Finance Minister Heng Swee Keat yesterday delivered a generous but targeted Budget aimed at helping Singaporeans with healthcare costs and other expenses, and giving businesses and workers support to thrive in a changing global environment.
He unveiled a $6.1 billion fund that will subsidise healthcare for Singaporeans born in the 1950s, with extra subsidies for outpatient care and MediShield Life premiums, as well as Medisave top-ups for five years.
Called the Merdeka Generation Package, this will benefit nearly 500,000 Singaporeans in all, and is the second initiative of its kind after the $8 billion Pioneer Generation Package announced in 2014.
With Singapore commemorating its bicentenary this year, Mr Heng announced two initiatives to mark what he called a key turning point in Singapore's development - a $200 million community fund to match charity donations, and a $1.1 billion Bicentennial Bonus.
This special bonus includes GST vouchers of up to $300 in cash that will benefit 1.4 million Singaporeans, and a personal income tax rebate of 50 per cent, capped at $200.
These measures are part of Singapore's efforts to forge a caring and inclusive society, said Mr Heng, who presented his first Budget since being named as the designated successor to Prime Minister Lee Hsien Loong late last year.
Noting that support for globalisation was on the wane worldwide, Mr Heng also flagged longer-term domestic challenges such as ageing, social mobility, economic transformation and climate change.
Singapore should build on its strengths, he said, pointing to the country's multicultural society and openness to diversity.
Mr Heng also devoted part of his two-hour speech to the importance of keeping Singapore safe and secure. "We cannot take our peace, prosperity and stability for granted," he said.
That is why the Government will continue to invest a significant share of its resources - about 30 per cent of total expenditure this year - to support defence, security and diplomacy efforts, he added.
"This spending is significant, but indispensable," he said, adding that even more would be spent if needed to safeguard Singapore.
Turning to the economy, Mr Heng said efforts to transform it are bearing fruit, with economic growth of 3.2 per cent last year.
All 23 Industry Transformation Maps, which cover about 80 per cent of the economy, have been launched, he said, noting that productivity has grown by 3.6 per cent a year for the past three years.
But with global growth expected to moderate this year in an increasingly uncertain climate, he outlined measures to help companies and workers build deep capabilities so that they can stay relevant amid a wave of disruption.
The Government will spend $4.6 billion on this front over the next three years - $3.6 billion to help workers and $1 billion to strengthen companies.
Among the initiatives are a $100 million fund to help small and medium-sized firms (SMEs) scale up, as well as more aid for them to go digital, and new programmes to help workers pick up skills in areas like prefabrication.
But Mr Heng also flagged uneven productivity growth across sectors, with the service sector seeing a 3 per cent growth in S Pass and work permit holders per year, or 34,000 in the last three years.
Calling this trend unsustainable, he said: "Our workforce growth is tapering, and if we do not use this narrow window to double down on restructuring, our companies will find it even harder in the future."
To that end, foreign worker quotas for the service sector will be tightened in two phases from next year, especially for S Pass holders.
Mr Heng also outlined several targeted steps to help Singaporeans who are less well off.
The monthly income ceiling for the Workfare Income Supplement will be raised from $2,000 to $2,300 by next January. The maximum payout each year will also be increased by up to $400.
These improvements will cost an additional $206 million a year, and benefit nearly 440,000 Singaporeans in total, said Mr Heng.
With healthcare needs growing, he said a scheme that subsidises primary care and basic dental care for lower-to middle-income families will be improved and extended to cover all Singaporeans for chronic conditions.
A $5.1 billion fund has also been set up to fund long-term care support measures such as ElderFund and CareShield Life subsidies.
Despite these spending initiatives, Mr Heng also stressed the need to maintain fiscal discipline.
Recurrent revenues must meet recurrent spending in areas such as healthcare and defence, he said.
"Many countries have taken the easier route by funding these recurrent expenditures through borrowing. We must not do this, as such borrowing shifts the burden of paying for today's needs onto future generations. That is not the Singapore way," he said.
The tax system must hence be continually reviewed, he said, announcing that returning travellers will have a smaller allowance on tax-exempt overseas shopping and duty-free alcohol.
Overall, the Budget remains expansionary, with ministries expected to spend $80.3 billion - 1.6 per cent higher than the year before. An overall deficit of $3.5 billion is projected, which Mr Heng said will be funded by previous surpluses.
Singapore Business Federation chairman Teo Siong Seng said the Budget is a "well-balanced and progressive" one that encourages companies to continue to transform and prepare for the future.
Parliament will sit from next Tuesday to March 8, and MPs will debate the Budget as well as spending plans of the various ministries.
More on Budget 2019
At a glance: TOP OF THE NEWS
Commentaries by Li Xueying and Vikram Khanna:
Keeping S'pore safe and secure
Drawing on past for the future
Budget links past, present and future: EDITORIAL
Excerpts from Budget speech: BUSINESS
