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Singapore Budget 2017 – Summary & Thoughts

Here’s a quick summary of what was announced earlier today.

The Singapore Budget was announced earlier today by Minister Of Finance Mr Heng Swee Keat. If you didn’t catch it live, here’s a quick summary of the key initiatives that were announced and some of our early thoughts.

Read Also: 5 Initiatives From Budget 2015 & 2016 That Are Still Impacting Our Lives Today

Opening Statement

3:33pm: Minister Heng Swee Keat: Aim for quality growth through higher productivity, rather than labour. Sustainable growth for Singapore would be about 2-3% per annum. We think this makes complete sense since reliance on labour for growth is not sustainable for our small island state. 

3:36pm: Minister shared that local employment increased in 2016 while foreign employment contracted.

3:41pm: Minister Heng Swee Keat starts off the budget by talking about initiatives that would help Singaporeans to continue upgrading and prepare themselves for the future economy. These include identifying sectors that would continue to expand and to ensure workers have the relevant skills to land jobs in these sectors. The general sentiment that we are getting is that constant upgrading to adapt to the future economy would be part and parcel for young Singaporean workers. 

3:44pm: Various schemes will be offered for employers who hire older workers. The government will help reduce the cost of firm hiring older eligible workers by up to 11%. This will increase the employability of older workers. 

3:50pm: Hoist of initiatives also announced to help enterprises in Singapore to innovate, tackle the digital economy and to expand regionally and take on more overseas projects. The general idea here in our opinion is that by providing the capability to help firms grow, workers will ultimately be the beneficiary of these growth as we become more productive in the economy.

Deepening Our Capabilities To Remain Relevant

4:02pm: Global Innovation Alliance & SkillsFuture Leadership Development Initiatives announced to help Singaporeans to become more skilled and to gain experience in a global world. More details to be announced in the future. Bottom-line, whether it’s from SkillsFuture or any other initiatives, the government wants you to continue upgrading yourself. Gone are the days when it’s okay to not continue learning while you are working.

A Green Singapore

4:14pm: A carbon tax on the emission of greenhouse gases from 2019. Tax rate to be between $10 – $20 per ton of greenhouse emission. This is a price signal to encourage the industry to reduce emission. We think this is a move in the right direction. Many other countries around the world have already started on this.

4:16pm: Diesel oil will be taxed based on a $0.10 per litre. A tax based on usage will incentive people to reduce diesel usage.

4:17pm: CEVs scheme for cars will be revised to include other form of pollutants instead of just Carbon Emission. 

Increase In Water Price

4:20pm: Water prices will increase by 30% over two phrases. According to the Minister, 75% of household will see an increase of water bill of less than $18. Government will help low income households deal with the increase in cost. This comes as no surprise to us since there have been plenty of discussion in recent weeks about water price hike leading up to the budget. 

Changes To HDB Housing Grants

4:27pm: To help couples buy their first flat. The government will increase the CPF Housing Grant from $30,000 to $50,000 for first-timers who purchase resale flats that are 4-room flats or smaller, and $40,000 for those who purchase resale flats that are 5-room flats or larger. Couples can now receive up to $110,000 when buying resale flat. This take immediate effect.

We think this would make 4-room resale flat extremely lucrative, especially if you are staying with, or nearby your parents.

U-Save & GST Vouchers

4:30pm: Income tax rebate, one-time GST Voucher, and of course, the regular GST Voucher. Basically, the usual goodies plus a little more this year in light of higher water bills. Nothing shocking here. 

Helping Those With Disabilities & Special Needs

4:36pm: More to be done to help those with disabilities and special needs and their caregivers. More efforts to integrate those with mental health issues into our community. We think this is a positive move in the right direction for a poorly represented group and look forward to more details in the future.

Efficient Allocation Of Budget

4:45pm: Minister Heng Swee Keat talked about the importance of spending on value-on-money government projects. There will be a permanent 2% downward adjustment that will be applied to the budget caps of all ministries. Think of it as a reduction in budget for all ministries.

4:47pm: Minster Heng Swee Keat mentioned the word “GST”, but did not elaborate much on it. What’s happening, did we miss out on something?

Motorcycle Tax

4:47pm: Higher ARF rate for motorcycles that are more expensive. 

Expected Budget Surplus For 2017

4:50pm: Budget surplus expected for 2017. No surprise there for us, particularly since there are plans to reduce government spending in ministries. Minister Heng Swee Keat ended his budget speech at approximately 4:55pm. 

What are your thoughts of this year Budget? Do You have a question or comment for the budget? Discuss it with us on Facebook

Read Also: A Surplus, Deficit, Or Balanced Budget? Is There An Ideal Type Of Budget? aims to provide interesting, bite-sized and relevant financial articles.

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