All households to benefit from S$100 utilities credit as part of support measures.
SINGAPORE: Approximately 1.5 million Singaporeans will receive up to S$300 in a special GST Voucher payment this August, announced Minister for Finance Lawrence Wong on Tuesday (June 21). This amount is in addition to the regular GSTV-Cash that they were slated to receive for 2022.
The initiative aims to benefit lower- to middle-income workers and retirees without income, with Mr. Wong noting that recipients of the GSTV-Cash could receive up to S$700 in August.
In an effort to assist all Singaporean households, a S$100 utilities credit will be provided by September to help offset their bills. Mr. Wong elaborated, “In the Budget, I’ve already allocated a significant amount of U-Save rebates for residents in HDB flats, with increased amounts for those in smaller units. This time, I will also offer a one-off S$100 household utilities credit to all Singaporean households, including those in private properties.”
When questioned about the absence of a tiered system based on property size, Mr. Wong clarified that the U-Save rebate system effectively functions as a tiered system. “Residents in private properties will receive a one-off rebate, but those in three- or four-room HDB flats will benefit from several months of rebates overall,” he explained.
In February’s Budget 2022 announcement, Mr. Wong stated that the Government would inject an additional S$640 million into the S$6 billion Assurance Package, aimed at covering at least five years of increased GST expenses for most households, and about ten years for lower-income households.
Inflation and Supply Chain Disruption
Mr. Wong acknowledged that the global economic environment has become “more challenging,” citing the ongoing Ukraine conflict, which has strained global supply chains and exacerbated inflation. “Global energy and food prices have surged, and we must prepare for broader inflation to affect various sectors before stabilizing,” he added.
Despite these challenges, Singapore is in a “stronger position” compared to other countries, Mr. Wong noted. “As a small and open economy, we have felt the impact of rising prices, particularly for energy and food,” he stated. “While we anticipate stabilization in both global and local inflation, we should expect price increases to persist in the coming months, particularly for energy, which is likely to remain high for the rest of the year.”
ComCare Support
In addition, two support schemes for lower-income and elderly citizens will see enhancements, according to Mr. Wong. The ComCare scheme will offer additional assistance to households in need, both in short- to medium-term and long-term support. A one-person household receiving long-term ComCare assistance will now receive S$640 monthly, reflecting a S$40 increase, as confirmed by the Ministry of Finance (MOF) in a separate press release.
Moreover, those applying for ComCare short-to-medium-term assistance will see increased cash support for utility expenses. The amount of aid will vary depending on each household’s composition, needs, and income.
The Ministry of Social and Family Development (MSF) indicated that these revised assistance rates complement the temporary measures introduced in April to help beneficiaries cope with rising living costs, with these measures set to remain in effect until the end of September. New beneficiaries of ComCare short-to-medium-term assistance will receive at least six months of support.
Furthermore, the Singapore Allowance and monthly pension ceiling for lower pension recipients will increase by S$30 each, now set at S$350 and S$1,280, respectively.
Mr. Wong emphasized that the S$1.5 billion support package is focused on assisting lower-income and vulnerable groups, who are “disproportionately impacted” by inflation. “I understand many Singaporeans are worried about rising prices and living costs. However, it is essential to recognize that these challenges extend beyond inflation to encompass significant structural changes in our operating environment,” he explained.
With issues like climate change and increasing geopolitical tensions, Mr. Wong noted the need for Singapore to accelerate economic reforms. “We must move forward responsibly and sustainably to ensure we are well-positioned to address future challenges and seize opportunities in this evolving landscape.”
GST Hike
In response to questions about potentially delaying the GST increase, Mr. Wong affirmed that the rise is “necessary” due to escalating spending needs linked to an aging population and healthcare. “We have explored various revenue-generating options, including changes to personal income tax, property tax, and luxury car taxes. However, these measures alone are insufficient, necessitating the GST increase,” he stated.
Recognizing the current uncertainties and difficult economic climate, he decided to postpone the GST hike as late as possible and stagger the increase in two phases. The first increment from 7% to 8% will occur on January 1, 2023, followed by a second increase to 9% on January 1, 2024.
