F.1. The Resilience Package will provide substantial support for Singaporeans during this downturn.

F.2. The key benefit that Singaporeans will derive from the Package will come from the measures to preserve jobs. That is the best way we can help households – to keep the breadwinners employed, so that they can provide for their families. We will complement these measures with direct assistance to all Singaporeans as well as targeted help for the most vulnerable groups.

F.3. However, this cannot be a job for Government alone. Families must take care of their members, and the community must take care of families in need. Everyone must pitch in, because that is far more fundamental to keeping our social fabric strong. Especially now, during difficult times, efforts by everybody – donors, community leaders and volunteers from all walks of life – to help the needy and vulnerable, is what will tie us together and strengthen our society. The Government will encourage them on by providing additional support for their efforts to help the needy.

Direct assistance to households

Additional GST Credits

F.4. The key problem that households faced last year, was rising cost of living, especially due to fuel and food prices. Inflation is now on a downward trend, although the absolute prices of many items remain high. However, many households this year may face reduced incomes, because of lower bonuses or wages and some pick-up in unemployment that is inevitable in the recession.

F.5. I will therefore double the GST Credits that households will receive in 2009. Each household will get an additional payout of GST Credits, on top of the one that they will receive in July. To help households with their immediate needs, the additional GST Credits will be paid out on 1 March 2009. This additional payout will cost the Government $580 million.

F.6. As before, more GST Credits will be given more to the low-income and the old. For example, a Singaporean retiree (aged 60 or above) living in a four-room HDB flat, will get an additional $400, or a total of $800 in GST Credits and Senior Citizens’ Bonuses in 2009.

S&CC and rental rebates

F.7. I will also provide an additional one month of S&CC rebates for those in one to three-room HDB flats, who will therefore receive a total of 3 to 4.5 months for this year. Those in larger flats will receive a total of one to two months of rebates.

F.8. Further, I will provide an additional one month of rental rebate for eligible households in public rental flats. In total, they will get three to four months of rental rebates this year.

Tax assistance to households

F.9. To help households which pay income tax, I will give a personal income tax rebate of 20% for tax residents for Year of Assessment 2009. This will provide immediate reduction in their tax payable for last year’s income. The rebate will be capped at $2,000. This will cost the Government $457 million.

F.10. We also want to help taxpayers who may have lost their jobs. Individual tax residents who have lost their jobs in 2008 or lose their jobs in 2009 will be able to pay their personal income taxes this year in instalments of up to 24 months, up from 12 months. This will help ease their cash burden.

F.11. I will also provide a 40% property tax rebate for owner-occupied residential properties for 2009. These property tax rebates will cost the Government $75 million.

F.12. Currently, those who own higher value homes or secondary residences have to pay income tax on the Net Annual Value of their residential property. I have decided to remove this tax on Net Annual Value with effect from Year of Assessment 2010. (Details in Annex D ( 15kb).)

All households will benefit

F.13. The benefits that households will receive as a result of these measures will be on top of what was previously committed for 2009 such as U-Save rebates. Taking all the measures together, Singaporean households will receive substantial benefits from the Government this year.

F.14. Low-income households and those with elderly family members will get the most benefits. A retired couple in their 60s who live in a three-room HDB flat together with their working daughter with relatively low-income, can expect to receive about $4,500 in benefits in 2009.

F.15. However, the Resilience Package will provide significant benefits for the middle class too. For example, take a family of four living in a five-room HDB flat with working parents earning $4,500 and $3,000 a month and two teenage children. They fall within the upper-middle income group in Singapore. They will receive $2,200 in total in 2009. This will include about $800 in GST Credits and $270 in personal income tax rebates, $800 in PSEA⁶ Top-Ups and $330 in U-Save, S&CC and property tax rebates.

F.16. Most households will in fact be receiving benefits this year that exceed what they would have gained if the Government had instead cut the GST by 2%. Keeping the GST unchanged has afforded substantial benefits for households, but more importantly, the distribution of benefits favours low and middle-income households. This is the right strategy for the times.

Increase in Additional CPF Housing Grant

F.17. On top of these measures that all households will receive, the Resilience Package will provide enhanced benefits to specific groups.

F.18. We will ensure that public housing remains affordable to first-time home buyers. The Government has decided to increase and broaden the Additional CPF Housing Grant (AHG) for first-time home-buyers. We will increase the maximum AHG quantum from $30,000 to $40,000. At the same time, we will raise the household income ceiling from $4,000 to $5,000. Another 2,700 first-time home-buyers will benefit from the enhanced AHG every year, bringing the number of beneficiaries of the AHG scheme to 8,000 yearly. The enhancements will more than double the estimated cost of the AHG scheme to approximately $150 million per year.

Targeted measures for vulnerable

F.19. We will enhance funding for the most vulnerable groups. The Government will increase the Public Assistance (PA) rate for single-person households by $30 from $330 to $360, taking into account the increase in cost of living over the last year and the possible difficulties that those in the extended family and the community may have in supporting PA recipients at this time.

F.20. For government pensioners, the Government has also decided to increase the Singapore Allowance by $20 per month to $240.

F.21. At the same time, we will top up the Public Transport Fund, to bring it to $10 million and ensure that it is sufficient to fund public transport vouchers for all low-income households who need help.

F.22. Further, we will provide more resources towards ensuring that healthcare remains affordable for low-income Singaporeans. The ElderCare Fund and Medifund have been well-utilised in helping needy patients. I will add a $100 million each to the ElderCare Fund and Medifund this year.

Financial assistance for students

F.23. We will also do more to ensure students from families in need continue to have every encouragement. MOE will enhance the financial assistance schemes for students in our schools, and introduce a Short-Term Study Assistance Scheme (SSAS) for students in our ITEs, polytechnics and autonomous universities. This will help students whose families face financial difficulties during the economic downturn. These enhancements will cost an additional $20 million a year. Details will be announced at MOE’s COS.

Support for charitable giving and the community

F.24. We will introduce several measures to support enhanced community initiatives at this time. First, to encourage greater charitable giving this year, I will increase the tax deduction for donations made in 2009 to Institutions of Public Character (IPCs) and other approved institutions from 200% to 250%. This amounts to a significant government contribution each time an individual or corporation makes a contribution. (Details are in Annex D ( 15kb).)

F.25. Second, we will provide an additional $15 million to support government-funded voluntary welfare organisations (VWOs), bringing the total to about $220 million for the year. We will be extending the Jobs Credit that I announced earlier to VWOs as well, as they too employ workers. Further, as a longer-term measure, we will put more resources in training social workers, so as to strengthen the capacity of the VWO sector and achieve a better reach to families at risk.

F.26. Third, funding to Self-Help Groups (SHG) will be increased to a total of $9 million a year for the next two years. We will likewise increase funding to the CCC-Comcare Fund to $7 million a year, for the next two years. The SHGs and grassroots organisations are best placed to provide assistance on a flexible basis to families who require urgent and temporary assistance.

F.27. Fourth, I will provide greater tax incentive for social enterprises – Companies Limited by Guarantee (CLG), set up by individuals to serve a core social objective. Social entrepreneurs are now making a mark, and we should encourage them to grow and add a new dimension to our social sector. One example is Barista Express Café which provides supportive employment to help former psychiatric patients re-integrate into society. I will extend the tax exemptions for start-ups to Companies Limited by Guarantee from YA2010. (Details are in Annex D ( 15kb).)

F.28. In total, we will be providing direct support to households and community groups amounting to $2.6 billion in 2009. This is on top of the help that Singaporean households will get from our jobs initiatives – the Jobs Credit, the WIS Special Payment and SPUR. These measures should help our families see through the crisis this year. They also seek to bolster the community support networks that remain at the core of Singapore’s collective approach to helping the less fortunate in our society.

⁶ Post-Secondary Education Accounts

ENHANCING BUSINESS CASH-FLOW AND COMPETITIVENESS

BUILDING A HOME FOR THE FUTURE