The first one is a broad overview. It is so broad that it even commented that Minster of Finance is back.
The second article goes into the essential details - water rates to go up, a carbon tax (in two years), differentiated tax for heavy motorcycles, measures for young couples buying their first flat, and help for businesses, and employees/job-seekers.
Budget 2017: Six key takeaways
TODAY
February 20, 2017
SINGAPORE — Amid growing uncertainties on the economic front, Finance Minister Heng Swee Keat on Monday delivered a Budget Statement aimed at re-positioning Singapore for the future. We break down the key points for you.
1. He’s back
Finance Minister Heng Swee Keat’s Budget speech on Monday (Feb 20) not only marks his official return to Parliament, but also caps his remarkable recovery from a stroke last year.
He collapsed during a Cabinet meeting on May 12 due to an aneurysm, which is a localised weakening of a blood vessel. He underwent successful treatment, and was discharged in June.
Before launching into his 80-minute speech, Mr Heng thanked Singaporeans and his fellow Members of Parliament for their support during his ailment.
“Your kindness and encouragement are both humbling and uplifting to me and my family. I’m happy to be back in the Chamber and grateful for the opportunity to continue, alongside Members of this House, to serve Singapore and Singaporeans to the best of my ability,” he added, to applause from the MPs.
2. The big picture
Mr Heng opened his Budget speech by acknowledging the “deep shifts” around the world and at home - from the rising tide of protectionism to the growing pains at home as the Singapore economy matures.
But he reiterated that the new challenges would also open up fresh opportunities for Singapore in the years to come. What Singapore needed to do, he stressed, was to be adaptable, and forge stronger capabilities and partnerships at home and abroad.
Added Mr Heng: “We will take a learning and adaptive approach, try new methods, continue with them when they work well, cut losses when they do not, and draw on feedback and experience to adjust and refine our plans. That is the Singapore way.”
3. Jobs, jobs, jobs
Many Singaporeans are concerned about the uncertain employment outlook and have asked what new measures the Government would introduce.
In his Budget speech, Mr Heng said Singapore needed to go beyond a “general stimulus” given the uneven performance across different job sectors, and should instead tackle specific issues faced by different industries.
Sectors which are doing well, such as the electronics, and health and services sectors, ought to think long term, build on their momentum and seize new opportunities. To that end, Mr Heng introduced several measures to help scale up and internationalise firms with good prospects.
For industries suffering from cyclical weaknesses, the minister introduced specific support measures. The hard-hit Marine and Process sectors, for instance, were granted a deferment on a previously announced increase in foreign worker levy.
To help the construction sector, the Government will bring forward S$700 million in public infrastructure projects over the next two years.
But for sectors facing major disruption, such as retail, Mr Heng said they “will need to dig deep to change their business models to stay viable”.
4. A new carbon tax
Come 2019, Singapore will be the first South-east Asian country to have introduced a carbon tax in order to encourage large emitters to reduce their carbon footprint.
“The tax will generally be applied upstream, for example, on power stations and other large direct emitters, rather than electricity users,” Mr Heng said in announcing the new tax during his Budget speech.
The Government is looking at setting a carbon tax rate of between S$10 and S$20 per tonne of greenhouse gas emissions, which is within the range of what other countries have implemented, he added.
For businesses, this proposed carbon tax rate represents a 6.4 to 12.7 per cent increase from current oil prices, compared to historical quarterly oil price fluctuations which have ranged from -29 to 35 per cent from 2011 to 2016.
For households, the tax rate would be equivalent to a rise in electricity prices of 0.43 to 0.86 cents per kilowatt-hour. This is a 2.1 to 4.3 per cent increase from current electricity tariffs as compared to quarterly electricity prices that have fluctuated up to 10 per cent between 2010 and 2016.
The move to tax greenhouse gas emissions will also help Singapore meet its commitments under the Paris Agreement efficiently and at “as low a cost to the economy as possible”, said Mr Heng.
Singapore ratified the Paris Agreement on climate change last September, formalising its pledge to reduce emissions intensity by 36 per cent from 2005 levels by 2030 and to stabilise emissions with the aim of peaking around 2030.
5. Water prices are going up
In the first price hike for water in 17 years, Mr Heng said prices will rise by 30 per cent by July next year. The price hike will take place over two rounds, with the first kicking in from July this year.
For the average household living in a public flat, this will mean forking out roughly S$9 to S$15 more a month before the government’s additional U-Save vouchers. After the additional U-Save subsidies, one- to two-room flat households would see their water bill go down by S$1, while an executive flat household would see a smaller increase of about S$11 in its water bill.
Currently, Housing and Development Board households pay about S$26 to S$49 a month for water.
For non-domestic users such as building owners and industry, water prices will similarly increase. From S$2.15 per cubic metre, the price will hit S$2.74 per cubic metre from July next year. Those who use NEWater will have a new water conservation tax imposed, that is 10 per cent of NEWater tariffs. This is to encourage water conservation, the PUB said.
6. More support for low and middle-income households
With basic costs of living in the form of water and service and conservancy charges set to increase, Mr Heng announced measures to help lower income households cope.
The GST Voucher — U-Save rebate for eligible HDB households will be increased by S$40 to S$120, depending on flat type. This means the rebates will increase from S$180 to S$260 now, to between S$220 to S$380 from July.
The higher U-Save rebates mean that three-quarters of all HDB households will see an average increase of less than S$12 in monthly water expenses. About 880,000 households will benefit, and one- to two-room flat households will not see any increase, said Mr Heng.
For lower income households, a one-off GST Voucher special cash payment of up to S$200 will be given, and more than 1.3 million Singaporeans will benefit.
S&CC rebates will also be raised by 0.5 months for the 2017 financial year. This means a total of 1.5 to 3.5 months’ worth of rebates for about 880,000 HDB households
“In total, we will provide additional support of over $850 million this year to help households with their expenses,” said Mr Heng.
Singapore Budget 2017: All you need to know in 3 minutes
20 Feb 2017
Chew Hui Min
SINGAPORE - Finance Minister Heng Swee Keat delivered a forward-looking Budget speech on Monday (Feb 20) after suffering a stroke last year.
Some of the highlights include a water price increase, help for companies and workers, as well as support for households and young families.
Here are nine things you need to know from this year's Budget:
1. Paying more for water
Water tariffs will go up by about 30 per cent by 2018. The increase will be in two steps - from July this year, and July 1, 2018.
As the water supply from Johor and local reservoirs become more unpredictable, Singapore will be relying more on costlier water sources - from desalination and Newater.
2. More taxes on emissions
A carbon tax of between $10 and $20 per tonne of greenhouse gas emissions will be placed on power stations and other large direct emitters.
It is expected to be introduced from 2019 after consultations with the industry and the public. Revenue from the tax will help to fund measures by industries to reduce emissions.
A new emissions scheme for vehicles, to be introduced from 2018, will consider four other pollutants on top of carbon dioxide.
Changes in diesel taxes came into immediate effect. The Government will introduce a volume-based duty at $0.10 per litre on automotive diesel, industrial diesel and the diesel component in biodiesel.
Taxing diesel according to usage will encourage users to reduce diesel consumption.
The current lump-sum diesel special tax will be reduced by $100 for diesel cars and $850 for taxis.
3. Pay more for expensive motorcycles
With a rising number of riders buying expensive motorcycles, two more tiers will be added to the Additional Registration Fee (ARF) for motorcycles.
More than half of motorcycle riders are expected to continue to pay the current rate of 15 per cent.
The ARF for motorcycles with an open market value of up to $5,000 will remain at 15 per cent.
The next $5,000 will be subject to a rate of 50 per cent, while the remaining value beyond $10,000 will be subject to a rate of 100 per cent.
4. Some couples can pay less for resale flats
Married couples looking for resale flats can rejoice. The CPF Housing grant has been upped by $10,000 to $20,000.
First-time applicants buying a four-room or smaller flat will get $50,000, up from $30,000. Those looking for a five-room flat or bigger will get $40,000.
Together with the Additional CPF Housing Grant (AHG) and Proximity Housing Grant (PHG), such couples can now receive up to $110,000 in subsidies.
The AHG gives applicants up to $40,000, for those whose combined incomes are $5,000 and below, while the PHG provides up to a further $20,000 for those who live near their parents.
5. Pay less income tax
Workers can look forward to a personal income tax rebate of 20 per cent, capped at $500.
The rebate will cost the Government $385 million.
6. Help for businesses to expand overseas
The Government will commit $600 million for a International Partnership Fund, it will co-invest with these firms to help them internationalise.
The fund will be managed by a unit of Temasek Holdings, Singapore's state investment company. The fund will eventually see its stake back to the Singapore company.
In addition, it will also enhance its Internationalisation Finance Scheme to enable firms to tap on the growing market for infrastructure development in emerging Asian economies.
7. Helping students and professionals go global
There will be more support for start-ups and their workers under the Global Innovation Alliance.
There will be schemes to help students in Singapore universities get work experience in foreign start-ups; set up launchpads overseas to connect entrepreneurs and business owners here with mentors and investors abroad; and facilitate partnership between local and foreign firms looking to expand in the region.
8. Help for workers
The "Attach and Train" programme will help workers find jobs in new growth sectors.
Such workers will get training or internships in industries that have growth potential but where companies may not be ready to hire yet.
The Government will also raise wage and training support under existing measures like the Career Support Programme, the Professional Conversion Programme and the Work Trial Programme.
9. Prudent spending
The Government needs to emphasise value-for-money and do "better - and more - with less", Mr Heng said.
Ministries will face a permanent 2 per cent cut to their Budget caps. Some of the funds will be used to implement cross-agency projects.
This means that the budget growth projections that the agencies are currently operating on will shrink, although it does not amount to a budget cut.
Four agencies - Home Affairs, Defence, Health and Transport - will have the 2 per cent adjustment phased in over two financial years.
Then some "big picture" analysis. How the budget will grow and how to sustain the budget (new revenue sources).
The govt has picked some low-hanging fruits like the NIRC. Some might say that is actually drawing on our reserves. I lean towards that opinion. But my opinion is "balanced" by my opposing concerns that our budget often include "capital investment" - Like expenditure on the MRT, Airport, Mandai redevelopment, and flood alleviation works.
Those are long term infrastructural projects which are capital investments. But we finance them as operating expenditure?
Singapore Budget 2017: Budgets to grow at a slower pace, future tax raises being considered
20 Feb 2017
Straits Times
Rachel Au-Yong
SINGAPORE - Government Budgets will grow at a slower pace, owing to the need to deliver more "value-for-money" services even as spending needs increase.
Finance Minister Heng Swee Keat said on Monday (Feb 20) that the Government will apply a permanent 2 per cent downward adjustment on the Budget caps of all ministries and organs of state from this financial year onwards.
This means that the budget growth projections that the agencies are currently operating on will shrink, although it does not amount to a budget cut.
Four ministries that are serving security needs or significantly expanding their services will see the adjustment phased in over FY2017 and FY2018. These are: Home Affairs, Defence, Health and Transport.
He added that he expects expenditure needs to increase rapidly in the years to come, especially in healthcare and infrastructure. For example, annual healthcare spending has more than doubled to around $10 billion in FY2016, compared to five years ago. This amount will rise as the population ages, he added.
Similarly, the Government is pumping in $20 billion over the next five years to expand the MRT network, and "tens of billions" into the new Changi Terminal 5.
He said: "With our spending needs increasing, the Government must continue to spend judiciously, emphasise value-for-money and drive innovation in delivery." "We can do better - and more - for less."
Mr Heng said that some of the savings from the ministries' budgets will be channelled towards "cross-agency projects that deliver value to citizens and businesses," such as the Municipal Service Office, which works with government agencies to resolve municipal issues, especially those where multiple organisations are involved.
In addition to managing resources prudently, the Government will grow its revenues to finance the growing expenditures, he said.
"Growing our economy is the first and most important step to increasing our revenues sustainably," he said. "We need to achieve this growth by implementing the strategies set out in the CFE (Committee on the Future Economy)."
The second step is to strengthen Singapore's revenue base in a "pro-growth and progressive manner".
The Government will bring its tax system in line with international tax regulations, and also raise revenues through new taxes or raise tax rates.
Said Mr Heng: "Domestically, we will also face rising expenditures over the longer term, as we invest more in healthcare and infrastructure. We will have to raise revenues through new taxes or raise tax rates. We are studying the options carefully. We must make these decisions in good time, to ensure that our future generations remain on a sustainable fiscal footing."
Mr Heng said he expects a budget surplus of $5.2 billion for FY2016, or 1.3 per cent of the gross domestic product (GDP). This is higher than the surplus of $3.4 billion - or 0.8 per cent of GDP - budgeted a year ago.
However, excluding the government's top-up to funds and Net Investment Returns Contribution from past reserves, there is an expected basic deficit of $5.6 billion, or 1.4 per cent of GDP.
"FY2016 was hence an expansionary budget," said Mr Heng.
It remains an expansionary budget for the upcoming financial year, he said, adding that the expenditures are expected to be $3.7 billion, or 5.2 per cent higher than for FY2016. A smaller budget surplus of $1.9 billion, or 0.4 per cent of GDP, is expected in FY2017.
"As we expect expenditures to continue rising in the long term, this budget position is prudent, while supporting firms and households in the midst of continued economic restructuring," he said.
Expenditure expected to outstrip revenue for third straight year
TODAY
February 20, 2017
SINGAPORE — Government spending is expected to outstrip revenue for the third straight year, although the overall fiscal position for FY2017 is expected to be a S$1.9 billion surplus.
Total expenditure (S$75.1 billion) is estimated to be 5.2 per cent higher, mainly because of increased spending in the national development, environment and water resources, health and home affairs ministries. In comparison, revenues are projected to rise by just 1.1 per cent to net the State’s coffers S$69.5 billion.
Noting the smaller budget surplus, Finance Minister Heng Swee Keat said on Monday (Feb 20) that the fiscal position is “prudent” because the Government expects expenditures to continue rising in the long term while it continues supporting firms and households in the midst of continued economic restructuring.
In terms of quantum, national development will get the highest increase in budget (S$1.3 billion, or 39 per cent more), mostly to fund public housing projects. For instance, S$629 million has been budgeted for the Home Improvement Programme and the Enhancement of Active Seniors scheme.
The Ministry of the Environment and Water Resources will get S$1 billion more (up 54.2 per cent) to fund drainage, sewerage and waste management projects, as well as to redevelop Mandai. Major projects to be carried out this financial year include anti-flood measures for Stamford Canal. At Mandai, a mega-nature attraction — including the relocated Bird Park — due to open in 2023 is being built.
Healthcare spending is projected to rise by S$900 million (up 9.6 per cent), mainly to cater for higher patient subsidies as capacity, patient numbers and services expand. Part of the increased spending is also attributable to the funding of Medishield Life premium subsidies.
An additional S$700 million has been given to the Ministry of Home Affairs, mainly to beef up capabilities to “address the heightened security threat environment”, according to the Budget Book.
For instance, there will be new immigration and checkpoint security functions with the opening of Changi Airport Terminal 4 this year. It was previously announced that the terminal will have more self-service immigration facilities to reduce reliance on manpower. These automated lanes will be enhanced with biometric checks.
Revenue collections are expected to rise in motor vehicle taxes (by S$420 million, or 18.2 per cent), customs and excise taxes (by S$380 million, or 13.9 per cent), and goods and services tax (by S$400 million, or 3.7 per cent).
FY2017 is expected to turn a basic deficit of S$8.2 billion. But after factoring in the top-ups to endowment funds and trust funds (S$4 billion), as well as S$14.1 billion in the Net Investment Returns Contribution (NIRC) — now incorporating long term returns made by Temasek Holdings — the estimated outturn is an overall surplus of S$1.9 billion.
Meanwhile, the fiscal position for this financial year is projected to be better than initially expected, despite a projected 2.3 per cent dip in the NIRC. The estimated overall surplus of S$3.45 billion has been revised to S$5.18 billion, the highest since FY2012 (S$5.82 billion).
This was mostly attributable to higher collections from Vehicle Quota Premiums, Stamp Duty, Personal Income Tax and Goods and Services Tax. Spending was also lower than initially expected, primarily in healthcare and housing, partly due to the timing of some projects.
[See also: Singapore Budget Revenue 2016. From which I extracted this table:
The top three revenue sources are as publicly cited by the government: Corporate Tax ($13.4 b), GST ($10.6b), and Personal Income Tax ($10.1b).
What is less often mention is the 4th largest revenue source. At $5.65 b, Vehicle Quota Premiums, or COE is the 4th largest source of revenue. If you include Motor Vehicle Taxes ($2.93b), Vehicle Ownership (COE and and Road Tax) accounts for $8.6b revenue. Asset Taxes (property tax) is 5th at $4.4b.
The "sin" Tax would be Customs and Excise Tax (Alcohol & Tobacco) - $2.91b, and Betting Tax - $2.72b - together accounting for $6.6b
Note that the figures in the link (and extracted here) were last updated in Mar 2016 and represent the budget estimates or projections at the time. The revised or final figures are already higher because of "higher collections from Vehicle Quota Premiums, Stamp Duty, Personal Income Tax and Goods and Services Tax."
The point is, if vehicle ownership is such a big revenue for the govt, how can we be a car-lite society?]
Revised FY2015
|
Estimated FY2016
|
|
$billion
|
$billion
|
|
64.16
|
68.44
|
|
Corporate Income Tax
|
13.85
|
13.41
|
Personal Income Tax
|
9.13
|
10.13
|
Withholding Tax
|
1.31
|
1.33
|
Statutory Boards’ Contributions
|
0.43
|
1.88
|
Assets Taxes
|
4.39
|
4.40
|
Customs and Excise Taxes
|
2.56
|
2.91
|
Goods and Services Tax
|
10.33
|
10.62
|
Motor Vehicle Taxes
|
1.80
|
2.93
|
Vehicle Quota Premiums
|
5.41
|
5.65
|
Betting Taxes
|
2.71
|
2.72
|
Stamp Duty
|
2.73
|
2.52
|
Other Taxes
|
5.88
|
6.33
|
Other Fees and Charges
|
3.29
|
3.32
|
Others
|
0.35
|
0.30
|
The top three revenue sources are as publicly cited by the government: Corporate Tax ($13.4 b), GST ($10.6b), and Personal Income Tax ($10.1b).
What is less often mention is the 4th largest revenue source. At $5.65 b, Vehicle Quota Premiums, or COE is the 4th largest source of revenue. If you include Motor Vehicle Taxes ($2.93b), Vehicle Ownership (COE and and Road Tax) accounts for $8.6b revenue. Asset Taxes (property tax) is 5th at $4.4b.
The "sin" Tax would be Customs and Excise Tax (Alcohol & Tobacco) - $2.91b, and Betting Tax - $2.72b - together accounting for $6.6b
Note that the figures in the link (and extracted here) were last updated in Mar 2016 and represent the budget estimates or projections at the time. The revised or final figures are already higher because of "higher collections from Vehicle Quota Premiums, Stamp Duty, Personal Income Tax and Goods and Services Tax."
The point is, if vehicle ownership is such a big revenue for the govt, how can we be a car-lite society?]
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