Deputy Prime Minister and Minister for Finance Mr Lawrence Wong's Opening Remarks at The Cost-of-Living Support Package Press Conference on Thursday, 28 Sep 202328 Sep 2023
At the Budget this year, I have provided comprehensive help for Singaporean households by enhancing the GST vouchers scheme as well as the Assurance Package.
The measures from these schemes are progressively being rolled out. Meanwhile, we have been tracking closely the state of the economy. Inflation in Singapore remains elevated but has shown signs of easing. Economic growth has been sluggish, but we do not expect a recession this year. However, the risks are weighted on the downside, and there could be disruptions to food and energy supplies globally. There could be a sharper than expected slowdown in the US and China economy, and within Singapore, real wage growth, meaning wage growth less inflation, is likely to moderate this year, because firms are likely to take a more cautious approach regarding salary increments.
Furthermore, there has been a series of recent price increases. We have frozen increases in government fees and charges this year, but some non-government charges have gone up because of higher costs. That includes the Town Council Service and Conservancy charges, as well as public transport fares. And then yesterday PUB announced the increase in water price over the next two years, 2024 and 2025.
I know that many Singaporeans are anxious about the overall economic outlook, the price increases, and the impact on their cost of living. The government is committed to supporting Singaporeans through these uncertain times, and as the Prime Minister said at the National Day Rally recently, the Ministry of Finance has been studying how we can do more, to provide better support for Singaporeans.
So today, I am announcing a $1.1 billion Cost-of-Living support package to provide relief to Singaporeans households. This package provides help for all Singaporean households, with more support for the lower- and middle- income groups, and it builds on the measures announced at this year’s Budget.
There is a $0.8 billion enhancement to the Assurance Package, or the AP, which brings the overall size of the AP to over $10 billion.
There are four components to the AP enhancements. First, I will provide cash special payment of up to $200 in December this year. About 2.5 million adult Singaporeans will receive this cash special payment, and combined with what was in the Budget, they will receive up to $800 in cash this December. Roughly about more than half of adult Singaporeans will receive the maximum amount of $800.
Second, I will provide every Singaporean household with additional $200 in CDC vouchers in January next year, combined with what was announced in the Budget, every Singaporean household will receive $500 worth of CDC vouchers in January 2024. And as usual, it will be split equally, half goes to the participating heartland merchants and hawkers, and the other half can be spent at participating supermarkets. The CDC vouchers in 2024 can be claimed digitally from 3 January 2024 onwards.
Third, I will provide an additional one-off half month of S&CC rebate in January next year. This will on average fully offset the S&CC increase in the first year of increases for 1- to 4- room flats, and about 85% for larger HDB flats.
Fourth, I will provide an additional $20 per quarter of U-Save rebates for eligible HDB households over 2024 to 2025, starting from January next year. This will cushion the impact of higher utility bills arising from the increases in water price, which PUB had announced, and also the upcoming increase in carbon tax.
The additional U-Save rebates will on average fully offset the increase in utility bills for 1- to 2- room flats over the next two years, and offset about 80% of the increase for 3- to 4- room HDB flats.
As announced by the Ministry of Transport last week, I will provide additional public transport subsidies to moderate the fare increase this year. The additional subsidies amount to $300 million. That is why the overall package is $1.1 billion, because we have $800 million for AP and $300 million for public transport subsidies. In addition, we will make available Public Transport Vouchers worth $50 each for lower-income households.
The measures in this latest support package will help Singaporeans cope with higher prices across various areas — from their daily necessities, to utilities, to public transport.
I assure all Singaporeans — we will continue to be there for you and support you every step of the way. As long as we continue to be responsible for one another and keep a lookout for each other, we can overcome the challenges ahead, and move forward together.
Let me just say a few words in Mandarin before I take some questions after that: