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 Singapores success. This is
underpinned by four key themes:

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 Cohesive Community

A Liveable and Endearing Home

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

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.

Budget 2014

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.

Median wages for citizens grew by

9%, after accounting for inflation
Higher than in other Asian NIEs
2008

2013

Investing in Productivity and Skills

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.

Productivity
Wage Credit
Scheme

In end-March 2014, businesses will

receive around $800m for employees
wage increases in 2013

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 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.

Budget 2014

In Budget 2014
PIC Enhancements; More Support For SMEs

Extend PIC for 3 years to provide continuing support for

businesses as they restructure

Introduce PIC+ for qualifying SMEs: Raise expenditure cap

for each qualifying activity from $400,000 to $600,000
from YA2015

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

Industry Transformation through New Industrial Spaces

Support clustering
competitiveness

among

firms

to

improve

5-year renewal of the Land Intensification Allowance

scheme till Jun 2020 and extended to logistics sector

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

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

Budget 2014

Helping Businesses Grow and Internationalise

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 Governments 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
MLP: Raise Governments 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

Managing Foreign Workforce Growth

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)
2011:

60,200

2013:

16,800

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

Budget 2014

A Fair and Equitable Society

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

Promoting Social Mobility

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.

Increased support
to pre-schools to
raise quality

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

Increased financial
assistance to benefit about
65,000 needy students

Raised the target for university

cohort participation to 40%
by 2020

200 more childcare

centres by 2017

Extended bursaries for

higher education to 2/3 of
Singaporean households

In Budget 2014
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

Budget 2014

Enhancing Progressivity
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 Singapores tax system through:

Higher property tax rates for high-end residential properties, especially
investment properties
Higher Additional Registration Fees for more expensive cars

Improving Housing and Public Transport

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:

WIS

Bus Service Enhancement

Programme to up
frequency and add 40 new
routes by 2014

Budget 2014

Reliability has
improved further
for trains and buses

Better last-mile
New fare
connectivity with
concessions for
200km more sheltered WIS recipients and
walkways by 2018
the disabled

Preparing for an Ageing Population

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

Special Employment Credit

(SEC) encourages
employment of older
workers

By 2020: 6 new polyclinics,

4 new community hospitals,
25 new and replacement
nursing homes

CPF LIFE provides lifelong

monthly payouts

MediShield Life from 2015

for all Singaporeans with
enhanced benefits

Help seniors unlock their

property savings with Lease
Buyback Scheme and Silver
Housing Bonus

Higher subsidies (up to 80%)

for intermediate and longterm care for lower- and
middle-income Singaporeans

In Budget 2014
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
the next
for Singaporeans
55
yearsfive
for years
Singaporeans
aged 55 and
years
and
above
in
2014,
excluding
those
already
covered
by
the
Pioneer
Generation
above in 2014, excluding those already covered by the Pioneer Generation Package
Package
Allow elderly patients to use a portion of Medisave more flexibly across a range of
Allow
elderly
patients above
to useexisting
a portion
of Medisave
more
flexibly across a range of
outpatient
treatments,
Medisave
withdrawal
limits
outpatient treatments, above existing Medisave withdrawal limits
From 2015, increase CPF employer contribution rates for all workers by 1 percentage
From
2015,
increasetoCPF
contribution
rates for all workers by 1 percentage
point to
be allocated
theemployer
Medisave Account.
In addition,
point
to
be
allocated
to
the
Medisave
Account.
In
addition,
Workers aged 5055 years: +1 percentage point to the Special Account
Workers above 5055
percentage
point
toto
the
Special
Account
5565 years: +1
+0.5
percentage
point
the
Special
Account
Workers above 5565 years: +0.5 percentage points to the Special Account
To offset cost increases, Government will provide employers (for one year) with:
To
offset cost up
increases,
Government
willof
provide
employers
(for oneCredit
year) with:
Additional
to 0.5 percentage
point
the Special
Employment
Employment
percentage
points Credit
Temporary
Additional 0.5
percentageCredit
point
of0.5
Temporary
Employment
Special Employment Credit up to 0.5 percentage points more
Workers aged 50-55 will also contribute an additional 0.5 percentage point to their Ordinary Account
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 onwards,
individuals
with their parents,
with
Enhance
parentstaying
and handicapped
parentgrandparents
reliefs by or
upgreat-grandparents
to $3,000 from enjoying
YA2015;
higher
reliefs
individuals staying with parents, grandparents or great-grandparents get more

Budget 2014

Supporting Vulnerable Groups

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).

Cash

Medisave

Benefits 1.4 million

Singaporeans

Helps 370,000 older

Singaporeans

U-Save
Provides relief to
800,000 households

SEC
WIS

Set up 20 Social
Service Offices by
2015 to coordinate
social services

Support PWDs
through the Enabling
Masterplan; extended
WIS and SEC to them

Enhanced Public
Assistance scheme
for 3,000 recipients

Expand GP outpatient
subsidy scheme to
520,000 households
and include all ages

In Budget 2014
Greater Support for Persons with Disabilities
Early intervention programmes for children with special needs:
Higher subsidies
Extend coverage to the upper-middle-income families
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
Increase handicapped dependant reliefs by $2,000
from YA2015

Budget 2014

In Budget 2014
Additional Support for Singaporean Households
The following one-off measures will help Singaporeans, especially lower-income groups
and retirees, cope with cost of living:

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

Service and Conservancy Charges Rebates of one to three

months for all HDB households, based on flat type

Other Tax Measures

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

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

In Budget 2014

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
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 from Sep 2014

Medisave Top-Ups
Annual Medisave top-ups, from Jul 2014
More for older cohorts

MediShield Life Subsidy

Special subsidies for MediShield Life premiums starting from
40% at age 65, rising to 60% at age 90
Effective in 2015

Budget 2014

11

In Budget 2014

Assurance in Their Golden Years

When MediShield Life is implemented:

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.

The package will benefit Singaporeans who:

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

Became citizens by
31 December 1986

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

Budget 2014

12