On 18th February 2019, Finance minister Heng Swee Keat delivered the Singapore 2019 Budget in parliament; dropping important information pertinent to the lives of Singaporeans.
The whole speech lasted 2:06:25 minutes, about the length of an average movie in 2018. Although Heng is a rather eloquent speaker, it can get a bit dry after awhile. Thankfully, you don’t have to watch it as we have already done it for you. We sat through all 2:06:25 minutes of the whole speech and picked out important information about how the budget will impact the lifestyles of the average Singaporean. As your lifestyle is very much determined by your expenses, we will examine how the budget will affect Education, Daily, Travel, Healthcare, and Retirement Expenses respectively. In addition, we will also examine the impact of the Merdeka package.
Education Expenses – Top up for Edusave & PSEA
Students and parents who pay for their expenses – here is something to be happy about. Singapore will be celebrating the 200 year anniversary of Sir Stamford Raffles’ arrival in Singapore this year. As part of the celebrations, Finance Minister Heng announced the S$1.1 billion, Bicentennial Bonus As part of the Bicentennial Bonus, 570,000 Singaporeans from the ages of 7 to 20 will be receiving a boost to their education funds.
Students from 7 – 16 years of age will receive a one-time S$150 top-up in their Edusave accounts, which can be used for things like enrichment activities organized by the school.
Students from 17 -20 years of age will get a one-time S$500 top-up to the Post-Secondary Education account which can be used for their post-secondary education expenses. This is dependent on how much their home’s annual value is worth. If the annual value of their homes are worth less than $13,000, students will receive $500, if this number is above $13,000 they will receive S$250.
Daily Expenses – Give And Take Away
‘Hongbao’ for Your Daily Expenses
Speaking of the Bicentennial bonus, Singaporeans aged 21 and above will be eligible to receive up to a maximum of $300 GST vouchers, with 1.4 million Singaporeans eligible for the full amount. In addition, all Singaporeans will receive a 50% Personal Income tax rebates. However, this amount is capped at $200. In total, you will be able to receive up to S$500 in rebates.
Although this amount looks quite attractive, there is also the looming 9% GST hike that will be raised sometime between 2021 and 2025.
Diesel Tax
In an effort to battle climate change, the Singapore government is doubling excise duty for diesel from $0.10 per liter, to $0.20 per liter. To reduce the impact of this, the special tax on diesel cars and taxis will be reduced by $100 and $850 respectively.
This may have an impact on the cost of living as diesel is used widely throughout Singapore. School buses, taxis, lorries, delivery vans, maintenance vans all use diesel as fuel. For the food and beverage industry, a lot of restaurants use diesel-powered boilers to cook their food. However, it is too early to tell if this increase in costs will be passed on the end consumer.
Healthcare Expenses – Extended CHAS coverage
Good news for all Singaporeans. The government has decided to expand on the Community Health Assist Scheme (CHAS) scheme. Now all Singaporeans will be able to receive subsidies from chronic conditions, regardless of how much you earn.
For those who are currently eligible for the CHAS Orange card, coverage will expand for common illnesses on top of chronic conditions. Existing subsidies for complicated chronic conditions will also be increased.
For more information on CHAS click here.
Travel Expenses – Lowered GST Relief
Bad news for frequent flyers. The threshold for the value of goods granted GST relief has been dropped.
People spending more than 48 hours overseas are only eligible to redeem GST relief for goods worth up to S$500, down from S$600.
People spending less than 48 hours overseas are only eligible to redeem GST relief for goods worth up to S$100, down from S$150.
In addition, the duty-free alcohol allowance for travelers returning to Singapore has been reduced to 2 liters, down from 3 liters.
Retirement Expenses – Top-up to CPF
For those that are not in the Merdeka Generation, the government is topping up your CPF to help with your retirement expenses.
S$1000 will be given to all 50-64-year olds (In 2019) with less than S$60,000 of retirement savings in their CPF account.
Merdeka Generation Package/ Healthcare and Retirement Expenses
For those who are aged 60 to 69 (in 2019), you stand to benefit from the Merdeka Generation Package ‘a gesture of our nation’s gratitude’ for those who sacrificed so much for our nation’s development. Finance Minister Heng Swee Keat announced that S$6.1 billion has been set aside to help people in this age group with their healthcare costs and medical expenses. According to Channel News Asia, seniors in the Merdka Generation will receive:
- A S$100 top-up to their’ PAssion Silver cards which can be used for activities at Community Centers
- Medisave top-ups of S$200 for five years
- Improved Community Health Assist Scheme (CHAS) subsidies and discounts at polyclinics, public specialist outpatient clinics
- Subsidies to their MediShield Life premium
- A S$1,500 incentive to join CareShield Life
Overall, the Budget 2019 has revealed a lot about where the taxpayer monies are going to, with a big chunk of it going to the Merdeka package. However, there are still a lot of questions as to how the government will pay for this considering there will be an overall deficit of $3.5b. Time will tell what impact it will have on the cost of living in Singapore but one thing is for certain, changes to the cost of living will be a constant.
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