Yahoo Finance Budget 2023: Enhanced schemes will help offset additional GST expenses by five years for most households
Lower-income households will have their additional GST expenses offset by 10 years.
Helping households tide through the high inflationary environment and the higher goods and services tax (GST) that was imposed in 2023 was one of the key points that were brought up during the Budget 2023.
One of the ways the government is helping is through a permanent GST voucher (GSTV) or GSTV scheme, which will help to defray costs permanently for lower- to middle-income Singaporeans.
In his speech, Finance Minister Lawrence Wong announced that the government will increase the GSTV quantum to $700 in 2023 from $500 previously for homes with annual values of $13,000 and below. The quantum will be upped to $800 from 2024.
For homes with annual values from $13,000 to $21,000, there will be an increase in a one-term GSTV cash payout to $350 in 2023 and to $450 in 2024.
As such, most retiree as well as lower-income households will be impacted by the increase in GST, says Wong.
“With the GST and GSTV combined, well-off consumers and foreigners and tourists will bear the higher GST rates [instead],” he adds.
In addition, Wong has also announced enhancements to the Assurance Package (AP), which was first revealed during the Budget 2020 to help defray any additional GST expenses.
This year, Wong has increased the AP cash portion by between $300 to $650 for eligible Singaporeans over the remaining years of the AP.
“This will bring the total cash payments to between $700 to $2,250 over five years,” he says.
Singaporeans will also be able to look forward to another $300 worth of Community Development Council (CDC) vouchers in 2024.
“These enhancements will enable us to maintain the commitments we set out earlier,” Wong stresses, noting that they will help offset the additional GST expenses for most of Singapore’s households for five years and for 10 years for lower-income households.
One-off measures
Eligible Singaporeans will receive a Cost-of-Living special payment ranging from $200 to $400.
Adult Singaporeans with incomes from $34,000 to $100,000 and who own only one property will receive $200 while Singaporeans with incomes of $22,000 or less will receive $400.
Those with incomes between $22,000 to $34,000 will receive $300.
At the same time, seniors aged 55 years and above will receive a Cost-of-Living Senior’s bonus between $200 to $300 depending on their income range. Seniors should only own only one property and have an annual income of not more than $34,000.
Should the annual value of the property be $13,000 or less, Singaporeans aged 55 years to 64 years old will receive $250 while those aged 65 years and above will receive $300.
Those living in properties with an annual value of between $13,000 to $21,000 will receive $200.
U-save rebates
Further to his speech, Wong said that he will double U-Save rebates to households over three tranches of disbursement in April, July and October.
Each household will receive up to a total of $760 in U-Save rebates for 2023 including the one in January, depending on the size of the flat.
One- and two-room HDB flats will receive an added $95 per payment tranche while three-room flats will receive $85 per payment tranche.
Four- and five-room flats will receive respective payment tranches of $75 and $65. Executive and multi-generation flats will receive $55 per payment tranche.
Households with children
Households with children will also receive added gifts from Budget 2023.
In Wong’s example, a lower-income household with two young children will receive about $5,500 in benefits including cash, top-ups to their Child Development Account (CDA), Medisave top-ups, U-Save, and more.
In another example, a six-person, mid-income household with two seniors and two school-going children will receive about $8,400 in benefits in 2023.
The updates, says Wong, reflects the government’s commitment to help Singaporeans through this challenging period of higher prices.
“We provided comprehensive support in 2022 and we are doing so again in 2023,” he says.
That said, Wong is careful to note that the year-after-year reliance on government support is not “fiscally sustainable”.
“Our best strategy is to make ourselves more productive and competitive so that workers earn more and the increase in earnings can more than make up for the higher prices,” he says.
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