1. Boosting productivity & innovation

The world is entering a new global economy, one marked by rising geopolitical risks and growing competition.

To ensure that Singapore’s economy remains vibrant, the Government is doubling down on productivity and innovation as key pillars for growth. Apart from a $4 billion top-up to the National Productivity Fund, the budget also introduced a new Enterprise Innovation Scheme that will include raising tax deductions to 400% of qualifying expenditure on five activities.

The Government is also committed to helping grow small and medium enterprises, which account for 99 per cent of companies and 72 per cent of employment in Singapore.

To help scale local enterprises, DPM Wong announced another top up of $150 million via the SME Co-Investment Fund and an additional $1 billion to the Singapore Global Enterprises initiative.

 

2. More help with cost of living

Inflation is running at multi-year highs and is unlikely to abate anytime soon. While the Government cannot force inflation down – since much of it is imported – there is plenty of aid to help households cope with the rising cost of living.

They introduced a Cost of Living Special Payment of between $200 and $400 and made enhancements to the permanent GST Vouchers and one-off Assurance Package to aid Singaporeans affected by the hike in GST.

Households can expect to receive up to $850 in GST Vouchers from 2024. Likewise, the cash payouts from the Assurance Package will grow by between $300 and $650. This will bring the total cash payments received by adult Singaporeans to between $700 and $2,250 over five years, depending on their income and property ownership.

The popular CDC vouchers will also return in 2024. Singaporean households can look forward to another $300 worth of CDC vouchers in January 2024 to pay for everyday items like groceries, coffeeshop meals and even haircuts.

 

3. Nudging young couples to start families

With Singapore experiencing record-low fertility rates, DPM Wong trained his sights on helping young couples start and raise a family.

Among other things, he addressed the concern among young couples about not being able to afford housing. To improve access to new flats, the Government will increase the CPF Housing Grant by $30,000 for eligible first-timer families purchasing 4-room or smaller resale flats, and by $10,000 for those purchasing 5-room or larger flats. First-time applicants for flats will also get more ballot chances.

DPM Wong also boosted the Baby Bonus Cash Gift by $3,000. This means that parents will receive $11,000 each for their first and second child, and S$13,000 for their third child and beyond. 

In view of the rising cost of living, the Government will also raise the co-matching cap for the Child Development Account. It previously co-matched every dollar that parents save in the CDA, up to a cap of $3,000 and $6,000 for the couple’s first and second child, respectively. It will now be co-matching up to $4,000 for the first child and $7,000 for the second child.

Fathers are also getting a leg up, with the doubling of paternity leave from two to four weeks.

 

4. Building retirement adequacy

The importance of saving more for retirement was another big theme in this year’s Budget. Given the rapidly ageing population, much still needs to be done to help Singaporeans prepare for their silver years.

To do this, the CPF monthly salary ceiling will go up to $8,000 from $6,000 progressively, starting from September this year.

This is great news for individuals, who will have more added to their retirement nest egg. But companies should take note that this will mean higher wage costs.

The Government will also raise the minimum CPF monthly payouts from the Retirement Sum Scheme from $250 to $350 a month for seniors.

 

Conclusion

Budget 2023 offered a package of measures aimed at boosting local enterprises as the world braces for a challenging phase ahead. But it also included a slew of measures that provide much needed help for individuals as they grapple with rising costs.