20% Singapore personal income tax rebate, 40% Singapore property tax rebate

20% Singapore personal income tax rebate, 40% Singapore property tax rebate

SINGAPORE: Households will get a 20 per cent personal income tax rebate for Year of Assessment 2009, capped at S$2,000.

There will also be 40 per cent property tax rebate for owner-occupied homes in 2009.

Together, these two tax rebates will cost the government S$532 million (S$75 million for property tax rebates and S$457 million for income tax rebates).

Home-buyers will also get more help to pay for their first home.

The Additional CPF Housing Grant for first time home-buyers will be increased from S$30,000 to S$40,000.

The household income ceiling to qualify for this will also be raised from S$4,000 to S$5,000.

8,000 home-buyers are expected to benefit from this scheme each year, costing the government about S$150 million per year. - CNA/vm

Source : Channel NewsAsia - 22 Jan 2009

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Government to give cash grants to help employers keep workers

Government to give cash grants to help employers keep workers

SINGAPORE: The government will introduce a Jobs Credit which will encourage businesses to preserve jobs as much as possible in the downturn, said Finance Minister Tharman Shanmugaratnam in his Budget Speech to Parliament on Thursday.

He said: “The Jobs Credit will provide every employer with a cash grant to reduce their costs of employing Singaporean workers during the crisis.

“The Jobs Credit that an employer receives will comprise 12 per cent of the first S$2,500 of the wages of each employer who is on the CPF payroll. It will be given in four quarterly payments, with each payment being based on the workers who are with the employer at the time.

“This will therefore provide incentive for employers to retain their local workers… Employers will receive the first payment at the end of March this year… The Jobs Credit of 12 per cent of wages will be equivalent to a 9 percentage point CPF cut.” - CNA

Source : Channel NewsAsia - 22 Jan 2009

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S$4.4b to be spent on country’s infrastructure, govt projects

S$4.4b to be spent on country’s infrastructure, govt projects

By Valarie Tan

SINGAPORE: The government is pushing ahead with plans to develop Singapore into a global city, as well as making it the best home for Singaporeans, and S$4.4 billion has been set aside for this.

S$1.3 billion will go into government projects to be brought forward in 2009.

The projects include HDB lift upgrading, building of park connectors and upgrading of military facilities.

Others are projects previously deferred to lessen pressure on the overheating construction sector.

S$1 billion will go into sustainable development programmes over the next five years on energy efficiency and green transport.

In addition, the government is looking into investing substantial amounts in education and healthcare infrastructure like the redevelopment of hospitals.

Over the next five years, S$9,200 will be spent on each student every year.

And half a billion dollars will be spent over the next five years to improve long-term care for elderly Singaporeans.

- CNA/yt

Source : Channel NewsAsia - 22 Jan 2009

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Singapore taps into reserves for first time to handle crisis and future uncertainty

Singapore taps into reserves for first time to handle crisis and future uncertainty

SINGAPORE: Singapore has taken the unprecedented step of tapping into its past reserves to give it the flexibility of dealing with future uncertainties even as it responds to the current economic downturn.

Finance Minister Tharman Shanmugaratnam said the government has sufficient savings built up during this term of government to fund the $20.5 billion Resilience Package he unveiled as well as the resulting record budget deficit of $8.7 billion.

However, he said that Singapore will not borrow to fund its budget as this would burden current or future generations with the need to repay that spending.

Instead, it is tapping on past reserves, with the President’s approval.

Mr Tharman said this gives the government the resources to deal decisively with the current economic crisis and that Singapore has reserves, well in excess of its liabilities.

He added the reserves are a valuable asset in responding to this ‘unprecedented crisis’.

The two main measures to be funded from past reserves are the Jobs Credit scheme and the Special Risk-Sharing Initiative for bank lending.

And these would require $4.9 billion in total.

Mr Tharman says the Government had requested for the money on grounds that the extraordinary measures being taken are temporary and will not be built into longer-term programmes.

The President has given his in-principle approval for the draw of $4.9 billion from the past reserves.

- CNA/ir

Source : Channel NewsAsia - 22 Jan 2009

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Larger tax deductions for donations, extra funding to charities, ComCare Fund

Larger tax deductions for donations, extra funding to charities, ComCare Fund

By Valarie Tan,

SINGAPORE: Community initiatives will get a boost in the arm — for every dollar you give to charity this year, you will get back S$2.50 in tax deductions.

To encourage giving during tough times, the government will increase the tax deduction for donations to Institutions of Public Character and other approved institutions to 250 per cent, from the current 200 per cent.

The charitable sector will also get more funding.

Government-funded voluntary welfare organisations will receive an additional S$15 million in funding this year, which brings the total amount to S$220 million for 2009.

Funding to self-help groups will increase by S$4 million over the next two years and that brings the total amount of funding to self-help groups to S$9 million a year.

Needy Singaporeans can also tap into the ComCare Fund, which the Government is increasing to S$7 million a year, for the next two years.

More resources will also be put into training social workers to beef up the sector.

To encourage the growth of social enterprises, the government will extend the tax exemptions for Companies Limited by Guarantee set up by social entrepreneurs.

- CNA/yt

Source : Channel NewsAsia - 22 Jan 2009

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More help for low income families in the economic downturn

More help for low income families in the economic downturn

By Pearl Forss,

SINGAPORE: More help for the low income households is on the way — they will receive additional rental rebates in public rental flats, while the Public Transport Fund will be topped up to S$10 million.

Putting food on the table for his wife, his mother in-law and three young children is a daily challenge for 68-year-old Ramachandran Chinnakannu.

The family’s breadwinner makes about S$900 a month as a security guard, and depends on help from charities to get by.

Mr Ramachandran already receives a Workfare Income Supplement (WIS) of S$2200 annually, of which S$600 is cash and the rest is in the form of CPF contributions.

He will get an additional 50 per cent of the WIS he is getting this year.

This means he will get an additional S$1100 cash payment under this scheme this year.

He will also get S$1000 in GST Credits and Senior Citizens’ Bonus.

In all, he will receive about S$2700 in cash from the government this year.

This is in addition to four months of service and conservancy charges rebates and rental rebates as the family lives in a one-room rental flat.

Mr Ramachandran said: “I don’t have enough money every month. Now monthly, I can spend a little of the money I receive. I can now buy my children books, milk, uniforms.”

And to help families like the Ramachandrans, the government will also enhance the financial assistance schemes for students.

Young children from low income families are going to receive a top-up of up to S$400 in their Post Secondary Education Accounts this year.

And students from ITEs, polytechnics, and universities can look forward to a new Short-Term Study Assistance Scheme if their families are facing financial difficulties.

- CNA/yt

Source : Channel NewsAsia - 22 Jan 2009

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Will government dip deep into reserves?

Will government dip deep into reserves?

By Loh Chee Kong

With Singapore staring at what might be its worst recession ever, the Budget to be unveiled today has taken on an added significance — even more so after senior Government leaders floated the idea of unlocking the closely-guarded national reserves for the first time.

But while the size of the Budget measures could easily be more than twice that of packages unveiled in previous downturns, several economists whom Today spoke to said that those hoping for a “big bang” approach might be disappointed — as the sacred cow is likely to be left untouched for now.

“Their intention was probably to highlight the possibility (of dipping into the reserves) if the recession lasts more than a year,” said CIMB-GK economist Song Seng Wun. He was alluding to recent comments by Prime Minister Lee Hsien Loong and Senior Minister Goh Chok Tong that the Government is mulling over the option of dipping into its reserves, unofficially estimated at more than $380 billion, including assets managed by the Government of Singapore Investment Corporation (GIC).

While not ruling out the possibility of the Government tapping “modestly” into the reserves at this stage, Singapore Management University economics professor Davin Chor felt it is more likely to use this Budget to signal its readiness to “dip further into these reserves” if economic conditions worsen.

Given that Parliament and the President would need time to deliberate over the decision to unlock the reserves, Citigroup economist Chua Hak Bin agreed that such a move, if any, would occur later in the year in the form of off-Budget measures.

Under the Constitution, surpluses accumulated by a Government during its term of office would be locked away in the reserves once Parliament is dissolved and elections are called.

Mr Song estimates that the current Government has accumulated some$60 billion in surpluses since it came to power in May 2006 — a sum that would in all likelihood offset any fiscal stimulus package.

In the past, measures to combat the previous downturns have cost the Government between $8 billion and $10 billion,Dr Chua pointed out. This time round, analysts are expecting the final cost to add up to between $20 billion and $25 billion.

Since Finance Minister Tharman Shanmugaratnam reiterated the Government’s measured stance in November to “keep some powder dry” — in contrast to firing all its bullets — global economic conditions have spiralled out of control alarmingly. And some economists feel that the Government should not keep too many bullets for later.

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CRISIS OF CONFIDENCE

Said Centennial Group economist Manu Bhaskaran: “This is not a poker game …It is a question of making a judgment on the severity of the downturn on demand and how much additional support the Government needs to give so that this demand shock is mitigated.”

Mr Bhaskaran added: “There are many things unpredictable about this crisis but one thing that is reasonably sure is that Singapore’s economy is facing the most severe downturn since Konfrontasi with Indonesia in 1963.”

Concurring, Nanyang Technological University economics don Choy Keen Meng called on the Government to use “80 to 90 per cent of its ammunition on Budget Day”.

Pointing out that the world economy is essentially mired in a “crisis of confidence”, Assistant Professor Choy said: “The Government needs to decisively exorcise the bad ‘animal spirits’ and turn sentiment around by coming up with a package that exceeds expectations.”

Arguing that the economy would hit rock bottom within the first half of this year, he reiterated that the “right time to stimulate the economy is when it is near the trough”.

Still, SMU’s Assistant Professor Chor believes a balance would be struck.

He added: “While I expect a fairly significant upfront outlay, the actual implementation and release of some of the stimulus funds is likely to be spread out over the course of the fiscal year.

“This would give some leeway for the Government to adjust the measures in response to changing conditions.” - TODAY/rs

Source : Channel NewsAsia - 22 Jan 2009

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SMEs say Jobs Credit scheme will help them retain workers

SMEs say Jobs Credit scheme will help them retain workers

By Satish Cheney,

SINGAPORE: Small- and medium-sized enterprises (SMEs) have welcomed the Jobs Credit scheme announced in the Singapore Budget.

The scheme helps employers keep their workers by offering each employer cash grants amounting to 12 per cent of the first S$2,500 of an employee’s wage.

Expand Construction has about 100 Singaporean workers at the executive level.

So far, it has not taken any strong cost-cutting measures but it is cautious about the tough months ahead.

So the Jobs Credit scheme is something the company is looking forward to.

Von Lee, group executive chairman of Expand Group of Companies, said: “It’s a lot of assistance, because we employ a lot of local staff and like what the minister says, the strategy is to reduce costs and save jobs, rather than cut jobs to save costs. So that sends out a very strong message and effectively because it’s a grant back to the company, it definitely makes a strong impact.”

Lau Kok Wah, general manager of Expand Construction, said: “At the same time, you also remove the uncertainties of many people about job security. That’s the most immediate concern of many people at this point in time.”

In fact, the company said that with help from the scheme, it will be able to hire more staff.

Besides the Jobs Credit scheme, the government had earlier announced that it intends to roll out more public construction projects this year.

Von Lee said: “We are more than willing as a construction company to invest in people and employ more people and prepare ourselves for the jobs coming on line.”

The company also welcomed the lower corporate tax rates announced in the Budget, saying it would help during these tough times.

- CNA/ir

Source : Channel NewsAsia - 22 Jan 2009

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Singaporean to oversee UBS investment banking in Asia

Singaporean to oversee UBS investment banking in Asia

Timothy Chia takes over from Robin Tomlin, who remains as senior adviser

By CONRAD TAN

UBS has appointed Singaporean Timothy Chia vice-chairman of investment banking in Asia, to help it anticipate shifts in Asian corporate behaviour in the difficult months ahead.

Mr Chia: Will oversee significant client relationships and major transactions in Asia
Mr Chia, a former venture capitalist, is also chief executive of Singapore-listed Hup Soon Global Corp, which distributes industrial products such as farm equipment and vehicle parts. From 1995-2004, he was president of private equity firm Pama Group.

He is the first Singaporean to assume the post at UBS.

As vice-chairman of UBS Investment Bank in Asia, he will oversee ’significant client relationships, major transactions and important strategic initiatives in the region’, the bank said.

He replaces Robin Tomlin, who has held the position for eight years. Mr Tomlin will continue as a senior adviser, UBS said.

Mr Chia sits on the boards of several other Singapore firms, including Banyan Tree, Fraser & Neave and Singapore Post.

Sutha Kandiah, joint head of investment banking for Singapore and Malaysia and co-head of equity capital markets in Asia at UBS, said that the bank decided 12-18 months ago to find a senior strategic adviser for its investment banking business in Asia.

‘We felt the business required someone with a strong, deep understanding of Asian corporations and behaviour, who also has a Singapore background and understands Singapore corporations,’ Mr Kandiah said.

‘In the next few years, we’re going to go through a systematic change in how corporations behave, and we wanted a senior adviser who understood the cycles of the Asian economy.’

As the financial crisis unfolds, the outlook for investment banking has become increasingly gloomy.

Asia-Pacific deal activity fell 31 per cent last year to US$703 billion, according to Zephyr, a database of M&A deals maintained by Bureau van Dijk Electronic Publishing.

That drop in full-year deal volume masks an even more dramatic slump in capital market activity towards the end of 2008, when credit markets seized up after the collapse of US investment bank Lehman Brothers.

But there is still business to be done, despite the ‘challenging’ outlook, especially in providing advisory services to firms, said Mr Kandiah. ‘Corporations need advice in good times and in bad.’

And private deals are still taking place, he said, although few companies are willing to risk a public offer of new shares in the current volatile markets.

‘The primary equity markets are shut, but in the secondary markets, block trades or private placements or bilaterally negotiated club deals are still happening, which tend to be off-radar,’ he said.

UBS also continues to provide advice to firms on structuring derivatives or swaps, as well as hedging and interest-rate risk management needs, he added.

UBS ranked first in the league table of top financial advisers for Asia-Pacific M&A deals last year, according to Zephyr and Thomson Financial. It was one of five banks that underwrote DBS Group’s recent $4 billion rights issue, announced on Dec 22.

Source : Business Times - 22 Jan 2009

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Unusual Budget for unusual times: PM Lee

Unusual Budget for unusual times: PM Lee

It will aim at keeping businesses afloat as Singapore prepares for long, bleak spell

By CHEN HUIFEN

(SINGAPORE) Prime Minister Lee Hsien Loong has indicated that this year’s Budget will be an unusual one, set against the backdrop of unprecedented economic circumstances and expectations of a protracted downturn.

At a gala dinner last night to mark the 10th anniversary of the Singapore-MIT Alliance, he told an audience of academics and graduate researchers that it ‘is not going to be an ordinary Budget - because this is not an ordinary year - either in the content of the Budget or its overall fiscal stance’.

‘Its focus will be to keep businesses afloat, so that they can provide jobs for Singaporeans,’ added Mr Lee. ‘And it will include special schemes to help businesses to reduce their costs, and maintain access to urgently needed financing. And there will also be measures to help households, especially needy households.’

He said that Singapore needs to prepare for a long downturn, and possibly several years of slow growth thereafter. The bleaker outlook had already been announced earlier in the day by the Ministry of Trade and Industry (MTI), which lowered its growth estimate for the year to between minus 5 per cent and minus 2 per cent.

‘It’s unprecedented, but if it materialises, we will see our worst economic performance in decades this year,’ said Mr Lee.

Although the Budget will not turn the situation around overnight, Mr Lee said it will help Singapore to tide over the difficult period and emerge stronger. He also assured steady investments in education and R&D, to build new capabilities and to ensure that Singapore improves its competitive edge for the future.

Singaporeans must also not lose sight of long-term opportunities.

‘Asia is the place where the world’s growth has been and will continue to be, after this storm has passed,’ said Mr Lee. ‘When the clouds clear, as they eventually will, Singapore must be well-positioned to grow at the heart of Asia again.’

Pointing to the Singapore-MIT Alliance as an example, Mr Lee said the partnership between Singapore’s National University of Singapore and Nanyang Technological University and the USA’s Massachusetts Institute of Technology was formed at a time of difficulty, during the Asian financial crisis. But the partners decided to press on with the alliance despite the uncertainties then, leading to successful collaboration and growth of talent exchanges over the years.

Its success also opened up new joint commitments. One is the Singapore-MIT Alliance for Research and Technology Centre (Smart). To be located at the new NUS University Town, it will be a hub where researchers and students from the three universities can teach, share ideas and interact freely.

‘In good times and bad, we have continued to enhance our infrastructure, attract talent and invest in education, and increasingly in recent years, in research and development,’ Mr Lee said, at the dinner held at The Ritz-Carlton Millenia Singapore. ‘Even now in the midst of crisis, we will persevere with measures to strengthen our resilience and competitiveness, and look over the horizon, to prepare for opportunities which are still there, especially for the watchful and well-prepared.’

Source : Business Times - 22 Jan 2009

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