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Singapore Budget 2019: Surplus instead of deficit in FY18, one-off Bicentennial Bonus to be paid
SINGAPORE is expected to register a budget surplus of S$2.12 billion for FY18, equal to 0.4 per cent of gross domestic product (GDP), instead of a small overall deficit of S$0.6 billion estimated a year ago.
The surplus for the fiscal year ending March 31 was due to the unexpected suspension of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project as well as higher-than-expected collections from stamp duties, corporate income tax and statutory board contributions.
Operating revenue increased to S$73.67 billion, 1.4 per cent higher than the estimated S$72.68 billion, while expenditure will total S$78.99 billion, 1.3 per cent lower than the S$80.02 billion anticipated.
Statutory board contributions improved to S$1.49 billion compared to the S$0.46 billion that was expected. They were boosted by higher contributions from the Monetary Authority of Singapore, which saw increased net profits in FY17/18 from a global equity market rally in the second half of 2017.
Corporate income tax collections increased to S$16.14 billion, up 6.8 per cent from estimates, on stronger-than-expected economic growth. Meanwhile, higher activity in the property market bumped stamp duty collections up to S$4.63 billion, 23 per cent higher than estimated a year ago.
The revenue increases were offset by lower-than-expected vehicle premium collections, which came in at S$3.27 billion rather than the S$5.59 billion previously anticipated. This was due to lower-than-projected certificate of entitlement (COE) prices and higher disbursements for COE rebates.
Part of the surplus will be shared with Singaporeans through a one-off Bicentennial Bonus of S$1.1 billion. The Bonus is made up of several components, including payouts of S$150 to S$300 for about 1.4 million lower-income Singaporeans aged 21 and above this year, based on their assessable income and the annual value of their homes. In addition, a Workfare Bicentennial Bonus will be paid out to eligible Singaporeans at 10 per cent of the total annual payment they received under the Workfare Income Supplement (WIS) scheme for 2018, with a minimum payment of S$100.
The Bonus will also include top-ups to Edusave and Post-Secondary Education Accounts to support parents with school-going children, and CPF top-ups of up to S$1,000 for Singaporeans aged 50 to 64 this year who have less than S$60,000 of retirement savings in their CPF accounts.
The lower expenditure in FY18 from the postponement of the HSR project will be partly offset by slightly increased spending on healthcare, trade and industry, and education.
For instance, healthcare spending is expected to total S$10.63 billion, up from the estimated S$10.2 billion, while trade and industry expenditure is projected to come in at S$4.68 billion versus S$4.37 billion. Education spending will increase to S$13.09 billion, up from the estimated S$12.84 billion.
Special transfers (excluding top-ups to endowment and trust funds) will add up to S$1.7 billion, slightly lower than the S$1.81 billion estimated, mainly due to a lower number of cash payout applications under the Productivity and Innovation Credit scheme. Meanwhile, top-ups to endowments and trust funds will be S$7.3 billion, as expected.
Net investments returns contribution (NIRC) is expected to rise to S$16.44 billion, up from the S$15.85 billion estimated previously. Excluding the government's top-ups to endowment and trust funds and NIRC, this would work out to a basic deficit of S$7.02 billion or 1.4 per cent of GDP.
For all of our Singapore Budget 2019 coverage, news, analysis, and infographics visit bt.sg/budget19