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Politics

Singapore expands support for elderly and low-earners as election nears

Budget for 2019 focuses more on social development, less on economy

SINGAPORE -- The government of Singapore will spend more on social development, including support for the elderly and low-income households, according to the draft budget for the fiscal year starting in April that was announced on Monday.

This comes as the city-state awaits its next general election -- which could happen as early as this year -- in which the ruling People's Action Party will be challenged by an opposition that has gained momentum with the backing of a veteran politician. The income gap is one of the key issues around which the next election will hinge.

In the 2019 budget, the government plans total expenditure of 80.25 billion Singapore dollars ($59 billion), 1.6% higher than the estimated spending for fiscal 2018, while operating revenue is targeted at SG$74.90 billion. The expenditure for social development such as health care and education will increase 3.5% to SG$37.68 billion.

One of the key measures announced on Monday was a new support package for the "Merdeka Generation" -- using a Malay word meaning independence -- targeting about 500,000 Singaporeans who were born in the 1950s. They account for 14% of the Singapore population.

The package includes health care support such as outpatient subsidies and a five-year annual SG$200 top-up fund for their medical savings from 2019 until 2023. The total cost over the lifetime of this generation will exceed SG$8 billion.

"They played a critical role in our nation's development ... The Merdeka Generation Package is a gesture of our nation's gratitude for their contributions and a way to show care for them in their silver years," Finance Minister Heng Swee Keat said in his budget speech at the parliament on Monday.

With the population ageing, health care spending has been increasing. The government earlier introduced a similar package for those born before 1949.

For Finance Minister Heng, this is the first budget since he was promoted last November to the position of first assistant secretary-general at the PAP -- making him the top candidate for succeeding Prime Minister Lee Hsien Loong. The PAP will fight the next election, which is due by April 2021, with the new executive team.

With recent political developments pointing to signs of an early election, including former presidential candidate Tan Cheng Bock's return to opposition politics and Lee Hsien Yang, brother of the prime minister, showing support for Tan, there had been speculation that the 2019 budget would contain pre-election measures.

According to a report from local bank United Overseas Bank, the previous pre-election budget in 2015 included a support program for the elderly, corporate and personal income tax rebates and enhancements to the "Goods and Services Tax Voucher" scheme that is designed for low-income households.

Similar measures can be seen in the 2019 budget, such as a 50% personal income tax rebate capped at SG$200 and a GST voucher worth up to SG$300 that will benefit the roughly 1.4 million citizens in low-income households.

For Singapore, 2019 will likely be hard due to the global economic slowdown. Singapore on Monday released data showing that January exports declined 10.1% from a year ago, making it the largest fall since October 2016. Last Friday it said this year's economic growth would likely be slower than the 3.2% in 2018, citing the ongoing U.S.-China trade tensions and slowing Chinese economy.

But, as far as the budget allocation is concerned, the government will spend less on economic development. Expenditure for economic development, such as transport, trade and industry, will fall 7.2% to SG$16.5 billion. On the other hand, the budget for security and external relations will increase 3.4% to SG$22.67 billion.

Heng said the 2019 budget laid out the government's approach to building "a strong, united Singapore."

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