SINGAPORE BUDGET 2019
Budget 2019, delivered by the Finance Minister, Mr Heng Swee Kiat, on 18 February 2019 offers strategic vision to strengthen Singapore’s social framework as an inclusive and forward-looking society. Themed as building “a strong, united Singapore”, this year’s budget seeks to continue the restructuring journey which the Government had undertaken since 2010. It seems to unite the past, the present and the future by adopting both a generational and sectorial approach to ensure that the country’s commitment to addressing long-term challenges for the aging, social mobility and economic transformation. In charting Singapore’s path forward, several initiatives have been initiated to provide customised support schemes to start-ups, better financing options for businesses, support for businesses that are adopting technology as a part of their business transformation and climate change.
The unveiling of the S$6.1 billion Merdeka Generation Package, which will benefit half a million Singaporeans, ensures that “no one gets left behind” as the country progresses. This benefit is a demonstration of national gratitude for those aged between 59 to 69 now who grew up during the tumultuous years of 1950 and 1960s. This generation had steered Singapore’s labor force in turbulent times, building a sturdy foundation for generations to come.
2019 also marks the year Singapore celebrates her bicentennial since the arrival of Sir Stamford Raffles in Singapore. This was a turning point in the country’s history. One of the initiatives announced to commemorate this milestone is the introduction of a Bicentennial Bonus which is consistent with the Government’s policy of sharing fiscal surpluses with Singaporeans.
On the tax front, save for the announcement on personal income tax relief, there are not many significant changes announced in Budget 2019. To a certain extent this was within expectations. With GST set to rise from 7% to 9% sometime between 2021 and 2025, new taxes introduced during the intervening period would probably be geared towards meeting specific policy objectives. Strangely, stamp duties, property tax and even taxes on tobacco and liquor were untouched.
Nevertheless, the Minister made a significant policy statement that a competitive tax regime is a key anchor in helping Singapore to attract and retain investments and talent. This is a prudent and calibrated decision as the OECD and nations around the world seek to review international tax policy in relation to the digital economy and profit-shifting.
From the business perspectives, Budget 2019 outlined 3 key thrusts to support industry transformation for globalisation:
– Build deep enterprise capabilities
• Companies will be provided support to scale up and venture into overseas markets through the Innovation Agents Programme, SME Co-Investment Fund III, Global Talent Programme and the Career Support Programme which are targeted to support businesses at different stages of growth.
• Build deep worker capabilities
• In its continuous effort to transform the workforce caused by technological disruption and changing cost structures, initiatives have been introduced to help the workforce to upgrade skill or reskill and to embrace lifelong learning in order to stay relevant and employability. Whilst it may be inevitable that some jobs are relocated or made redundant, the Government will continue to invest in Singaporeans from their early childhood and through their working lives.
• Build deeper partnership across the economy
• Singapore has negotiated various free trade agreements to help businesses gain access to new markets and the Government recognises the significant roles that trade association and chambers (TACs) play to assist these businesses. The Government will continue to work through TACs by strengthening support through the Local Enterprise and Association Development programme.
Finally, Singapore seeks to chart the course towards a sustainable future. Budget 2019 is about strengthening our economic competitiveness in order to deal with the inevitability. In an era of increasing uncertainties brought about by technological advancements, changing trade winds, increasing trade protectionism and the sentiment in supporting globalisations is on the wane worldwide. The trajectory to this year’s budget remains consistent with those of previous years as it seeks to continue to tackle long terms challenges by planning ahead. With all these in placed, it is now up to businesses to survive, grow and crafting a societal fabric tenacious enough to withstand multifold pressures.
27 February 2019
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Click here to view the Singapore Budget 2019 publication.