For the fiscal year 2008, a personal income tax rebate of 20%, up to a cap of $2,000, would be given to all resident taxpayers. There are also calls by MPs to lower the GST. Personally, I think that the Government would not want to change the GST so frequently, confusing the people and troubling the retailers. A better way is to return the extra money through tax rebates, cut in income taxes and putting more money in social assistance, especially for the poor and elderly.
To encourage Singaporeans to voluntarily put aside more savings whenever they can, Minister of Finance Tharman Shanmugaratnam announced the liberalisation of rules for the topping up of CPF members’ Minimum Sum as well as the enhancement of tax reliefs associated with such top-ups. Employers would now be allowed to make top-ups to their employees’ Retirement or Special Accounts, and enjoy full tax deduction for doing so.
Minister Tharman said that the Government would give LIFE Bonus to the first five cohorts of CPF members who join the CPF LIFE scheme - those aged 46 to 50 this year. The L-Bonus is targeted at lower and middle-income CPF members and would extend to 80% of the cohort aged 50 today. The Government had also agreed to the suggestion of the National Lifelong Income Committee to provide a one-off incentive to encourage CPF members who would not be automatically included in CPF LIFE to opt in to the scheme. The L-Bonus would be given to members who have less than $40,000 in their Minimum Sum but would like to participate in CPF LIFE. It would also be extended to older CPF members above the age of 50 who opted in.
As MediShield premiums would need to rise in tandem with the enhanced coverage provided by MediShield, Minister Tharman announced that the Government would top up the Medisave accounts of those aged 51 and above by $150 to $450 this year. The Government would also top up the ElderCare Fund by $400 million and the Medifund by $200 million this year, bringing the fund sizes of the ElderCare Fund and Medifund to $1.5 billion and $1.6 billion respectively.
The Government would also increase the monthly Public Assistance rate for a single-person household from $290 to $330, and top up the ComCare Fund by $200 million this year.
Adding to the social dimension of the Budget 2008, there is an increase in assistance for pensioners and top up another $10 million to the Citizens’ Consultative Committees (CCC) ComCare Fund, Self-Help Groups (CDAC, Yayasan MENDAKI, SINDA and the Eurasian Association) and Voluntary Welfare Organisations (VWOs) to support flexible assistance schemes to households that may need additional assistance.
I am impressed by Mdm Halimah insight that the most important part of the Budget is the investments the government is making in the people. To that end, she also urged the government to consider giving every Singaporean an Individual Learning Account which they can use to upgrade themselves. I love this idea; first this is a longterm commitment, just like one's lifelong road of learning, secondly it weans Singaporeans off the idea of an expectation of an instant cash handout each time there is an surplus. The money should be invested in the people for a more benefical way. For those who are in immediate need of monetary help, the relevant welfare agencies should be trying their best to help out and reach out to the lower income groups. Read Newpaper: Going to Orchard Road A LUXURY for Bedok family (http://newpaper.asia1.com.sg/news/story/0,4136,157485,00.html?)
Like Mdm Halimah, MP for Ang Mo Kio GRC Lee Bee Wah also called for more to be done lower income groups such as older women who may not have accumulated enough CPF savings to take part in CPF Life. She also called for the government to consider lowering the income tax rate to 15 per cent so as to help Singaporeans cope with the cost of living and to also attract foreign talent.
Other recommended changes includes removal of Estate Duty. Minister Tharman announced the removal of Estate Duty from Singapore’s tax regime, a move that he said would enhance Singapore’s attractiveness as a place for wealth to be invested and built up. He urged individuals who had accumulated wealth to contribute to society, and take advantage of the enhanced philanthropy incentives introduced last year.
“If we make Singapore an attractive place for wealth to be invested and built up, whether by Singaporeans or foreigners who bring their assets here, it will benefit our whole economy and society, not just the individuals who build up their wealth. It is not a zero sum game.”
So this year's budget requires a delicate balance in making Singapore competitive and keeping Singapore an affordable place for locals to live in.Luckily, the governement has not lost sight of the cultivating its only natual resource: Human resource. By enhancing the bursary schemes and extend the reach of the Study Loan Schemes for university and polytechnic students and by topping up Post-Secondary Education Accounts (PSEAs) for all students by an additional $150 to $600, over and above what was announced in Budget 2007, at least concerned parents would have lesser to worry about for their child's education. The Learning Endowment Fund would also be increased by $800 million to bring the total fund size to $3 billion. There is also a restructuring of the Skills Development Levy (SDL). All employers would now contribute the SDL on all workers that they employ, up to the first $4,500 of gross remuneration. The levy rate would, however, be reduced from 1% to 0.25%. And here is something sweet for locals who did not have a chance to study at a government-subsidised undergraduate institution; the Government would provide subsidies for part-time degree programmes at the three publicly-funded universities and UniSIM.
Quote by Tharman "“…a key focus going forward will now be continuous education for adults. This is going to be absolutely essential for us... in a world where we are competing on skills, quality and productivity, not on costs alone.”
On the business side, the budget will keep business cost competitive by increaing rental space for business by moving government departments out of valuable office space downtown and postpone an additional 1 billion worth of construction works from the 2 billion postponed previously. Coporate taxes will also be refined to benefit SMEs, startups and special sectors that the government wants to cultivate such as Islamic banking and maritime hub.
It will be interesting to see the direction the budget takes as disscussions are ongoing in Parliament, whether the MPs call for more emphasize on lower-income group will be addressed or the final verdict has already been casted in stone.
On a side note, Indra Sahdan Daud has been asked to continue for another two weeks in MLS team Real Salt Lake in its final training camp in Rosario, Argenetina to assess him further to decide whether to sign him on. Good luck Indra.
Sources:
Singapore Budget 2008
Source: Government of SingaporePublished Friday, 15 February, 2008 - 16:35
From eGov monitor
http://www.egovmonitor.com/node/17203
Source: Channel Newsasia
MPs praise 'pro-people' Budget but say it should also address needs of lower income
Posted: 27 February 2008 1208 hrs
http://www.channelnewsasia.com/stories/singaporelocalnews/view/331375/1/.html
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