Budget 2024 is just around the corner and will be announced on 16 February 2024, at 3.30pm!
It is most likely to focus on enhancing existing packages to alleviate the cost of living pressures and job support.
After the Singapore Budget is announced, it has sort of become a yearly tradition where most of us just check the news to see whether we are getting more GST vouchers, cash or CDC vouchers.
Jokes aside, the Singapore Budget is really an unveiling of a strategic financial plan to address the country’s challenges and national priorities by the government to us.
As of now, nothing official, except for the announcement date, has been released. But here’s a collection of what economists in the financial industry (DBS & UOB) expect for Budget 2024!
TL;DR: Singapore Budget 2024
Singapore Budget 2024 Predictions
If you’ve followed the news, you would have known about the continuing waves of layoffs (across tech companies such as Google and Lazada), the ongoing geopolitical conflict in Ukraine and Gaza, and high-interest rates. These are signs that the global landscape is still not looking very good.
Back home, we face mounting cost of living issues and a declining real median income of 2.2 per cent.
The Budget is expected to tackle these issues affecting businesses and individuals’ lives.
According to DBS economist Chua Han Teng, Budget 2024 will likely take a cue from the Forward Singapore exercise and balance short- and long-term priorities. There is also potential room for a slight expansionary budget for FY2024, with an expected overall fiscal deficit of $3 billion (0.4% of GDP).
Further Enhancements to The Cost Of Living Package
To no one’s surprise, the first prediction is further enhancements to the Cost Of Living (COL) Package as a form of near-term support. This package has been enhanced many times and will likely be enhanced this year.
The latest announcement in September 2023 was an additional $1.1 billion to the Cost-of-Living Package, which included:
- Additional Assurance Package cash special payment of up to $200 for 2.5 million eligible Singaporeans in December 2023
- Additional $200 CDC vouchers for every Singaporean household in 2024
- Additional one-off 0.5-month S&CC rebate for 950,000 Singaporean HDB households in January 2024
- Additional $20 U-Save rebates per quarter from January 2024 to December 2025.
For Budget 2024, UOB predicts that there will be an enhancement in the cash payouts or U-save utility rebates under the existing Assurance Package alongside a possible one-off cost-of-living special cash payment in FY24. Additional CDC vouchers for each Singaporean household or one-off top-ups to PSEA/Edusave/CDA accounts can also be added.
More Support for Workers & Businesses
According to UOB Senior Economist Alvin Liew, the government will likely top up the annual SkillsFuture Credit and enhance the co-funding share under the Progressive Wage Credit Scheme (PWCS) for 2024 to 2026.
Another UOB economist, Jester Koh, believes the government may raise the Local Qualifying Salary (LQS).
Finally, both economists agree that there is a chance for an additional one-off Central Provident Fund (CPF) transition offset to mitigate the impact on business costs from the upcoming scheduled increases in the CPF monthly salary ceiling to $8K by 2026.
How Do I Catch The Budget?
If you’re keen to watch or listen to Budget 2024 live, there are a few channels that you can tune into:
Free-to-air TV channels
- Channel 5 (Singapore Association for the Deaf (SADeaf) will provide simultaneous sign language interpretation of the Budget Speech on Channel 5)
- Channel News Asia (CNA)
Livestreams
- CNA website (www.channelnewsasia.com)
- CNA YouTube
- CNA Facebook
- 8 World News (www.8world.com)
- 8 World News YouTube
- 8 World News Facebook
- MediaCorp’s meWATCH (www.mewatch.sg)
Radio
Budget 2024 will commence at 3.30pm on 16 February, Friday.
Budget 2023
If you need a reminder of what went down during Budget 2023, here is last year’s coverage for your reference!
This year, the theme for Singapore’s Budget is aptly titled “Moving Forward in a New Era”.
With Singapore entering a post-pandemic era amidst high inflation and increased nationalism, it must continue exercising financial prudence while supporting Singaporeans.
Without further ado, here are some critical highlights for Singaporeans.
For Singaporeans
With inflation expected to remain high in the first half of 2023, the government will further support Singaporeans with a $3 billion top-up to the Assurance Package (a total of $9.6 billion).
These top-ups are meant to help defray the rising living costs and the upcoming GST hike in 2024. No new measures have been introduced.
Amidst global inflation, there were three packages in 2022 totalling $3.5 billion, funded by corporate income tax and asset-related taxes.
As such, Singapore had to draw from its past reserves (expected $3.1 billion) to fund COVID-19 measures.
DPM Wong said that Singapore must continue its fiscal prudence and thanked Singaporeans for understanding the GST hikes.
For Families
Budget 2023 has also highlighted how strengthening Singapore’s social compact is imperative to building a resilient nation. Thus, the government has introduced new measures and enhanced grants further to help families going forward:
- BTO Balloting: Additional ballot chance for families with children and young married couples aged 40 and below. This will be implemented later this year.
- CPF Housing Grant
- Increased 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 large flats. Eligible First-Timer families purchasing resale flats will immediately benefit from this increased CPF Housing Grant. This additional grant amount will be credited into their CPF account from April 2023 onwards.
- Increased by $15,000 for eligible First-Timer singles purchasing 4-room or smaller resale flats, and by $15,000 for those purchasing 5-room or large flats. Eligible First-Timer singles purchasing resale flats will immediately benefit from this increased CPF Housing Grant. This additional grant amount will be credited into their CPF account from April 2023 onwards.
| Families | Singles | ||
|---|---|---|---|
| Maximum Grant Amount | Up to $190,000 (from $160,000) | Up to $95,000 (from $80,000) | |
| CPF Housing Grant for Resale Flats | 4-room or smaller resale flats | Up to $80,000 (from $50,000) | Up to $40,000 (from $25,000) |
| 5-room or smaller resale flats | Up to $50,000 (from $40,000) | Up to $25,000 (from $20,000) | |
| Enhanced CPF Housing Grant (EHG) | Up to $80,000 | Up to $40,000 | |
| Proximity Housing Grant (PHG) | Up to $30,000 | Up to $15,000 | |
On top of measures to help families secure housing, the government will also support families with the costs of raising children and supporting fathers in raising their children by doubling paid paternity leave.
| For all eligible Singaporean children born on | 14 Feb 2023 to 31 Dec 2023 | 1 Jan 2024 onwards |
|---|---|---|
| Cash Support | – Increase in Baby Bonus cash gift by $3,000 – Increase in government contributions to the Child Development Account (CDA) – Increase First Step Grant by $2,000 – Increase government co-matching cap for CDA by $1,000 for the first and second child |
|
| Government-Paid Paternity Leave | 2 weeks | 4 weeks (2 weeks on a voluntary basis) |
| Working Mother’s Child Relief (WMCR)* | ||
| 1st Child | 15% of mother’s earned income | $8,000 |
| 2nd Child | 20% of mother’s earned income | $10,000 |
| 3rd Child and beyond | 25% of mother’s earned income | $12,000 |
*No change for WMCR claims on qualifying Singaporean children born or adopted before 1 Jan 2024
For lower-income families, there will also be additional support. This comes in the form of a $300 million top-up to the ComCare Endowment Fund, which supports ComCare, a critical source of support for many lower-income families.
Additionally, ComLink, a nationwide platform serving 14,000 families with children living in rental housing, will be better integrated and streamlined across different programmes in Government that support lower-income families.
Lastly, KidSTART will be scaled up to support 80% of eligible children in lower-income families, starting from children born this year.
For Workers
As mentioned repeatedly in Budget 2023, Singapore’s second-best safeguard besides our financial reserves is our people. Thus, the government is committed to investing in our working population.
There will be enhanced employment support with a $2.4 billion top-up to the Progressive Wage Credit Scheme (PWCS) fund to continue providing transitional support for businesses.
There will also be an enhanced Enabling Employment Credit to support employers hiring persons with disabilities who have not worked for at least six months.
Moreover, the Senior Employment Credit and Part-time Re-employment Grant for senior workers will be extended till 2025.
A new Uplifting Employment Credit will also be introduced as a time-limited wage offset to encourage firms to employ ex-offenders.
Strengthening Retirement Adequacy
The CPF contribution rates of Platform Workers and Companies will be aligned with those of employees and employers over 5 years. As take-home pay will be affected, CPF Transition Support will be provided in the first four years after implementation.
The CPF contribution rates of senior workers will be increased, and their minimum CPF monthly payout will be boosted under the Retirement Sum Scheme to $350 a month.
Middle-income Singaporeans can save more for retirement as the government raises the CPF monthly salary ceiling from $6,000 to $8,000 in 2026. The government will phase in the increases over four years, starting this year, to allow employers and employees to adjust to the changes.
Integrate Training and Job Placement
The government is also set to support workers in upskilling and job placement by:
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Engaging enterprises to understand the manpower and skills gaps in the sector
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Working with training providers to update existing training programmes or develop new ones
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Working with employment facilitation agencies, industry partners, and unions to ensure that training translates into better employment and earnings prospects
Tax System Changes (Cars, Property, Donation Tax Reliefs)
As COVID-19 has dipped into our reserves, Singapore wants to raise revenue for future expenses. However, it is not as simple as just “taxing the rich”.
Therefore, Singapore is gunning for a fair and progressive tax system based on collective responsibility, with those better off contributing more.
On top of these changes, the government will be enhancing tax-deductible donations and the Corporate Volunteer Scheme, reviewing social service sector salary benchmarks, topping up the Community Silver Trust, and providing a $10 million top-up to support Self-Help Groups.
