Overview of Budget 2024 - Explainer for SEC & PU Students

SINGAPORE BUDGET 2024 POLICIES OVERVIEW AND EXPLAINER SECONDARY AND PRE-UNIVERSITY BRIEF OVERVIEW OF SINGAPORE BUDGET 2024 POLICIES Explainer for Secondary and Pre-University Students INTRODUCTION TO THE BUDGET Every February, Singapore’s Finance Minister will deliver the Budget Statement to outline the government’s expenditure and support for Singaporeans in the next financial year (1 April to 31 March). It is regarded as the most important annual financial event in the country. It is followed by the Committee of Supply (COS) debates where Members of Parliament (MPs) debate the plans and proposed expenditures of the different Ministries in the next financial year. This year, Finance Minister and DPM Lawrence Wong delivered the Budget in Parliament on 16 February 2024 and announced one of the largest budgets in recent years. Some observers see this as a ‘General Election’ Budget – that is, one that is deliberately inflated with support for citizens in order to raise support for the incumbent government in the upcoming General Election (which is speculated to be held at the end of the year). The 2024 Budget is worth about S$131.4 billion . © Chua Zhe Lei | Department of Humanities | 2024 1

SINGAPORE BUDGET 2024 POLICIES OVERVIEW AND EXPLAINER SECONDARY AND PRE-UNIVERSITY ASSURANCE PACKAGE (S$1.9B) AND OTHER SUPPORT DIRECT SUPPORT FOR SINGAPOREANS 1. Additional $600 in Community Development Council (CDC) Vouchers 1 will be provided to Singaporean households in two tranches in end-June 2024 and January 2025. 2. Cost-of-Living Special Payment of between $200 and $400 in cash will be provided for adult Singaporeans with assessable incomes 2 of up to $100,000 , and who do not own more than one property . 3. Additional one-off U-Save rebates 3 will be given to help HDB households cope with increases in their utility bills . Eligible HDB households can expect to receive two-and-a-half times the amount of regular U-Save rebates, or up to $950 , in Financial Year (FY) 2024. This will cover about four months of utility bills for those living in 3- and 4-room flats . 4. Additional one-off Service and Conservancy Charges (S&CC) Rebate 4 for HDB flats . Together with the regular S&CC rebates, eligible HDB households will receive up to four months of such rebates in FY2024. 5. Top-up of the Goods and Services Tax (GST) Fund by $6 billion to deliver on the Government’s commitment to permanently defray GST expenses for lower- and middle-income households , through the GST Voucher Scheme 5 . 5 Scheme to assist lower- and middle-income households with their expenses, in particular what they pay in the universal Goods and Services Tax. 4 Service and Conservancy Charges are charged by the Town Council for maintenance and upkeep for the common residential properties. 3 U-Save rebates are partial refunds on utility charges. 2 Assessable income (also known as taxable income) is all forms of income from trade, business, profession or vocation, employment, as well as rental income that is taxable. 1 General scheme for all households to cope with rising costs in daily expenses. Vouchers can be used for heartland merchants, hawkers, and some supermarkets. © Chua Zhe Lei | Department of Humanities | 2024 2

SINGAPORE BUDGET 2024 POLICIES OVERVIEW AND EXPLAINER SECONDARY AND PRE-UNIVERSITY ENTERPRISE SUPPORT PACKAGE (S$1.3B) DIRECT SUPPORT FOR COMPANIES IN SINGAPORE 1. Companies will receive a 50% Corporate Income Tax 6 Rebate capped at $40,000, in the Year of Assessment 2024. 2. A minimum benefit of $2,000 in cash payouts for companies which have employed at least one local employee in 2023. 3. The Enterprise Financing Scheme (EFS) 7 will be enhanced by permanently raising the maximum working capital loan quantum 8 by $500,000 . 4. The enhanced maximum trade loan quantum 9 and the Government's risk sharing of project loans to support domestic construction projects will be extended until 31 March 2025. 5. The SkillsFuture Enterprise Credit will be extended by a year to 30 June 2025. This Credit allows for additional support for eligible employers to cover their out-of-pocket expenses when they embark on workforce and business transformation . 9 Maximum amount of short-term financing or credit that a financial institution, such as a bank, extends to a business to cover its trade needs (such as inventory, stock financing, etc.). 8 Maximum amount of short-term financing or credit that a financial institution, such as a bank, extends to a business to cover its day-to-day operational expenses and short-term liabilities. 7 The EFS allows for a comprehensive approach to enable Singapore enterprises to access financing more readily across all stages of growth. In general, the Government will share the loan default risk in the event of enterprise insolvency with the Participating Financial Institutions. 6 In general, Singaporean and foreign companies are taxed at a flat rate of 17% of its chargeable income. © Chua Zhe Lei | Department of Humanities | 2024 3

SINGAPORE BUDGET 2024 POLICIES OVERVIEW AND EXPLAINER SECONDARY AND PRE-UNIVERSITY PURSUIT OF BETTER GROWTH AND JOBS Anchoring Quality Investments 1. Singapore’s investment promotion toolkit has been improved by the introduction of the Refundable Investment Credit (RIC) . This is a tax credit with a refundable cash feature . It will support high-value and substantive economic activities (e.g., new R&D activities, green transition activities, etc.) 2. The National Productivity Fund (NPF) 10 will be topped-up by $2 billion . Building on Our Strengths 1. The Financial Sector Development Fund 11 will be topped-up by $2 billion . This empowers the Monetary Authority of Singapore (MAS) to have more resources to take full advantage of current opportunities , and extend our lead in the financial services sector (e.g., through embracing and building infrastructure in areas like Financial Technology and green technology). 2. More funds will be set aside for research and development (R&D) . There will be a further $3 billion investment in the Research, Innovation and Enterprise 2025 (RIE2025) plan 12 to help sustain Singapore’s investments in R&D at about 1% of our national gross domestic product (GDP). 12 The RIE is Singapore’s R&D and technology plan, and its main function is to lay the groundwork for the nation’s science and technology framework every five years. 11 The fund provides grants to firms and individuals in the financial services sector to continually promote Singapore as a financial centre and develop skills, expertise and infrastructure to support the financial services. 10 Established in 2010, the fund supports a wide range of measures for businesses to improve productivity, and continue to educate and train workers. © Chua Zhe Lei | Department of Humanities | 2024 4

SINGAPORE BUDGET 2024 POLICIES OVERVIEW AND EXPLAINER SECONDARY AND PRE-UNIVERSITY 3. As a leader for artificial intelligence (AI), as part of the National AI Strategy 2.0 13 , the country will invest more than $1 billion over the next five years into AI compute, talent, and industry development . 4. Additional resources to increase investments in upgrading Singapore’s nationwide broadband network . It aims to enable mass market access to broadband speeds of up to 10GB/second 14 in the second half of the 2020s, to deal with the pervasiveness of advanced technologies in the future. Developing Our Local Enterprises 1. The Partnerships for Capability Transformation (PACT) scheme 15 will be enhanced to support partnerships in more areas (e.g., capability training, interna