Singapore Budget 2016: 11 things that stood out in Heng Swee Keat's Budget

Minister for Finance, Mr Heng Swee Keat, arrives at Parliament House on March 24, 2016.
Minister for Finance, Mr Heng Swee Keat, arrives at Parliament House on March 24, 2016. ST PHOTO: MARK CHEONG

SINGAPORE - Finance Minister Heng Swee Keat's maiden Budget speech in Parliament on Thursday (March 24) was a business-minded one.

He spent some time addressing the current economic slowdown and giving help to those who continue to be displaced by economic transformation, but his overarching theme was preparing for the future.

He began his speech by harking back to the first Budget speech of 1965, and ended his two-hour address with a call for Singaporeans to contribute to the "Singapore story" for the next 1,000 years.

These are 11 announcements that stood out:

1. Surplus of $3.4 billion

Overall, the 2016 Budget is expected to have a surplus of $3.4 billion.  This is possible because of the large Net Investment Returns Contribution (NIRC) expected - $14.7 billion. This is higher than the $9.9 billion of NIRC that came in to prop up Budget 2015. It is double the average NIRC of $7 billion to $8 billion from FY 2009 to 2013. One reason is that Temasek has been added to the NIRC framework. Deputy Editor Ignatius Low and Opinion Editor Chua Mui Hoong give their analyses in our blog.

 

2. Help for small businesses and struggling sectors

Small businesses will get a higher corporate income tax rebate, help to secure loans, and an extension of the special employment credit scheme.

The struggling marine and process sectors (but not other sectors) will get a reprieve from foreign worker levy hikes, while neighbourhood shops will have help for promotional activities and upgrading projects.

3. Help for workers

No one expected programmes that will top the SkillsFuture scheme already announced in 2015, but there was some help for low-wage workers and those with disabilities.

Workfare was enhanced, and training opportunities for people with disabilities will be provided under the Workfare Training Support Scheme.

4. Stress on innovation, robotics and growth

A raft of schemes to promote automation, the use of robots and internationalisation were introduced or enhanced. Indeed, ensuring SMEs "scale up" was a major thrust of the Budget.

Measures include an Automation Support Package, tax incentives, support from IE Singapore to expand overseas, and new platforms to apply for government grants and facilitate collaboration in the trade and logistics sector. Grants for innovation and to adopt new technologies were also announced.

5. Jurong gets more hip

A new Jurong Innovation District will be built in Jurong West by 2022, bringing together researchers, students, innovators and businesses to develop new products and services.

6. Personal income tax relief capped at $80,000

The total amount of personal income tax relief an individual can claim will be capped at $80,000. The change will not affect 99 per cent of tax-resident individuals, said Mr Heng. Instead, a small proportion of people, for whom the 15 personal income tax reliefs taken together may unduly reduce total taxable incomes, will be affected.

7. $3,000 upfront help for new parents

Parents of Singaporean babies born from Thursday (March 24) onwards will get $3,000 up front in their child's Child Development Account (CDA) under the new First Step Grant. Parents will not have to contribute anything first to get that amount.

The $3,000 will count towards the existing caps, meaning first-time parents who receive the grant and then save $3,000 to their child's CDA will hit the $6,000 co-savings ceiling.

However, while children born from Thursday are eligible, the money will be deposited only from July 1, when necessary updates to systems are completed.

In addition, it was announced that a grant of $35,000 will be given to families with young children in rental housing to buy a new two-room flat with a shorter lease under the Fresh Start Housing Scheme.

8. KidStart pilot programme

This is the name of a pilot initiative that will help parents pay for development programmes for their child up to the age of six. About 1,000 children are expected to benefit from the $20 million programme. Research shows that a child's early life experiences significantly influence their physical, cognitive and social development, Mr Heng said.

9. Silver Support

Seniors in the low-income groups will get their first payouts.

Those who are in the bottom 30 per cent of 65 and above can get between $300 and $750 each quarter to supplement their retirement incomes. There will be a double payout in July 2016, for two quarters, and it will be made automatically. More than 140,000 seniors will stand to benefit from the permanent scheme, which Mr Heng called a "major new feature" in Singapore's social security system.

10. Some help for households

While there were fewer handouts than last year, top-ups to GST vouchers and Service & Conservancy Charges (S&CC) rebates continue. In addition to the $150 to $300 cash given to those eligible, there is a one-off payment of $100 to $200. Households can get one to three months in S&CC rebates as well as U-Save subsidies for their utilities bills.

11. OBS in Coney Island

A new Outward Bound Singapore (OBS) camp will be built on Coney Island by around 2020. Mr Heng said: "To thrive, our young people need a sense of adventure, resilience, and be ready to challenge themselves to be their best."