The budget was just announced on Monday at 3:30pm. This year, it is more focused on the future where the finance minister makes sure that Singapore will have enough revenue going forward. This means its not so good news for majority of the people but some things have to be done in order to be sustainable.
However, Singapore also registered the best surplus year in 2017 of almost $10 Billion. As such, there will be a sweet surprise for all Singaporeans. Read on to find out more
Here are 9 highlights of the 2018 budget which may be applicable to individuals like you and me:
1. More support for education
The annual Edusave contributions provided by the Government will be increased, from S$200 to S$230 for each primary school student, and from S$240 to S$290 for each secondary school student. This will take effect from January 2019. The Government will also update the income eligibility criteria for the Edusave Merit Bursary and the Independent School Bursary.
Currently, the income eligibility criteria for the Edusave Merit Bursary is S$6,000 in gross monthly household income, or S$1,500 in gross monthly household per capita income. From this year, this will be increased to S$6,900 and S$1,725 respectively.
Another interesting news that concern financial education is that a new financial education curriculum will be piloted at polytechnics and the Institute of Technical Education to give youth a good foundation in financial literacy.
2. Enhanced Proximity Housing Grant
The proximity housing grant will be increased from $20,000 to $30,000 for families buying resale HDB flats to live together with their parents. The keyword is live together. This will also extend to singles who will get $15,000.
For those buying resale flats to live near their parents or children, the PHG will still be $20,000. However, the live near criteria will be extended from within 2km currently to within 4km. Singles who buy a resale flat near their parents will also now receive a PHG of S$10,000.
The revised proximity condition of 4km will also apply to the Married Child Priority Scheme and Senior Priority Scheme for new flats, with effect from HDB's May 2018 Build-To-Order (BTO) and Sale of Balance Flats (SBF) exercise.
3. Extension of S&CC rebate
For those who own a house, this is good news for you. The S&CC rebates will be as follow:
- 1 & 2 Room HDB flats : 3.5 Months rebate with $380 GST U-SAVE voucher
- 3 Room HDB flat : 2.5 Months with $340 GST U-SAVE voucher
- 4 Room HDB flat : 2.5 Months with $300 GST U-SAVE voucher
- 5 Room HDB flat : 2 Months with $260 GST U-SAVE voucher
- Executive/Multi Generational HDB flat : 1.5 Months with $220 GST U-SAVE voucher
The money is typically used to pay town council expenses like cleaners' wages, pest control, as well as the maintenance and replacement of lifts.
4. Foreign domestic worker levy to rise
Now for the not so good news. For those who own a maid, be prepared to pay more levy going forward. The levy will be raised from S$265 to S$300 for the first worker and to S$450 for the second worker. This will take effect from Apr 1, 2019.
For those who are paying the concessionary FDW levy of $60, they will continue to pay the same amount. However, the qualifying age for levy concession under the aged person scheme will be increased from 65 to 67. All households with persons aged 65 and 66, which are enjoying or have enjoyed the levy concession under the aged person scheme before Apr 1, 2019 will continue to pay the monthly levy rate of S$60.
5. Tax deductions for donations
Another good news for those who have been making regular donations or want to make more donations. A 250-per-cent tax deduction for donations to charities that are Institutions of a Public Character will be extended for three more years, until 2021.
6. GST hikes (in the future)
The most awaited news on whether the GST will increase is confirmed. The Government will raise GST by 2 percentage points to 9 per cent sometime from 2021 to 2025. Good news is this is not going to happen now so we still have time to prepare for it.
7. Buyer's Stamp Duty for residential properties raised
Another shocking news for those who want to buy property. The buyers stamp duty will be raised from 3% to 4% but only for properties with a value of more than $1 Million. If you have already bought a property valued at 1 Million and above and got your OTP on or before 19 February 2018, be sure to exercise your OTP on or before 12 March 2018 to continue enjoying the 3% stamp duty.
8. Excise duty to be raise for tobacco products
9. Hongbao for Singaporeans: SG Bonus
Finally, the best news for this Chinese New Year. All Singaporeans aged 21 and above will get a HongBao of $100-$300 depending on our income. Here are the details:
- $300 for those with an annual income of S$28,000 or below
- $200 for those with an annual income of S$28,001-S$100,000
- $100 for those with an annual income in excess of $100,000
Overall, this budget is more like planning for the future to me. I expected more support for healthcare needs in Singapore but it wasn't really mentioned in this year's budget. Long term healthcare cost such as nursing home, home nursing and those support for persons with family members who have disabilities at home are not mentioned. The only announced measure is where key services for seniors will be consolidated under one ministry for better quality delivery. I'm not sure how this will have a positive impact for the seniors or their family members who need help out there.
Nevertheless, I believe it is important to plan ahead for the future which the government is doing so clearly for this year's budget. I would think Singapore really need to find more sources of income instead of just relying on raising taxes. There's a lot of work to do to transform industries, keep up with technological trends and the digital age disruptions and try to generate new sources of income for the country. We certainly hope that the future will be as bright as it has been for Singapore.