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Budget 2023: Helping Workers and Businesses Seize New Opportunities in the New Era

Deputy Prime Minister Lawrence Wong outlined how the year’s budget will help Singapore navigate the uncertain economic outlook.
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By Ian Tan Hanhonn 14 Feb 2023
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Budget 2023 has been presented amidst a mixed and uneven global economic outlook for the year.

With inflation expected to remain high for at least the first half of the year, the Government’s focus will be on helping Singaporeans and businesses tide over this period and building up Singapore’s capabilities to seize new opportunities in the global arena.

Deputy Prime Minister Lawrence Wong delivered the Government’s 2023 Budget Statement in Parliament on 14 February 2023.

Mr Wong said that Singapore’s economic fundamentals remain strong and that its neutrality in the global arena makes it an important place for global and regional businesses.

“We will take full advantage of these opportunities to attract new flows of investments, capital, talent and ideas. All these will add vibrancy to our economy and create more good jobs for Singaporeans,” he said.

On Integrating Training and Job Placements (Workers)

Mr Wong said there is a need to develop labour market intermediaries who can work with industry, training and employment facilitation partners to optimise training and job placements.

“We all know that it is good to have more skills training, but training programmes can vary in quality. Some lead to recognised certifications … but others may not be so relevant to industry needs,” he said.

The Government will pilot the Jobs-Skills Integrators (JSI) to bring together key players in selected sectors to develop industry-relevant training and facilitate job matching.

The JSIs will have to be able to engage enterprises and understand the manpower and skills gap in the sector.

Afterwhich, they will need to work with training providers to either update existing programmes in place, or develop new programmes that will help close the skills gap.

“They will also have to work closely with employment facilitation agencies, get buy-in from industry partners and unions, and identify individuals with the right aptitude and fit for training,” said Mr Wong.

NTUC Assistant Secretary-General Desmond Choo believes that the JSI will provide a structural shift for training with more immediate employment gains.

“This will encourage workers to upgrade and make career transitions,” he said.

NTUC Secretary-General Ng Chee Meng also weighed in on the JSI, stating that the initiative will optimise training and placement opportunities for workers.

He said: “NTUC supports this move because the best way to cope with rising cost of living is for our workers to achieve better skills and in turn, have better jobs.

NTUC will continue to work with our tripartite partners and unions to push for better training outcomes for our workers.”

On Enhancing Employment Support (Workers)

Mr Wong noted that the Government wants to encourage and support employers who recognise and support senior workers.

“I will therefore extend the Senior Employment Credit till 2025 to continue providing wage offsets to employers that hire senior workers,” he said.

He added that the Government will also extend the Part-time Re-employment Grant till 2025 to encourage employers to offer flexible work arrangements and structured career planning to senior workers.

The Ministry of Manpower will provide more details of the schemes at the Committee of Supply (COS) debate.

Meanwhile, the Government is also looking at helping lower-wage workers achieve better career progression and wages through the enhancement of the Progressive Wage Credit Scheme – which will be given an extra boost of $2.4 billion.

More is also being done to support employers who hire persons with disabilities.

“I will enhance the Enabling Employment Credit to cover a larger proportion of wages and a longer duration for persons with disabilities who have not been working for at least six months,” said Mr Wong.

Additionally, firms who hire ex-offenders will also be given support in the form of a time-limited wage offset through the new Uplifting Employment Credit.

On Strengthening Retirement Adequacy (Workers)

In line with the recommendations of the Advisory Committee on Platform Workers, the Government will be making it mandatory for platform workers below the age of 30 to make increased CPF contributions.

“Platform companies will also be required to pay CPF contributions for these platform workers,” said Mr Wong.

As these changes will affect the take-home pay of these platform workers, additional support will be provided through a transition support scheme.

More details will be provided at COS.

To help senior workers better manage their retirement adequacy, the Government will be increasing their CPF contribution rates until 2024.

The minimum CPF monthly payout for seniors on the Retirement Sum Scheme will also be increased to $350 per month.

As for middle-income Singaporeans, the Government will work to help them save more by raising the CPF monthly salary ceiling from the current $6,000 to $8,000 by 2026.

“We will phase in the increase over four years, starting this year, to allow employers and employees to adjust to the changes,” said Mr Wong.

NTUC Deputy Secretary-General Heng Chee How welcomed the move, saying it provides older workers with better assurance for their retirement.

He said: “These were part of my calls during my Budget debate speech last year, that we should continue to take incremental steps to increase the CPF contributions rates for older workers to reach the goal set by the Tripartite Workgroup on Older Workers.

“I look forward to the upcoming budget debate speech, where I will speak on measures that can help older workers be better prepared for their retirement adequacy.”

On Dealing with Increasing Costs (Businesses and Workers)

To help businesses weather immediate financial challenges, the Government will extend the Enterprise Financing Scheme (EFS) and the Energy Efficient Grant (EFG) till 31 March 2024.

The EFS includes the 70 per cent Government risk-share for trade loans, the enhanced maximum quantum for trade and working capital loans, and support of domestic construction projects through project loans.

The EFG will provide support for businesses to invest in energy-efficient technologies to reduce the impact of higher electricity prices,

To help Singaporeans tackle inflation and the increase in GST, the Government will be increasing the GSTV Cash quantum and making updates to the Assurance Package to account for higher inflation.

“I will increase the AP Cash by between $300 and $650 for eligible Singaporeans over the remaining years of the Assurance Package,” said Mr Wong.

The updates for the Assurance Pacakge drew the support of Union of Security Employees General Secretary Raymond Chin and Amalgamated Union of Public Employees General Secretary Sanjeev Tiwari.

Mr Chin said: “Families and even middle-income workers, who usually feel the pinch more, are assured of targeted support.”

Mr Sanjeev, on the other hand, believes that the package will help the lower-income group with rising costs and the increase in GST.

On Building Capabilities and Securing Investments (Businesses)

The existing National Productivity Fund, which supports a range of measures for productivity enhancements, will be given a boost of $4 billion. The scope of the fund will be expanded to include investment promotion.

“We will use the fund to anchor more quality investments here. This includes supporting companies to build new capabilities, add greater value to our domestic ecosystems and upskill our workers,” said Mr Wong.

The Government will also introduce a new Enterprise Innovation Scheme, which will support businesses’ innovation activities through enhanced tax deductions and allowances.

On Developing Local Enterprises (Businesses)

The Government will set aside $1 billion to provide customized support for promising local companies under the Singapore Global Enterprise (SGE) initiative.

On how the SGE will provide companies with more support, Mr Wong said: “Promising companies will be offered specialised capability-building programmes tailored to their needs. This could involve working with experts to strengthen the core leadership team, accelerate their internationalisation plans, and build a strong talent pipeline.”

Another $150 million will be set aside for the SME Co-Investment Fund to invest in promising SMEs.