The Singapore Budget 2020 was just announced today amidst geopolitical uncertainty, a slowing Singapore growth rate and COVID-19 fears. This environment has caused much anxiety amongst Singaporeans as they were concerned about Singaporean’s vulnerability to external economic threats.
“This year, with the economic slowdown and the uncertainties of the COVID-19 outbreak, we are mindful that many families are facing greater pressures. During my fellow MPs’ and my own walkabouts, people often tell us that they are worried about job security and rising expenditures,” said Mr Heng Swee Keat.
The Budget 2020 was presented by Finance Minister Heng Swee Keat and he addressed some of these concerns. This year’s budget presented a huge economic and spending stimulus of $106 billion to support the local growth and development.
Care and Support Package
He also announced a $1.6 billion Care and Support Package for households, amongst many other initiatives. These initiatives are all aimed to support social, economic and business developments in Singapore.
Here are some of the Highlights of the Care and Support Package:
GST Rates will not rise in 2021
A previously announced increase in the Goods and Services Tax will not be happening in 2020 or 2021. Deputy Prime Minister Heng Swee Keat announced that the GST rate will remain at 7 per cent in 2021. He said that the ministry will “assess carefully the appropriate time for the increase”, as Singapore’s recurring spend is on the rise and this increase will need to take place by 2025.
In the event of an increase, $6 billion will be set aside for the Assurance Package. This will translate to every adult Singaporean receiving $700 to $1,600 over the 5 years after the GST price hike.
There will be more support for students from pre-school to higher education. Students will now receive more financial assistance. The MOE Financial Assistance Scheme will increase the annual bursary quantum for pre-university students by $100.
There will be more transport and school meal subsidies for students. Higher education bursaries will rise from $148 million to $198 million.
Higher Learning Institutes will also encourage local graduates to have an overseas experience. The aim is to have at least 70% of local graduates having at least one overseas experience.
The enhanced financial assistance will cost $52 million. Deputy Prime Minister Heng Swee Keat also said that “every Singapore child will have their education subsidised by $180,000 by the time they are 16”.
This year’s expansionary budget would run a deficit of $10.9 billion. This amount accounts for 2.1% of gross domestic product and exceeds the deficit of $8.7 billion that was used during the global financial crisis in 2009. However, Mr Heng Swee Keat said in parliament, “there is sufficient accumulated fiscal surplus to fund the FY2020 budget deficit and there is no need to draw on past reserves.”
This budget will help Singaporeans weather the challenges that our economy is facing and it will encourage resilience and unity.
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