| Growth Dividends
4.5 First, I will distribute Growth Dividends
to all adult citizens. The Growth Dividends differ
from previous surplus sharing schemes like the
New Singapore Shares (NSS) and Economic Restructuring
Shares (ERS) in two respects. Previously, we gave
NSS and ERS in the form of shares, on which Singaporeans
could earn dividends over time if they did not
encash their shares. Many chose to encash their
shares early instead of waiting for the dividends,
despite the attractive interest rates. I have
therefore decided to distribute the Growth Dividends
in the form of cash which can be collected immediately
upon allotment.
4.6 Second, those who are less well-off will
receive more Growth Dividends. The amount that
a person receives will depend on two factors:
his income and his wealth.
4.7 His income will be assessed by the Inland
Revenue Authority of Singapore (IRAS). We will
use what IRAS calls Assessable Income (AI). Those
earning not more than $24,000 per year will get
more. I have decided on $24,000 as the cut-off
as this is roughly the median income for Singaporean
workers.
4.8 I will use the Annual Value (AV) of his property,
as assessed by IRAS, as a proxy for his wealth.
Those living in properties with AV less than or
equal to $6,000 will get more. $6,000 will cover
all those who live in 1, 2, and 3-room HDB flats
and almost everyone who lives in a 4-room HDB
flat. At the top end, those living in properties
with AV of more than $10,000, which are the larger
private properties, will get a smaller amount.
Table 2. Structure of Growth
Dividends
| Annual Assessable Income
$24,000 or less |
$800 |
$600 |
$200
|
| Annual Assessable Income
more than $24,000 |
$600 |
$400 |
4.9 If your property has an AV of $6,000 or less
and you earn $24,000 or less a year, you will
qualify for the largest quantum of $800. If you
live in a property with AV more than $10,000,
you will get $200. From time to time lower middle-income Singaporeans remind me that they too need
a helping hand, as they earn only slightly more
than the lower-income groups but often just miss
out on our social safety nets. I understand their
concerns. This is why the highest quantum of $800
will cover 45% of the population, not just the
lower-income but also the lower middle-income
earners.
4.10 Singaporeans can look forward to receiving
their Growth Dividends on 1 May 2006. The Growth
Dividends are expected to cost the Government
$1.4 billion.
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