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Strengthening the social compact with inclusive growth

Notwithstanding the overall steady recovery expected for the Singapore economy in 2022, certain segments of the society continue to struggle. To support inclusive growth, Budget 2022 announced an array of support packages for the less privileged households and individuals, along with measures to facilitate workforce upskilling and transformation as well as enhancements to existing philanthropic platforms.

Financial aid for low to middle income Singaporean households

Similar to Budget 2021, a $560 million Household Support Package (HSP) was introduced to help low to middle income families with their utility bills, children’s education and daily essentials. The HSP consists of:

  • Additional GST U-Save Vouchers of up to $285 per household for utility bills
  • A one-off $200 top-up to the Child Development Account for education
  • A set of $100 Community Development Council Vouchers

Support for lower-wage workers to upskill and transform

More will be done for the lower-wage workers. For eligible Singapore Citizens and Permanent Resident employees under the existing Progressive Wage Credit Scheme (PWCS), the Government will:

  • broaden the coverage to include sectors such as retail, food services and waste management
  • require companies employing foreign workers to pay all their local employees at least the Local Qualifying Salary now set at $1,400 per month
  • accredit qualifying firms with a Progressive Wage mark (PW) with the goal that Government procurement will deal only with such PW-accredited firms from March 2023

To support the transition, the Minister announced an initial $2 billion PWCS injection to co-fund wage increases between 2022 to 2026. Qualifying businesses will be automatically enrolled. Co-funding ratios will vary between 50% to 15%, taper down towards 2026 and be applicable for wage increases of up to $3,000 of gross monthly wages. These PWCS refinements will further complement Workfare payout enhancements, which is expected to benefit more than half a million workers.

Rather than rely solely on wage support measures, the Government has placed further emphasis on upskilling and transformation of the workforce as a more sustainable strategy.

For mid-career workers, a new SkillsFuture Career Transition Programme offering subsidised training and support to develop high-quality skill sets and maximise employability will commence from 1 April 2022. This will replace the SGUnited Skills and SGUnited Mid-Career Pathways – Company Training programmes which are expiring on 31 March 2022.

Furthermore, the Government expanded the eligibility and coverage of the SkillsFuture Enterprise Credit to promote greater initiation of workforce transformation programs. Eligible employers can receive a one-off credit capped at $10,000 to cover up to 90% of workforce transformation initiative costs. The deadline for employers to claim this credit has been extended to 30 June 2024.

Building a caring society

Recognising the catalytic effect of fiscal measures in encouraging philanthropy, the Minister also announced the following:

  • The dollar-for-dollar matching scheme for the Tote Board’s Enhanced Fund-Raising Programme for charities and One Team Singapore Fund for Singapore athletes has been extended to FY2024 and FY2026 respectively
  • The Charities Capability Fund and Cultural Matching Fund have been extended to FY2026 and FY2024 respectively
  • Top-ups of $26 million and $150 million are committed for the Charities Capability Fund and Cultural Matching Fund

Preparing for our future healthcare needs

We are delighted to hear the Minister emphasise the importance of and the need for primary care, with the Government pushing for our three healthcare clusters to work more closely with the community partners. While the ‘Healthier SG’ strategy will be a challenging effort, it is worthwhile, as will be the focus on mental health.

The task of ensuring we have enough trusted - key word being “trusted” - primary care doctors, is not a simple one. While locally we have three medical schools churning out about 500 young doctors collectively annually, it may perhaps be worth spending time focusing on how to induce the majority of these doctors into primary care rather than have them compete for other medical and surgical specialties.

It is reassuring to hear that the Government is working towards embedding the lessons learnt during the pandemic when it comes to mental health. This is something that has historically been under-diagnosed but which desperately needs addressing.

Get in touch

Chris Woo

Tax Leader, PwC Singapore

+65 9118 0811

Email

Dr Zubin J Daruwalla

Health Industries Leader, PwC Singapore

+65 9751 7023

Email

Kexin Lim

Partner, Corporate Tax, PwC Singapore

+65 9784 8577

Email

Tan Tay Lek

Partner, Tax, PwC Singapore

+65 9179 2725

Email

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