Singapore Budget 2021: Everything You Need to Know in 5 Minutes

Emerging Stronger Together Singapore Budget 2021: All You Need To Know

The Singapore Budget is prepared for each financial year.

This year, Singapore’s Budget was delivered by Deputy Prime Minister and Minister for Finance, Heng Swee Keat on 16 Feb 2021 at 3pm.

Summary of Singapore Budget 2021

Opening Statement

• COVID-19 has made an impact on both our nation’s demand and our supply side
• Singapore’s Gross Domestic Product (GDP) contracted by 5.4% in the year 2020
• Overall, we face a budget deficit of $64.9 billion which is about 13.9% of our GDP.
• Singapore reacted with various fiscal, monetary and transitional measures. With that, we were able to avert a worse recession, protect jobs and livelihoods of Singaporeans.
• On average, Singapore managed to save/create close to 155,000 jobs

Our COVID-19 Response

• Singapore has now moved from containment to restructuring measures, following a series of successful measures to deal with COVID-19
• Singaporeans will need to understand that the global battle is far from over. The recovery is going to be long-drawn and full of uncertainties.

COVID-19 Resilience Package – For the Economy

 

• This year, Singapore economy is projected to experience a 4 to 6% growth.
• This budget, $11 billion will be allocated to the Resilience Package to help Singaporeans tide through this tough period of time.
• Of the $11 billion, $4.8 billion will be allocated to public health and safe reopening measures.
  This includes getting the nation vaccinated against COVID-19 and upkeep and maintain safe distancing measures in public venues.
• The rest of the $11 billion will be allocated to support workers and affected businesses.
  JSS will be enhanced and brought forward from last year. $25 billion committed to help over 155,000 employees till March 2021.

Extension of Job Support Scheme

For industries in Tier 1, namely Aviation, Tourism and Aerospace sectors:

• JSS will be extended for 6 months.
• 30% from April to June 2021.
• 10% from June to August 2021.

For industries in Tier 2, namely Retail arts & culture, food services and the built environment:

• JSS will be extended for 3 months.
• 10% from April to June 2021.

For industries in Tier 3A such as nightlife, the government will provide assistance to help businesses pivot or wind down.

There will also be targeted support for sectors deeply affected by the COVID-19 pandemic.

• For the Aviation sector: 
  $870 million will be allocated to preserve the core capabilities and Singapore’s position
• Public Land Transport (Taxi and PH car drivers):
  $133 million will be set aside for COVID-19 Driver Relief Fund
• Arts and Culture & Sports:
  $45 million will be set aside for Arts and Culture Resilience and Sports Resilience Package. This is to enhance and deepen skills while transforming business models.

Emerging Stronger with Better Skilled Workers and Innovative Businesses

Singapore must build new capabilities in people and business as we find a new way to work together:

• Changing landscape:
  As global supply chains are being re-configured, Singapore must find a way to transform ourselves to tap into the flow of goods and capital
• Rising Inequalities:
  The global economy will remain stunted as long as countries remain in the shadow of COVID-19.
• Singapore will also need to find ways to be sustainable in order to safeguard our future generations.
• Over the next 3 years, $24 billion will be allocated to enable firms and workers to emerge stronger together.

3 Enables of Emerging Stronger

• With Travel and connectivity taking a severe hit, expect changes to the aviation landscape.
  – Airports will need more digital systems to effectively reroute people and goods.
  – Our airport needs to invest in on-arrival testing and biosafety systems to secure our position as a safe, trusted and well-connected airport for travellers and employees.
• The government will also be investing in 3 Key platforms to support business
  – Launchpad to provide co-funding for corporates to rekindle a startup mindset with organisation
  – Open innovation platform (OIP) to better match problems and solution provides.
  – GIA network to be extended
• We will also be setting up a Singapore intellectual property system.
  More details will be announced on World IP day in April 2021.
• Singapore will also be stepping up efforts in ASEAN.
  This will be done through cross border projects in ASEAN and the ASEAN payment policy framework. 
  The ASEAN payment policy framework will enhance digital connectivity and deepen capacity to collaborate and innovate.

Venture Debt for High-Growth Enterprises

The government will catalyse a wide range of capital to co-fund and enable businesses to innovate, transform and scale.

• To provide grants and growth, the government will be extending and enhancing the Enterprise Financing Scheme – Venture Debt Programme will be increased to $8 million.
• $1 billion will also be set aside to encourage SMEs to invest in new and emerging technologies by co-funding costs of adopting frontier technologies (eg. 5G and AI)
  
• The $1 billion will be allocated to initiatives such as
  CTO-as-a-Service
  To allow SMEs access to professional IT consultancies
  Digital Leaders Programme
  To allow SMEs to hire core digital team and developing digital transformation roadmap
• The government will also be extending enhanced existing schemes to March 2022

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For Large Local Enterprises (LLE)

• $500 million will be set aside to co-invest with Temasek in a Local Enterprises Funding Platform, to be managed commercially.
• Temasek to match the Government’s funds on a 1-for-1 basis.
• This means that there will be $1 billion available for Large Local Enterprises to tap on, to assist them on their digital transformation.

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Second Tranche of SGUnited Jobs & Skills Package – For Singaporeans

• The government will be allocating $5.2 billion to Jobs Growth Incentive
  Hiring window extended to end-September 2021
• There will be extended support for SGUnited Skills, SGUnited Traineeship, the Mid-Career Pathways Attachment and Company Training programmes
• The government will look to encourage the hiring of locals this year.
  We are looking to support 200,000 locals getting hired and provide up to 35,000 traineeship and training opportunities. 

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Household Support Package – GST Vouchers For Singaporeans

 

• Singaporeans will be receiving a one-off GST Voucher – Cash Special Payment of $200 for eligible Singaporeans.
• GSTV – U-Save Special Payment for eligible households living in HDB. There will also be a utilities rebates between $120 and $200 this year for each household.
• Service and Conservancy Charges (S&CC) rebates will be extended for a year, for all eligible households.
• Additional $200 Top-up for each child (below the age of 21) through CDA, Edusave, Post-Secondary Education Accounts.
• $100 Community Development Council (CDC) vouchers per household.
  These vouchers can be used at participating heartland shops and hawker centres, in order for Singaporeans to support heartland businesses.
  About 1.3 million households will benefit from these vouchers.

More details on GST Voucher (GSTV) – U-Save and U-Save Special payment

More details on GST Voucher (GSTV) – Cash and Cash Special Payment

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More Help for the Needy

• Lower wage work
  For help and aid through schemes
• Older workers
  Senior Worker Support Package in last budget
  Increase budget allocation for Senior Worker Early Adopter Grant and Part-Time Re-deployment Grant by $200 million
• PwDs
  More jobs created and set aside through specific schemes
• Lower-income families
  MSF strengthening holistic support through CommunityLink (ComLink)
  Over the next 2 years, will provide resources to MSF to expand ComLink to cover 14,000 families with children
• Children with special needs
  Children under 7 can benefit from a differentiated approach
  Piloting an Inclusive Support Programme to benefit more children, to allow children to be more meaningfully engaged to help them develop social skills and social inclusion

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Assistance for Our Charity Sector

• 250% tax deductions for donations to IPCs will be extended for 2 years.
• Tote’s Board’s Enhanced Fund-Raising Programme extended by 1 year
• ComChest’s SHARE as One matching period will be extended to the year 2023
• $20 million will be allocated to Change for Charity Grant
• Business and IPC Partnership Scheme to be extended until the end of 2023
• $50 million for CDCs’ Care and Innovation Fund

On Electric Vehicles (EVs)

With all the hype around electric vehicles (EVs), the government sees a need to switch to cleaner-energy vehices.

$30 million will be set aside over the next 5 years for EV-related initiatives.

Changes to Road Tax with Effect from August 2021

• Petrol Duties will be raised:
  Premium Petrol: Increase by 15cents per litre
  Intermediate Petrol: Increase by 10cents per litre
• To help Singaporeans transit into the increasing petrol duties, there will be a 1-year road tax rebates given to Singaporeans.
  

  Vehicle Type	1-Year Road Tax rebate
  Motorcycles	60%
  Taxi	15%
  Lorries and Buses	100%
  Cars	15%

• There will also be Additional Petrol Duty Rebate of $50 or $80 (Depending on engine capacity up to 400cc
• Taxis will also receive a $360 Petrol Duty Rebate.

Green Bonds Market

• The government will be issuing green bonds on select public infrastructure projects. 
• The issuance will serve as a reference for the Singapore Dollar corporate green bond market, including the standards and framework applied, and yields achieved.

Tax Measures – GST Extended to Imported Low-Value Goods from 2023

GST rate hike will not happen in the year 2021 due to current economic conditions.

The hike will happen sometime between the year 2022 to 2025, as Singapore will not be able to put off increase for too long. Without GST to meet our rising recurrent needs, especially for our increasing need for healthcare as a nation.

In addition, GST will be imposed on imported low-value goods from 1 Jan 2023.

This new legislation will apply to goods imported via post or air that are valued less than or equal to the current GST import relief limit of $400.

At the moment you do not need to pay GST on these low-value goods imported via post or air to facilitate clearance at the border.

Plus, GST will also be imposed on imported business-to-consumer (B2C) non-digital services with human interaction.

It includes things like educational, counselling, fitness training and telemedicine services.

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Significant Infrastructure Government Loan Act Legislation (SINGA)

• The Singapore government will be issuing bonds to finance major, long term infrastructure projects.
• There will be a limit of $90 billion borrowing limit based on expected project pipeline.

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Overall Position

Due to the dampened economic activity and significant expenditure strain for decisive response against the COVID-19 pandemic, Singapore will experience an overall budget deficit of $64.9 billion (13.9% of GDP) for FY2020.

For FY2021, the government is proposing to draw an additional $1.7 billion from the reserves to fund the $11 billion COVID-19 Resilience Package.

This will bring the total draw on the reserves for FY2020 and FY2021 to $53.7 billion.

In addition, economists surveyed by Bloomberg estimate that the budget for FY2021 might lead to a budget deficit equivalent of about 4 per cent of GDP.

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For this budget, the focus will be on sustainability and green efforts, as well as support for workers, businesses and the needy.

Do you have any predictions for what’s going to happen this year, or wish to share your thoughts on the budget!

I WANT TO DISCUSS BUDGET 2021 WITH SOMEONE!

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Summary of the Singapore Budget 2020

Before that happens, let’s take a look at the summary of Singapore Budget 2020.

2020 was a special year, where four budgets were delivered instead of one.

• Singapore Budget 2020
• Resilience Budget 2020
• Solidarity Budget 2020
• Fortitude Budget 2020

Here are some of the key focus areas for Singapore Budget 2020.

Support for Businesses and Workers

The Government has provided various support measures to help companies ride out the economic uncertainty in 2020.

• $4 billion Stabilisation and Support Package
•  Jobs Support Scheme (JSS) 
• Wage Credit Scheme (WCS) for more than 95,000 employers in Singapore
•  Up to 100% property tax rebates for non-residential properties
• Increase in Working Capital Loan for enterprises

Financial Assistance for Individuals

With the economic downturn, there were several measures that were rolled out to provide temporary financial reliefs for individuals.

• Temporary Relief Fund of $600
• COVID-19 Support Grant
• COVID-19 Recovery Grant
• Solidarity Payment of $600
• Self-Employed Person Income Relief Scheme (SIRS)
• Enhanced Care & Support Package
• No increase in GST in 2021

Support for Youths

There is also a focus on nurturing the future leaders of Singapore, where there is an increase in bursaries and subsidies in education, as well as opportunities for overseas exposure.

• Raise the number of government-supported pre-schools from 50% to 80% by 2025
• Raise the income ceiling for the Additional Subsidy for pre-school and Kindergarten Fee Assistance Scheme (KiFAS) to $12,000 a month
• SkillsFuture Credit top-up of $500, valid for 5 years
• Enhanced support for the Global Ready Talent Programme, a scheme for internship and work opportunities

Given how we are still facing a long-standing fight against COVID-19, there will still be a focus by the Government to help the nation emerge stronger. 

And with the recent reveal of the Singapore Green Plan, we can expect one of the key pillars to be sustainability, with plans on green housing, towns, buildings and waste management. 

In addition, given that an unprecedentedly large portion of reserves was used during last year’s Budget, we can also expect more prudent spending for Budget 2021 this year.

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