Opportunities for the Future

Assurance for Our Seniors

Budget In Brief

Backdrop to Budget 2014

In the last few Budgets, we have focused on building a nation of opportunity and an inclusive society where every citizen shares in Singapore’s success. This is underpinned by four key themes:

Budget 2014 2

We have embarked on several multi-year initiatives that are making good progress. Budget 2014 builds on these efforts to provide greater emphasis on transforming our economy and strengthening social support, especially for our seniors.

Quality Growth

Based on innovation and deeper capabilities Good jobs and rising incomes for Singaporeans Thriving small and medium enterprises

A Fair and Equitable Society

A Liveable and Endearing Home A Cohesive Community

Quality and affordable public housing Connected and reliable public transport Attractive social spaces for all

Affordable healthcare Assurance for retirement needs Help for the vulnerable Opportunities for every child to do well

Strong families and communities Vibrant arts and sports scene Active citizenry

Transforming Our Economy

We have made skills, innovation and productivity the basis for economic growth and rising real incomes. This is key to keeping our economy vibrant, with a strong core of Singapore-based companies and with every working Singaporean in well-paying, meaningful jobs. Restructuring is benefitting Singaporeans through higher real wages.

2008 2013

Median wages for citizens grew by 9%, after accounting for inflation

We provide firms with strong support for every investment that could improve productivity. We set aside $2b for the National Productivity Fund, introduced the Productivity & Innovation Credit (PIC) scheme and other measures in previous years. Last year, we added a three-year Transition Support Package including the Wage Credit Scheme (WCS). Many SMEs have benefitted from these schemes.

Investing in Productivity and Skills

Productivity has increased by 11% since we began the restructuring journey. This was entirely due to the strong cyclical recovery in 2010, but there has been little improvement since. Budget 2014 will deepen support for companies that make efforts to strengthen dynamism and efficiency.

Wage Credit Scheme

In end-March 2014, businesses will receive around $800m for employees’

wage increases in 2013

Budget 2014 3

Since 2011, we have disbursed more than $1b in PIC benefits. Two out of three

SMEs with turnover of more than $1m have claimed PIC benefits

Productivity

Higher than in other Asian NIEs

Tax Incentives For Innovation

Qualifying R&D expenditure: 10-year extension of the 50% additional tax deduction till YA2025

EDB-approved R&D projects: 5-year extension of the further tax deduction scheme till Mar 2020

Acquisition of Intellectual Property Rights: 5-year extension of writing down allowance till YA2020

In Budget 2014

Scale up Adoption of Infocomm Technology (ICT) 3-year ICT for Productivity and Growth Programme (IPG)

Proven ICT solutions: Target to extend these solutions to another 10,000 SMEs

Piloting of emerging solutions: Support 80% of qualifying costs, capped at $1m per participating firm

Enabling high speed connectivity for businesses: Subsidise SMEs’ fibre broadband subscription plans of at least 100 Mbps and provide support to implement Wireless@SG services at their premises

Facilitating access to fibre broadband: Subsidise up to 80% of the costs of new in-building infrastructure, capped at $200,000 per building

PIC Enhancements; More Support For SMEs Extend PIC for 3 years to provide continuing support for

businesses as they restructure

Investment in Skills and Training

Top up $500m to the Lifelong Learning Endowment Fund to $4.6b, in line with our commitment to Continuing Education and Training

Introduce PIC+ for qualifying SMEs: Raise expenditure cap for each qualifying activity from $400,000 to $600,000 from YA2015

5-year renewal of the Land Intensification Allowance scheme till Jun 2020 and extended to logistics sector

Industry Transformation through New Industrial Spaces

Support clustering among firms to improve competitiveness

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We have progressively raised levies and lowered Dependency Ratio Ceilings. To raise the quality of our foreign workforce, we have differentiated the levies for skilled and unskilled workers, and tightened the requirements for S Pass and Employment Pass holders.

Foreign Worker Inflow (excluding construction sector)

MLP: Raise Government’s risk-share for loans to young SMEs

CIP: Additional $150m to further catalyse growth capital for promising enterprises

Internationalisation Finance Scheme: Double the maximum loan quantum to $30m per firm

More support under Global Company Partnership Programme

Micro-Loan Programme (MLP) has provided 3,500 loans to SMEs over the last 2 years

Co-Investment Programme (CIP) has catalysed over $500m of investments from private sector players, over 3 times the Government’s seed funding

IE Singapore provided assistance to more than 26,000 companies in 2013, including access to $775m in trade and financing loans

In Budget 2014

Helping Businesses Grow and Internationalise

Managing Foreign Workforce Growth

In Budget 2014

Construction — Targeted Policies and Upstream Measures

Increase levies for basic-skilled workers by $100 in 2016 to encourage employment of skilled workers

New Market-Based Skills Recognition Framework to help retain workers with better skills and experience

Extend maximum Period of Employment from 18 to 22 years for higher-skilled workers

Mandate use of productive technologies on selected sites

Increase buildability and constructability scores for private projects on non-Government Land Sale sites

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2011:

2013:

60,200

16,800

Our approach is to ensure that our students have every opportunity to advance through education, regardless of family background. We are committed to significant upstream interventions to give even greater support to students from lower- and middle-income families.

200 more childcare centres by 2017

Enhance the Kindergarten Fee Assistance Scheme (KiFAS)

Provide more fee assistance

Extend support to middle-income families

Extend to all Anchor Operators and MOE Kindergartens

Increase bursaries for students in ITEs, polytechnics and universities

Raise qualifying per capita monthly household income threshold to $1,900 to cover two-thirds of Singaporean households

More support for lower- and middle-income families

Our policies and programmes seek to:

Provide stronger support for those who start off with less

Strengthen our social safety nets

Mitigate inequalities

Keep quality healthcare affordable and strengthen community networks

Improved affordability of childcare for lower- and middle-income families

Raised the target for university cohort participation to 40%

by 2020

Increased support to pre-schools to

raise quality

Increased financial assistance to benefit about

65,000 needy students

Extended bursaries for higher education to 2/3 of Singaporean households

Promoting Social Mobility

In Budget 2014

Budget 2014 6

A Fair and Equitable Society

Bus Service Enhancement Programme to up

frequency and add 40 new routes by 2014

In previous years, we have:

Significantly enhanced the Workfare Income Supplement (WIS) to boost incomes and retirement savings of low wage workers

Introduced the Progressive Wage Model in the cleaning sector to ensure that they enjoy significant upgrades in their basic pay and get more when they upgrade their skills

Increased progressivity of Singapore’s tax system through: Higher property tax rates for high-end residential properties, especially

investment properties Higher Additional Registration Fees for more expensive cars

Enhancing Progressivity

Improving Housing and Public Transport

$

Better last-mile connectivity with

200km more sheltered walkways by 2018

New fare concessions for

WIS recipients and the disabled

WIS

To ensure quality, affordable housing for Singaporeans, we have:

Increased supply of Build-To-Order (BTO) flats by more than 77,000 over the last three years

Enhanced housing grants and raised income ceilings for BTOs and Executive Condominiums

Introduced several rounds of measures to cool the residential property market

We are improving our public transport system to benefit commuters:

Reliability has improved further

for trains and buses

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Preparing for an Ageing Population

We are providing more support to older workers. We are also making healthcare more accessible and affordable.

CPF LIFE provides lifelong monthly payouts

Help seniors unlock their property savings with Lease Buyback Scheme and Silver

Housing Bonus

Higher subsidies for Specialist Outpatient Clinic services for lower- and middle-income Singaporeans, benefiting 400,000 patients

Annual Medisave top-ups of $100 to $200 over five years for Singaporeans aged 55 and above in 2014, excluding those already covered by the Pioneer Generation Package

Allow elderly patients to use a portion of Medisave more flexibly across a range of outpatient treatments, above existing Medisave withdrawal limits

From 2015, increase CPF employer contribution rates for all workers by 1 percentage point to be allocated to the Medisave Account. In addition, Workers aged 50–55 years: +1 percentage point to the Special Account Workers above 55–65 years: +0.5 percentage point to the Special Account

To offset cost increases, Government will provide employers (for one year) with:

Additional up to 0.5 percentage point of the Special Employment Credit Additional 0.5 percentage point of Temporary Employment Credit

Workers aged 50-55 will also contribute an additional 0.5 percentage point to their Ordi-nary Account

Enhance parent and handicapped parent reliefs by up to $3,000 from YA2015 onwards, with individuals staying with their parents, grandparents or great-grandparents enjoying higher reliefs

Special Employment Credit (SEC) encourages

employment of older workers

In Budget 2014

MediShield Life from 2015 for all Singaporeans with

enhanced benefits

By 2020: 6 new polyclinics, 4 new community hospitals,

25 new and replacement nursing homes

Higher subsidies (up to 80%) for intermediate and long-

term care for lower- and middle-income Singaporeans

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Higher subsidies for Specialist Outpatient Clinic services for lower- and middle-income Singaporeans, benefiting 400,000 patients

Annual Medisave top-ups of $100 to $200 over the next five years for Singaporeans 55 years and above in 2014, excluding those already covered by the Pioneer Generation Package

Allow elderly patients to use a portion of Medisave more flexibly across a range of outpatient treatments, above existing Medisave withdrawal limits

From 2015, increase CPF employer contribution rates for all workers by 1 percentage point to be allocated to the Medisave Account. In addition, Workers above 50–55 years: +1 percentage point to the Special Account Workers above 55–65 years: +0.5 percentage points to the Special Account

To offset cost increases, Government will provide employers (for one year) with: Temporary Employment Credit — 0.5 percentage points Special Employment Credit — up to 0.5 percentage points more

Workers above 50-55 years will also contribute an additional 0.5 percentage points to their Ordinary Account

Enhance parent and handicapped parent reliefs by up to $3,000 from YA2015; individuals staying with parents, grandparents or great-grandparents get more

In Budget 2014

Budget 2014 8

Benefits 1.4 million Singaporeans

Supporting Vulnerable Groups

Greater Support for Persons with Disabilities

Early intervention programmes for children with special needs: Higher subsidies Extend coverage to the upper-middle-income families

Increase handicapped dependant reliefs by $2,000 from YA2015

Affordable transport: New fare concessions (25% discount) on public transport Higher subsidies (up to 80%) for dedicated transport services to schools and care

centres, to also include upper-middle-income families For those unable to take public transport or dedicated transport services, subsidies of

up to 50% for taxi services

In Budget 2014

We introduced the permanent GST Voucher (GSTV) Scheme to help low-income families cope with the cost of living. For a typical elderly couple staying in a small HDB flat, the GSTV fully offsets the GST they pay. There are also new and enhanced schemes to support needy families and persons with disabilities (PWDs).

Helps 370,000 older Singaporeans

Provides relief to 800,000 households

U-Save Medisave Cash

Set up 20 Social Service Offices by

2015 to coordinate social services

WIS

SEC

Support PWDs through the Enabling

Masterplan; extended WIS and SEC to them

Expand GP outpatient

subsidy scheme to

520,000 households

and include all ages

Enhanced Public Assistance scheme for 3,000 recipients

Budget 2014 9

Enhance Early Turnover Scheme to further incentivise owners to replace their diesel commercial vehicles

Service and Conservancy Charges Rebates of one to three months for all HDB households, based on flat type

Additional Support for Singaporean Households

GST Voucher — U-Save Special Payment of $90 to $260 to all HDB households, based on flat type

The following one-off measures will help Singaporeans, especially lower-income groups and retirees, cope with cost of living:

In Budget 2014

GST Voucher — Cash: Seniors’ Bonus of $100 to $250 for Singaporeans aged 55 years and above this year, based on annual value of home and assessable income

$

Extend Carbon Emissions-based Vehicle Scheme by six months

Increase excise duties across all liquor categories by 25%, from 21 Feb 2014

Increase excise duties on cigarettes and other manufactured tobacco products by 10%, from 21 Feb 2014

Budget 2014 10

Other Tax Measures

Special subsidies for MediShield Life premiums starting from 40% at age 65, rising to 60% at age 90

Effective in 2015

Additional 50% off subsidised bills at Specialist Outpatient Clinics and polyclinics

Enhanced benefits under CHAS

Disability Assistance of $1,200 a year in cash for those with moderate to severe functional disabilities

Components come into effect between Sep 2014 and Jan 2015

In Budget 2014

Annual Medisave top-ups, from Aug 2014

More for older cohorts

Honouring Our Pioneer Generation

The Pioneer Generation Package recognises the unique contributions of the generation who built up Singapore. We will provide our Pioneer Generation with additional healthcare benefits covering outpatient treatment, Medisave top-ups and medical insurance for life. About 450,000 Singaporeans will benefit.

Outpatient Care

Medisave Top-Ups

MediShield Life Subsidy

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For Pioneer Generation members aged 80 and above in 2014

We intend to fully cover their premiums through a combination of premium subsidies and Medisave top-ups. This will be the case even for those

currently not covered under MediShield.

For younger Pioneer Generation members (e.g. aged 70 in 2014)

If they are already on MediShield today, we aim to cover about half of their current premiums. If they are not on MediShield today, they will be brought

onto MediShield Life. They can expect to pay less than the current MediShield premiums.

In Budget 2014

For more information, please go to www.singaporebudget.gov.sg

Assurance in Their Golden Years

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The package will benefit Singaporeans who:

&

Became citizens by 31 December 1986

Were at least 16 years old in 1965 (i.e. 65 and older in 2014)

When MediShield Life is implemented: