Saturday, February 22, 2014

L.A.M. On Budget 2014 and How it Really Affects You

Some highlights from yesterday's Budget 2014.



On our Finance Minister's head:
  • The Good: It's as shiny as ever.
  • The Bad: It wasn't shiny enough to keep some of our MPs from sleeping.
  • The Impact: Makes a good cover photo for this blogpost.


On our Economy:
  • The Good: Singapore's economy grew 4.2% in 2013 despite uncertain global outlook.
  • The Bad: This year's growth is forecasted to be slower at 2 - 4%.
  • The Impact: That 10% raise you are asking for? You should have asked for it last year.

On our Budget:
  • The Good: FY2013 is likely to have a budget surplus of $3.9Bn.
  • The Bad: FY 2013's budget surplus is higher than the $2.4 billion surplus in 2012.
  • The Impact: We were taxed harder in 2013 compared to 2012. Those bastards!
  • The Good: FY2014 expected to have an overall budget deficit of $1.2Bn
  • The Impact: That extra tax burden we had last year? We might get back some of it in benefits this year. (Later on, we will learn that most of the benefits go to old people)

On Healthcare:
  • The Good: Medishield Benefits will be enhanced.
  • The Bad: Medishield Premiums will increase.
  • The Impact: Less money in our Medisave because you are expected to live longer. Also healthier people will be subsidising less healthy people even more. Those unhealthy bastards!

On CPF:
  • The Good: Employer's CPF contribution will increase 1% from 16% to 17%.
  • The Bad: The additional 1% will go into Medisave to pay for increased Medishield Premium.
  • The Impact: You know that point about having less Medisave above? Less of a problem now. On the other hand, there is a good chance that prices will go up in general so that employers can pay more CPF

On Property-Cooling Measures:
  • The Good: Too soon to start relaxing them.
  • The Bad: Too soon to start relaxing them.
  • The Impact: Good for buyers, bad for sellers, bad for developers and bad for property agents.

On Education:
  • The Good: Lifelong Endowment Fund topped up by $500m to bring it to $4.6Bn. Kindergarten Assistance Scheme for lower income (Income below $4,800). Extended bursaries for higher education to 2/3 of Singaporean housholds.
  • The Impact: Good for people seeking education. Bad for illiterates. More competition for jobs among degree holders. Also you will now have to queue even earlier for choice kindergartens. That is until more kindergartens are set up.


On National Productivity:
  • The Good: Productivity and Innovation Credit Scheme extended for 3 years. Raised expenditure cap for qualifying activity to 600K from 400K. Support 80% of qualifying costs (capped at $1m) for Infocomm Technology solutions. Subsidised fibre broadplan plans for SMEs and for new in-building infrastructure to facilitate access to broadband.
  • The Impact: Good for SMEs. Facebook status updates will be posted faster for SME employees. Also your favourite restaurant is now more likely to replace some of their waiters with iPads.


On Foreign Workers:
  • The Good: Increased levy from $600 to $700. Lowered Dependency Ratio Ceilings.
  • The Bad: Increased levy from $600 to $700. Lowered Dependency Ratio Ceilings.
  • The Impact: Less foreigners, more expensive operations and HR for smaller companies. But companies are encouraged to make use of various productivity schemes to reduce dependence on foreign labour and increase productivity. Also Tharman asked you to change your mindset about using self-checkout counters at supermarkets to reduce reliance on foreign labour.



On the Pioneer Generation:
  • The Good: Increase Employer's CPF contribution by an additional 1% for workers aged above 50-55 into Medisave Account. More flexible use of Medisave. Annual Medisave top ups of $100-$200. Higher subsidies for Specialist Outpatient Clinic services. $8bn Pioneer Package fund to be set up.
  • The Bad: Workers above 50-55 will also contribute an additional 0.5% into their Ordinary account.
  • The Impact: Finally someone remembered to help their Ah Kong and Ah Ma. Some Filial Piety at last!

On Tax Relief:
  • The Good: Enhance parent and handicapped parent relief by up to $3000. Handicapped dependent reliefs increased by $2000.
  • The Impact: Stay with your parents, get more tax benefits. More benefits if you have handicapped dependents. Good karma begets more tax relief.

On Other Benefits:
  • The Good: GST Vouchers to benefit 1.4m Singaporeans. U-Save vouchers to benefit 800K households. 
  • The Impact: More money and relief, especially if you are poorer or live in cheaper housing.

On the "Sin" Taxes:
  • The Good/Bad: Liquor Tax increased by 25%. Up by $1.20 per litre for Beer, Stout Cider and Perry. And up by $1.75 per litre for other types of liquor
  • Tobacco Tax by 10%. Up by 3.52 cents per stick of cigarette.
  • Betting Duties increase from 25% to 30%.
  • The Impact: Beer, Stout Cider and Perry will cost $1.20 more per liter. Other alcohols will cost $1.75 more per liter. Cigarettes will cost 3.52 cents more per stick. And Gambling will be more expensive/returns will be lower.

2 comments :

Anonymous said...

Most crabby budget ever!!!!!!!!!

John Lam said...

Probably saving the ammo for 2015