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Budget 2011 : Sharing the $6.6b Surplus Package
In the Spotlight | 19 February 2011
By: Louis Kent Lee
Articles (199) Profile
By: Choo Hao Xiang
Articles (151) Profile

The Singapore government aims to raise incomes by 30% in real terms over this decade by improving productivity of the workforce and strengthening our society.

“The most important way for us to achieve this is to sustain our growth, create good jobs and provide opportunities for everyone to keep upgrading. That is the only way we can grow the incomes of Singaporeans sustainably over the long term,” the Finance Minister Tharman Shanmugaratnam said when he delivered this year’s Budget in Parliament on 18 Feb-10.

In view that the competition from China and other emerging players which have exerted downward pressure on wages of low skilled workers all around the world and the fact that technology can replace most menial technical jobs, upgrading the skills of workers is imminent to meet the real income growth aim.

“We must therefore restructure our economy and raise skills in every job, so that productivity becomes the key driver of growth,” the Minister added.

Increased Subsidies For Upgrading Qualifications

Moving on with the continuing Education and Training (CET) plans, this year will see strengthened support for professionals, managers, executives and technicians (PMET), who make up more than half of Singapore’s workforce. The capacity for diploma-level programmes at polytechnics will be expanded by about 60% to about 10,000 places by 2015, in addition, the Ministry of Manpower (MOM) will also introduce an umbrella programme for PMETs, Skills Training for Excellence Programme (STEP).

It will be more affordable for PMETs who wish to upgrade their qualifications or obtain new skills. Subsidies will be increased significantly for Singaporean adults who pursue their first degree or diploma on a part-time basis at any of our polytechnics, CET centres, universities or UniSIM. The subsidy will be equivalent to that of what a full-time student enjoys.

Taken from the example as stated in the Budget, “it will mean a part-time undergraduate student in an engineering degree at NTU will pay about $14,000 over a five-year course, down from $21,000 currently.”

Subsidies For Homeowners And New Ones

In a bid to make Singapore a top quality home for its residents, the Singapore Budget 2011 is tilted towards the lower-income group looking to secure a place of their own for the first time. Extending a helping hand, the Government will provide a total of $175 million in grants each year through a Special CPF Housing Grant to this group of families who earn up to $2,250 per month.

Applying to those who are purchasing build-to-order flats from the Housing Board, the scheme will come on top of the existing $40,000 Additional CPF Housing Grant and a subsidized loan. According to the Finance Minister, this package will increase homeownership among the low-income families, offering them the opportunity to participate in Singapore’s progress.

You Save With U-Save

Meanwhile, home dwellers are set to benefit as well, with Utilities-Save (U-save) and service and conservancy charge (S&CC) rebates worth a total of about $200 million to be made available, as unveiled in the “Grow and Share” surplus-sharing package.

This will render assistance to Singaporean households in coping with the rising utility costs due to the escalating global oil prices. The rebates will be in addition to what was given in the GST Offset Package announced in the 2007 Budget.

This translates to about $235 to $360 in U-Save rebates and 1 to 3 months in S&CC rebates this year for each household.

Additionally, relief measures from the U-save rebates for utility bills also include removal of the radio and TV license fee.

This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.

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