Singapore budget puts focus on young families, vulnerable households amid inflation, war worries

There will also be changes to property stamp duty and vehicle taxes that will affect Singapore’s wealthiest the most

Finance Minister Lawrence Wong expects Singapore’s headline inflation to remain high, at least for the first half of this year

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Singapore has unveiled a budget focused on social policies. Photo: Reuters

Kimberly Limin SingaporeandDewey Simin Singapore

Published: 6:59pm, 14 Feb 2023Updated: 3:54pm, 17 Feb 2023

Singapore on Tuesday unveiled a budget focused on social policies, with a series of new measures unveiled to insulate young families, older citizens and gig workers from inflation and a further increase in the goods and services tax.

As part of continuing refinements to the country’s overall tax regime – to make it more progressive and to fund widening welfare measures – the government also announced changes to property stamp duty for higher value properties and vehicle taxes that will affect Singapore’s wealthiest the most.

The country’s tobacco tax, already one of the world’s highest, will rise further.

People walk in an underground MRT railway station in Singapore. Photo: EPA-EFE

In his budget speech, Deputy Prime Minister and Finance Minister Lawrence Wong unveiled measures such as additional public housing subsidies for new families, the doubling of paternity leave to four weeks – on a voluntary basis in the first instance – and a boost in the country’s “baby bonus” to encourage childbearing.

These policy changes “are part of our overall efforts to strengthen our social compact and to build a fairer and more inclusive society”, Wong said.

A previously announced S$6.6 billion (US$4.98 billion) “Assurance Package” first unveiled in 2020 will be increased to S$9.6 billion to cover the increases in spending due to the GST hike and inflation. Separately, a permanent voucher scheme in place since 2012 to offset GST for lower- and middle-income households will also be enhanced, with recipients getting up to S$850 per year depending on the size of their homes.

The voucher scheme ensures that well-off residents, foreigners and tourists pay a higher effective GST rate compared to low-income groups, Wong said. The GST will increase to 9 per cent in January, following an increase from 7 to 8 per cent this year.