2017 Singapore Budget: What Do You Need to Know

2017 Singapore Budget: What Do You Need to Know

In case you haven’t been up to date with the news and have been wondering why your Facebook news feed suddenly had “Water” and “Price Hike” in it, welcome back to reality.

The 2017 Singapore budget outlined a few significant changes that will have a direct impact on the lives of ordinary citizens, including aspiring home-owners, students, and utility bill-payers.

Here are the most crucial aspects that you need to know about.

1.      Water Price Increases

Source: PUB Singapore[Source]

Of all the changes introduced, the water price hike is one that all families and businesses feel immediately and directly.  Starting from 1 July 2017, water prices will be increased by 30% in two phases.

The last time that prices were revised was in year 2000, and the rationale for the price hike is that costs of water production and transportation have increased with more desalination and NEWater plants being built.

Wondering what the monetary impact is on your household bill?  According to the government, the increase in monthly water bills will be less than $18 for 75% of the household.

If you know your average monthly water consumption volume, then you can refer to this useful table from PUB to determine what you’d be paying from mid 2018.

2.      Pay More for Diesel

Pay More for Diesel

Diesel emits more particulate matter and nitrogen oxides than petrol.  Although diesel usage isn’t the only air-polluting factor, the government seems to want to take heed from European cities, which have seen worsened air quality, in part due to large commercial diesel-powered vehicles.

At present, the tax on diesel is a lump-sum Special Tax and doesn’t vary according to the volume used.  This has now changed, as volume-based duty of $0.10 per litre on automotive and industrial diesel is imposed.

For your Information
This increase will be balanced by a reduction in the annual Special Tax on diesel cars by $100, as tax amount will be based on volume used.

3.      Pay Less for Resale Flats

Pay Less for HDB

A resale HDB flat could be more within your reach now.  For first-time home buyers who are looking for a flat of no bigger than four-room, your CPF Housing Grant is now increased to S$50,000 from S$30,000.

For five-room flats, the grant is increased to $40,000.  If you are intending to live in a resale flat close to your folks, then you could be receiving up to $110,000 in housing grants when you take the Additional CPF Housing Grant and Proximity Housing Grant into account.

This is great news for potential home buyers who’ve been just about nudged out of the market and a $20,000 boost is no small deal.

4.      Going Global is Even Easier

Going global is easier

For students and professionals who see an international experience not just as a ‘cherry on top’ but as an essential ingredient to broadening life’s experiences, the Budget this year addresses that wish.

The Global Innovation Alliance will be created to assist Singaporeans in gaining international experiences, build networks, and to foster better collaborating opportunities with industry counterparts in other major cities.

These cities include Beijing, San Francisco, and various ASEAN cities, with probably more to come in future.

How about Tertiary students?

These students can look forward to more inspiring overseas work-and-study experiences.  The well-established NUS Overseas College programme that has inspired many local start-up founders will soon be modeled after in other universities.

For local entrepreneurs, the government will establish the Innovation Launchpads in selected international markets to help create networking opportunities with potential business partners and service providers.

Despite the most banal name, Welcome Centres will be set up to attract innovative foreign companies to work with local partners in co-creating and testing new products.

5.      Preschool Education Gets a Boost

Preschool is getting boosted by the government

One of the greatest concerns of raising children in their early years is finding accessible and convenient pre-schools, unless designer nurseries and infant-care centres are your thing.

The government plans to increase the level of support for children below 18 months of age by increasing the capacity of infant care centres to over 8,000 places in three years’ time.

6.      GST Voucher and Personal Income Tax Rebate

GST Voucher

[Source]

In order to offset some of the increase in water prices, the GST Voucher, U-Save Rebate, will be increased for selected HDB households.  The increase will range between $40-$120 depending on the type (e.g. 1-room or 4-room).

Lower income families will also be given a one-off Cash Special Payment of up to $200 on top of the regular GST Voucher.  Eligible citizens can receive up to $500 in cash.

Last but not least, there will be a personal income tax rebate of 20% of tax payable, capped at $500.

How to face this news? You may ask.

Read the recent article regarding 3 ultimate ways to save and grow your money.

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