DELIVERED by Finance Minister Lawrence Wong on Friday (Feb 16), Budget 2024 tackled immediate cost-of-living worries for households and businesses, while laying out plans to strengthen economic competitiveness, support young families, and help workers stay relevant.
Here are nine key announcements made by Wong, who is also deputy prime minister.
1. S$1.9 billion in cost-of-living support for households
Recognising that households are still feeling the pressure of higher living-costs, Wong announced a further S$1.9 billion enhancement to the GST Assurance Package.
This includes an extra S$600 in Community Development Council vouchers for all Singaporean households; a means-tested cash payment of S$200 to S$400 for eligible Singaporeans; and additional U-Save as well as service and conservancy charges rebates.
2. S$1.3 billion to support businesses with rising costs
To help businesses cope with rising costs, there is a new S$1.3 billion Enterprise Support Package, with three components.
First, companies will get a 50 per cent corporate income tax rebate, capped at S$40,000, for the Year of Assessment (YA) 2024. Companies which are not profitable will still get at least S$2,000 in cash support, as long as they have at least one local employee in 2023.
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Second, the Enterprise Financing Scheme will be enhanced, with the maximum working capital loan quantum permanently raised to S$500,000.
Third, the SkillsFuture Enterprise Credit will be extended to Jun 30, 2025, giving companies an additional year to claim any unused credit.
3. Refundable investment credit to attract high-quality investments
Singapore’s investment pipeline has been healthy, but global competition for investments is getting tougher, said Wong.
Singapore will enhance its competitiveness with a new Refundable Investment Credit for companies that invest in “high-value and substantive” economic activities. This includes setting up or expanding manufacturing facilities, or new innovation and research and development activities.
4. New SkillsFuture programme for mid-career workers
To better support mid-career workers to retrain and gain new skills, a new SkillsFuture Level-Up Programme will be introduced for Singaporeans aged 40 and above.
This includes a S$4,000 top-up in SkillsFuture Credit for selected courses; subsidies for a second full-time diploma; and a monthly training allowance – equivalent to 50 per cent of the worker’s average income in the last 12 months, capped at S$3,000 – for selected full-time courses.
5. Higher Local Qualifying Salary of S$1,600
From Jul 1, Singapore will raise the Local Qualifying Salary, which is the minimum that local workers must be paid by an employer that hires foreign workers. For full-time workers, this will go up to S$1,600 from S$1,400. For part-time workers, the minimum hourly rate will be increased to S$10.50, from S$9 currently.
6. Housing support for young families
Young couples waiting for their Build-To-Order flats will get financial support to rent a public flat in the open market for one year. This is under a new voucher scheme for couples eligible for the existing Parenthood Provisional Housing Scheme – though details are yet to come.
7. Central Provident Fund (CPF) tweaks
Wong announced several tweaks to the CPF system, all of which will kick in next year. First, contribution rates for those between the ages of 55 and 65 will be raised a further 1.5 percentage points.
Second, the Enhanced Retirement Sum will be raised to four times the Basic Retirement Sum, from three times currently. This will let more seniors fully commit their accumulated CPF savings to receive higher payouts.
Third, the government will close the Special Account for those aged 55 and above. The savings in this account will be transferred to the Retirement Account up to the full retirement sum, where they will continue to earn the long-term interest rate. The rest of the monies will go to the Ordinary Account – which has a lower interest rate.
8. Personal income tax rebate, higher threshold for dependant reliefs
To further help Singaporeans with cost-of-living concerns, a 50 per cent personal income tax rebate will be introduced for YA 2024, capped at S$200. The rebate will cost the government S$350 million, said Wong.
The annual income threshold for dependant-related tax reliefs will also be raised to S$8,000, from S$4,000 currently, with effect from YA 2025.
9. Property tax moves
Wong also announced several property tax moves. First, homeowners will be able to pay less property tax at each Annual Value band, from Jan 1, 2025.
This is as the Annual Value bands for owner-occupier residential property tax rates will be raised, to keep up with property market trends.
The lower threshold, for the portion of Annual Value that attracts no property tax, will be raised to S$12,000, from S$8,000 now. The highest band will be raised to over S$140,000, from over S$100,000, with the corresponding adjustments made to the bands in between.
Separately, singles aged 55 and above who want to downgrade can now claim a refund on the Additional Buyer’s Stamp Duty (ABSD) paid on their replacement private property, so long as it is of a lower value and their first property is sold within six months.
Housing developers will be granted some flexibility under the ABSD regime. Residential developments that have sold at least 90 per cent of units within five years of the land acquisition will have the ABSD clawback rate lowered.
