Singapore Strategy – Moving forward socially and competitively February 15, 2023 200

  • FY2022 overall fiscal deficit was S$2bn (0.3% of GDP), below the estimated S$5bn (or 0.9% of GDP). FY2023 is more balanced with a modest deficit of S$0.4bn (or 0.1% of GDP).
  • Huge support for households to cope with inflation via a S$3bn increase in Assurance Package (AP) to S$9.6bn and an additional $300mn in the GST Voucher scheme. Another major area of support for households was an increase in grants for first-time families purchasing resale HDB flat by S$10k and S$30k.
  • The support for households to cope with the rise in inflation is a positive fiscal boost for the economy. Another benefit to the economy will be the additional funds to promote investments and competitiveness via the National Productivity Fund. This will be the 3rd consecutive overall fiscal budget deficit totalling S$7.34bn. There may be less opportunity for deficit as a balanced budget must be maintained over each term of Government. Some of the beneficiaries of the budget include Sheng Siong (BUY, SSG SP, S$1.86) from the additional cash handouts or vouchers and ComfortDelGro (BUY, CD SP, S$1.75) as platform competitors face higher employee costs.



A social compact refresh budget

The budget was largely to support families, seniors and vulnerable groups. There were direct cash handouts to cope with the rising cost of living, support for families to purchase their first homes, increase in cash payouts for newborns, more social assistance for lower-income families, top-up in subsidies for seniors and further boosting of the social service sector funds.



Sector snippets

  1. Climate-related spending will rise significantly in the medium term and more resources will be committed as extensive infrastructure plans are implemented, for instance, coastal and drainage infrastructure.
  2. Increase the Baby Bonus cash gift by S$3k to S$11k (1st-2nd child), and third child onward increased from S$10k to S$13k. But total healthcare expenditure to fall 1.9% in FY2023 to S$16.9bn.
  3. Buyer stamp duty for residential properties will be raised by 1-2% for homes above S$1.5mn. Non-residential properties will similarly face a 1-2% rise for properties above S$1mn.
  4. GST Voucher (GSTV) scheme will enjoy an extra S$530mn to S$1.7bn. AP topped up by S$3 billion to provide household cash payouts, CDC Vouchers and one-off payments (cost-of-living, CDA top-up, Edusave)
  5. Platform companies to pay CPF for Platform Workers (aged below 30).



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About the author

Profile photo of Paul Chew

Paul Chew
Head of Research
Phillip Securities Research Pte Ltd

Paul has 20 years of experience as a fund manager and sell-side analyst. During his time as fund manager, he has managed multiple funds and mandates including capital guaranteed, dividend income, renewable energy, single country and regionally focused funds.

He graduated from Monash University and had completed both his Chartered Financial Analyst and Australian CPA programme.

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