As Singapore moves into the future, the Government plans to keep it as one the world’s most competitive/robust job markets by investing in its people.
A notable initiative to enhance the workforce is SkillsFuture which will help all Singaporeans at every age develop and master skills so they can excel in every field.
The Government also plans to help families, with enhanced childcare initiatives as well as tax breaks for families to support both children and elderly parents. Keep reading to learn how the budget will affect life in Singapore.
Investing in Students
In order to have a successful workforce, Singaporeans must know their interests so they can better choose their educational path. The Government is helping Singaporeans better discover this in several ways.
First, the Government is developing an Educational and Career Counsellor Group for Singapore’s Schools and Institutes of Higher Learning (IHLs). The career counsellors will help students prepare for the industry of their choice by connecting them with vital information as well as guiding them. Working individuals will also gain more access to career counseling.
Secondly, the Government recognizes the value of internships and plans to enhance them at the IHL level, across the country. These programs will become more meaningful and structured so students can get valuable work/international experience that will help prepare them for a global career.
Continuing the Education of Workers
In order to provide more value to Singaporeans in their careers, the Government will continue to invest in their education and growth. To start with, a SkillsFuture Credit will be issued to every Singaporean over 25 starting in 2016. They will have $500, which will be added to at regular intervals and does not expire. The credit can be used for training and education only.
To further enhance their investment in Singaporeans, the Government’s SkillsFuture Earn and Learn Programme offers fresh graduates from polytechnic and ITE schools an opportunity for job placement, that will provide them with pay and experience, which can lead to an industry-recognized certification. This program will help both employees and employers.
Mid-career Singaporeans can expect enhanced subsidies for continuing education. Professionals over 40 will receive a minimum of 90% paid on the training cost for any programs funded by WDA and MOE. Modular courses will also be subsidized by MOE for Singaporeans at any age.
Under the SkillsFuture Leadership Development Initiative, collaborations with strategic companies will be stepped up, to develop a pipeline of Singaporeans to take on corporate leadership roles and responsibilities.
Helping Singaporeans Accumulate More Central Provident Fund Savings
The Government has made it a priority to help Singaporeans accumulate more central provident fund (CPF) savings while they are in their working years. The CPF salary ceiling has been increased from $5,000 to $6,000 in order to match the income growth Singapore has experienced the last few years. More than half a million plan members will be benefited.
Additionally the contribution cap will be raised for the Supplementary Retirement Scheme (SRS) which will continue to offer those voluntarily contributing to retirement savings tax incentives.
CPF contribution rates are being increased for older workers:
- For workers between 50 and 65 years of age. They will see a 1 percentage point increase to the CPF contribution rate from their employer to 17%, a 1 percentage point increase from the employee themselves to 20%, for a total of 37% contributed to their CPF.
- Workers between 55 and 60 will see a 1 percentage point increase from their employer to 13%, and will remain the same at 13% for themselves, for a total contribution of 26% to their CPF.
- Workers above 60 to 65 will see a 0.5 percentage point increase from the employer to 9% and remain the same at 7.5% from themselves, for a total of 16.5% total contributed to their CPF.
In order to encourage voluntary re-employment from workers over 65, the Government is offering up to a 3% Special Employment Credit (SEC), which is on top of the 8.5% wage offset that employers are already receiving in 2015.
To further make CPF contributions more progressive, the Government is raising the interest rate by 1% on the first $30,000 of 55+ member’s CPF balance. Starting in 2016, CPF members 55 and over will earn 6% on their first $30,000, 5% on the next $30,000, and 4% on amounts above $60,000.
Government Offers Support to Growing Singapore Population
The Government is making quality childcare more affordable by introducing the Partner Operator (POP) Scheme which will enhance the current Anchor Operator (AOP) Scheme. Any childcare provider that operates on the POP Scheme must keep fees affordable, provide enhanced quality, and develop their own teachers. With the AOP and POP schemes in partnership about 50% of pre-school children in Singapore will benefit from this new Governmental initiative.
With some families struggling to pay pre-school fees, the Government will provide a one-time top-up to the Child Development Account (CDA) for all families with a child 6 and below. For families earning up to $13,000, they will receive a top-up of $600 to their CDA while families earning $13,001 and above receive $300. A quarter million children will benefit from this initiative.
Assisting Students by Waiving Fees and Offering Financial Assistance
In order to keep out-of-pocket expenses lower for Singaporeans, the Government is waiving all exam fees for national examinations like PSLE, GCE ‘N’, ‘O’ and ‘A’ levels for every Singaporean student in the country’s Government-funded schools. Additionally, students who are enrolled full-time at Institute of Technical Education (ITE) Colleges and Polytechnics will also have their exam fees waived.
The Government is also providing another $150 on top of the annual contribution of at most $240, into the Edusave Accounts of Singaporean students between the age of 7 and 16. Nearly 400,000 students will benefit from this program.
The Government will also offer an additional $11 million per year for financial assistance to students through the MOE Financial Assistance Scheme. These assistances include transportation subsidies that will help students with at least half of their transportation costs including public transportation and school buses. More annual grants will be offered to students over the next three years.
Other Budget Issues Affecting Singaporeans
In an effort to reduce carbon emissions, the Government is raising the petrol duty by $0.20 per liter of premium grade petrol and $0.15 per liter of intermediate grade petrol. Singaporeans can expect this to take effect immediately.
In an effort to make it easy for people to adapt to this new petrol duty, the Government is offering a one-year tax rebate of 100% for commercial vehicles, 60% for motorcycles, and 20% for cars using petrol.
The Government is also trying to help families in the middle-income level who have children and elderly parents to take care of. To help these 144,500 households, the Government will reduce the foreign domestic worker concessionary levy by 50% to $60 per month. The concessionary level will also be extended to households that have children below 16 which is up from the standard 12 years as of today.
As another way to help middle-income tax payers, the Government is offering a Personal Income Tax rebate of 50% which is capped at $1,000 for the this year i.e. income must have been earned in 2014. This tax rebate will benefit about 1.5 million individuals.