7/24/2019 Summary of Singapore's Economic Policies

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H2 Economics: Singapore’s Policies Summary

Workfare Income Supplement (WIS)

- supplement wages and retirement savings of older low-wage workers and encouragethem to stay employed 

- through cash payments and CPF contributions - impact: increase size of workforce (more elderly people working), improve equity (help

low-wage workers) 

Workfare Training Support (WTS) Scheme

- encourage Singaporean workers to attend training- 95% course fee funding - provides training allowance for the employee - impact: increase skills in the workforce, rise in productivity and LRAS 

Productivity and Innovation Credit (PIC)- encourage investment in R&D, automation and training - by giving 400% tax deduction on R&D expenditure 

- e.g. IT and automation equipment 

- impact: increase productivity, increase LRAS 

Wage Credit Scheme (WCS)

- government co-fund 40% of wage increases given to Singaporean employees - for employees earning less than $4000 monthly - impact: improve equity, support productivity gain sharing between employers and

employees 

Special Employment Credit (SEC)

- support employers and raise employability of older low-wage Singaporeans 

- provide employers with continuing support to hire older Singaporean workers - for each Singaporean employee aged above 50 who earns up to $3000 monthly,

employers receive an SEC of 8% of the employee’s monthly wages 

Skills Programme for Upgrading and Resilience (SPUR)- o"ers financial incentives to employers when they send their workers for courses - provide course fee subsidies for employers to help employers manage excess

manpower during downturn + compensation for workers’ absence (absentee payrollsubsidy) 

- upgrade workers and capabilities to strengthen business competitiveness 

Skills Development Fund (SDF)

- employers enjoy subsidies as high as 90% for sta" training costs 

Property Cooling Measures

- Total Debt Servicing Ratio (TDSR): restrict financial institutions from lending toindividuals if their outstanding debt repayments exceed 60% of gross income

- Loan-to-Value (LTV) limits: maximum percentage of purchase price that can beborrowed from the bank (ranges from 40% to 80%) 

- Additional Buyer Stamp Duty (ABSD): tax when buying property - 7% for secondhouse, 10% for third house 

- Seller’s Stamp Duty (SSD): discourage short-term speculative activity; 15% tax ifproperty sold in 1st year of purchase 

2013 Tham Kah Loon