The widely anticipated Jubilee Budget was finally out yesterday and will be subjected to parliamentary debate in early March 2015. So, what is the main thrust of the budget and what's in it for you and me?
This budget is one that is focused on preparing the nation for a challenging future while addressing the needs of the middle class and the poor. The "sandwiched class" of middle-income Singaporeans who have young children and have to support elderly parents stand to benefit the most from this budget as they are the main ones feeling the pinch from the rising costs of living. The continued efforts focusing on helping the poor and needy signifies a society that has matured.
BUDGET 2015 AT A GLANCE
Supporting the Middle Class
- 50% personal income tax rebate, capped at S$1,000 for Year of Assessment (YA) 2015
- Lower maid levy for more families with young children below age 16, up from age 12 and elderly parents, halved to $60 a month from 1 May; this translates to $720 savings a year
- Help with childcare and education costs with top-ups to the Child Development Accounts (up to S$600), Edusave Accounts (S$150) and Post-Secondary Education Accounts (up to S$500) of Singaporean children and
- Waiver of exam fees for Singaporeans sitting for national exams in Government-funded schools will be waived from 2015 and covers fees for PSLE, GCE N, O and A levels (savings of up to S$900). Exam fees for full-time ITE and polytechnic students will also be waived.
Strengthening Safety Nets
- Quarterly Silver Support cash payouts of S$300 to S$750 each for the low-income elderly for life
- One-off seniors' bonus of up to S$600 a year
- More cash for lower-income households
Boosting Retirement Savings
- CPF salary ceiling to be raised from S$5,000 to S$6,000
- Higher CPF contribution rates for workers aged 50 to 65
- 1% extra interest on first S$30,000 of CPF balances from age 55 next year, on top of the existing 1% extra interest on the first S$60,000 of savings. This means that the first S$30,000 in Special, Retirement or Medisave accounts can earn up to 6% interest risk-free
- Higher annual contribution cap for Supplementary Retirement Scheme
Encouraging Companies to Grow & Restructure
- More grants for companies to innovate and expand overseas
- Wage Credit Scheme (WCS) extended by 2 years, but at the half the current rate
- Corporate Income Tax Rebate of 30%, up to a cap of S$20,000 on their taxes payable, extended by 2 years
- Temporary Employment Credit extended by 2 years, increased to 1% of wages in 2015
- Planned hike in foreign worker levy to be deferred
Building Skills
- $500 SkillsFuture Credit for Singaporeans aged 25 and above to spend on further education and training from 2016; will be topped up regularly and will not expire. They can either choose to go for a short course with the S$500 or accumulate more credits for more substantial training in the future
- More study awards, course subisidies, internships and on-the-job training
More Progressive Taxes / Tax Deductions
- Higher taxes for top 5% of income-earners from 2017, with those with chargeable income of more than S$320,000 paying 22% tax, up from 20%
- Tax deductions for donations made this year will rise from 250% to 300% to encourage
- Higher petrol duties; raised by 15 to 20 cents per litre; 1 year road tax rebate of 20% for cars, 60% for motorcycles and 100% for commercial vehicles using petrol to partially offset increase
Infrastructure
- Development expenditures to grow to S$30 billion by 2020, from S$12 billion in 2010
- Changi Airport's new Terminal 5 to be almost as large as Terminals 1 to 3 combined
- Increasing hospital beds and nursing home capacity
How will the budget benefit you and your family? Do you feel that the government should do more in certain areas? Which are these areas? Let us know.
