Tuesday, February 23, 2010

Direct Benefits for Households in Budget 2010

I've only highlighted some of the more direct benefits (non-business related). It would seem however that some of the benefits are targeted at the revised CPI basket to lower the inflation rate. The majority of the benefits though are for businesses to "improve" their productivity through training, R&D or M&A.

Below are some of the more direct benefits to households:
  1. For property tax payable from January 2011, the existing 1994 property tax rebates will be replaced by the following progressive property tax schedule for owner-occupied residential properties:

    - 0% for the first $6,000 of AV;
    - 4% for the next $59,000 of AV;
    - 6% for the balance of AV in excess of $65,000.

    This will mean that all HDB flat owners and the large majority of private property owners will pay lower taxes.

  2. For Year of Assessment 2010, the parent relief will be increased to:

    - $7,000 (from $5,000 currently) for taxpayers who are staying with their dependants;
    - $4,500 (from $3,500 currently) for taxpayers who are not staying with their dependants;
    - $11,000 (from $8,000 currently) for taxpayers who are staying with their handicapped dependants;
    - and $8,000 (from $6,500 currently) for taxpayers who are not staying with their handicapped dependants.

  3. For Year of Assessment 2010, the Government will allow wives who are taxpayers to claim a spouse relief of $2,000, similar to the current scheme for husbands. Accordingly, wife relief will be renamed as “spouse relief.”

  4. For Year of Assessment 2010, the Government will increase the income threshold for dependant-related reliefs from $2,000 to $4,000, except for the CPF Cash Top-up Relief for top-ups to the CPF accounts of spouse and siblings (for which the changes to the income threshold will be effective from Year of Assessment 2011).

  5. For Year of Assessment 2011, the Government will increase the course fees relief from $3,500 to $5,500.

  6. The Government will extend the 250% tax deduction for donations to Institutions of Public Character (IPCs) and other approved institutions for 2010.

  7. The Government will provide a top-up to the CPF-Medisave Accounts of older Singaporeans. Details are given in the table below.

  8.  The Government will provide a top-up to the Post-Secondary Education Account (PSEA) accounts of young Singaporeans. Details of the top-up are given in the table below.

  9. The Government will enhance the Workfare Income Supplement (WIS) as follows:

    - Higher payouts
    . Maximum payouts for the WIS will be increased by between $150 and $400, with more going to older workers to encourage them to remain in the workforce;

    - Extension to more workers
    . Those earning up to $1,700 per month will now be eligible for WIS, up from the current limit of $1,500 per month.

For more information on the budget 2010 for families, you can visit the budget website here.

In my opinion, productivity can only be improved through innovation and this cannot be resolved by throwing money at the problem. The question should be whether is there such an environment here that will encourage such innovation.


Anonymous said...

thanks !! very helpful post!

Anonymous said...

unfortunately our country is run like a corporation for which GDP is the main KPI. so throwing money at corporations has been the strategy for some time. anyway, what would you suggest to boost innovation... more freedom?

Xtrocious said...

I think the pay lower property taxes assumption may not hold as long as annual value keeps rising...

chantc said...

Freedom may be slightly related to innovation but I feel that the main thing is that you must have an environment that encourages taking calculated risks.

Innovation is all about trying something different. If you always look at a track record of something being done first before trying it out, innovation will never happen because someone else will be able to get the first mover advantage and may secure the necessary copyrights and trademarks before you even think of considering it.

How to boost innovation? Seriously, I don't think innovation can be taught. It can only be earned through experience. That would also mean having customers that believe that things are possible if you dare to dream. Having this customer support (through subsidies) is easy. It's the culture (taking calculated risks) that's difficult to cultivate.

chantc said...

The 3 tier property tax just simplifies the property tax rebates that have been on-going for the longest time. The rebates have been so-called transferred to a formula.

AVs should go up over time, if the country is growing. That's natural. The problem is whether anyone is distorting the figures. It doesn't take that many people to distort the AV figures.

For example, do you really believe that the average employed household income is about $7,700 in 2008?

Anonymous said...

Keep posting stuff like this i really like it

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