SINGAPORE: Deputy Prime Minister Lawrence Wong on Friday (Feb 16) announced several financial measures to help both Singaporeans and businesses, in what was likely his last Budget before the country’s leadership transition. These included more payouts to alleviate cost-of-living concerns, moves to make preschools more affordable and a new SkillsFutureContinue Reading
HONG KONG: A Hong Kong activist with terminal cancer was jailed on Friday (Feb 16) for attempted sedition over plans to protest against China’s political clampdown with a prop coffin. Koo Sze-yiu, 78, is among the handful of outspoken government critics still remaining in the city after Beijing crushed HongContinue Reading
The expected FY2024 budget surplus will mark a reversal from a revised deficit of S$3.6 billion, or 0.5 per cent of GDP, in FY2023.
Mr Wong said revenue collections over the past year were “better than expected”, on the back of higher corporate income tax collections.
Corporate income tax is expected to come up to S$28.4 billion, S$4.1 billion or 17 per cent higher than the estimated figures.
Other taxes, such as personal income tax and vehicle quota premiums, also saw better takings due to the stronger-than-expected economic recovery in 2022.
“The additional revenue will allow us to pay for new spending, including the S$7.5 billion injection to the Majulah Package Fund,” said Mr Wong.
However, total expenditure also went up to S$106.9 billion, which is S$2.7 billion or 2.6 per cent higher than previously estimated.
This is due to higher-than-expected spending by various ministries, such as defence, health and transport. Higher operating expenditure came about due to the need to meet priority areas such as catching up of projects deferred by the COVID-19 pandemic, and elevated costs from higher inflation.
“Accounting for both our revenue upside and higher spending, we expect to end FY2023 with a deficit,” said Mr Wong.
Mr Wong also reiterated the need to “uphold the ethos of fiscal discipline and responsibility” and ensure the country’s fiscal position “always remains balanced, sound and sustainable.
He pointed to the Finance Ministry’s occasional paper released last year, which laid out projections of Singapore’s medium-term fiscal outlook.
The paper noted that government expenditure is expected to rise to about 19 per cent to 20 per cent of GDP between the financial years of 2026 to 2030, and possibly exceed 20 per cent by the end of the decade.
This remains the government’s assessment, said Mr Wong.
“Assuming we stay within this range of spending increase, we should have sufficient revenues to maintain a balanced budget over the coming years,” he added.
Student Aung Phyo, 20, said he arrived at the embassy at 8pm on Thursday and slept in his car before starting to queue around midnight. “We had to wait for three hours and police opened the security gate around 3am and we had to run to the front of theContinue Reading
SINGAPORE: Some home owners will pay less property taxes when the annual value (AV) bands for owner-occupied properties are raised next year.
From Jan 1, 2025, the lowest AV band threshold will be raised from S$8,000 (US$5,900) to S$12,000. The highest threshold will increase from over S$100,000 to over S$140,000. Corresponding adjustments will be made to bands in between.
This means that home owners can expect to pay the same or lower property taxes at each band, assuming that there is no change in their AVs and before any rebate.
Property taxes are calculated based on AVs, which are based on the estimated yearly rent if a property was rented out. Owner-occupied homes – where the owner lives in the property – pay lower tax rates.
First announced at Budget 2020 to help offset higher GST expenses, the Assurance Package will now be enhanced by a further S$1.9 billion to provide the following:
In December, a one-time MediSave bonus of between S$100 and S$300 will be given to all adult Singaporeans between the ages of 21 and 50.
The amount they receive will depend on their year of birth (from 1974 to 2003), annual value of their residence and whether they own more than one property.
Older Singaporeans born in 1973 or earlier will get their MediSave bonus – of up to S$1,500 – under the Majulah Package.
All past and present NSmen, including those enlisting by Dec 31, 2024, will receive S$200 in digital credits that can be redeemed on the LifeSG mobile app.
The credits can be spent at over 100,000 merchants. They will be given out in November and are valid for one year.
“It is a small gesture, but when you add it all up, it will cost us S$240 million and benefit 1.2 million national servicemen,” said Mr Wong.
“I hope this will go some way in expressing our appreciation and gratitude to our national servicemen as well as their families for all that they have done, and will continue to do for our country.”
Prabowo Subianto’s apparent victory in Indonesia’s presidential election, after several failed attempts in the past, is much more than a domestic issue. It is an important indicator of a global shift toward more nationalistic leaders.
If his victory is confirmed, Prabowo will preside over a decisive few years for Indonesia, not only because it will need to maintain high economic growth to create a middle-income class, but also because of its evolving role in the world.
In the arena of strategic competition between the US and China, most countries are being pushed to take sides. Only very few are large and relevant enough to create their own space of influence.
India is one, with Prime Minister Narendra Modi heading toward a third mandate and starting to compete with China for leadership of the Global South. The question is whether Indonesia, the fourth most populous country in the world, can become a relevant middle power, contributing to multipolarity, instead of cold-war-type bipolarity.
That potentially positive contribution of Indonesia to the world needs strong leadership, which Prabowo has tried to show during his campaign. The strength seems to be there, at least when measured in terms of Prabowo’s much more nationalistic discourse compared with outgoing President Joko Widodo. As for other factors, only time will tell.
Beyond strength and leadership, Prabowo will need to deliver on two fronts: economic growth and foreign policy.
For the former, the US$1.4 trillion economy will need to become much bigger by maintaining the 5% average growth rate achieved under Widodo, if not more (which Prabowo has already set at a desired 7%).
Maintaining high growth rates is essential for Indonesia to avoid the middle-income trap, which neighboring powers like Thailand seem to have fallen into. To that end, Indonesia will need to stay open to foreign direct investment, which surged to a record high of $47 billion last year.
Indonesia’s new “El Dorado,” nickel, with 42% of global reserves, should provide tailwinds, but its diversification strategy – namely becoming an industrial power to refine and produce electric vehicles (EVs) – will be harder to achieve.
This is all the more the case since nickel prices are down and overcapacity in EVs is already looming in China.
A third important issue is Widodo’s legacy in terms of economic dependence on China. For the sake of economic growth, he reached a Faustian deal with China from infrastructure to commodities, and with a huge concentration of imported Chinese goods.
As for foreign policy, Widodo’s legacy is more mixed. Indonesia has not managed to lead the Association of Southeast Asian Nations (ASEAN), which would be rather natural given that it outsizes the bloc’s nine other members, and notwithstanding its presidency in 2023.
Indonesia’s presidency of the Group of Twenty in 2022 was a tour-de-force given that it was immediately tainted by the war in Ukraine and the radically opposed views on the G20 role between the West and Russia, supported by China.
From this standpoint, Prabowo has been crystal-clear during his campaign on bringing Indonesia to the world stage as a key Asian power. The irony, though, is that this might run counter China’s interests, which remains an important supporter of Indonesia’s growth.
In other words, Prabowo will soon realize that his economic and foreign-policy objectives may not be aligned with Beijing’s.
The positive news is that Widodo seems to have cautiously opened the door to a less pro-China policy, to support Indonesia’s middle-power ambitions. First, Widodo did not join the BRICS’ expansion, as other key emerging economies did (especially Saudi Arabia) while formally applying for membership to the Organization for Economic Cooperation and Development (OECD).
All in all, one should expect Prawodo to follow Widodo on economic policies while becoming more outspoken on Indonesia’s global role, which also means that a twist will be needed on China’s role in the Indonesian economy.
The buzzword may be diversification (probably not de-risking yet) on the grounds of a more nationalistic agenda. Striking the right balance between the economy and foreign-policy ambitions will be the key for Prawodo’s success as the incoming Indonesian president.
Alicia Garcia Herrero is chief economist for Asia-Pacific at Natixis and senior research fellow at Bruegel.
While natural gas is the cleanest form of fossil fuel – it produces the least amount of carbon emissions per unit of electricity – Singapore cannot achieve net zero emissions if it continues to rely solely on natural gas, said Mr Wong. But the country has a dearth of options for clean energy due to a lack of natural resources. A way around this is to import low-carbon energy and Singapore is making progress in this, the Deputy Prime Minister said.
“But there is a limit to importing electricity without compromising security. So we will need other options to decarbonise the rest of our energy supply.”
These options include hydrogen, which Mr Wong described as still “technologically nascent, costly and risky”. Singapore set out its National Hydrogen Strategy in 2022 and will start by testing and deploying ammonia, a hydrogen carrier, for power generation and bunkering on Jurong Island.
Singapore is also assessing the possibilities of geothermal power – heat from the earth as an energy source – and is tracking developments in nuclear energy.
“We will build our capabilities, so that we can critically assess the evolving technologies in this space and decide on the feasibility of nuclear deployment one day in the future,” said Mr Wong.Continue Reading
“Preventive care is especially important for seniors. Loneliness can do great harm to a senior,” said Mr Wong. “They need to stay active and socially connected.” Last year, it was announced that around S$800 million will go towards enhancing active ageing centres from the 2024 financial year through to FY2028Continue Reading
SINGAPORE: Central Provident Fund (CPF) members aged at least 55 will no longer have a Special Account from 2025 onwards, but they will be able to put more money into their Retirement Accounts, said Deputy Prime Minister Lawrence Wong in his Budget speech on Friday (Feb 16).
These moves are meant to better support the retirement needs of seniors in Singapore, he added.
The Enhanced Retirement Sum is the maximum amount that CPF members can put into their Retirement Accounts to receive payouts. It is currently set at three times the Basic Retirement Sum (BRS), but will be increased to four times the BRS next year.
“This will allow more members aged 55 and above to fully commit their accumulated CPF savings to receive higher payouts, should they wish to do so,” he said.
Having more money in a CPF Retirement Account translates to bigger monthly payouts. According to the Ministry of Finance, a CPF member with three times the Basic Retirement Sum in 2025 can have an estimated monthly payout of S$2,530 (US$1,880).
By comparison, a member with four times the BRS next year – or S$426,000 – can receive an estimated monthly payout of S$3,330.
CPF members can voluntarily top up their Retirement Accounts by transferring savings from their Ordinary Account or by making cash top-ups.
Meanwhile, the closure of Special Accounts means that savings in the account will be transferred to the Retirement Account up to the Full Retirement Sum, which is two times the basic sum.
“The remaining (Special Account) savings will be transferred to the Ordinary Account. Of course, members can voluntarily transfer these OA savings to the RA at any time, up to the revised (Enhanced Retirement Sum), to earn higher interest and to receive higher retirement payouts,” said Mr Wong.