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Singapore 2019 Budget doles out S$1.1 billion bicentennial bonus, ‘Merdeka Generation Package’

This year, eligible Singaporeans will receive up to S$300 as part of the bicentennial bonus, as well as a personal income tax rebate, the Budget revealed.

Singapore’s finance minister Heng Swee Keat delivered his Budget speech on Monday, a Budget that revealed mostly social measures and rebates on taxes to support Singaporeans. The highly anticipated Merdeka Generation Package was also revealed, a scheme launched to thank Singaporean seniors who are born in the 1950s by assisting them with their medical bills.

This year, eligible Singaporeans will receive up to S$300 as part of the bicentennial bonus, as well as a personal income tax rebate, the Budget revealed.

Singapore has doubled in its social spending for the financial year of 2018, at S$30 billion, as compared to financial year 2009 which was at S$15 billion.

‘The social measures in Budget 2019 are part of our long-term plan to build a caring and inclusive society,’ said Mr Heng.

The Singapore government expects to spend S$4.6 billion over the next three years on economic measures in Budget 2019. Out of this sum, S$3.6 billion will go to help workers.

‘Budget 2019 lays out this government's approach to build a strong, united Singapore. We nurture our young, take care of our seniors, expand opportunities for our people to be at their best, and to live in a liveable, endearing home, secure and globally connected,’ Mr Heng said.

Billion-dollar bicentennial bonus

A S$1.1 billion bicentennial bonus was revealed, a package which includes up to S$1,000 in Central Provident Fund (CPF) top-ups for older Singaporeans. The CPF is a mandatory savings plan for Singaporeans and permanent residents.

Singaporeans aged 50 to 64 with lower CPF balances will receive S$300 to S$1,000 in top ups while seniors aged 50 to 54 with up to S$30,000 in their accounts will get S$500. Those who have more than S$30,000 but less than S$60,000 in their accounts will receive S$300.

According to Mr Heng, most of those recipients will be women who may be mothers, caregivers or housewives.

Up to S$300 GST vouchers will be given in cash for 1.4 million Singaporeans, Mr Heng said. Taxpayers will receive a 50% rebate, capped at S$200 for the year of assessment 2019.

Merdeka Generation Package

Individuals who are born in the 1950s and who obtained citizenship by 1996 – aged 60 to 69 – will benefit from the Merdeka Generation Package, where the government has set aside a S$6.1 billion fund to provide healthcare incentives.

Others who missed out from the Pioneer Generation Package will also be eligible, if they are born in 1949 or earlier and became citizens in the country by 1996.

Mr Heng said the package is set to benefit close to 500,000 Singaporeans.

Foreign workers quota cut for services sector

The dependency ratio ceiling (DRC) for the services sector will be lowered from 40% to 38% from January 1st, 2020, and adjusted further to 35% from January 1st, 2021. The DRC refers to the maximum permitted ratio of foreign workers to the total workforce that a company in the given sector is allowed to hire.

The ratio for S-Pass workers (a working visa for mid-level skilled foreigners) in the services sector will also be reduced from 15% to 13% from 2020, followed by 10% from 2021.

The foreign worker DRC for other foreign worker dependent sectors such as manufacturing, construction, process, and marine shipyard will be unchanged, at 60%, 87.5%, 87.5%, and 77.8%, respectively.

Support for local workforce

Mr Heng said the enterprise development grant and the productivity solutions grant will be extended for three more years.

Workers will also be given support through programmes. New professional conversion programmes relating to blockchain, embedded software, and pre-fabrication will be launched, said Mr Heng.

Meanwhile, the career support programme will be extended for another two years to provide wage support for employers to hire mature, retrenched Singaporeans.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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