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SG Budget 2017: Measures for dealing with major global shifts
THIS year’s Budget, delivered by Finance Minister Heng Swee Keat in Parliament on Monday, addressed the issue of ensuring that Singapore will be able to thrive in a changing world.
In his speech, Mr Heng stressed the need to build capabilities and partnerships in economy and society. He noted, too, the need to take decisive action to re-position Singapore for the future.
Here are the key initiatives and issues Mr Heng addressed in Parliament on Monday:
In order to address continued cyclical weaknesses in the marine and process sectors, the government will defer the foreign worker levy increases in these two sectors by one more year.
The construction sector will also get support in the form of S$700m worth of public sector infrastructure projects that will be brought forward to start in the fiscal year (FY) of 2017 and FY2018.
Workers will also get a boost in the form of increased wage and training support. The government will also pay out more than S$600 million to businesses this March through the Wage Credit Scheme. Over the years of assessment (YA) 2017 and 2018, an extra S$310 million will be spent to enhance and extend the Corporate Income Tax rebate.
Employers will also receive assistance in dealing with their wage bill, through the extension of the additional special employment credit. A personal income tax rebate of 20 per cent of tax payable, capped at S$500, will be given to Singapore residents for YA2017.
This year's Budget also dealt with the challenges of preparing for the future economy, with measures that include an SMEs Go Digital Programme and a new International Partnership Fund. Over the next four years, the government will set aside S$2.4 billion to implement the Committee on the Future Economy (CFE) strategies.
Mr Heng also addressed how Singapore will help its people to deepen their capabilities. A Global Innovation Alliance for Singaporeans will be set up to help them gain overseas experience, build networks, and collaborate with their counterparts in other innovative cities.
Where industries are concerned, the government will roll out 17 industry transformation maps within FY2017. This comes on top of the six that have already been launched.
The construction sector will also get a boost, with the public sector construction productivity fund, with about S$150 million.
On the environmental front, Singapore will implement a carbon tax on the emission of greenhouse gases from 2019. A new vehicular emissions scheme will kick in from Jan 1, 2018, and the Early Turnover Scheme for commercial diesel vehicles will be enhanced.
Water prices are also set to increase by 30 per cent over two phases starting from July 1, 2017. For 75 per cent of the households, the increase in monthly water bills will be less than S$18.
Mr Heng also said that the government will continue to support families and help the needy. It will spend an additional S$110 million per year to boost the CPF Housing Grant scheme and offer additional support of more than S$850 million to help households with their expenses.
As part of the government's effort to improve public transport infrastructure, it will spend more than S$20 billion over the next five years to almost double the train network by 2030.
New additional registration fees tiers will be introduced for more expensive motorcycles and as a complementary measure, the Ministry of Transport will cease the contribution of motorcycle Certificate of Entitlement quota to the open category.
During his speech, Mr Heng noted too the need for the government to continue to spend judiciously. It will apply a permanent 2 per cent downward adjustment to the budget caps of all ministries and organs of state from FY2017 in order to ensure prudent spending.
For FY2016, Singapore is expected to have a budget surplus of S$5.2 billion, or 1.3 per cent of the country's gross domestic product. For FY2017, the budget remains expansionary. Overall, a smaller budget surplus of S$1.9 billion (0.4 per cent of GDP) is expected.