Budget 2017: Moving Forward Together20 Feb 2017
BUDGET 2017: MOVING FORWARD TOGETHER
1 Minister for Finance Heng Swee Keat delivered the Singapore Government’s Budget Statement for Financial Year 2017 in Parliament on Mon, 20 February 2017.
2 Economic growth was 2% in 2016, similar to that in 2015, with some sectors doing better while others faced headwinds. Similarly, labour market performance was mixed, with jobs created in some sectors and lost in others. The overall unemployment rate remained low. The outlook for 2017 is largely similar to 2016.
3 Budget 2017 is delivered on the cusp of major global shifts. Even as the mood turns inwards amongst advanced economies, the pace of change is increasing, with rapid technological advances disrupting businesses and jobs. These deep shifts create new challenges and opportunities for Singapore. Economically, we need to develop deep capabilities in our firms and workers and forge strong partnerships. Socially, we need deep partnerships as well, with a good balance between government action and community initiative.
Building an Innovative and Connected Economy
4 Budget 2017 provides both near term support measures, with a targeted approach to address sector-specific needs, and also addresses the Committee on the Future Economy’s seven mutually reinforcing strategies for the medium to longer term.
5 Beyond existing measures, the Budget includes deferring Foreign Worker Levy increases for the Marine and Process sectors, bringing forward $700 million of infrastructure projects, enhancing the Corporate Income Tax rebate, and extending the Additional Special Employment Credit. There will also be more support for workers in transition.
6 Budget 2017 also takes a further step on the economic transformation journey. It includes measures to strengthen corporate capabilities, particularly in promoting digitalisation, with a new SMEs Go Digital Programme, and strengthened capabilities in data and cybersecurity. There are measures to promote innovation and scaling up globally, including improving access to Intellectual Property, a new Tech Access Initiative, a new International Partnership Fund, and financing support for local companies with overseas infrastructure projects.
7 The Budget seeks to deepen Singaporean’s capabilities by developing a skilled and adaptable workforce, with workers having the ability to operate overseas, while also deepening skillsets to remain in jobs. It also aims to foster partnerships for success, with more Industry Transformation Maps and forward-looking government regulations. As part of plans to develop a vibrant and connected city, investments in critical economic infrastructure will be made, along with shared infrastructure for economic clusters, and the creation of shared social spaces.
Sustaining a Quality Environment for our Future
8 Singapore needs to play its part to protect the living environment. The Government intends to introduce carbon tax as part of efforts to reduce greenhouse gas emissions. Given the highly pollutive nature of diesel, diesel tax will be restructured, by permanently reducing the annual tax paid by diesel vehicles and introducing a volume-based duty on diesel. Some rebates will be provided. In addition, a new Vehicular Emissions Scheme will replace the current Carbon Emissions-based Vehicle Scheme, and the Early Turnover Scheme will be enhanced. The price of water will be increased as well to reflect its scarcity.
A Caring and Inclusive Society
9 Budget 2017 sustains the momentum of recent social policy moves by providing increased help for families, enhanced support for vulnerable groups, and strengthened community partnerships. Families can expect additional support in housing, infant care, and post-secondary education bursaries.
10 Households, particularly the lower income, will get assistance with their expenses, including an increase in the GST Voucher – U-Save payout, a one-off GST Voucher – Cash Special Payment, plus more S&CC and Personal Income Tax rebates.
11 A Third Enabling Masterplan will be introduced to better integrate persons with disabilities into the workforce and to give support for caregivers. There will be a strengthening of mental health support, with voluntary welfare organisations better resourced to reach those in need. In addition, the Government will provide top-ups to self-help groups. To strengthen community bonds through sports and the arts, there will be top-ups to the VWO-Charities Capabilities Fund, the Sports-In-Precinct Programme, and the Cultural Matching Fund.
A Sustainable Fiscal System
12 Budget 2017 represents an investment in Singapore’s economic transformation and social resilience. The Government has maintained a sustainable fiscal system, with a pro-growth and progressive tax system, which produces steady revenue streams. In the coming years, expenditure needs are expected to rise more rapidly, particularly in healthcare and infrastructure.
13 The Government will continue to spend judiciously, emphasising value-for-money and driving innovation. At the same time, there is a need to grow and strengthen the revenue base, in order to finance growing expenditures. The Government will have to raise new revenue through new taxes or raising tax rates. This would be necessary to ensure future generations can remain on a sustainable fiscal footing.
14 Budget 2017 outlines a plan for Singaporeans to move forward together, and to thrive in an uncertain and rapidly changing world. By building strong partnerships in our economy and society, we can progress into a future full of promise.
15 More details of the measures introduced in Budget 2017 can be found on the Singapore Budget website, at www.singaporebudget.gov.sg.