Tuesday, 20 February 2018

Budget 2018: Together, A Better Future

Singapore Budget 2018

• Singaporeans aged 21 and older will receive 'hongbao' SG Bonus of up to $300 after $9.61 billion budget surplus for the 2017 financial year

• GST to be raised from 7% to 9% some time between 2021 and 2025

• GST on imported digital services from 2020

• Higher Buyer’s Stamp Duty for residential properties valued above $1 million

• Carbon tax of $5 per tonne of greenhouse gas emissions to be levied from 2019

• 10% increase in excise duty for all tobacco products

• Corporate income tax rebate raised to 40%, with higher cap; wage credit extended

• Productivity Solutions Grant among measures to 'foster pervasive innovation'

• Proximity Housing Grant enhanced to give more support to family members who want to live with or near each other

• Higher maid levies for those without caregiving needs

• $200 million per year to increase support for education

• $5 billion rail fund, borrowing by statutory boards to tackle infrastructure investment challenges

•  Singapore's net investment returns contribution (NIRC) stands at $15.9 billion in FY2018, NIRC is now the largest contributor to Singapore's revenues, larger than any single tax, including the goods and services tax, and corporate and personal income taxes

GST set to rise to 9% as Singapore plans for future spending needs
It will go up between 2021 and 2025; carbon tax from 2019; higher stamp duty from today
By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 20 Feb 2018

A hike in the goods and services tax (GST), the first move to do so in 10 years, was confirmed yesterday in a Budget that laid the ground for challenges ahead, even as a surplus of $9.6 billion was declared that made a "hongbao" cash payout possible.

GST will rise from 7 per cent to 9 per cent, but it will take effect only some time from 2021 to 2025, depending "on the state of the economy, how much our expenditures grow and how buoyant our existing taxes are", Finance Minister Heng Swee Keat said yesterday.

To cushion the impact on the elderly and those with lower incomes, the permanent GST Voucher scheme will get a $2 billion boost this year. There will also be an offset package to help people adjust to the increase.

Mr Heng said a gap remained even after exploring ways to manage future expenditure, such as through being prudent, saving and borrowing for infrastructure, and the GST hike is vital in closing it.

Other revenue-raising measures announced in Mr Heng's Budget statement in Parliament were a one percentage point increase from today in the top marginal stamp duty on residential property, a 10 per cent rise in tobacco excise duty with effect from yesterday and a carbon tax first announced last year that will kick off at $5 per tonne of greenhouse gas emissions from 2019.

GST will be also charged on imported services, such as video and music streaming over the Internet and consultancy and marketing services, from 2020.

These tax measures come as Mr Heng said the 2017 Budget is ending the year with a revised surplus of nearly $10 billion - a jump from the forecast $1.9 billion.

But he said this was lifted by one-off items, including unexpectedly high statutory board contributions and increased stamp duty takings as the property market picked up.

Of this, $700 million will be shared with Singaporeans through a one-off SG Bonus for all those aged 21 and above. Each person will get $100 to $300, depending on income.

But some of it will be saved to pay for big-ticket items, including $5 billion for a Rail Infrastructure Fund and $2 billion for premium subsidies and other support when the ElderShield review is complete.

He urged caution in depending on such exceptional factors for long-term fiscal planning.

While the "positive near-term outlook shows that the hard work of employers, workers and the Government is paying off" - economic growth and productivity improved, boosting the real median income of Singaporeans by 5.3 per cent - Mr Heng explained that his Budget is a "strategic and integrated plan" to ensure a fiscally sustainable and secure future for Singapore.

There were three major shifts to prepare for: a shift in geopolitical economic weight towards Asia after Brexit, and tax and trade changes by the United States; the emergence of new technologies; and Singapore's ageing population.

All three would interact to affect Singapore profoundly, he added.

To prepare for these shifts, measures announced continued on the work of previous Budgets to position Singapore for the future.

There were schemes to move businesses and workers up the value chain to anchor Singapore as a Global-Asia node of technology, innovation and enterprise; projects to improve the living environment; and increased support for charity to foster a caring, cohesive society.

Undergirding these efforts is the need to keep finances sustainable for the long term, said Mr Heng.

To help meet the inevitable rise in public spending, especially in healthcare, infrastructure, security and education, there was a need to act now rather than later, he said.

Indeed, on the increase in GST, he noted: "I expect that we will need to do so earlier rather than later."

This is expected to add 0.7 per cent of GDP a year to government coffers, which works out to more than $3 billion in today's dollars.

For the upcoming financial year, a slight deficit of $0.6 billion, or 0.1 per cent of GDP, is expected amid a Budget that Mr Heng described as expansionary. Ministries' total spending is forecast to rise 8.3 per cent from the 2017 financial year to $80 billion, for example.

To put future Budgets on a sound footing, the Government is studying plans for statutory boards and government-owned companies to borrow for critical national infrastructure projects, and will consider providing guarantees for some of these borrowings.

This will mean committing part of the reserves to back the loans, and will require the assent of President Halimah Yacob and the Council of Presidential Advisers.

Mr Heng said: "This is another way to use the strength of our reserves to back our infrastructure projects without directly drawing on the reserves."

The move will spread the cost of such investments over more years, and ensure the financial burden is distributed equitably between current and future generations.

Thursday, 15 February 2018

Society should care for the elderly, nurture young: PM Lee Hsien Loong in Chinese New Year Message 2018

He calls on Singaporeans to reflect on these key issues amid Chinese New Year festivities
By Seow Bei Yi, The Straits Times, 15 Feb 2018

Prime Minister Lee Hsien Loong has highlighted two key themes that he wants Singaporeans to reflect on amid the Chinese New Year festivities - and which he indicated would feature in the 2018 Budget to be unveiled on Monday.

First, as the population ages, Singapore will need to create strong social support and community networks for seniors, keep them socially engaged, and build up healthcare systems and services.

Second, it will help the young "uncover their diverse talents", including by spending heavily on education and training.

In his annual Chinese New Year message, PM Lee said that these issues "guide the thinking" behind the Budget, which Finance Minister Heng Swee Keat will be announcing after the holiday weekend.

PM Lee urged Singaporeans to reflect on them in the quieter moments of the festive season.

"The Government too will not stop thinking about what it needs to do to ready our society for these challenges," he said.

As in past Chinese New Year messages, PM Lee underlined the importance of keeping traditions alive.

"We stay up through the night to see the year in for our parents' longevity, and give our children red packets for good fortune," he said, referring to the Chinese belief that staying awake for the night will add years to the lives of one's parents.

"These customs reflect the enduring hopes of every generation, that our ageing parents live well in their silver years, and our children grow up happy and successful, in a peaceful and prosperous world."

These are values and attitudes not limited to individual families; they hold society together as well, he said.

"As a people too, we should look after the elderly, as we are the beneficiaries of their labours, and care for the young, who carry our hopes for the future."

And even as Singaporeans care for their elderly parents, they need to look ahead and provide for their own silver years, he added.

Demographers have calculated that by 2030, one in four Singaporeans would be 65 and older.

PM Lee then called on Singaporeans to make full use of new technologies to get ahead, and with Asia rising, "to seize the many economic opportunities around us".

The Government, meanwhile, will invest heavily in the young through education and training.

"We will help our young to uncover their diverse talents... so that when they grow up, they can strike out on their own, build their own families and careers, and fulfil their aspirations and dreams," he said, returning to the theme of family that often resonates in his Chinese New Year messages.

Efforts will also be in place to build the city and infrastructure "so that the next generation can continue to create new possibilities, prosper and flourish".

In what could be a hint of tax policies to come, PM Lee also called on Singaporeans to uphold the time-tested Asian values of thrift, self-reliance and leaving something more for the children, rather than burdening them with their parents' debts.

"We must always think beyond the immediate and beyond ourselves, to look and plan over the horizon on behalf of future generations," he said.

He added: "As we usher in the Year of the Dog, let us be dogged in our efforts to create a better Singapore and a brighter future for our children."

PM Lee wished Singaporeans a Happy Chinese New Year.

Monday, 12 February 2018

Preparing workers for future economy: Redesigning jobs, retooling mindsets

More than 100 training programmes, a clutch of Cabinet ministers putting their heads together, two major policies, SkillsFuture and Adapt and Grow. No effort is spared in trying to train workers and redesign jobs for the future economy. Insight asks: Will they work?
By Tham Yuen-C, Assistant Political Editor and Joanna Seow, Political Correspondent, The Sunday Times, 11 Feb 2018

It is one of the biggest helping hands to enable workers to retrain, as disruption plays havoc with job security.

SkillsFuture, introduced four years ago, is one of the key components of a new national emphasis on learning as a way of life, regardless of age or education.

Yet, momentous as this strategy shift has been, as is sometimes the way in policymaking, it came about in quite an uneventful way.

In 2014, the Applied Study in Polytechnics and ITE Review Committee was set up to look into improving career prospects for students from these institutions.

Around the same time, a group of public servants was working on the Continuing Education and Training Masterplan 2020, focused on people already in the workforce.

The two reviews came to the same conclusion: There must be a stronger, sustained link between education and employment if workers need to update their skills over and over again to adapt to the wave of changes brought by technology and globalisation.

Mr Ng Cher Pong, the man now charged with coordinating the SkillsFuture initiative as chief executive of SkillsFuture Singapore (SSG), tells Insight: "It was more an evolution rather than a certain 'aha' moment, where you say, 'Hey, actually this is what we should do'."

Fast forward to today, and jobs are being created and made redundant so quickly that it has become a difficult task to form major policies for training and retraining workers, and designing jobs for them.

Questions coming thick and fast include: What is the speed and impact of technological change on work? What jobs will be gone in 20 years? What skills do people need to succeed at work?

The answers are not always clear.

Crystal ball-gazing is a fraught process, especially when trying to predict what kinds of jobs will be around in the next five years, let alone 20. With frequent disruptions to the economy, the famed Singapore style of long-term policymaking does not work as before.

Another hurdle is persuading workers that they need to reskill when they are busy working and have not lost their jobs. Companies, too, have been slow to respond to the call for training, fearing that their investments may benefit someone else when workers do not stay long enough in a job.

Unlike, say, infrastructure policies where outcomes are literally concrete, when it comes to getting people ready for the new world of work, the best-laid plans can produce nebulous results.

Still, the Government is betting that major policies such as SkillsFuture and Adapt and Grow will adequately prepare Singaporeans and Singapore for the future economy.

Insight asks: Will they work?

SkillsFuture Credit will expire? Don't be misled by scammers' claims

By Ng Huiwen, The Straits Times, 9 Feb 2018

SkillsFuture Singapore (SSG) said yesterday that it is aware of scammers who have been going door to door asking Singaporeans to sign up for courses using their SkillsFuture Credit.

These individuals claim that the credit will expire and tell residents that they will not be eligible for subsequent top-ups.

In a Facebook post yesterday, SSG said that these claims are false.

The agency clarified that there is no expiry date for the SkillsFuture Credit and it can be used for any course in the training exchange in myskillsfuture.sg.

In addition, all training providers have to follow strict marketing guidelines.

For instance, they are not allowed to use gimmicks, such as lucky draws and freebies, to promote their programmes, or use misleading marketing techniques.

"SSG takes this very seriously and will not hesitate to act against those who contravene our guidelines and terms on the use of SkillsFuture Credit," the post said.

The SkillsFuture initiative was previously hit by a series of scams involving false claims.

Last December, it was reported that SSG was cheated of nearly $40 million - the biggest case of a government agency being defrauded here.

Those who have feedback on suspicious SkillsFuture-related practices can contact SSG on 6785-5785 or at ssg.gov.sg/feedback.

Wednesday, 7 February 2018

Singapore must maintain social mobility: PM Lee Hsien Loong

PM Lee sounds warning on growing social divide
Singapore will wither if society is rigid and stratified by class
By Ng Jun Sen, Political Correspondent, The Straits Times, 6 Feb 2018

Singapore's politics will turn vicious, its society will fracture and the country will wither if it allows widening income inequalities to create "a rigid and stratified social system", said Prime Minister Lee Hsien Loong.

"The issues of mitigating income inequality, ensuring social mobility and enhancing social integration are critical," he wrote in a reply to a parliamentary question from Mr Gan Thiam Poh (Ang Mo Kio GRC).

"This is why this Government will strive to keep all Singaporeans - regardless of race, language, religion or social background - together."

Mr Gan asked Mr Lee about the current state of income inequality and whether the Government has plans to prevent this income gap from creating divisions along class lines. He also queried if an inter-ministerial committee can be set up to look into better integration of all social classes in Singapore.

To the last, Mr Lee said a specific committee is not necessary as government ministries already seek to tackle these challenges in "a concerted and coordinated effort".

"As globalisation and technological disruption have widened income inequality, the Government has over the years intervened more aggressively to support the less well-off," he said, citing both long-term policies such as education, home ownership and affordable healthcare, as well as targeted, means-tested programmes such as the Workfare Income Supplement scheme.

Mr Gan's questions come after an Institute of Policy Studies report last December, which concluded that Singapore's sharpest divides now are along class lines, rather than race or religion. It found that people were more likely to share ties with others of a similar educational background or housing type - common indicators of socio-economic level here.

"If what the study is saying is true, then it is timely that it is detected and we should (strive) to resolve the gaps before they widen too far," Mr Gan told The Straits Times.

In recent weeks, the issue gained renewed attention. Deputy Prime Minister Tharman Shanmugaratnam named slowing social mobility, and an ageing population, as the two big challenges that Singapore faces. Last week, a new book, This Is What Inequality Looks Like by sociologist Teo You Yenn, was launched, generating debate about how Singapore's competitive education system could perpetuate class differences.

In his reply to Mr Gan, Mr Lee said income inequality in Singapore has declined slightly over the past decade. The Gini coefficient fell from 0.470 in 2006 to 0.458 in 2016 - and the figure was 0.402, after accounting for government taxes and transfers. A value of zero indicates perfect equality, while a value of one suggests maximum inequality.

To fund increased social spending, "significant changes" have been made, from introducing GST in 1994 to increasing the reliance on Net Investment Return Contributions as a source of revenue, he noted.

In terms of social mobility, every citizen in a fair and just society must have the opportunity to do better and move up in society based on his efforts and talent, said Mr Lee.

"Some degree of income inequality is natural in any economy," he said. "But in a fair and just society, this inequality must be tempered and complemented by social mobility. Nobody should feel that his social position is fixed based on his parents' income level or position in life."

Education is a critical plank of the Government's efforts, he stressed, whether in building up pre-schools and having schemes like KidStart for children from poor families or giving out bursaries and getting people to go for training via SkillsFuture.

Meanwhile, the Government takes a "deliberate and proactive approach" to measures that encourage mixing among classes, such as in planning where facilities like hawker centres and playgrounds should be sited.

Not feasible to build drains for all extreme rainfall events: Environment and Water Resources Minister Masagos Zulkifli

No history of flash floods in most areas hit on Jan 8
Very costly to build and expand drains to accommodate every extreme rainfall event: Masagos
By Audrey Tan, Environment Correspondent, The Straits Times, 6 Feb 2018

Only two of the nine locations in eastern Singapore that suffered flash floods on Jan 8 had a history of flooding, Minister for the Environment and Water Resources Masagos Zulkifli said yesterday.

He also said that with climate change, Singapore can expect intense rainfall to be the norm in future. This means flash floods could occur in areas with no record of flooding.

But he cautioned that it was not feasible to build and expand drains to accommodate every extreme rainfall event, as that would be very costly and require setting aside large tracts of land. For instance, Bedok Canal is being widened at a cost of $128 million and the space can accommodate a 10-lane expressway.

Mr Masagos made these points in Parliament to five MPs, including Mr Murali Pillai (Bukit Batok) and Non-Constituency MP Dennis Tan, who had asked about the floods.

On Jan 8, the nine places were inundated with rain - the heaviest recorded total rainfall that morning was 118.8mm, half of Singapore's average rainfall for January - with submerged cars, flooded bus cabins and some businesses being disrupted.

Although eight of them are low-lying and susceptible to flash floods, only two had a history of flooding.

They are Tampines Road, opposite Jalan Teliti, and Arumugam Road in the Ubi area. Between 2015 and this year, five flash floods took place in Tampines Road and three in Arumugam Road.

"The flash floods were caused by the intense rainfall temporarily exceeding the existing design capacity of the drains," Mr Masagos said.

"Although the flood waters affected only certain stretches of the roads, and subsided within 15 to 60 minutes, we acknowledge that members of the public were inconvenienced and a number of cars had stalled," he added.

Every year, since 1980, heavy rain has been pouring down more often. Also, the annual maximum hourly rainfall has risen. It was about 80mm in 1980 and 90mm in 2016.

It has led the Government to invest in drainage infrastructure.

Tuesday, 6 February 2018

Heartbeat @ Bedok: Community facilities under one roof at new lifestyle hub

Heartbeat@Bedok houses sports centre, library, community club, polyclinic and more
By Seow Bei Yi, The Straits Times, 5 Feb 2018

Singapore's second integrated community hub opened in Bedok yesterday, bringing a sports centre, public library, community club, polyclinic and senior care centre under one roof.

Heartbeat@Bedok, which occupies a site roughly the size of three football fields, also has more than 30 retailers, including eateries.

Noting that residents' lifestyles and needs have changed since Bedok Town was built more than 40 years ago, Mr Lee Yi Shyan, an MP for East Coast GRC, said the new building allows for more efficient use of land, and for the different agencies there to provide joint programmes.

"The land freed up by relocating amenities would make room for new housing and new parks," he said, before the building was officially opened by Prime Minister Lee Hsien Loong yesterday. "In a mature town like Bedok, we are hard-pressed to find any open space to build new flats for young families," he added.

About a third of the floor area of Our Tampines Hub, which opened last year, Heartbeat@Bedok houses the ActiveSG East Bedok Sports Centre, Bedok Public Library, Kampong Chai Chee Community Club, Bedok Polyclinic and a senior care centre.

Mr Lee Yi Shyan said he hoped the hub would be a "national innovation laboratory" to pilot new services, such as telemedicine and the pairing of workout data with health statistics to track individuals' rehabilitation progress.

For a start, various agencies there have rolled out an initiative called Heartbeat Cares to reach out to seniors and their families.

Under this initiative, residents may be referred to the Active Health Lab - by Sport Singapore and its healthcare partners - to develop a personalised fitness regime. There are also weekly morning exercise sessions, health screenings, talks and cooking demonstrations.

About 14 per cent of Bedok Town's 290,000 or so residents are aged 65 and above.

Monday, 5 February 2018

Why Singapore needs to build big: National Development Minister Lawrence Wong

Bold moves in infrastructure: Thinking big pays off for Singapore planners
Some ideas end up being shelved, but it is part of the challenge in the planning of infrastructure, as Insight finds out
By Ng Jun Sen, Political Correspondent, The Sunday Times, 4 Feb 2018

Whatever happened to Singapore's Long Island Project?

A natural reaction to that would be, "What Long Island Project?"

Over time, it has become largely forgotten. But decades ago, urban planners envisioned building an island using reclaimed land off East Coast Park for recreation and with beautiful waterfront housing.

But this plan - known as the Long Island Project - has since been put aside as there was little demand for it, reveals the Urban Redevelopment Authority's (URA) chief planner, Ms Hwang Yu-Ning, in an interview with Insight.

"People love East Coast Park, so do we really want to commit to the plan if we don't need it? Some of these options can be safeguarded for future use," she says.

"If we need to dust off these plans later on, we would have already studied the idea."

The decision underscores the changing and complex nature of infrastructure planning.

It is hard to say when is the right time to build ahead of demand, says Ms Hwang. There is a risk that the demand for a project may never come, if plans proceed too quickly.

Even so, Singapore has bet big in the past - and seen those bold gambles pay off in a big way.

National Development Minister Lawrence Wong, in his interview with Insight, cites several examples - moving the airport from Paya Lebar to Changi, which made Singapore an aviation centre; building the region's first container port; and converting Jurong from swampland to an industrial estate.

Infrastructure has always been a key part of Singapore's economic strategy, says Mr Wong, who is also Second Minister for Finance.

"We are building for practical needs, to enhance our hub status to attract more investments and create more jobs for Singaporeans."

He stresses the importance of being prepared to think big and make decisive moves, instead of just incremental changes.

This is because Singapore has to navigate an uncertain global environment and the threat of other countries bypassing the Republic as a regional hub, Mr Wong says.

For instance, other countries are building new ports, and new shipping routes are being created.

To future-proof Singapore against intensifying competition, the Government is - once more - betting big by embarking on billion-dollar projects such as the upcoming High-Speed Rail between Jurong and Kuala Lumpur, the mega port in Tuas and a fifth airport terminal in Changi.

These "big-ticket items" are a key reason why government spending on infrastructure is slated to rise in the coming years.

On these mega projects, Mr Wong says: "It's about giving us the best possible chance of attracting investments, remaining a competitive, attractive regional centre, and giving Singapore the best chance of success in an uncertain world."