out of this pandemic, and Singapore is in a very good position to do that."
Singapore hopes to balance its Budget as economy picks up: DPM Heng
SINGAPORE - Singapore has a good chance of balancing its budget during this term of government if economic recovery goes as expected, said Deputy Prime Minister Heng Swee Keat on Sunday (Feb 21).
He noted that the trajectory of the recovery will depend on the course of the pandemic, but with vaccination exercises taking place globally, there is hope for the economy to gain strength in 2021.
The Government hopes to balance its budget over the next four to five years especially since it has drawn significantly on past reserves - a total of $53.7 billion since last year, said Mr Heng, who is also Finance Minister. "But I'm hoping that as businesses resume, as income resumes, we can get back to a balanced budget," he added.
After having to present five Budgets last year as the pandemic unfolded, he hoped he will have to do only one this year, which would be a sign that the situation has stabilised. But the Government is ready to react should there be a need to, he said.
Speaking on a Channel 5 programme, Mr Heng addressed questions on this year's Budget, focusing on themes such as Singapore's green ambitions and support for businesses and workers.
Increasing the goods and services tax (GST) rate from 7 per cent to 9 per cent will support government revenues in the coming years, especially as recurrent spending in areas like healthcare is expected to go up as Singapore's population ages, he said.
Mr Heng pointed out that the Ministry of Health is receiving the highest allocation of funds among all ministries this year, and its allocation will continue to grow as healthcare needs will rise.
In his Budget speech on Feb 16, Mr Heng said the GST hike will take place between 2022 and 2025, and sooner rather than later.
On Sunday, he reminded Singaporeans of measures in place to cushion the impact of this hike, citing the $6 billion Assurance Package committed in Budget 2020, that would see adult Singaporeans receiving cash payouts of between $700 and $1,600 over five years.
The payouts would be equivalent to not paying the hike in GST for 10 years for the lowest 20 per cent of households, and five years for the average household, he said.
Singapore's system of taxes and benefits is a progressive one, Mr Heng added, citing how in 2020, the top 20 per cent of Singaporean households paid 56 per cent of taxes and received 11 per cent of benefits, while the lowest 20 per cent of households paid 9 per cent of taxes and received 27 per cent of the benefits. "Our system has been designed over the years to tilt our support... to those with greater needs, and we continue to observe this principle," he said.
He added that income inequality measured by the Gini coefficient, which the Government had been tracking since 2000, was at a historic low last year due to massive transfers.
Mr Heng also highlighted how rebates have been put in place to help offset the costs motorists incur with the recent petrol duty hike.
Those who rely on their vehicles for a living get rebates which are equivalent to not paying the rise in petrol duty for a year, while other motorists will get support of about two-thirds their expected cost rise.
Mr Heng said Singapore and its people must always be prepared for change, but said that the future is full of promise.
"What we must do is to come together, put our minds together, our hearts together, our hands together and say, well, how do we work together to seize these opportunities," he said.
"There will be many, many new opportunities that will come out of this pandemic, and Singapore is in a very good position to do that."
- Joined
- Jul 14, 2008
- Messages
- 89,028
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- 113
from straitstimes.com:
Singapore's progressive wage model sustainable, has worked well: DPM Heng
SINGAPORE - Singapore's progressive wage model is a sustainable one which has worked well, said Deputy Prime Minister Heng Swee Keat, in highlighting the importance of getting various parties to work together to roll it out to more sectors.
He was speaking during a panel on the Budget, in response to a union leader's wish for the model - which sets out a wage ladder and training requirements for lower-paid workers at different skill levels - to be put in place across other industries more quickly.
"We can get everyone, companies, workers, the unions, the Singapore National Employers Federation to all work together so that we can make the change," said Mr Heng to fellow panellist K. Thanaletchimi on the one-hour Channel 5 programme on Sunday (Feb 21).
The model will be discussed in detail during the debate on the ministries' budgets, he added.
It is currently mandatory in the cleaning, landscaping and security sectors, covering some 80,000 workers, and will be extended to the lift and escalator maintenance sector next year. The labour movement has been pushing to expand the model to more sectors.
Mr Heng noted that helping workers move into new jobs is a major part of this year's Budget, especially as the global economy evolves and jobs change.
Emphasising the Budget's objective on helping Singapore emerge stronger from the Covid-19 crisis, he said the Jobs Growth Incentive - which he has committed $5.2 billion to this year - is part of efforts to help businesses transform, noting that a productive new hire could add to the company's revenue and justify the hiring.
"We are using this time to really accelerate that hiring so that companies which have confidence that (they) can continue growing can hire and their growth is not impeded during these next few months," he said.
Some $24 billion will be allocated over the next three years to accelerate economic transformation, by supporting firms and workers.
Mr Heng also highlighted how workers will be given support to take on jobs in growth areas like the urban solutions and sustainability sector - one of the areas of focus in Singapore's Research, Innovation and Enterprise 2025 plan.
There are many green shoots in research and development in this sector, he said, adding that some of Singapore's companies are doing well in areas such as carbon sequestration and reducing waste.
"If Singapore can do it, the solutions that we find will also be valuable to many cities around the world," he said. "And in that way, it can keep our businesses and workers competitive."
During the programme, Mr Heng also discussed support for households and more vulnerable groups.
Addressing concerns about support for employees' mental well-being, he said there are work groups tackling the issues of mental wellness among groups like workers and students.
"I hope that employers can play a more proactive role to ensure the mental well-being of our workers," he said, urging Singaporeans to come together to see how the problems can be addressed.
Singapore's progressive wage model sustainable, has worked well: DPM Heng
SINGAPORE - Singapore's progressive wage model is a sustainable one which has worked well, said Deputy Prime Minister Heng Swee Keat, in highlighting the importance of getting various parties to work together to roll it out to more sectors.
He was speaking during a panel on the Budget, in response to a union leader's wish for the model - which sets out a wage ladder and training requirements for lower-paid workers at different skill levels - to be put in place across other industries more quickly.
"We can get everyone, companies, workers, the unions, the Singapore National Employers Federation to all work together so that we can make the change," said Mr Heng to fellow panellist K. Thanaletchimi on the one-hour Channel 5 programme on Sunday (Feb 21).
The model will be discussed in detail during the debate on the ministries' budgets, he added.
It is currently mandatory in the cleaning, landscaping and security sectors, covering some 80,000 workers, and will be extended to the lift and escalator maintenance sector next year. The labour movement has been pushing to expand the model to more sectors.
Mr Heng noted that helping workers move into new jobs is a major part of this year's Budget, especially as the global economy evolves and jobs change.
Emphasising the Budget's objective on helping Singapore emerge stronger from the Covid-19 crisis, he said the Jobs Growth Incentive - which he has committed $5.2 billion to this year - is part of efforts to help businesses transform, noting that a productive new hire could add to the company's revenue and justify the hiring.
"We are using this time to really accelerate that hiring so that companies which have confidence that (they) can continue growing can hire and their growth is not impeded during these next few months," he said.
Some $24 billion will be allocated over the next three years to accelerate economic transformation, by supporting firms and workers.
Mr Heng also highlighted how workers will be given support to take on jobs in growth areas like the urban solutions and sustainability sector - one of the areas of focus in Singapore's Research, Innovation and Enterprise 2025 plan.
There are many green shoots in research and development in this sector, he said, adding that some of Singapore's companies are doing well in areas such as carbon sequestration and reducing waste.
"If Singapore can do it, the solutions that we find will also be valuable to many cities around the world," he said. "And in that way, it can keep our businesses and workers competitive."
During the programme, Mr Heng also discussed support for households and more vulnerable groups.
Addressing concerns about support for employees' mental well-being, he said there are work groups tackling the issues of mental wellness among groups like workers and students.
"I hope that employers can play a more proactive role to ensure the mental well-being of our workers," he said, urging Singaporeans to come together to see how the problems can be addressed.
- Joined
- Jul 14, 2008
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- 89,028
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- 113
from straitstimes.com:
Better support for gig workers to be looked into, says DPM Heng
SINGAPORE - The pandemic has drawn attention to the substantial number of self-employed people in Singapore, and the authorities will continue to look into how they can be better supported, Deputy Prime Minister Heng Swee Keat said on Tuesday (Feb 23).
This diverse group may include those taking on gig jobs like food delivery temporarily, and those who take on such jobs on a part-time basis, Mr Heng noted.
There are also those who do not file taxes or have Central Provident Fund contributions - which is why the Government does not have comprehensive data on this group of workers, he told participants at a post-Budget forum broadcast on Channel 8.
"It was only after the pandemic that we realised that there were so many self-employed workers... so we will further investigate how we can assist the self-employed, Mr Heng said in Mandarin.
He addressed questions from participants on the Budget, focusing on themes such as the impact of the pandemic on individuals and businesses, and support measures for vulnerable groups.
Asked by host Tung Soo Hua about support for older workers, who may face discrimination and barriers when it comes to employment, Mr Heng said businesses also play an important role, besides policy measures such as raising the retirement and re-employment age. Workers, on their part, also need to continually update their skills.
"I hope we can study how to further enhance our efforts in helping older workers with employment and transitioning to different jobs," he told the participants, who included younger and older workers as well as business owners.
Madam Annie Chan, the second-generation owner of Mummy Yummy - a food business that also distributes free food to vulnerable groups - noted that while families in rental flats were quite well provided for during the pandemic, some middle-income families have been hit hard. However, they may not qualify for assistance as they do not meet the criteria, she said.
Mr Heng, who is also Finance Minister, agreed that the pandemic has affected Singaporeans across income brackets, including those in the middle-income group.
In Budget 2021, as well as last year's Budget, the Government supported middle-income households with measures that help Singaporeans to retain their jobs as far as possible.
"If we can help to protect workers' rice bowls, then it can also help safeguard their livelihoods and support their families," said Mr Heng.
Charity and volunteering efforts are also important in helping the vulnerable, he said, urging more Singaporeans to contribute, given that the country's needs in this area will continue to grow.
On the planned goods and services tax (GST) hike between next year and 2025, Mr Heng said that it is necessary to fund Singapore's rising expenditure needs.
But a $6 billion Assurance Package that has been set aside will effectively delay the impact of the GST increase for lower-income Singaporeans for 10 years, while this impact will also be delayed for the majority of Singaporean households for at least five years.
He also noted that the introduction of a new framework for borrowing to finance major infrastructure projects is an equitable one, given that it helps to spread the costs of these projects over several generations.
If the economy rebounds, Mr Heng hopes that schemes like the SGUnited Traineeships Programme, which allows fresh graduates to go through an attachment at a company while receiving an allowance, will no longer have to be extended. "Ideally, companies will be able to hire graduates straight out of school," he said.
But if the Covid-19 situation takes a turn for the worse, or if the global economy does not recover soon, more Budgets could be rolled out to help Singaporeans, Mr Heng added.
Better support for gig workers to be looked into, says DPM Heng
SINGAPORE - The pandemic has drawn attention to the substantial number of self-employed people in Singapore, and the authorities will continue to look into how they can be better supported, Deputy Prime Minister Heng Swee Keat said on Tuesday (Feb 23).
This diverse group may include those taking on gig jobs like food delivery temporarily, and those who take on such jobs on a part-time basis, Mr Heng noted.
There are also those who do not file taxes or have Central Provident Fund contributions - which is why the Government does not have comprehensive data on this group of workers, he told participants at a post-Budget forum broadcast on Channel 8.
"It was only after the pandemic that we realised that there were so many self-employed workers... so we will further investigate how we can assist the self-employed, Mr Heng said in Mandarin.
He addressed questions from participants on the Budget, focusing on themes such as the impact of the pandemic on individuals and businesses, and support measures for vulnerable groups.
Asked by host Tung Soo Hua about support for older workers, who may face discrimination and barriers when it comes to employment, Mr Heng said businesses also play an important role, besides policy measures such as raising the retirement and re-employment age. Workers, on their part, also need to continually update their skills.
"I hope we can study how to further enhance our efforts in helping older workers with employment and transitioning to different jobs," he told the participants, who included younger and older workers as well as business owners.
Madam Annie Chan, the second-generation owner of Mummy Yummy - a food business that also distributes free food to vulnerable groups - noted that while families in rental flats were quite well provided for during the pandemic, some middle-income families have been hit hard. However, they may not qualify for assistance as they do not meet the criteria, she said.
Mr Heng, who is also Finance Minister, agreed that the pandemic has affected Singaporeans across income brackets, including those in the middle-income group.
In Budget 2021, as well as last year's Budget, the Government supported middle-income households with measures that help Singaporeans to retain their jobs as far as possible.
"If we can help to protect workers' rice bowls, then it can also help safeguard their livelihoods and support their families," said Mr Heng.
Charity and volunteering efforts are also important in helping the vulnerable, he said, urging more Singaporeans to contribute, given that the country's needs in this area will continue to grow.
On the planned goods and services tax (GST) hike between next year and 2025, Mr Heng said that it is necessary to fund Singapore's rising expenditure needs.
But a $6 billion Assurance Package that has been set aside will effectively delay the impact of the GST increase for lower-income Singaporeans for 10 years, while this impact will also be delayed for the majority of Singaporean households for at least five years.
He also noted that the introduction of a new framework for borrowing to finance major infrastructure projects is an equitable one, given that it helps to spread the costs of these projects over several generations.
If the economy rebounds, Mr Heng hopes that schemes like the SGUnited Traineeships Programme, which allows fresh graduates to go through an attachment at a company while receiving an allowance, will no longer have to be extended. "Ideally, companies will be able to hire graduates straight out of school," he said.
But if the Covid-19 situation takes a turn for the worse, or if the global economy does not recover soon, more Budgets could be rolled out to help Singaporeans, Mr Heng added.
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Deities. Chinks pray to deities when they want good fortune, of course must show sincerity no?
Sincerity is relative and not absolute.
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Singaporeans can save on travel. PAP bring the world to SG. Just open your door is China. Travel to work is India. Go makan is Malaysia. Go hospital is flipping.
It is better not to go hospital in flip flops.
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from straitstimes.com:
Singapore must ensure it can build back reserves, should need arise to draw on them again: DPM Heng
SINGAPORE - If the Covid-19 pandemic situation worsens, the Singapore Government may need to seek President Halimah Yacob's consideration for a further draw on past reserves to continue funding investments that would enable Singapore to emerge stronger in the midst of an unprecedented health and economic crisis.
In such a situation, Singapore should then think hard about how to ensure it can, over time, build back its reserves drawn for this purpose, said Deputy Prime Minister and Finance Minister Heng Swee Keat on Wednesday (Feb 24).
Singapore expects to draw $42.7 billion of past reserves for the last financial year. With the Government obtaining Madam Halimah's in-principle support to utilise up to $11 billion in FY2021, it is expected to draw up to $53.7 billion from the reserves since the onset of the coronavirus pandemic.
In a Facebook post published as MPs began debate on Budget 2021 in Parliament, Mr Heng acknowledged that drawing on past reserves for the second year in a row was a "difficult" decision.
"The discipline of balancing budgets is the cornerstone of our financial resilience," he wrote.
"In my Budget statement, I explained that if economic recovery progresses on track, we expect to fund the expenditures for the remainder of this term of Government without having to further draw on reserves.
"But the global outlook is highly uncertain, and we must be prepared for a scenario where recovery is bumpier and takes much longer."
Mr Heng added: "If the economic and fiscal situation turn out to be worse than expected, we should still stay the course to invest for the longer term to emerge stronger. In such a scenario, how then do we continue to ensure good fiscal discipline?"
The issue is not unique to Singapore, he added, pointing to how some countries have legislatively binding debt ceilings, with Germany hotly debating further suspension of a "debt brake" that typically restricts federal borrowing to 0.35 per cent of economic output.
Due to the pandemic, this law was suspended for 2020 and 2021, with the German government reportedly planning to propose extending this for a third straight year. Their finance minister has pledged to spend freely to tackle the economic fallout from the coronavirus.
Said Mr Heng: "We have benefited during this crisis from the prudence and long-term orientation of previous generations. We owe it to future generations to exercise this prudence and ensure they can deal with future crises."
Noting that he would give more details at his Budget round-up speech on Friday, he said: "If we rally together and make the best choices to position us well for the longer term, I am confident that we can emerge stronger and build a better future for our children."
Singapore must ensure it can build back reserves, should need arise to draw on them again: DPM Heng
SINGAPORE - If the Covid-19 pandemic situation worsens, the Singapore Government may need to seek President Halimah Yacob's consideration for a further draw on past reserves to continue funding investments that would enable Singapore to emerge stronger in the midst of an unprecedented health and economic crisis.
In such a situation, Singapore should then think hard about how to ensure it can, over time, build back its reserves drawn for this purpose, said Deputy Prime Minister and Finance Minister Heng Swee Keat on Wednesday (Feb 24).
Singapore expects to draw $42.7 billion of past reserves for the last financial year. With the Government obtaining Madam Halimah's in-principle support to utilise up to $11 billion in FY2021, it is expected to draw up to $53.7 billion from the reserves since the onset of the coronavirus pandemic.
In a Facebook post published as MPs began debate on Budget 2021 in Parliament, Mr Heng acknowledged that drawing on past reserves for the second year in a row was a "difficult" decision.
"The discipline of balancing budgets is the cornerstone of our financial resilience," he wrote.
"In my Budget statement, I explained that if economic recovery progresses on track, we expect to fund the expenditures for the remainder of this term of Government without having to further draw on reserves.
"But the global outlook is highly uncertain, and we must be prepared for a scenario where recovery is bumpier and takes much longer."
Mr Heng added: "If the economic and fiscal situation turn out to be worse than expected, we should still stay the course to invest for the longer term to emerge stronger. In such a scenario, how then do we continue to ensure good fiscal discipline?"
The issue is not unique to Singapore, he added, pointing to how some countries have legislatively binding debt ceilings, with Germany hotly debating further suspension of a "debt brake" that typically restricts federal borrowing to 0.35 per cent of economic output.
Due to the pandemic, this law was suspended for 2020 and 2021, with the German government reportedly planning to propose extending this for a third straight year. Their finance minister has pledged to spend freely to tackle the economic fallout from the coronavirus.
Said Mr Heng: "We have benefited during this crisis from the prudence and long-term orientation of previous generations. We owe it to future generations to exercise this prudence and ensure they can deal with future crises."
Noting that he would give more details at his Budget round-up speech on Friday, he said: "If we rally together and make the best choices to position us well for the longer term, I am confident that we can emerge stronger and build a better future for our children."
- Joined
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- 113
from straitstimes.com:
Budget debate: Raising productivity the only way to keep improving jobs and lives, says DPM Heng
SINGAPORE - Raising productivity, where firms transform in ways that bring workers along as they develop, is the only way to continually improve the the jobs and lives of Singaporeans - which is the ultimate goal of the country's economic growth, said Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
Responding to MPs' comments on the Budget statement, Mr Heng noted that the $24 billion set aside for business and worker transformation over the next three years is about pursuing Singapore's medium- to longer-term economic priorities even as the country tackles its immediate challenge.
The move also seeks to give Singapore's workers and companies a distinct advantage in the global marketplace, he added.
Several MPs, including Dr Koh Poh Koon (Ang Mo Kio GRC), had highlighted the synergies between firms and workers, he acknowledged, adding: "The fortunes of businesses and workers are inextricably linked, more so today than ever."
As Ms Jessica Tan (East Coast GRC) and others had pointed out, building a stronger Singapore core is at the heart of the Government's approach, Mr Heng added.
Highlighting points made by labour MPs about how the way forward for Singapore is as much about being stronger together as it is about emerging stronger, he said: "It is the strength of our collective capabilities and connectedness as an economy and as a society that will determine how far we will go."
While uncertainties and risks in the global economy remain given the Covid-19 pandemic and the emergence of new virus strains, the virus situation within Singapore remains under control. Singapore's economic recovery is expected to be gradual and uneven across sectors. GDP growth forecasts for 2021 is estimated at between 4 per cent and 6 per cent, said Mr Heng, who is also Finance Minister.
"Now is the time to chart our course, position ourselves to catch the winds of opportunity and sail boldly in the reshaped world," he said, adding that this is the focus of this year's Emerging Stronger Budget.
Decisive efforts have cushioned economic fallout
In his speech, the minister outlined the efforts in 2020 to support firms and businesses - some $27.4 billion in grants were committed to preserve jobs and help firms pivot to new growth areas. This was more than 18 times the amount disbursed in 2019, Mr Heng said.
The decisive response helped contain the economic impact of the Covid-19 pandemic to avoid deep scarring, which was also pointed out by Mr Liang Eng Hwa (Bukit Panjang SMC) and Mr Desmond Choo (Tampines GRC).
These efforts are estimated to have prevented a further 6.6 percentage points of GDP contraction in 2020 and mitigated the rise in resident unemployment rates by 2 percentage points.
Singapore's economy contracted 5.4 per cent in 2020 - its worst recession since independence - and its resident unemployment rate was 4.1 per cent. Globally, real GDP is estimated to have fallen 3.5 per cent in 2020, the worst global economic crisis since the Great Depression in the 1930s, Mr Heng noted.
The calibrated strategy Singapore has taken through the combined Budgets from 2020 and 2021 has also had positive outcomes for firms and workers, he said.
Some of the hardest-hit sectors are starting to see light at the end of the tunnel, Mr Heng pointed out, citing how consumer-facing sectors like retail and food services saw a gradual recovery by the fourth quarter in 2020.
Post Covid-19 economy
Responding to questions from MPs, including Mr Zhulkarnain Abdul Rahim (Chua Chu Kang GRC), about what the post Covid-19 world means for Singapore's economy, Mr Heng outlined three areas Singapore must work on to pave the way for its next lap of growth.
First, the country must remake itself as a global Asian node of technology, innovation and enterprise. This requires enhancing the country's connectivity and positioning its firms and workers at the intersection of key global chains growing out of Asia.
Second, as Mr Gan Thiam Poh (Ang Mo Kio GRC) had highlighted, the Republic must shift to a technologically advanced and innovation-driven economy where firms and workers are equipped with the skills to harness technology and intangible assets as a key differentiator.
Third, Singapore must invest in economic resilience and sustainability as a source of competitive advantage, Mr Heng said, noting how Mr Shawn Huang (Jurong GRC) had summarised it aptly - that is, for Singapore to survive, pivot and develop an edge to seize opportunities of the future.
"If we get this right, we can set our economy on the path of growth for the next five to 10 years."
Singapore will also build on its Alliances for Action to enable more industries to transform together, and invest in future engines of growth to create new opportunities for firms and workers, Mr Heng added.
This includes nurturing and harnessing the growth of the green economy, a key part of the future economy, which Dr Lim Wee Kiak (Sembawang GRC) and Ms Cheryl Chan (East Coast GRC) had highlighted.
"Making bold investments now will give us a head start and create many good jobs for Singaporeans in the future," he said.
Replying to Workers' Party MP Leon Perera's (Aljunied GRC) point about incentivising collaboration between multinational corporations (MNCs) and small and medium-sized enterprises (SMEs), Mr Heng said that synergy of firms working together applies to firms of all sizes and sectors.
The Ministry of Trade and Industry will elaborate on initiatives for knowledge transfers and skills training at the debate on their ministry's budget, he added.
Singapore takes an ecosystem approach to economic development, sustaining an ecosystem of innovative and competitive firms to support a vibrant economy, Mr Heng stressed.
"All these efforts serve to create opportunities for our people."
Budget debate: Raising productivity the only way to keep improving jobs and lives, says DPM Heng
SINGAPORE - Raising productivity, where firms transform in ways that bring workers along as they develop, is the only way to continually improve the the jobs and lives of Singaporeans - which is the ultimate goal of the country's economic growth, said Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
Responding to MPs' comments on the Budget statement, Mr Heng noted that the $24 billion set aside for business and worker transformation over the next three years is about pursuing Singapore's medium- to longer-term economic priorities even as the country tackles its immediate challenge.
The move also seeks to give Singapore's workers and companies a distinct advantage in the global marketplace, he added.
Several MPs, including Dr Koh Poh Koon (Ang Mo Kio GRC), had highlighted the synergies between firms and workers, he acknowledged, adding: "The fortunes of businesses and workers are inextricably linked, more so today than ever."
As Ms Jessica Tan (East Coast GRC) and others had pointed out, building a stronger Singapore core is at the heart of the Government's approach, Mr Heng added.
Highlighting points made by labour MPs about how the way forward for Singapore is as much about being stronger together as it is about emerging stronger, he said: "It is the strength of our collective capabilities and connectedness as an economy and as a society that will determine how far we will go."
While uncertainties and risks in the global economy remain given the Covid-19 pandemic and the emergence of new virus strains, the virus situation within Singapore remains under control. Singapore's economic recovery is expected to be gradual and uneven across sectors. GDP growth forecasts for 2021 is estimated at between 4 per cent and 6 per cent, said Mr Heng, who is also Finance Minister.
"Now is the time to chart our course, position ourselves to catch the winds of opportunity and sail boldly in the reshaped world," he said, adding that this is the focus of this year's Emerging Stronger Budget.
Decisive efforts have cushioned economic fallout
In his speech, the minister outlined the efforts in 2020 to support firms and businesses - some $27.4 billion in grants were committed to preserve jobs and help firms pivot to new growth areas. This was more than 18 times the amount disbursed in 2019, Mr Heng said.
The decisive response helped contain the economic impact of the Covid-19 pandemic to avoid deep scarring, which was also pointed out by Mr Liang Eng Hwa (Bukit Panjang SMC) and Mr Desmond Choo (Tampines GRC).
These efforts are estimated to have prevented a further 6.6 percentage points of GDP contraction in 2020 and mitigated the rise in resident unemployment rates by 2 percentage points.
Singapore's economy contracted 5.4 per cent in 2020 - its worst recession since independence - and its resident unemployment rate was 4.1 per cent. Globally, real GDP is estimated to have fallen 3.5 per cent in 2020, the worst global economic crisis since the Great Depression in the 1930s, Mr Heng noted.
The calibrated strategy Singapore has taken through the combined Budgets from 2020 and 2021 has also had positive outcomes for firms and workers, he said.
Some of the hardest-hit sectors are starting to see light at the end of the tunnel, Mr Heng pointed out, citing how consumer-facing sectors like retail and food services saw a gradual recovery by the fourth quarter in 2020.
Post Covid-19 economy
Responding to questions from MPs, including Mr Zhulkarnain Abdul Rahim (Chua Chu Kang GRC), about what the post Covid-19 world means for Singapore's economy, Mr Heng outlined three areas Singapore must work on to pave the way for its next lap of growth.
First, the country must remake itself as a global Asian node of technology, innovation and enterprise. This requires enhancing the country's connectivity and positioning its firms and workers at the intersection of key global chains growing out of Asia.
Second, as Mr Gan Thiam Poh (Ang Mo Kio GRC) had highlighted, the Republic must shift to a technologically advanced and innovation-driven economy where firms and workers are equipped with the skills to harness technology and intangible assets as a key differentiator.
Third, Singapore must invest in economic resilience and sustainability as a source of competitive advantage, Mr Heng said, noting how Mr Shawn Huang (Jurong GRC) had summarised it aptly - that is, for Singapore to survive, pivot and develop an edge to seize opportunities of the future.
"If we get this right, we can set our economy on the path of growth for the next five to 10 years."
Singapore will also build on its Alliances for Action to enable more industries to transform together, and invest in future engines of growth to create new opportunities for firms and workers, Mr Heng added.
This includes nurturing and harnessing the growth of the green economy, a key part of the future economy, which Dr Lim Wee Kiak (Sembawang GRC) and Ms Cheryl Chan (East Coast GRC) had highlighted.
"Making bold investments now will give us a head start and create many good jobs for Singaporeans in the future," he said.
Replying to Workers' Party MP Leon Perera's (Aljunied GRC) point about incentivising collaboration between multinational corporations (MNCs) and small and medium-sized enterprises (SMEs), Mr Heng said that synergy of firms working together applies to firms of all sizes and sectors.
The Ministry of Trade and Industry will elaborate on initiatives for knowledge transfers and skills training at the debate on their ministry's budget, he added.
Singapore takes an ecosystem approach to economic development, sustaining an ecosystem of innovative and competitive firms to support a vibrant economy, Mr Heng stressed.
"All these efforts serve to create opportunities for our people."
- Joined
- Jun 27, 2018
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- 29,297
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PSP’s Leong Mun Wai counters DPM Heng’s argument against using entire NIR for Budget 2021
by The Online Citizen
01/03/2021
in Finance, Parliament
Reading Time: 2min read
0
Non-Constituency Member of Parliament (NCMP) Leong Mun Wai took to Facebook on Monday (1 Mar) to question Deputy Prime Minister Heng Swee Keat’s rebuttal that there will be a lack of fiscal resources in the future if 100 per cent of Net Investment Return (NIR) is used to support the 2021 Budget.
“If NIR or Net Investment Return is at $39.2B, why did DPM Heng strongly refute my claim that there is no lack of fiscal resources in the foreseeable future. If the entire NIR is used in the budget, it will more than cover our basic deficit of $31B and gives a surplus of $8.2B for FY2021,” said Mr Leong, who is a member of the Progress Singapore Party (PSP).
He added, “Under the professional management of MAS, GIC and Temasek, our total financial assets of $1.35T should be able to earn the same level of NIR consistently in the long term after taking into account the short-term financial market volatility.”
Explaining his point further, Mr Leong noted that Singapore’s total financial assets will continue to grow, even without the NIR, due to two factors.
The two said factors are the country’s land sale revenue and further accumulation of foreign reserves from Singapore’s large capital account surplus, the NCMP said.
“Even without the NIR, the total financial assets will continue increasing because of two factors: One, our land sale revenue of about $10B to $15B a year — $11.2 billion for FY2021 — and two, the further accumulation of foreign reserves from our large capital account surplus.”
“Recent experience has shown that regional uncertainties have triggered even more capital inflow into our country,” he noted.
While speaking in Parliament last week, Mr Heng, who is also Finance Minister, said that the reserves should not be treated like a “gold mountain”, in response to Mr Leong’s suggestion to use the entire returns from investing the reserves.
“If we adopt (Mr Leong’s) suggestion, one day even this mountain will be eaten up completely… We have a responsibility to future generations,” said Mr Heng.
Under the NIR framework, the Government can spend up to 50 per cent of long-term expected real returns, including capital gains, on its relevant assets.
Mr Heng also went on to state that the Net Investment Return Contribution (NIRC) was already the Government’s largest single source of revenue — above corporate income tax, personal income tax or the goods and services tax — and that this happened due to years of fiscal discipline and did not happen by chance or good fortune.
“If we had succumbed to the temptation to spend more, we would not have built up our reserves. And without reserves, we could not have been able to generate this stable and recurrent source of revenue today,” he explained.
Leong Mun Wai 梁文辉
7 hours ago
国会の声 ３月１日
Every year, the Budget and Committee of Supply debates are the most important sessions in Parliament. The Budget Debate will take place first followed by the COS debates. In my first experience of this year’s Budget Debate which was spread over 3 days from 24 Feb to 26 Feb, I felt that the time allotted was insufficient to allow for a thorough debate especially on the alternative views.
There are at least a few more important clarifications like the ones below that I would like to make in order to present a fuller picture to Singaporeans.
’
1. If NIR or Net Investment Return is at $39.2B, why did DPM Heng strongly refute my claim that there is no lack of fiscal resources in the foreseeable future. If the entire NIR is used in the budget, it will more than cover our basic deficit of $31B and gives a surplus of $8.2B for FY2021. Under the professional management of MAS, GIC and Temasek, our total financial assets of $. should be able to earn the same level of NIR consistently in the long term even after taking into account the short-term financial market volatility.
2. Even without the NIR, the total financial assets will continue increasing because of two factors: (1) our land sale revenue of about $ to $ a year ($. for FY2021) and (2) the further accumulation of foreign reserves from our large capital account surplus. Recent experience has shown that regional uncertainties has triggered even more capital inflow into our country.
3. I would also like to ask him if the expenditure side of the budget could be reviewed to suit a different socio-economic structure post-Covid. For example, if there are fewer foreigners, can we slow down on some of our infrastructural and housing developmental expenditures.
4. It is also puzzling to me that the more than 2.2 million foreigners residing in our country did not contribute enough tax revenue to relieve us from having to bear more tax increases. Are a substantial portion of the foreigners not productive and hence not paying taxes? Or maybe the additional infrastructural developments to house the foreigners costs more than the taxes they pay? If the foreigners are not net fiscal revenue contributors, then expenditure increases cannot be blamed solely on the increase in social expenditure for Singaporeans.
5. With the NIR revenues and possibility of expenditure cuts especially as the Covid pandemic tapers off, where is the urgency to raise taxes? Even if tax increases are necessary, is it justifiable to single out GST as the only viable source of tax increase?
6. Despite DPM Heng’s rebuttal on the viability of raising other taxes like the additional stamp duty on property transactions and wealth taxes and so on, further debate with more concrete data is called for. His arguments on the other taxes are debatable but the regressive nature of GST is undeniable.
7. Is it fair to impose further tax burdens on the middle-income and lower income Singaporeans when they already have little or no ability to pay, never mind about how many times benefits they get relative to the taxes they pay? The support given to cushion GST is only planned to last for between 5 to 10 years, but the GST hike is permanent.
8. I would like to ask what is the long term target rate for the GST? The 2% hike to 9% GST will only increase fiscal revenue by about 3% and that will definitely not be enough to pay for all the spending increase that they are purporting. If there are more hikes, the burden to the middle-class Singaporeans will get heavier and heavier, where is the end?
9. The PSP is 100% for an open Singapore because no one in their right mind will think that Singapore can survive or operate as a closed economy. But we also think that a rebalancing of the local-foreign worker mix is urgently needed to address the many problems affecting Singaporeans who are below the top quintile. Both Minister Ong and Minister of State Gan did not answer my point that it is not a level-playing field for Singaporean workers because foreign workers do not need to contribute to CPF.
In conclusion, we urge the Government to allot more time to the Budget debates in the future. We believe that it is important to deliberate the issues in more depth for the Singaporeans to understand our financial position better.
#SGBudget2021
by The Online Citizen
01/03/2021
in Finance, Parliament
Reading Time: 2min read
0
Non-Constituency Member of Parliament (NCMP) Leong Mun Wai took to Facebook on Monday (1 Mar) to question Deputy Prime Minister Heng Swee Keat’s rebuttal that there will be a lack of fiscal resources in the future if 100 per cent of Net Investment Return (NIR) is used to support the 2021 Budget.
“If NIR or Net Investment Return is at $39.2B, why did DPM Heng strongly refute my claim that there is no lack of fiscal resources in the foreseeable future. If the entire NIR is used in the budget, it will more than cover our basic deficit of $31B and gives a surplus of $8.2B for FY2021,” said Mr Leong, who is a member of the Progress Singapore Party (PSP).
He added, “Under the professional management of MAS, GIC and Temasek, our total financial assets of $1.35T should be able to earn the same level of NIR consistently in the long term after taking into account the short-term financial market volatility.”
Explaining his point further, Mr Leong noted that Singapore’s total financial assets will continue to grow, even without the NIR, due to two factors.
The two said factors are the country’s land sale revenue and further accumulation of foreign reserves from Singapore’s large capital account surplus, the NCMP said.
“Even without the NIR, the total financial assets will continue increasing because of two factors: One, our land sale revenue of about $10B to $15B a year — $11.2 billion for FY2021 — and two, the further accumulation of foreign reserves from our large capital account surplus.”
“Recent experience has shown that regional uncertainties have triggered even more capital inflow into our country,” he noted.
While speaking in Parliament last week, Mr Heng, who is also Finance Minister, said that the reserves should not be treated like a “gold mountain”, in response to Mr Leong’s suggestion to use the entire returns from investing the reserves.
“If we adopt (Mr Leong’s) suggestion, one day even this mountain will be eaten up completely… We have a responsibility to future generations,” said Mr Heng.
Under the NIR framework, the Government can spend up to 50 per cent of long-term expected real returns, including capital gains, on its relevant assets.
Mr Heng also went on to state that the Net Investment Return Contribution (NIRC) was already the Government’s largest single source of revenue — above corporate income tax, personal income tax or the goods and services tax — and that this happened due to years of fiscal discipline and did not happen by chance or good fortune.
“If we had succumbed to the temptation to spend more, we would not have built up our reserves. And without reserves, we could not have been able to generate this stable and recurrent source of revenue today,” he explained.
Leong Mun Wai 梁文辉
7 hours ago
国会の声 ３月１日
Every year, the Budget and Committee of Supply debates are the most important sessions in Parliament. The Budget Debate will take place first followed by the COS debates. In my first experience of this year’s Budget Debate which was spread over 3 days from 24 Feb to 26 Feb, I felt that the time allotted was insufficient to allow for a thorough debate especially on the alternative views.
There are at least a few more important clarifications like the ones below that I would like to make in order to present a fuller picture to Singaporeans.
’
1. If NIR or Net Investment Return is at $39.2B, why did DPM Heng strongly refute my claim that there is no lack of fiscal resources in the foreseeable future. If the entire NIR is used in the budget, it will more than cover our basic deficit of $31B and gives a surplus of $8.2B for FY2021. Under the professional management of MAS, GIC and Temasek, our total financial assets of $. should be able to earn the same level of NIR consistently in the long term even after taking into account the short-term financial market volatility.
2. Even without the NIR, the total financial assets will continue increasing because of two factors: (1) our land sale revenue of about $ to $ a year ($. for FY2021) and (2) the further accumulation of foreign reserves from our large capital account surplus. Recent experience has shown that regional uncertainties has triggered even more capital inflow into our country.
3. I would also like to ask him if the expenditure side of the budget could be reviewed to suit a different socio-economic structure post-Covid. For example, if there are fewer foreigners, can we slow down on some of our infrastructural and housing developmental expenditures.
4. It is also puzzling to me that the more than 2.2 million foreigners residing in our country did not contribute enough tax revenue to relieve us from having to bear more tax increases. Are a substantial portion of the foreigners not productive and hence not paying taxes? Or maybe the additional infrastructural developments to house the foreigners costs more than the taxes they pay? If the foreigners are not net fiscal revenue contributors, then expenditure increases cannot be blamed solely on the increase in social expenditure for Singaporeans.
5. With the NIR revenues and possibility of expenditure cuts especially as the Covid pandemic tapers off, where is the urgency to raise taxes? Even if tax increases are necessary, is it justifiable to single out GST as the only viable source of tax increase?
6. Despite DPM Heng’s rebuttal on the viability of raising other taxes like the additional stamp duty on property transactions and wealth taxes and so on, further debate with more concrete data is called for. His arguments on the other taxes are debatable but the regressive nature of GST is undeniable.
7. Is it fair to impose further tax burdens on the middle-income and lower income Singaporeans when they already have little or no ability to pay, never mind about how many times benefits they get relative to the taxes they pay? The support given to cushion GST is only planned to last for between 5 to 10 years, but the GST hike is permanent.
8. I would like to ask what is the long term target rate for the GST? The 2% hike to 9% GST will only increase fiscal revenue by about 3% and that will definitely not be enough to pay for all the spending increase that they are purporting. If there are more hikes, the burden to the middle-class Singaporeans will get heavier and heavier, where is the end?
9. The PSP is 100% for an open Singapore because no one in their right mind will think that Singapore can survive or operate as a closed economy. But we also think that a rebalancing of the local-foreign worker mix is urgently needed to address the many problems affecting Singaporeans who are below the top quintile. Both Minister Ong and Minister of State Gan did not answer my point that it is not a level-playing field for Singaporean workers because foreign workers do not need to contribute to CPF.
In conclusion, we urge the Government to allot more time to the Budget debates in the future. We believe that it is important to deliberate the issues in more depth for the Singaporeans to understand our financial position better.
#SGBudget2021
- Joined
- Jul 14, 2008
- Messages
- 89,028
- Points
- 113
from straitstimes.com:
Budget debate: Scope to further review Singapore's wealth taxes, says DPM Heng
SINGAPORE - There is scope to further review Singapore's wealth taxes, but imposing such levies will not replace the need to increase the goods and services tax (GST), said Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
Responding to questions from MPs about stepping up wealth taxes, Mr Heng said that such taxes are not new in Singapore, and the country has enhanced the progressivity of wealth-related taxes over the years.
During the debate on the Budget statement on Wednesday, Ms Foo Mee Har (West Coast GRC) highlighted how the trend of wealth taxes is gaining traction globally, and cited Argentina's one-time levy on millionaires in December 2020.
Several other countries, including Britain, have also brought wealth tax into the spotlight, she said.
In response, Mr Heng noted that Argentina's one-off tax was done to fund higher spending for Covid-19 measures.
But Singapore entered the pandemic on a strong fiscal position, and is fortunate to be able to tap its past reserves, he said.
Adding that he believes Ms Foo's intent to be for those who came out on top of the crisis to do more for the community, Mr Heng said that Singapore will continue to review its wealth taxes.
Replying to the suggestion by Workers' Party MP Leon Perera (Aljunied GRC) of raising buyer's stamp duty and additional buyer's stamp duty (ABSD) for more expensive properties, Mr Heng agreed that there is a role for property-related taxes and that the Government will continue to review this to ensure that it remains progressive.
He highlighted that the ABSD is a property market measure, rather than a revenue-raising one, and is calibrated to maintain a stable and sustainable property market.
Noting that property tax and stamp duty was made more progressive in the Budgets in 2010, 2013 and 2018, Mr Heng added: "I trust that Mr Perera will give his strong support if and when we make such new moves."
Other options have also been considered as alternatives to GST, including estate duty, he said. But this was abolished in 2008, because the middle- and upper-middle income groups were affected disproportionately compared with the wealthy, who were able to avoid the estate duty through tax planning.
Mr Heng reiterated that the country does tax wealth and has been raising wealth taxes over the years. But the question is not about taxing wealth, but how to design wealth tax moves to ensure that they are effective.
Singapore must ensure that the wealth tax cannot be easily avoided, achieves a balance between progressivity and staying competitive, and adds to the country's revenue resilience and adequacy, he said.
Addressing WP MP Louis Chua's (Sengkang GRC) suggestions on spending land sales proceeds in the Budget, Mr Heng said that selling Singapore's land does not make the Government wealthier and should not directly support its expenditure. Investing the proceeds instead generates a sustainable stream of income over the long term, and has served the country well, he added.
He also added that relying on land sales for fiscal revenue comes with its risks, given the volatility of land prices and because relying on land sales to fund spending could lead to the Government having a vested interest to keep land prices high.
In places where local governments rely on land sales for revenues, distortionary effects on the welfare of people in countries can be seen, Mr Heng pointed out.
"The current approach of spending the land sales proceeds through the NIRC (Net Investment Returns Contribution) avoids these pitfalls, and allows the Government to make land sale decisions based on what is best for the country's development, and not because it needs to balance the budget."
Budget debate: Scope to further review Singapore's wealth taxes, says DPM Heng
SINGAPORE - There is scope to further review Singapore's wealth taxes, but imposing such levies will not replace the need to increase the goods and services tax (GST), said Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
Responding to questions from MPs about stepping up wealth taxes, Mr Heng said that such taxes are not new in Singapore, and the country has enhanced the progressivity of wealth-related taxes over the years.
During the debate on the Budget statement on Wednesday, Ms Foo Mee Har (West Coast GRC) highlighted how the trend of wealth taxes is gaining traction globally, and cited Argentina's one-time levy on millionaires in December 2020.
Several other countries, including Britain, have also brought wealth tax into the spotlight, she said.
In response, Mr Heng noted that Argentina's one-off tax was done to fund higher spending for Covid-19 measures.
But Singapore entered the pandemic on a strong fiscal position, and is fortunate to be able to tap its past reserves, he said.
Adding that he believes Ms Foo's intent to be for those who came out on top of the crisis to do more for the community, Mr Heng said that Singapore will continue to review its wealth taxes.
Replying to the suggestion by Workers' Party MP Leon Perera (Aljunied GRC) of raising buyer's stamp duty and additional buyer's stamp duty (ABSD) for more expensive properties, Mr Heng agreed that there is a role for property-related taxes and that the Government will continue to review this to ensure that it remains progressive.
He highlighted that the ABSD is a property market measure, rather than a revenue-raising one, and is calibrated to maintain a stable and sustainable property market.
Noting that property tax and stamp duty was made more progressive in the Budgets in 2010, 2013 and 2018, Mr Heng added: "I trust that Mr Perera will give his strong support if and when we make such new moves."
Other options have also been considered as alternatives to GST, including estate duty, he said. But this was abolished in 2008, because the middle- and upper-middle income groups were affected disproportionately compared with the wealthy, who were able to avoid the estate duty through tax planning.
Mr Heng reiterated that the country does tax wealth and has been raising wealth taxes over the years. But the question is not about taxing wealth, but how to design wealth tax moves to ensure that they are effective.
Singapore must ensure that the wealth tax cannot be easily avoided, achieves a balance between progressivity and staying competitive, and adds to the country's revenue resilience and adequacy, he said.
Addressing WP MP Louis Chua's (Sengkang GRC) suggestions on spending land sales proceeds in the Budget, Mr Heng said that selling Singapore's land does not make the Government wealthier and should not directly support its expenditure. Investing the proceeds instead generates a sustainable stream of income over the long term, and has served the country well, he added.
He also added that relying on land sales for fiscal revenue comes with its risks, given the volatility of land prices and because relying on land sales to fund spending could lead to the Government having a vested interest to keep land prices high.
In places where local governments rely on land sales for revenues, distortionary effects on the welfare of people in countries can be seen, Mr Heng pointed out.
"The current approach of spending the land sales proceeds through the NIRC (Net Investment Returns Contribution) avoids these pitfalls, and allows the Government to make land sale decisions based on what is best for the country's development, and not because it needs to balance the budget."
- Joined
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from straitstimes.com:
Budget debate: Job security about staying employable, with new skills for future jobs, says DPM Heng
SINGAPORE - Job security is about staying employable and not just staying employed in the same job, noted Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
He added that the Government will continue to strengthen the ecosystem so people can continuously gain new skills and be prepared for future jobs.
"To help workers capture these opportunities and enjoy the fruits of growth, we have moved into helping workers get into growth areas, and equipping them with skills to secure sustainable livelihoods," he said in response to labour MP Patrick Tay (Pioneer) who had highlighted employability and job security as the top concerns of workers.
"Our immediate priority is to build upon the skills and experience that workers have accumulated, while breaking down barriers so that they can access new jobs," added Mr Heng.
For example, the Government will continue to support job seekers in their career growth through the extension and re-calibration of the SGUnited Jobs and Skills Package.
It is also partnering market leaders to conduct quality training at scale. For example, SkillsFuture Singapore is working with Google, Boston Consulting Group, and Siemens to offer SGUnited MidCareer Pathways programmes in infocomm technology, professional services, and advanced manufacturing.
Such company partners have collectively committed more than 6,000 training places and enrolled more than 2,500 trainees.
Mr Heng observed that Singaporeans have taken ownership of learning and skills acquisition, with more than 188,000 locals using their SkillsFuture Credit last year, a 21 per cent increase from 2019.
Firms are also doing their bit in enabling workers to build skills, he said. Last year, 3,400 enterprises sent staff for training in courses supported under the SkillsFuture Enterprise Credit, and about 250 enterprises also benefited from partnerships with SkillsFuture anchor companies to enhance their staff's skills development.
Mr Heng also responded to a comment by labour MP Koh Poh Koon (Tampines GRC) that upskilling and job redesign must come together for pervasive transformation.
"We will continue to provide strong support to companies on this front. This includes operation and technology roadmapping that integrates upskilling to achieve a long-term growth strategy," he said.
At the same time, the unions and trade associations and chambers can reach out to more firms and promote deeper collaboration between firms and workers, Mr Heng pointed out.
For instance, the Singapore Business Federation partnered Workforce Singapore to lead an initiative that helps companies adopt Industry 4.0 through job redesign.
To date, close to 70 companies have participated to potentially uplift more than 1,000 jobs and generate more than $52.5 million in cost savings. The business federation aims to scale this to help up to 300 companies and 1,500 workers by September next year.
Meanwhile, the Jobs Security Council also helped to place more than 28,000 workers in new positions last year.
Mr Heng said: "By pre-emptively matching at-risk workers to new employers, the Job Security Council helps workers minimise employment downtime, and aids businesses to manage fluctuating manpower needs."
Budget debate: Job security about staying employable, with new skills for future jobs, says DPM Heng
SINGAPORE - Job security is about staying employable and not just staying employed in the same job, noted Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
He added that the Government will continue to strengthen the ecosystem so people can continuously gain new skills and be prepared for future jobs.
"To help workers capture these opportunities and enjoy the fruits of growth, we have moved into helping workers get into growth areas, and equipping them with skills to secure sustainable livelihoods," he said in response to labour MP Patrick Tay (Pioneer) who had highlighted employability and job security as the top concerns of workers.
"Our immediate priority is to build upon the skills and experience that workers have accumulated, while breaking down barriers so that they can access new jobs," added Mr Heng.
For example, the Government will continue to support job seekers in their career growth through the extension and re-calibration of the SGUnited Jobs and Skills Package.
It is also partnering market leaders to conduct quality training at scale. For example, SkillsFuture Singapore is working with Google, Boston Consulting Group, and Siemens to offer SGUnited MidCareer Pathways programmes in infocomm technology, professional services, and advanced manufacturing.
Such company partners have collectively committed more than 6,000 training places and enrolled more than 2,500 trainees.
Mr Heng observed that Singaporeans have taken ownership of learning and skills acquisition, with more than 188,000 locals using their SkillsFuture Credit last year, a 21 per cent increase from 2019.
Firms are also doing their bit in enabling workers to build skills, he said. Last year, 3,400 enterprises sent staff for training in courses supported under the SkillsFuture Enterprise Credit, and about 250 enterprises also benefited from partnerships with SkillsFuture anchor companies to enhance their staff's skills development.
Mr Heng also responded to a comment by labour MP Koh Poh Koon (Tampines GRC) that upskilling and job redesign must come together for pervasive transformation.
"We will continue to provide strong support to companies on this front. This includes operation and technology roadmapping that integrates upskilling to achieve a long-term growth strategy," he said.
At the same time, the unions and trade associations and chambers can reach out to more firms and promote deeper collaboration between firms and workers, Mr Heng pointed out.
For instance, the Singapore Business Federation partnered Workforce Singapore to lead an initiative that helps companies adopt Industry 4.0 through job redesign.
To date, close to 70 companies have participated to potentially uplift more than 1,000 jobs and generate more than $52.5 million in cost savings. The business federation aims to scale this to help up to 300 companies and 1,500 workers by September next year.
Meanwhile, the Jobs Security Council also helped to place more than 28,000 workers in new positions last year.
Mr Heng said: "By pre-emptively matching at-risk workers to new employers, the Job Security Council helps workers minimise employment downtime, and aids businesses to manage fluctuating manpower needs."
- Joined
- Jul 14, 2008
- Messages
- 89,028
- Points
- 113
from straitstimes.com:
Budget debate: S'pore has to refrain from borrowing for recurrent expenditure, says DPM Heng
SINGAPORE - While Singapore will look to borrow for long-term infrastructure, it has to resist doing so for recurrent expenditure.
If not used productively, borrowing can often lead to high debt and low growth, which would affect investor confidence, businesses' cost of funding and the country's long-term growth, Deputy Prime Minister Heng Swee Keat said on Friday (Feb 26).
Responding to MPs' support for borrowing for long-term infrastructure, he stressed that the Government's approach to borrowing is a carefully calibrated one.
There is good debt and bad debt, which Ms Foo Mee Har (West Coast GRC) had noted, but the key difference is what is done with the debt proceeds, Mr Heng said.
The Government is currently already borrowing, under the Government Securities Act and the Local Treasury Bills Act, he added. "But instead of spending the proceeds, we invest them for long-term returns, which is used to repay our debt."
In response to the question by Associate Professor Jamus Lim (Sengkang GRC) if Singapore could borrow more to fund soft capital like education, Mr Heng said that Singapore had to refrain from doing so for such recurrent expenditures.
In many countries, there is a tendency to expand the scope of what constitutes soft capital beyond the original intentions, he noted.
"When used to fund increases to government subsidies or social transfers, it is really more recurrent spending. Borrowing continuously for them will just lead to ever higher debts, which have to be repaid by future generations."
Interest rates are low for now, but this can change quickly and when they change, existing debts have to be refinanced and a higher interest rate could quickly worsen the fiscal situation, Mr Heng said.
Prof Lim had said he was "happy as a clam" that the Budget's fiscal strategy included elements which he had raised previously, but Mr Heng pointed out that he had announced that the Government was studying borrowing in 2019, before Prof Lim had entered Parliament. “But I’m glad he shares our views. So perhaps if you read more of our past Budget statements, you’ll be even happier.”
He added: "Borrowing is not a form of revenue. Borrowing gives us cash for liquidity planning but it does not create free monies for spending. Today's debt is paid for by tomorrow's growth and tomorrow's generation."
Replying to Ms Foo and Dr Lim Wee Kiak (Sembawang GRC) on the safeguards for borrowing and how borrowing under the new Significant Infrastructure Government Loan Act (Singa) bonds may impact Singapore's credit rating, Mr Heng said that Singapore will set $90 billion as a borrowing limit.
This limit is sized based on the expected expenditure of major, long-term infrastructure projects over the next 15 years, and any increase of this limit will require legislative amendments which are subject to parliamentary approval, he added. Other safeguards such as a limit on interest costs will also be put in place, and more information will be provided when the Bill is presented in Parliament later in the year, he said.
The key is to use debt equitably and sustainably, Mr Heng said, adding that the Government would study the suggestion by Mr Liang Eng Hwa (Bukit Panjang) of a one-off, special purpose borrowing to help Singapore emerge stronger from the Covid-19 crisis.
Debate over borrowing for soft capital
Mr Heng and Prof Lim later crossed swords when the Workers' Party MP asked why the minister "remains dismissive of soft capital".
"The key I think, is ultimately that we invest what we end up borrowing... and while I agree that we shouldn't allow recurrent expenditures to be lumped into soft capital, it's easy to allow recurrent expenditures of all forms," Prof Lim noted.
Rather, he added, the crux is that we always evaluate how a given project is defined as soft or hard capital in its ultimate investment and repayment potential.
Mr Heng replied: "Let me say that in parliamentary debates, please do not put words into my mouth. I did not dismiss soft capital. You said I was dismissive of soft capital, I did not. I said that we have to be careful."
He added that Singapore has to be cautious about soft capital precisely because it is soft - it can morph into various shapes and over time, and everything becomes a capital investment.
Mr Sitoh Yih Pin (Potong Pasir) also weighed in, suggesting that one of the reasons why Singapore is quite comfortable to borrow now is because of its fairly large reserves and the confidence that its rate of return from the reserves in the long term is going to exceed its cost of borrowing.
In reply, Mr Heng noted that even if Singapore's fiscal situation is good, it may not even be enough for it to fund the lumpy infrastructure investment required. Borrowing means that the cost is shared with various generations, and at this point, it is efficient to do so because interest rates are ultra low, he added.
Budget debate: S'pore has to refrain from borrowing for recurrent expenditure, says DPM Heng
SINGAPORE - While Singapore will look to borrow for long-term infrastructure, it has to resist doing so for recurrent expenditure.
If not used productively, borrowing can often lead to high debt and low growth, which would affect investor confidence, businesses' cost of funding and the country's long-term growth, Deputy Prime Minister Heng Swee Keat said on Friday (Feb 26).
Responding to MPs' support for borrowing for long-term infrastructure, he stressed that the Government's approach to borrowing is a carefully calibrated one.
There is good debt and bad debt, which Ms Foo Mee Har (West Coast GRC) had noted, but the key difference is what is done with the debt proceeds, Mr Heng said.
The Government is currently already borrowing, under the Government Securities Act and the Local Treasury Bills Act, he added. "But instead of spending the proceeds, we invest them for long-term returns, which is used to repay our debt."
In response to the question by Associate Professor Jamus Lim (Sengkang GRC) if Singapore could borrow more to fund soft capital like education, Mr Heng said that Singapore had to refrain from doing so for such recurrent expenditures.
In many countries, there is a tendency to expand the scope of what constitutes soft capital beyond the original intentions, he noted.
"When used to fund increases to government subsidies or social transfers, it is really more recurrent spending. Borrowing continuously for them will just lead to ever higher debts, which have to be repaid by future generations."
Interest rates are low for now, but this can change quickly and when they change, existing debts have to be refinanced and a higher interest rate could quickly worsen the fiscal situation, Mr Heng said.
Prof Lim had said he was "happy as a clam" that the Budget's fiscal strategy included elements which he had raised previously, but Mr Heng pointed out that he had announced that the Government was studying borrowing in 2019, before Prof Lim had entered Parliament. “But I’m glad he shares our views. So perhaps if you read more of our past Budget statements, you’ll be even happier.”
He added: "Borrowing is not a form of revenue. Borrowing gives us cash for liquidity planning but it does not create free monies for spending. Today's debt is paid for by tomorrow's growth and tomorrow's generation."
Replying to Ms Foo and Dr Lim Wee Kiak (Sembawang GRC) on the safeguards for borrowing and how borrowing under the new Significant Infrastructure Government Loan Act (Singa) bonds may impact Singapore's credit rating, Mr Heng said that Singapore will set $90 billion as a borrowing limit.
This limit is sized based on the expected expenditure of major, long-term infrastructure projects over the next 15 years, and any increase of this limit will require legislative amendments which are subject to parliamentary approval, he added. Other safeguards such as a limit on interest costs will also be put in place, and more information will be provided when the Bill is presented in Parliament later in the year, he said.
The key is to use debt equitably and sustainably, Mr Heng said, adding that the Government would study the suggestion by Mr Liang Eng Hwa (Bukit Panjang) of a one-off, special purpose borrowing to help Singapore emerge stronger from the Covid-19 crisis.
Debate over borrowing for soft capital
Mr Heng and Prof Lim later crossed swords when the Workers' Party MP asked why the minister "remains dismissive of soft capital".
"The key I think, is ultimately that we invest what we end up borrowing... and while I agree that we shouldn't allow recurrent expenditures to be lumped into soft capital, it's easy to allow recurrent expenditures of all forms," Prof Lim noted.
Rather, he added, the crux is that we always evaluate how a given project is defined as soft or hard capital in its ultimate investment and repayment potential.
Mr Heng replied: "Let me say that in parliamentary debates, please do not put words into my mouth. I did not dismiss soft capital. You said I was dismissive of soft capital, I did not. I said that we have to be careful."
He added that Singapore has to be cautious about soft capital precisely because it is soft - it can morph into various shapes and over time, and everything becomes a capital investment.
Mr Sitoh Yih Pin (Potong Pasir) also weighed in, suggesting that one of the reasons why Singapore is quite comfortable to borrow now is because of its fairly large reserves and the confidence that its rate of return from the reserves in the long term is going to exceed its cost of borrowing.
In reply, Mr Heng noted that even if Singapore's fiscal situation is good, it may not even be enough for it to fund the lumpy infrastructure investment required. Borrowing means that the cost is shared with various generations, and at this point, it is efficient to do so because interest rates are ultra low, he added.
- Joined
- Jul 14, 2008
- Messages
- 89,028
- Points
- 113
from straitstimes.com:
Budget debate: GST has to be increased to fund rising recurring costs, says DPM Heng
SINGAPORE - The goods and services tax (GST) has to be increased to fund rising recurrent spending in key areas like healthcare and to provide for more social safety nets, said Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
A $6 billion Assurance Package set aside in last year's Budget will ensure that lower-income households will pay less than those that are well-off when the GST goes up, said Mr Heng, who set out in detail in his Budget round-up speech why the upcoming tax hike cannot be delayed or dropped.
Raising the GST is the responsible thing to do in order to not burden future generations, given how there have been structural increases in Singapore's recurrent spending, stressed Mr Heng.
For instance, annual healthcare spending has nearly tripled from $3.9 billion in fiscal year 2011, to $11.3 billion in 2019.
"If we want to spend more, we have to raise the revenue... do not make irresponsible promises which burden future generations," he asked of MPs.
"If these are recurrent needs - which have to be financed year after year - we must find recurrent revenues - which we can collect year after year."
Singapore is not the only country that is planning ahead, and Mr Heng pointed out that even Saudi Arabia, a country blessed with huge oil reserves, recently introduced a 5 per cent value-added tax from 2018, which it increased to 15 per cent from last July.
The GST is set to go up from 7 per cent to 9 per cent between next year and 2025.
Rising costs
Singapore's healthcare cost is estimated to rise to 3 per cent of Singapore's gross domestic product by 2030, said Mr Heng.
By that year, the number of Singaporeans aged 65 and above will increase from one in six to one in four, and spending for healthcare will increase, given how seniors are four times more likely to be hospitalised than their younger counterparts, and to stay for twice as long, he added.
"Our demographic trends will mean higher spending, outstripping GDP growth," he said.
But healthcare is not the only area where spending will rise.
Mr Heng noted how in the Budget three years ago, he had mentioned that the annual security spending by the Defence and Home Affairs Ministries was likely to rise by 0.2 percentage points of GDP to meet rising threats such as information warfare.
Social spending, due to more funds being set aside for pre-school education and lifelong learning, will also go up.
Infrastructure spending will also jump, given how more resources are needed in this area to enhance Singapore's competitiveness, build homes for its residents and improve its connectivity.
Difficult decisions will need to be made to face these growing spending needs head on, and Mr Heng noted that since 2007, the Government has already increased a range of other taxes to collect more from those who are better off. Wealth-related taxes, for instance, have become more progressive.
These funds are then transferred to the lower-income through social spending - all while the GST remained at 7 per cent, he added.
While the GST is not going to be raised now, given that the economy is still recovering from the Covid-19 pandemic, Singapore is facing structural trends like an ageing population that will increase its recurrent expenditures.
For example, public healthcare capacity is being ramped up, and Mr Heng pointed to a new integrated hospital in Bedok North to be ready by 2030 that will serve the growing population in the east.
"If we defer this spending, we risk being unable to adequately care for our people when the need comes."
Support for GST increase
Mr Heng assured Singaporeans that the $6 billion Assurance Package will help cushion the impact of the coming GST hike, with more help directed at lower-income households.
This package will effectively delay the GST rate increase for most Singaporean households by at least five years, and lower-income Singaporeans will receive higher offsets of about 10 years worth of additional GST expenses.
This is on top of existing benefits and transfers such as the permanent GST Voucher scheme, said Mr Heng. "These keep our overall taxes and transfers system fair and progressive," he said.
Last year, the top fifth of all Singaporean households by income paid 56 per cent of the taxes and received 11 per cent of the benefits, whereas the bottom quintile paid 9 per cent of the taxes and received 27 per cent of the benefits.
He added that the Government is concerned for the households in between, which paid 35 per cent of taxes while receiving 62 per cent of the benefits.
Mr Heng rejected as baseless Non-Constituency MP Leong Mun Wai's observation that his Progress Singapore Party does not see Singapore facing any shortage of fiscal revenues in the foreseeable future.
Mr Heng stressed that MPs cannot be advocating national policy "on the basis of personal hunches", and should instead focus on the hard work that needs to be done.
"It will be foolhardy to underestimate the risks and uncertainties we are facing," he added.
Budget office
In his speech, Mr Heng also shot down a suggestion by Workers' Party chief and Leader of the Opposition Pritam Singh to set up an independent parliamentary budget office to enhance scrutiny on government spending.
Such an office would be "a wasteful duplication", given that the Government already has such scrutiny in place, he said.
Other than independent audits by the Auditor General's Office, there already is parliamentary scrutiny of its spending through the Estimates and Public Accounts Committees, and Mr Heng noted that the WP is represented in both committees.
The Government has achieved world-leading outcomes while running one of the leanest administrations in the world, and is always looking to do better with less, he said.
"Prudence and stewardship are core values of this Government. We hold ourselves to high standards and work hard to ensure that our spending is cost effective, to deliver the best value for money for taxpayers," he said.
Mr Heng also voiced his concern over how the WP planned to fund this independent parliamentary budget office, and how much it would cost. He mentioned a $20 million figure that he said the WP had proposed be spent to set up this office "to do this job for them".
"Even as they call for more scrutiny on government expenditure, we invite them to hold themselves to the same scrutiny," he said.
Budget debate: GST has to be increased to fund rising recurring costs, says DPM Heng
SINGAPORE - The goods and services tax (GST) has to be increased to fund rising recurrent spending in key areas like healthcare and to provide for more social safety nets, said Deputy Prime Minister Heng Swee Keat on Friday (Feb 26).
A $6 billion Assurance Package set aside in last year's Budget will ensure that lower-income households will pay less than those that are well-off when the GST goes up, said Mr Heng, who set out in detail in his Budget round-up speech why the upcoming tax hike cannot be delayed or dropped.
Raising the GST is the responsible thing to do in order to not burden future generations, given how there have been structural increases in Singapore's recurrent spending, stressed Mr Heng.
For instance, annual healthcare spending has nearly tripled from $3.9 billion in fiscal year 2011, to $11.3 billion in 2019.
"If we want to spend more, we have to raise the revenue... do not make irresponsible promises which burden future generations," he asked of MPs.
"If these are recurrent needs - which have to be financed year after year - we must find recurrent revenues - which we can collect year after year."
Singapore is not the only country that is planning ahead, and Mr Heng pointed out that even Saudi Arabia, a country blessed with huge oil reserves, recently introduced a 5 per cent value-added tax from 2018, which it increased to 15 per cent from last July.
The GST is set to go up from 7 per cent to 9 per cent between next year and 2025.
Rising costs
Singapore's healthcare cost is estimated to rise to 3 per cent of Singapore's gross domestic product by 2030, said Mr Heng.
By that year, the number of Singaporeans aged 65 and above will increase from one in six to one in four, and spending for healthcare will increase, given how seniors are four times more likely to be hospitalised than their younger counterparts, and to stay for twice as long, he added.
"Our demographic trends will mean higher spending, outstripping GDP growth," he said.
But healthcare is not the only area where spending will rise.
Mr Heng noted how in the Budget three years ago, he had mentioned that the annual security spending by the Defence and Home Affairs Ministries was likely to rise by 0.2 percentage points of GDP to meet rising threats such as information warfare.
Social spending, due to more funds being set aside for pre-school education and lifelong learning, will also go up.
Infrastructure spending will also jump, given how more resources are needed in this area to enhance Singapore's competitiveness, build homes for its residents and improve its connectivity.
Difficult decisions will need to be made to face these growing spending needs head on, and Mr Heng noted that since 2007, the Government has already increased a range of other taxes to collect more from those who are better off. Wealth-related taxes, for instance, have become more progressive.
These funds are then transferred to the lower-income through social spending - all while the GST remained at 7 per cent, he added.
While the GST is not going to be raised now, given that the economy is still recovering from the Covid-19 pandemic, Singapore is facing structural trends like an ageing population that will increase its recurrent expenditures.
For example, public healthcare capacity is being ramped up, and Mr Heng pointed to a new integrated hospital in Bedok North to be ready by 2030 that will serve the growing population in the east.
"If we defer this spending, we risk being unable to adequately care for our people when the need comes."
Support for GST increase
Mr Heng assured Singaporeans that the $6 billion Assurance Package will help cushion the impact of the coming GST hike, with more help directed at lower-income households.
This package will effectively delay the GST rate increase for most Singaporean households by at least five years, and lower-income Singaporeans will receive higher offsets of about 10 years worth of additional GST expenses.
This is on top of existing benefits and transfers such as the permanent GST Voucher scheme, said Mr Heng. "These keep our overall taxes and transfers system fair and progressive," he said.
Last year, the top fifth of all Singaporean households by income paid 56 per cent of the taxes and received 11 per cent of the benefits, whereas the bottom quintile paid 9 per cent of the taxes and received 27 per cent of the benefits.
He added that the Government is concerned for the households in between, which paid 35 per cent of taxes while receiving 62 per cent of the benefits.
Mr Heng rejected as baseless Non-Constituency MP Leong Mun Wai's observation that his Progress Singapore Party does not see Singapore facing any shortage of fiscal revenues in the foreseeable future.
Mr Heng stressed that MPs cannot be advocating national policy "on the basis of personal hunches", and should instead focus on the hard work that needs to be done.
"It will be foolhardy to underestimate the risks and uncertainties we are facing," he added.
Budget office
In his speech, Mr Heng also shot down a suggestion by Workers' Party chief and Leader of the Opposition Pritam Singh to set up an independent parliamentary budget office to enhance scrutiny on government spending.
Such an office would be "a wasteful duplication", given that the Government already has such scrutiny in place, he said.
Other than independent audits by the Auditor General's Office, there already is parliamentary scrutiny of its spending through the Estimates and Public Accounts Committees, and Mr Heng noted that the WP is represented in both committees.
The Government has achieved world-leading outcomes while running one of the leanest administrations in the world, and is always looking to do better with less, he said.
"Prudence and stewardship are core values of this Government. We hold ourselves to high standards and work hard to ensure that our spending is cost effective, to deliver the best value for money for taxpayers," he said.
Mr Heng also voiced his concern over how the WP planned to fund this independent parliamentary budget office, and how much it would cost. He mentioned a $20 million figure that he said the WP had proposed be spent to set up this office "to do this job for them".
"Even as they call for more scrutiny on government expenditure, we invite them to hold themselves to the same scrutiny," he said.
- Joined
- Dec 6, 2012
- Messages
- 28,963
- Points
- 113
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