Many support packages and no GST hike in Hongbao Budget

In his 2020 Budget Statement on Tuesday (Feb 18), Deputy Prime Minister and Finance Minister Heng Swee Keat announced that the Budget has been geared towards responding to the current situation, with Singapore still recovering from economic uncertainty due to global trade tensions and, at the same time, dealing with the challenges posed by the Covid-19 outbreak.

The biggest announcement Mr Heng made was that there will be no increase in the Goods and Services Tax (GST) to 9 per cent next year. It will remain at 7 per cent for the time being.

Mr Heng said, however, that the Government “will not be able to put off the increase indefinitely. We will still require recurrent sources of revenue to fund our structural spending needs in the medium term. The GST increase continues to be necessary sometime from 2022 to 2025”. The GST increase, he explained, is needed for publicly-subsidised healthcare and education.

He added that, when the GST is raised, the Government will be providing an Assurance Package of S$6 billion to help Singaporeans transition through the increase.

The Finance Minister also announced an additional S$800 million for frontline ministries fighting the Covid-19 outbreak, with most of it allotted to the Ministry of Health.

In the light of economic uncertainties, there will also be two packages totalling S$5.6 billion to stabilise the economy and provide assurance to Singaporeans. 

The first is the Stabilisation and Support Package for workers and enterprises. The second is the Care and Support Package for households, to support the people through these uncertain times, and to alleviate concerns over cost of living. More help will be given to the less well-off.

Mr Heng emphasised that jobs would be given utmost priority under the S$4 billion Stabilisation and Support Package. “We will help our workers retain their jobs, and use any lull period to upgrade their skills, to be ready when the tide turns.”

Additional support will be provided through the introduction of a Jobs Support Scheme and enhancing the Wage Credit Scheme. /TISG