SINGAPORE - The goods and services tax (GST) hike will not kick in next year, while $6 billion has been set aside this year to help cushion the impact when the increase does take effect.

The Budget's new Assurance Package means all adult Singaporeans will get cash payouts of between $700 and $1,600 over five years, so most households will get enough to offset at least five years' worth of additional GST expenses.

Those living in one- to three-room flats will get enough to offset about 10 years' worth.

This works out to about $7,000 in GST offsets over five years for a family of four in a four-room flat with a combined income of $6,000. It includes cash of about $4,000.

The planned GST hike from 7 per cent to 9 per cent was first announced in 2018.

The Government said then that it was necessary, given the needs in healthcare and other areas, and would take place sometime between 2021 and 2025.

Finance Minister Heng Swee Keat said on Tuesday (Feb 18) that the coronavirus outbreak is a "stark reminder of the continued importance of maintaining a sound fiscal footing to deal with surprises and unexpected scenarios".

He added that the GST would remain unchanged next year after reviewing revenue and expenditure projections and considering the state of the economy but "we will not be able to put off the increase indefinitely".

Apart from the $6 billion Assurance Package, other measures are in place to keep Singapore's taxes and transfer system progressive.

These include continuing to absorb GST on publicly subsidised healthcare and education, and enhancing the permanent GST Voucher scheme when the GST is raised.

This will maintain the Government's commitment to fully offset GST for the lower half of retiree households, significantly offset it for the upper half of retiree households and offset about half the levy for lower-income households with no elderly members, Mr Heng said.