Budget 2023 Singapore Key Highlights
This year, the theme for Singapore’s Budget is aptly titled “Moving Forward in a New Era”.
With Singapore entering a post-pandemic era amidst high inflation and increased nationalism, Singapore needs to continue exercising financial prudence while supporting Singaporeans.
Without further ado, here are some key highlights for Singaporeans.
With inflation expected to remain high at least in the first half of 2023, the government will further support Singaporeans with a $3 billion top-up to the Assurance Package (total of $9.6 billion).
These top-ups are meant to help defray the rising costs of living and the upcoming GST hike in 2024. No new measures have been introduced.
Amidst global inflation, there were three packages in 2022 totaling $3.5 billion, funded by corporate income tax and asset-related taxes.
As such, Singapore had to draw from its past reserves (expected $3.1 billion) to fund COVID-19 measures.
DPM Wong has said that Singapore must continue its fiscal prudence and thanked Singaporeans for their understanding when it comes to the GST hikes.
Budget 2023 has also highlighted how strengthening Singapore’s social compact is imperative to building a resilient nation. Thus, the government has introduced new measures and enhanced grants further to help families going forward:
- BTO Balloting: Additional ballot chance for families with children and young married couples aged 40 years old and below. This will be implemented later this year.
- CPF Housing Grant
- Increased by $30,000 for eligible First-Timer families purchasing 4-room or smaller resale flats, and by $10,000 for those purchasing 5-room or large flats. Eligible First-Timer families purchasing resale flats will benefit from this increased CPF Housing Grant with immediate effect. This additional grant amount will be credited into their CPF account from April 2023 onwards.
- Increased by $15,000 for eligible First-Timer singles purchasing 4-room or smaller resale flats, and by $15,000 for those purchasing 5-room or large flats. Eligible First-Timer singles purchasing resale flats will benefit from this increased CPF Housing Grant with immediate effect. This additional grant amount will be credited into their CPF account from April 2023 onwards.
|Maximum Grant Amount||Up to $190,000 (from $160,000)||Up to $95,000 (from $80,000)|
|CPF Housing Grant for Resale Flats||4-room or smaller resale flats||Up to $80,000 (from $50,000)||Up to $40,000 (from $25,000)|
|5-room or smaller resale flats||Up to $50,000 (from $40,000)||Up to $25,000 (from $20,000)|
|Enhanced CPF Housing Grant (EHG)||Up to $80,000||Up to $40,000|
|Proximity Housing Grant (PHG)||Up to $30,000||Up to $15,000|
On top of measures to help families secure housing, the government will also be supporting families with the costs of raising children and supporting fathers in raising their children by doubling paid paternity leaves.
|For all eligible Singaporean children born on||14 Feb 2023 to 31 Dec 2023||1 Jan 2024 onwards|
|Cash Support||- Increase in Baby Bonus cash gift by $3,000
- Increase in government contributions to the Child Development Account (CDA)
- Increase First Step Grant by $2,000
- Increase government co-matching cap for CDA by $1,000 for the first and second child
|Government-Paid Paternity Leave||2 weeks||4 weeks (2 weeks on a voluntary basis)|
|Working Mother's Child Relief (WMCR)*|
|1st Child||15% of mother's earned income||$8,000|
|2nd Child||20% of mother's earned income||$10,000|
|3rd Child and beyond||25% of mother's earned income||$12,000|
*No change for WMCR claims on qualifying Singaporean children born or adopted before 1 Jan 2024
For lower-income families, there will also be additional support. This comes in the form of a $300 million top-up to the ComCare Endowment Fund which supports ComCare, a critical source of support for many lower-income families.
Additionally, ComLink, a nationwide platform serving 14,000 families with children living in rental housing, will be better integrated and streamlined across different programmes in Government that support lower-income families.
Lastly, KidSTART will be scaled up to support 80% of eligible children in lower-income families, starting from children born this year.
As mentioned repeatedly in Budget 2023, Singapore’s second-best safeguard besides our financial reserves is our people. Thus, the government is committed to investing in our working population.
There will be enhanced employment support with a $2.4 billion top-up to the Progressive Wage Credit Scheme (PWCS) fund to continue providing transitional support for businesses.
There will also be an enhanced Enabling Employment Credit to support employers hiring persons with disabilities, who have not been working for at least six months.
Moreover, the Senior Employment Credit and Part-time Re-employment Grant for senior workers will be extended till 2025.
A new Uplifting Employment Credit will also be introduced in the form of a time-limited wage offset to encourage firms to employ ex-offenders.
Strengthening Retirement Adequacy
The CPF contribution rates of Platform Workers and Companies will be aligned with those of employees and employers over a period of 5 years. As take-home pays will be affected, CPF Transition Support will be provided in the first four years after implementation.
The CPF contribution rates of senior workers will be increased and their minimum CPF monthly payout will be boosted under the Retirement Sum Scheme to $350 a month.
Middle-income Singaporeans will now be able to save more for retirement as the government raises the CPF monthly salary ceiling from $6,000 to $8,000 in 2026. The government will phase in the increases over four years, starting this year, to allow employers and employees to adjust to the changes.
Integrate Training and Job Placement
The government is also set to support workers in upskilling and job placement by:
Engaging enterprises to understand the manpower and skills gaps in the sector
Working with training providers to update existing training programmes, or develop new ones
Working with employment facilitation agencies, industry partners, and unions to ensure that training translates into better employment and earnings prospects
Tax System Changes (Cars, Property, Donation Tax Reliefs)
As COVID-19 has dipped into our reserves, Singapore is looking to raise revenue for future expenses. However, it is not as simple as just “taxing the rich”.
Therefore, Singapore is gunning for a fair and progressive tax system based on collective responsibility with those better off contributing more.
On top of these changes, the government will be enhancing tax-deductible donations, the Corporate Volunteer Scheme, reviewing social service sector salary benchmarks, topping up the Community Silver Trust, and providing a $10 million top-up to support Self-Help Groups.
Budget 2023 Highlights
All in all, many existing schemes to support Singaporeans have been enhanced amidst high inflation and the impending GST hike to 9 per cent in 2024. A number of new measures have also been introduced such as the additional ballot chance for eligible first-timer couples.
We will continue updating this article with more detailed information as its released. So bookmark this article for reference!