Budget 2018 to focus on Singaporeans, business and the environment: Heng Swee Keat

related media assets (image or videos) available. Click to see the gallery.

2 related media assets (image or videos) available. Click to see the gallery.

SINGAPORE: Welcome to our live blog covering this year's Budget statement.

Finance Minister Heng Swee Keat is delivering the 2018 Budget statement in Parliament at 3.30pm on Monday (Feb 19).

Follow us on Twitter and Facebook for the highlights of #SGBudget2018 or catch his speech live on Channel NewsAsia, 938Now, channelnewsasia.com and todayonline.com.

You can also go to Channelnewsasia.com's Budget 2018 site for all the latest stories.

Refresh for the latest updates on this live blog.

4.20pm: Additional U-Save for households for three years

Government expects to collect carbon tax revenue of nearly S$1 billion in the first five years. Funds will be set aside to enhance support for companies to improve energy efficiency.

Eligible HDB households will each get S$20 more a year to cover the expected average increase in electricity and gas expenses arising from carbon tax.

4.17pm: Carbon tax

The new carbon tax is set at S$5 per tonne of carbon-dioxide-equivalent (tCO2e) of greenhouse gas emissions for facilities that produce more than 25,000 tCO2e in a year.

The first payment will be in 2020, based on emissions in 2019. It is to be increased to S$10 to S$15 per tCO2e by 2030.

This is lower than the S$10 to S$20 per tCO2e previously expected.

4.10pm: Beyond the economy

Mr Heng is moving on to how Singapore can become a smart, green and liveable city.

"Today, Singaporeans enjoy the comforts of a modern city, along with clean air, clean water and verdant spaces."

He mentions how otters have returned to Singapore's waterways.

4.05pm: A new Infrastructure Office

The Office will bring together local and international firms for infrastructure projects, to tap on opportunities in Asia - for example, China's Belt & Road Initiative, Japan and India's Asia-Africa Growth Corridor.

4pm: More initiatives for innovation

Finance Minister Heng Swee Keat delivering the Budget 2018 statement.

- The National Robotics Programme will be expanded to the built-environment sector, especially construction

- A new Enterprise Development Grant will combine IE Singapore and SPRING's existing grants, with up to 70 per cent co-funding

- Tax deduction for internationalisation to be doubled

- Also, a Capability Transfer Programme to support skills transfer from foreign specialists to Singaporeans

Read more here.

3.39pm: The way forward - 4 main themes

To address the coming shifts, Mr Heng lays out four areas of focus for the Budget:

- To develop a vibrant and innovative economy

- To build a smart, green and liveable city

- To foster a caring and cohesive society

- To plan ahead for a fiscally sustainable and secure future

3.33pm: Mr Heng highlights 3 major shifts in the coming decade

VIDEO: Ageing will be a major issue for Singapore in the coming decade. There will be “significant increase” in healthcare and social expenditure, says Minister Heng Swee Keat. #SGBudget2018 https://t.co/GmwWlQZ6Oh pic.twitter.com/HUNAj9Bdmy — Channel NewsAsia (@ChannelNewsAsia) February 19, 2018

- A shift in global economic weight towards Asia

- The emergence of new technologies

- Ageing population

3.28pm: Good news for the Singapore economy

Mr Heng starts on a positive note as he talks about the Singapore economy's better-than-expected growth in 2017.

GDP grew 3.6 per cent, up from 2.4 per cent in 2016.

Productivity growth was also stellar at 4.5 per cent value-added per actual hour worked - the highest figure since 2010.

3.08pm: Finance Minister Heng Swee Keat arrives

Mr Heng waves as he arrives at Parliament House, holding the traditional briefcase.

Minister for Finance Heng Swee Keat arrives in Parliament to deliver Budget 2018. (Photo: Gaya Chandramohan)

2.36pm: Where you can tune in for Budget 2018 coverage

Finance Minister Heng Swee Keat will be delivering this year's Budget in about an hour.

Mediacorp will broadcast the 2018 Budget statement live on Channel NewsAsia, 938Now, channelnewsasia.com, Channel NewsAsia Facebook and Toggle.

You can also go to Channelnewsasia.com's Budget 2018 site for all the latest stories.

Channel NewsAsia's Facebook page will also carry Mr Heng's speech live.

2pm: What can you expect from Budget 2018?

This year's Budget could provide more clarity on tax hikes as the Government strikes a balance between increasing spending on social needs and fiscal sustainability.

A bumper Budget surplus is also expected on the back of stronger economic growth.

Channel NewsAsia's Tang See Kit takes a look at five issues that could be in the spotlight for Budget 2018.

Keeping Singapore in good fiscal health, longer-term goals of transforming the economy and the local workforce will likely top the agenda at Budget 2018.

SINGAPORE: When Finance Minister Heng Swee Keat delivers the Budget for 2018 on Monday (Feb 19), the focus will be on the long term.

One reason being this year’s Budget will have “the benefit of riding the wave of a firmer economic footing for the first time”, said UOB economist Francis Tan.

Compared to the first two Budgets of the Government’s term, Singapore’s economic growth quickened last year on the back of a stellar run in the manufacturing sector. Official data released this week showed the economy expanded 3.6 per cent in 2017, trumping earlier estimates and the Government's revised growth forecast ranges.

With a slowing economy out of the way, Mr Heng is expected to devote his attention to the longer-term goals of economic restructuring and transformation.

Also high up on the agenda will be the task of keeping Singapore in good fiscal health as the Government's expenditure continues to outstrip revenue.

“I see this year’s Budget continuing its focus to transform the economy in areas of capabilities building, innovation and internationalization, as well as go deep and granular in addressing skills gap and skills mismatches,” said Mr Liang Eng Hwa, chairman of the Government Parliamentary Committee (GPC) for Finance and Trade.

“On the social front, I expect the Finance Minister to focus its attention on healthcare and eldercare. What is also getting attention for this year’s budget is our finances,” the Holland-Bukit Timah GRC MP added.

Here are the five issues that could be given the spotlight in Budget 2018:

1. LAYING OUT SINGAPORE’S SPENDING NEEDS

In the lead-up to the Budget, the Government has signaled that higher public expenditure on areas, including healthcare and infrastructure, will be inevitable as Singapore’s population ages.

By 2030, one in four Singaporeans will likely be aged 65 and above.

Before that, the country’s ageing population will reach a “critical demographic crossroad” this year, when the share of the population who are 65 and older will match those under 15 for the first time, said Mr Tan.

Given the demographic challenges, one major implication is the need for more healthcare and social spending in the coming years, according to the UOB economist.

An old man walks on an overhead bridge. (File photo: Francine Lim)

A greying population also means that forward-planning will be necessary when it comes to infrastructure to enhance the liveability of Singapore, said Mr Heng in an earlier interview with Channel NewsAsia.

Meanwhile, billion-dollar major infrastructure projects, including Changi Airport’s Terminal 5 and the Tuas mega port, will be essential in maintaining Singapore’s competitiveness, he added.

Amid heightened terror threats, homeland security will also be “a very major item” in the upcoming Budget as it is an "important area to invest resources in”, Mr Heng said last month.

2. TAX HIKES: NOT IF, BUT WHEN

In light of growing spending needs, speculation of a review of the tax regime has dominated the chatter in recent months especially since Prime Minister Lee Hsien Loong said that raising taxes will be inevitable.

Some economists and tax experts are expecting Budget 2018 to see a hike in the Goods and Services Tax (GST), given how Singapore’s rates remain comparatively low against regional countries.

Other forms of tax increases that the taxman might be mulling include an e-commerce tax, a further increase in “sin” taxes such as those levied on tobacco, alcohol and gambling, as well as wealth taxes.

But each has its own downside.

For one, many economists have described higher GST as a “regressive” tax that would hurt the lower-income household, while some like Nomura economist Brian Tan fear that a hike in GST would be “tempting fate” and risk derailing the turnaround in the broader economy.

Overall, OCBC’s head of treasury research and strategy Selena Ling reckoned that Budget 2018 will likely see a “give and take tone”.

“The finance minister had previously articulated the need to keep the tax system fair and progressive across income groups,” she wrote in a note. “A sustainable tax system is one that rewards effort by individuals and enterprise, and fiscal sustainability is about striking the right balance between current and future generations.”

People cross a traffic junction in the Orchard Road shopping district in Singapore. (File photo: Roslan RAHMAN/AFP)

3. PRUDENCE

As such, the Government’s underlying principle of being prudent with its spending will likely be given more emphasis.

Last year, a permanent 2 per cent downward adjustment was implemented to the Budget caps of all ministries and organs of state, as part of an effort to control expenditure.

Moving forward, the Government will need “to instill further prudence” to ensure a responsible and sustainable fiscal position, said Mr Liang who is hoping for the finance minister to provide “greater clarity on (Singapore’s) fiscal position in the medium to long term” amid growing expenditure.

“How is the revenue trajectory picture looking beyond 2020 ... and whether we have in place sustainable and diversified revenue sources to fund the various big ticket expenditure items that are our priorities,” he elaborated.

But for FY2017, there will be some good news in the form of a bumper Budget surplus on the back of stronger growth, said UOB’s Mr Tan. The economist is estimating an overall budget surplus of S$3.1 billion, which works out to 0.7 per cent of GDP, compared to the Government’s estimates of S$1.9 billion.

Apart from a rise in collection from corporate income tax, higher volume of property transactions may have bumped up Government revenue from stamp duties.

This means that the Government will have “more firepower” in Budget 2018 to nudge its economic stakeholders towards the seven strategies mapped out in the Committee for Future Economy (CFE) report, he said.

4. TRANSFORM BUSINESSES, WITH HELP FOR STRUGGLING INDUSTRIES

With that in mind, firms can expect a "pro-business" Budget with more support when it comes to innovation, going digital and venturing abroad.

Experts are pencilling in more measures to strengthen the Industry Transformation Maps (ITMs) – the 23 roadmaps that were first announced in Budget 2016 as part of a S$4.5 billion industry transformation programme – as well as a ramp up in research and development (R&D) tax incentives to fill the gap when the Productivity and Innovation Credit (PIC) scheme expires.

“It has been laborious for both large and small companies to leverage the current R&D enhanced tax deductions to scale their innovation efforts. For SMEs in particular, where cash is key to survival, they would no longer find it worth the effort to avail of the incentive with the expiry of the PIC,” said Ms Tan Bin Eng, partner and business incentives advisory leader at Ernst & Young Solutions LLP.

She suggested a simplification of the Government’s current approach of evaluating R&D eligibility and documentation requirements, particularly for SMEs. Alternatively, it could also consider extending and increasing the cash payouts under the PIC exclusively for R&D-related activities, Ms Tan added.

Budget 2018 may also contain some relief measures for underperforming sectors, such as the construction and the offshore and marine sectors. These include a deferment of the foreign worker levy hikes or bringing forward more public sector infrastructure projects for the construction sector, experts said.

5. CONTINUE TO UPSKILL WORKERS, BOOST PRODUCTIVITY

Ensuring that Singaporeans remain employable in the face of a fast-changing economic landscape will also be on the agenda.

To sharpen the plethora of policies that were rolled out over the years, Mr Liang expects enhancements to be unveiled for schemes, such as the Professional Conversion Programmes under Workforce Singapore.

“There is the real possibility that disruptive changes to employment may outpace the speed in which workers can reskill themselves. Hence, as we restructure the economy to create new jobs, we need to double efforts and intensity to develop new skills sets among our workers,” said Mr Liang.

There should also be continued efforts to boost overall labour productivity, said UOB’s Mr Tan.

While overall labour productivity in 2017 surged to a seven-year-high of 4.5 per cent, the improvement was powered mainly by the externally-oriented sectors.

By contrast, labour productivity growth in the domestically-oriented sectors remained stuck in low gear.

“It thus remains important that Budget 2018 contains more tools and resources to help improve the labour productivity of the service sectors,” he noted.

SINGAPORE - The upcoming Budget will be pro-Singaporean, pro-business, and pro-environment, said Finance Minister Heng Swee Keat on Sunday evening (Feb 18) during the River Hongbao celebrations.

Mr Heng, who is due to give his annual Budget statement in Parliament on Monday, was addressing crowds gathered at The Float@Marina Bay.

"Budget Day is tomorrow. Everyone has been asking me if there will be a 'hongbao'," Mr Heng joked in Mandarin.

But the Budget is actually a comprehensive, strategic plan for Singapore, he added in a more serious tone.

"In the coming 10 to 15 years, we will face some very large challenges, so we need a strategic plan to build a better Singapore," he said.

Ahead of Budget Day, Deputy Prime Minister Teo Chee Hean also spoke on Sunday of the need to help companies improve their technology and workforce, and help workers gain skills needed for the "jobs of the future".

The Budget statement will be delivered at 3.30pm on Monday.

The Straits Times will cover the speech live at www.straitstimes.com. The public can also watch it on the official Budget website.

SINGAPORE - Amid Singapore's strong position riding on a global upturn last year, Finance Minister Heng Swee Keat outlined in his Budget speech on Monday (Feb 19) three major shifts in the coming decade: a greater economic emphasis on Asia, the emergence of new technologies and an ageing population.

Budget 2018 is meant to be a strategic and integrated plan to help Singapore prepare for these changes.

GREATER EMPHASIS ON ASIA

With several advanced economies turning their attention inwards due to domestic pressures - such as Brexit in Britain and the United States' recent tax changes and review of trade pacts - Asia will play a larger role in global trade and investment flows, Mr Heng said.

China setting out a regional infrastructure bank for its bold plans under the Belt and Road initiative, and a rapidly growing middle-class population in Asean countries are just some of the significant opportunities for Singapore firms, Mr Heng added.

But he also warned about potential threats to the stability of the region, in the form of tensions in the Korean peninsula and the South China Sea, as well as terrorism concerns.

NEW TECHNOLOGIES

New technologies, such as robotics and digital innovations, are reshaping the economy and jobs, Mr Heng said.

Soon, firms will compete less on physical assets, but more on intangible ones such as intellectual property, data and user networks, said Mr Heng, adding that "first-mover advantage and time to market will be key".

AGEING POPULATION

With an ageing population, there will be more spent on healthcare and other social expenditure, which, in turn, places greater demands on families and the Government, said Mr Heng.

It also means that the resident workforce will shrink, tightening the labour market and slowing economic growth further, unless people change the way they work to be more productive, and supplement the workforce with a calibrated inflow of foreigners, Mr Heng added.

Noting that there are other forces that can also strain the social fabric, such as income inequality and social mobility, Mr Heng said the Government will continue to invest in education and skills upgrading, and promote sports, arts and volunteerism to build common interests and shared activities.

These three shifts will interact, to bring new opportunities - such as technology to help older workers stay productive - but also new challenges - such as the risk of cyber attacks and online radicalisation, said Mr Heng. But Singapore is in a good position to guard against such challenges and capture the opportunities, he added.

It will do so under four broad strokes:

1. Developing a vibrant and innovative economy

2. Building a smart, green and liveable city

3. Fostering a caring and cohesive society

4. Planning for a financially sustainable and secure future

DEVELOPING A VIBRANT AND INNOVATIVE ECONOMY

Singapore must become a technology hub connecting Asia to the rest of the world, said Mr Heng.

To do this, it must make “innovation pervasive in our economy”, develop deep capabilities in its workers, and establish strong partnerships abroad.

The Government will push this through by:

- Extending the Wage Credit Scheme, which subsidises wage increases for Singaporean employees earning up to $4,000 monthly, for another three years, though this will taper off over the years.

- Doubling the corporate tax rebate to 40 per cent of tax payable and capped at $15,000, up from $10,000 previously.

- Leaving levy rates for foreign workers unchanged for all sectors.

- Introducing the new Productive Solutions Grant, which will fund up to 70 per cent of qualifying costs for small and medium-sized enterprises seeking to adopt off-the-shelf technologies.

- Setting up a new Infrastructure Office to bring together local and international firms to develop, finance and execute infrastructure projects, and enable local companies to tap opportunities in the region.

BUILDING A SMART, GREEN AND LIVEABLE CITY

The authorities will continue to improve the living environment here by implementing Smart Nation initiatives, such as better adoption of e-payments, and developing next-generation grid architectures that can respond quickly and reliably to changes in energy demand and supply, said Mr Heng.

mp3 downloader

Contact Form