Deputy Prime Minister and Minister for Finance, Lawrence Wong, will deliver the Singapore Budget 2023 Statement in Parliament on Tuesday, 14 February 2023, 3.30pm.
Stay tuned to our live coverage, for the latest announcements and updates of Singapore Budget 2023, as it happens. We will also provide real-time commentary on the potential implications that the announcements may have for Singapore and Singaporeans.
This page will be updated periodically as the Budget 2023 statement is delivered.
3.30pm: Minister for Finance, Lawrence Wong, is in Parliament delivers Budget Statement 2023.
3.34pm: 2022 was a year of brutal inflation worldwide, said Mr Wong. Inflation reached historic levels, and Singapore had to contend with the pressures. Inflation was further fuelled by tight labour market and companies had to pay higher wages, adding to the inflationary momentum.
3.36pm: Singapore now expects to draw a lower amount of $3.1 billion from past reserves to fund emergency Covid-19 public health expenditures.
The expected draw on past reserves from FY2020 to FY2022 is $40 billion, which is lower than the initial draw of $52 billion for which the Government had sought the President’s agreement. DPM Wong says he expects a slight deficit of $2 billion, or 0.3% of GDP, for FY2022.
Singapore’s GDP To Grow By 0.5% To 2.5% In 2023, Has To Brace For Inflationary Pressures
3.39pm: For 2023, the key factor that will shape Singapore’s growth will be the global economy. Asia is expected to continue growing this year, with China’s Covid-19 situation stabilising. The pick-up in demand will provide a boost to the local economy.
A positive growth of 0.5% to 2.5% this year for Singapore’s GDP is expected.
3.42pm: Early signs of inflationary pressures easing but it is still early to tell due to reasons such as a tight labour market around the world.
Singapore has to brace itself for a high inflationary period at least for the first half of this year. The government will help businesses to mitigate the challenges this period.
The Enterprise Financing Scheme and Energy Efficiency Grant will be extended by a year, till March 31, 2024, to help businesses facing tighter financial conditions and higher energy prices.
3.44pm: GST cash voucher amount to go up from $500 to $700 in 2023, and to $850 from 2024 for those who qualify for higher tier.
3.46pm: Cash payouts will increase by between $300 and $650 for eligible Singaporeans over the remaining years of the Assurance Package, which runs from 2022 to 2026.
The CDC voucher amount will increase by $100 in 2024. All Singaporean households can look forward to another $300 of CDC vouchers in January 2024.
For households with children, each child up to six years old will get a $400 top-up to his Child Development Account. Older children will get a $300 top-up to their Edusave or Post-Secondary Education Account.
The enhancements to the Assurance Package will cost $3 billion. The total amount of the Assurance Package will cost $9.6 billion. The updates to the package reflect’s the government’s commitment to help residents cope with cost-of-living.
3.53pm: The geopolitical context has shifted significantly and this has profound implications to the world.
Mr Wong also noted that there are several “pressing issues” that were brought up during the Government’s ongoing Forward Singapore exercise. This includes long wait times for new HDB flats, rising resale home prices and work-life balance.
Securing Singapore’s Future And Providing Support For Businesses
3.57pm: Singapore aspires to be a kinder and more gracious country. To achieve the shared aspirations, the government will look at:
- uplifting wages of lower income workers
- supporting workers who are displaced with reskilling and upskilling
- giving opportunities to all regardless of the circumstances of social status
4.00pm: Budget 2023 will centre on three key areas to secure Singapore’s future in a new era.
The first area is to grow the economy, equip workers with relevant skills and provide a fuller range of opportunities for everyone to advance in life. The second is to strengthen the social compact and provide better support for families, seniors and vulnerable groups. Lastly, the final key area is to build up collective resilience so that Singapore can bounce back from external shocks and setbacks.
To anchor more quality investments in Singapore, $4 billion will be added to the National Productivity Fund. The fund which provides grants for companies to invest in productivity, training and further education, will be expanded to include investment promotion, he adds. This includes supporting companies to build new capabilities, add greater value to domestic ecosystems, and upskill workers. These efforts will lead to better-paying jobs for Singaporeans.
4.05pm: A new Enterprise Innovation Scheme was introduced. Businesses will get to enjoy tax deductions of up to 400% of qualifying innovation expenditure under the new scheme. Previously, the tax deduction was up to 250%.
The qualifying expenditure will be capped at S$400,000 for each activity, except for innovation carried out with polytechnics and ITE, which will be capped at S$50,000.
To support small and medium-sized enterprises as they scale up, $150 million will be added to the SME Co-Investment Fund. The Singapore Global Enterprises initiative scheme that helps large Singapore companies scale up will also get a $1 billion boost.
4.13pm: There is also a need to develop labour market intermediaries – job skill integrators – to optimise training and job placement. These intermediaries can be existing institutions. This is because workers may not know what training programmes to go for, and employers may be unfamiliar with such a landscape.
They will have to engage enterprises to understand the manpower and skills gap in the industry and must ensure that the training will translate to better prospects for workers.
These intermediaries, or jobs-skills integrators, will be appointed to work with industry, training and employment facilitation partners, and deliver the following outcomes:
- Engage enterprises to understand the manpower and skills gap in the sector.
- Work with training providers to update existing training programmes, or develop new ones that will close the skills gap.
- Work closely with employment facilitation agencies, get buy-in from industry partners and unions, and identify individuals with the right aptitude. They must also ensure that training translates into better employment and earnings prospects.
4.16pm: The Senior Employment Credit, which provides wage support to employers, will be extended to 2025.
Under the scheme, employers receive wage offsets for hiring Singaporean senior workers aged 55 and above, and earning up to $4,000 a month.
The Progressive Wage Credit Scheme fund will be topped up by $2.4 billion. It is a scheme to provide transitional wage support for employers.
4.18pm: A new Uplifting Employment Credit scheme will be rolled out to help hire ex-offenders.
More Support For Young Couples
4.21pm: First-timer BTO candidates cover a wide range, says Mr Wong, and we should identify and provide more support for specific groups. More support will be given to first-timer families with children, as well as married couples under 40 applying for the first time.
More will be done to help such families secure their BTO flats in a timely manner, including by giving them an additional ballot for their BTO applications.
More support will also be given to first-timer families purchasing 4-room or smaller resale flats – CPF Housing Grant will be increased by $30,000. The grant for those buying 5-room or larger flats will also be increased by $10,000. This applies to eligible home buyers who submit their resale applications from 3.30pm on Tuesday.
From 1 April 2023, eligible first-timers buying a resale flat can receive up to $190,000 in housing grants, an increase from the $160,000 currently. This will provide more support for Singaporeans who are buying an HDB resale flat as their first home.
4.25pm: Working Mother’s Child Relief will be changed from a percentage to a fixed amount. From 2025, tax relief will be changed, starting from $8,000.
With this change, eligible working mothers will be able to claim $8,000 in tax relief for her first child, $10,000 for her second child and $12,000 each for her third and subsequent child. This will provide more government support to eligible lower- and middle-income working mothers.
4.26pm: Baby Bonus: Eligible Singaporean children born from today will get extra $3,000 in Baby Bonus in disbursements.
Disbursements will be restructured so that they are paid out over a longer period. Eligible parents can expect up to $9,000 in payouts in the first 18 months of a child’s life, as well as $400 every six months starting from when the child is 2 years old until the child is 6 1/2 years old.
4.27pm: Government contributions to the Child Development Account (CDA) will be increased for eligible Singaporean children born from Tuesday. This can be used by parents to directly offset pre-school and healthcare expenses.
A one-off Baby Support Grant of $3,000 will also be given to children born between Oct 1, 2022 and Feb 13, 2023. The Government had introduced the grant for children born from Oct 1, 2020 to Sept 30, 2022 amid the pandemic.
The government-paid paternity leave will be doubled from 2 weeks to 4 weeks for eligible working fathers of Singaporean children born on or after Jan 1, next year. All parents of Singaporean children will be eligible for this additional time off if they have worked with their employer for a continuous period of at least 3 months.
More Support For Workers
4.35pm: Lower-income families will receive support via the ComCare Endowment Fund, which will be topped up by $300 million.
The ElderCare Fund will be topped up by $500 million to support means-tested subsidies for seniors who need home-based, centre-based or institutional care.
MediFund will be topped up by $1.5 billion to strengthen the safety net for lower-income individuals and seniors facing financial difficulties with their medical bills, even after government subsidies, MediShield Life and MediSave.
4.42pm: As part of strengthening protections of platform workers, these workers who are younger than 30 will be required to make increased CPF contributions when the proposed changes are implemented. To cushion the impact, the government will provide CPF Transition Support to lower-income platform workers who see an increase in their contribution rates for the first 4 years after implementation.
4.44pm: The Government will continue with the next increase in CPF contribution rates in 2024 for senior workers aged 55 to 70 from Jan 1, 2024, to enhance retirement adequacy.
The minimum CPF monthly payout for seniors on the Retirement Sum Scheme will also be raised to $350 a month.
The CPF monthly salary ceiling will be raised to help middle-income Singaporeans save more for their retirement. The monthly salary ceiling will be raised from $6,000 to $8,000 in 2026. The increases will be phased over 4 years, from September 2023, to allow employers and employees to adjust to the changes.
Building Our Resilience
4.55pm: Our reserves are our greatest insurance as well as the best safeguard in any crisis. They allow us to respond and bounce back stronger when we meet with crisis. If we were ever to be hit by a bigger calamity, our reserves will provide us the support to rebuild Singapore.
Solidarity and trust among citizens and a collective ownership and responsibility among Singaporeans matters. This keeps our social fabric strong and resilient.
4.49pm: Tax deduction rate of 250% will be extended for another 3 years, until the end of 2026, for donations to Institutions of a Public Character.
A Corporate Volunteer Scheme will be rolled out for 3 years to encourage businesses to step up in giving. Under this initiative, the scope of eligible activities for tax incentives will be expanded to include off-site and virtual ones. The quailifying per-IPC cap will also be double to $100,000 per calendar year.
A $1 billion top-up will be provided to the Community Silver Trust, which provides dollar-to-dollar donation matching grants for social service agencies which care for seniors in the community.
The Government will also provide a $10 million top-up to self-help groups over the next 3 years.
5.07pm: Further increases in spending will need to be funded by additional revenues to ensure a balanced budget for the medium term. The changes to strengthen tax structure in Budget 2022 include increases in goods and services tax, personal income tax for top income-earners, and property tax for higher-value owner-occupied residential properties and all non-owner-occupied residential properties.
Further adjustments will be made to the tax system this year.
5.13pm: Large multinational enterprises can expect a global minimum effective tax rate of 15% in 2025.
Singapore’s corporate tax system will be affected by international taxation rules such as the Global Anti-Base Erosion rules under Pillar 2 of the Base Erosion and Profit Shifting initiative (Beps 2.0).
The government will monitor international developments and adjust its implementation timeline if there are delays to Beps 2.0. It will continue to engage companies and give them sufficient notices ahead of any changes to tax rules or schemes.
5.14pm: For 2022, an overall deficit of $2 billion, or 0.3% of GDP, is expected. For 2023, an overall deficit of $0.4 billion, or 0.1% of GDP, is expected.
Singapore had to draw on past reserves for the last 3 financial years to cope with the Covid-19 pandemic. Budget 2023 will not draw on past reserves. With the return to normalcy, the Contingencies Fund balance will also be reduced to $6 billion.
Higher Stamp Duty Rates For Expensive Properties, Higher-End Cars To Increase In Taxes, And Higher Taxes On Tobacco Products
5.15pm: There will be higher marginal BSD rates for higher value residential and non-residential properties. For residential properties, the portion of the value of the property in excess of S$1.5 million and up to S$3 million will be taxed at 5%. Those in excess of S$3 million will be taxed at 6%, up from the current rate of 4%.
The changes are expected to affect 15% of residential properties.
For non-residential properties, the value of the property in excess of $1 million and up to $1.5 million will be taxed at 4%. Properties in excess of $1.5 million will be taxed at 5%, which will be up from the current 3%. This is expected to affect 60% of non-residential properties.
Changes to the BSD regime apply to all properties from tomorrow.
5.16pm: Luxury cars will also be taxed at a higher rate. The additional registration fee (ARF) rates will be adjusted to better differentiate higher-end cars.
Buyers of cars with open market value of more than S$40,000 will pay higher marginal ARF rates than they do today. For the highest open market value tier, the revised ARF rates will be 320%, up from 220% today. Preferential ARF rebates will be capped at S$60,000, to avoid providing excessive rebates to more expensive cars.
These changes are expected to affect the top one-third of cars by open market value. Buyers of cars with an open market value of S$40,000 or less will not be affected.
The government will raise the excise duty on all tobacco products by 15% to discourage consumption.
The Singapore Spirit
5.19pm: Budget 2023 will help Singaporeans tide over immediate cost-of-living pressures, grow the economy, equip workers, strengthen Singapore’s social compact and build a more resilient nation.
But the road ahead will not be easy.
“We have seen it in action, and experienced it in abundance over the last 3 years – how we are responsible for one another, keep an eye out for our fellow citizens, and always band together as a team,” Mr Wong said.
“And as one united people, we can move forward with confidence in this new era, and shape a brighter future and a better Singapore together.”
Where To Watch Singapore Budget Statement 2023 Live?
For those who interested to catch the live broadcast of Finance Minister Lawrence Wong’s Singapore Budget 2023 live, you can do so via the following platforms:
- Television: CNA and Channel 5
- Radio: CNA938 and Capital 958
- Browser: Singapore Budget website, Channel NewsAsia website, 8 World News and MediaCorp’s meWATCH
- YouTube: CNA and 8 World News
- Facebook: CNA and 8 World News
Pre-Budget 2023 Reading List
Singapore exited the acute phase of the Covid-19 pandemic on 13 February 2023. The Disease Outbreak Response System Condition (DORSCON) framework was changed to from yellow to green. Border measures have been lifted and visitors are expected to return to Singapore in throngs, providing a much needed boost to the tourism sector.
The country has pulled together to weather a “crisis of a generation”. As it prepares for a new post-pandemic future, the Budget this year, themed “Moving Forward in a New Era”, will set the stage for the fiscal decisions of the country.
With the latest Goods and Services Tax (GST) increase from 7% to 8%, observers are keeping an eye on whether if the 1% increase to 9% will proceed as planned. To cushion the impact of the GST hike, the government first announced a $6 billion Assurance Package in Budget 2020. This was enhanced by another $640 million to $6.6 billion, as announced in Budget 2022.
Businesses are hoping for support to cope with the rising business and manpower costs. Some are also asking for targeted grants for some GST-registered businesses amid inflation.
As a whole, the country is also dealing with concerns on inflation and there are concerns on how it might potentially impact citizens’ retirement plans. Meanwhile, the hot resale HDB market showing no signs of abating, with 21 housing estates having HDB flats of more than $1 million in 2022.
HDB rental prices have also continued to escalate, driven partly by demand from couples waiting for their Build-To-Order flats and foreigners entering Singapore.
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