H2 Economics: Singapores Policies Summary

Workfare Income Supplement (WIS)

- supplement wages and retirement savings of older low-wage workers and encourage
them 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 employees monthly wages

Skills Programme for Upgrading and Resilience (SPUR)

- oers 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 payroll
subsidy)

- 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 to
individuals if their outstanding debt repayments exceed 60% of gross income

- Loan-to-Value (LTV) limits: maximum percentage of purchase price that can be

borrowed from the bank (ranges from 40% to 80%)

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

- Sellers Stamp Duty (SSD): discourage short-term speculative activity; 15% tax if
property sold in 1st year of purchase

2013 Tham Kah Loon