Since Singapore is dealing with the economic fallout from the ongoing Covid-19 outbreak, Singapore Finance Minister – Mr. Heng Swee Keat while presenting the Budget 2020 in the country’s Parliament on February 18, proposed a series of measures worth $5.6 billion. It includes the $4 billion Stabilisation and Support package (to help workers and businesses solve in near-term economic uncertainty), and $1.6 billion Care and Support package (for family expenses). And some additional supports will also be given to sectors directly influenced by the coronavirus outbreak, such as tourism, aviation, retail, foodservice, and point-to-point transport services.
Here are the top 5 highlights of the Singapore Budget 2020 you need to know.
1. The Singapore government is fighting against the ever-increasing coronavirus
The Singapore Budget 2020 speech took place in parliament amid growing uncertainties of the Covid-19 virus (corona/nCoV) in the region. With the outbreak becoming more of a threat every day, the Singapore government did take time to announce measures to address this issue seriously.
At least S$ 800 million is committed to frontline activities fighting the nCoV virus. This budget will be allocated between the Ministry of Health and other related ministries.
A series of plans have been put in place to support frontline activities to cope with the Covid-19 outbreak, as well as measures to reduce the impact on the economy and help heavily affected industries that are most devastated by the virus outbreak.
A large number of allocations, which lie on the considerable resources committed each year for public health, will be allocated to the Ministry of Health (MOH) to address the outbreak.
2. Actions improve the Economic Situation with Support packages
Nearly $6 billion has been set aside to address economic deficits and other problems caused by coronavirus outbreaks.
Care and Support package
This package is one of the key points of the Singapore Budget 2020 speech. The $1.6 billion Care and Support Package has been allocated to all Singaporean households. Each Singaporean adult over 21 years old will be paid in a lump sum of $100 to $300. The amount depends on their income.
People who earn up to $28,000 in the 2019 evaluation year will receive $300. Those with incomes between $28,001 and $100,000 will receive $200 and those whose income is assessed more than $100,000 will receive $100. Moreover, those who own multiple properties will only receive $100. And parents with children under the age of 20 will receive an additional $100.
Stabilization and Support package
This package amounts to $4 billion, will help stabilize the economy and support the country’s workers and enterprises by helping workers stay in their jobs, and help enterprises with cash flow.
To help workers stay employed, their wage cost will be defrayed through two schemes:
a) Jobs Support Scheme
An employment support program will be introduced to help businesses retain local employees.
- For every local employed employee, the Ministry will compensate 8% of wages, up to a monthly limit of S$3,600, for three months.
- The money will be given to the employer by the end of July 2020.
This program, which includes 1.9 million local employees in Singapore, will cost the government S$1.3 billion.
b) Wage Credit Program
In order to support the increase of salaries for local employees, the Wage Credit Program will be strengthened.
- The monthly salary cap for Singaporean employees will be increased from S$ 4,000 to S$ 5,000 a month, to increase eligible salaries in 2019 and 2020.
- The enhancements, worth S$ 1.1 billion, will be available to approximately 90,000 businesses, benefiting more than 700,000 local employees.
c) Corporate Income Tax Rebate
Under the Stabilisation and Support package, economy-wide support to help enterprises with cash flow will be given too.
- For example, the Corporate Income Tax Refund for the 2020 review year will be issued at 25% of the tax payable, at S$ 15,000 each.
- The discount will benefit all companies that pay taxes and cost around S$ 400 million.
3. GST in 2021 is not increasing
Many are expected to raise GST during the budget speech of 2020, but that has not changed right now. The GST will remain 7% despite predictions – making this fact one of Singapore’s top 2020 budget information.
However, Mr. Heng emphasized that the increase may be necessary by 2025. Instead, companies will be reduced income tax in the fiscal year 2020 at a rate of 25%.
4. Measures fight against climate change
This year, the Singapore government decided to approach this issue primarily by promoting Electric Vehicles (EVs).
Gasoline and petrol vehicles are one of the biggest reasons for climate change and global warming. Therefore, to minimize the use and promote EVs, carbon taxes were introduced last year. This year too, taxes will be provided continuously, with incentives for those who are using electronic transport.
From 2021, streetcars and taxis will be refunded up to 45% on the Additional Registration Fee, capped at $20,000. This is part of the Commercial Vehicle Emissions Scheme (CVES) for light-duty vehicles and will be available initially from 2021 to 2024. Besides, road tax for electronic vehicle owners will be reduced in the coming days.
The government also aims to expand the number of charging points to 28,000 from the current 1,600 by 2030. Moreover, government vehicles and public transport will eventually be electronic. The budget speech for 2020 also included Mr. Heng’s introduction of the $5 billion Coastal and Flood Protection Fund.
5. Other Highlights
In his two-hour and 15-minute speech, Mr. Heng also outlined measures for economic development, business transformation, and workforce development. To encourage workers to upgrade their skills, the government will make a one-time $500 deposit to the SkillFuture account of all Singaporeans aged 25 and over.
Middle-aged workers between the ages of 40 and 60 will get an additional $500 to top up at the beginning, to help them get acquainted. Credit from both leading companies will expire in about five years, to motivate Singaporeans to use them.