Budget 2015: Building Our Future, Strengthening Social Security

1 Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam delivered the Singapore Government’s Budget Statement for Financial Year 2015 in Parliament on Monday, 23 February 2015.

2 This Budget builds on the transformation of Singapore in its first 50 years as an independent country, to give Singaporeans greater assurance at each stage of life, more opportunities, and a better home for all. It is a Budget focused on building Singapore’s future - with firms driven by innovation, with deep skills and expertise in every job, and a society that is fair and just.

3 To achieve this vision, the Budget takes major steps in four areas:

1. We will invest in the skills of the future, and empower every individual to learn and develop through life. Singapore must become a meritocracy of skills, not a hierarchy of grades earned early in life.

2. We will continue to restructure the economy, and support the next generation of business successes by promoting innovation and internationalisation.

3. We will invest in economic and social infrastructure for the future, to create new competitive strengths, a highly liveable home for all Singaporeans, and quality healthcare.

4. We will strengthen assurance in retirement, and enhance support for our middle-income families.

Fostering Deep Skills and Innovation

4 The Singapore economy is well-positioned to be amongst the leaders in Asia and globally in five key growth clusters: advanced manufacturing, applied health sciences, smart and sustainable urban solutions, logistics and aerospace, as well as Asian and global financial services.

5 To develop the advanced capabilities needed to power these future growth clusters and other supporting sectors, we are embarking on significant investments in our people through SkillsFuture. The Government will introduce measures designed to promote skills mastery and a culture of lifelong learning. Over $1 billion per year on average will be spent from now till 2020 on initiatives to support lifelong learning such as providing enhanced Education and Career Guidance programmes in schools and training subsidies, and introducing a SkillsFuture Credit account for all Singaporeans to tap on for training. We will also launch a SkillsFuture Earn and Learn Programme that will provide young people with the opportunity to start work while continuing to learn and acquire skills.

6 We must take concerted efforts to make innovation pervasive in our economy, incorporating as many SMEs as possible. The Government will recalibrate the pace of increase in foreign worker levies in view of the slower pace of foreign worker inflows. However, we must help firms respond to the reality of a permanently tight labour market. Budget 2015 will give stronger support for SMEs which are committed to going beyond the norm and innovate. At the same time, we will strengthen support for our SMEs to grow by venturing abroad.

7 Budget 2015 also involves a major reinvestment in Singapore’s infrastructure to meet Singapore’s future economic and social needs. The development of Changi Airport Terminal 5 will begin in the next few years. The public transport system will be improved, the healthcare infrastructure upgraded, and the heartlands rejuvenated.

Building a Fair and Just Society

8 Budget 2015 takes further steps in the mission of building a fair and just society. It builds on the major shifts in social policy that we have introduced in the last five years, to support both middle-income and lower-income Singaporeans, covering major facets of life: education, work, housing, and healthcare.

9 We will strengthen our social security system, to help Singaporeans supplement incomes in retirement. We will raise the CPF salary ceiling, and raise contribution rates for older workers, as well as CPF interest rates for older Singaporeans to benefit those with lower balances. This will help families save more for retirement. For lower-income elderly Singaporeans, the new Silver Support scheme will be introduced to provide a supplement for their retirement income.

10 Budget 2015 also provides additional help for Singaporean families and households to help them with the cost of living. We will invest more in affordable and quality childcare, top up the Child Development, Edusave and Post-Secondary Education accounts of every Singaporean child, waive the fees for all Singaporean students in national examinations, reduce the foreign domestic worker concessionary levy, enhance the GSTV - Cash and provide a Personal Income Tax rebate. In addition, this Budget will encourage the spirit of philanthropy and giving, as part of Singapore’s 50th year.

Achieving a Fair and Sustainable Fiscal System

11 To fund the various investments for the future outlined in Budget 2015, whether in people, enterprises, or infrastructure, it is necessary that we take steps now to strengthen future revenues, to put Singapore on a firm fiscal footing for the rest of this decade.

12 We will increase the Personal Income Tax rates from Year of Assessment 2017 for high-income taxpayers, who form the top 5 percentile of income earners. This will make our tax system more progressive. We are now also ready for our spending rule to be based on the total expected returns of all three investment entities - GIC, MAS and Temasek. Including Temasek in this framework would enable us to spend based on its total expected returns, including realised and unrealised capital gains, and not just actual dividends paid by Temasek to the Government. We target to present a Constitutional Amendment Bill to Parliament later this year.

Conclusion

13 Singapore has been vastly transformed through the past 50 years of development. Budget 2015 takes Singapore into the future – a future that keeps social mobility alive in each new generation, meets the aspirations of young and middle-aged Singaporeans in their careers, and provides greater assurance as we grow old.

14 More details of the measures introduced in Budget 2015 can be found on the Singapore Budget website, at www.singaporebudget.gov.sg.

Issued by Ministry Of Finance
23 February 2015