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Big support package for the elderly expected in Singapore budget 2015

·Editor-in-chief
Stock photo for use with stories about elderly, caregivers, foreign workers, ageing population in Singapore.

Expect the government to announce a big assistance package for the elderly along with other programmes to address Singapore’s long-term economic and social challenges when it unveils the budget for the next fiscal year, say analysts.

"Coming budget will — I suppose it’s driven by political needs — very much focus on the social side,” said CIMB economist Song Seng Wun.

He added that the Silver Support scheme, which is expected to provide basic financial help to the low-income elderly, may be the budget’s centerpiece.

Deputy Prime Minister and Minister of Finance Tharman Shanmugaratnam is scheduled to unveil the budget for fiscal year 2015 at 3:30pm in Parliament on Monday.

In a research report last week, DBS senior economist Irvin Seah said the upcoming budget would be a “people’s budget” that strengthens social safety nets.

He expects details of the Silver Support scheme to be announced and that the plan will be similar in structure to the Pioneer Generation Fund worth S$8 billion.

“A lump sum of probably about SGD 10-12bn will be set aside for the Silver Support scheme and returns from the investment of the fund will be used to finance it,” he said.

He believes attention will be paid to changes to the Central Provident Fund (CPF) system, after a CPF advisory panel announced its recommendations for the enhancement of the system.

Long-term approach

Seah also expects “transient measures” in the form of cash handouts and utilities rebates for low and middle income families, and possibly a one-off tax rebate for higher income earners, as Singapore this year celebrates its golden jubilee.

“But the focus will be on shaping the next 50 years,” he said.

Echoing the sentiment, Abhijit Ghosh, corporate tax partner at PwC Singapore, said, “This year’s budget should be a watershed one – a more profound budget that should set the direction for next 50 years of Singapore’s growth.”

“One can expect the budget to focus on the needs of our aging population, provide more support for internationalisation of our SMEs and introduce measures to enhance our overall producitivity," he said.

Tay Hong Beng, head of tax at KPMG in Singapore, hoped to see a “renewed focus on innovation-led economic growth, encouraging businesses to build competitive advantage through research and development this year”.

 

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