Fiscal deficit to rise to $1.3b on back of massive transfer package in Budget 2015

A one-off cash handout will be given to residents this year.

DBS expects that the government will post a $1.3 billion fiscal deficit in Budget 2015, down from a projected surplus of $1.9b in FY14.

The deficit will stem from a $13.5b transfer package which will be introduced to alleviate the well-being of less fortunate segments of the society and to share the fruits of economic success with Singaporeans amid the nation's 50th birthday.

DBS expects the government to introduce a one-off cash handout and rebates for all Singaporeans, similar to the "Grow and Share" package announced in 2011.

The bulk of the special transfers is meant for the Silver Support scheme, which will provide basic financial help to the low-income elderly with insufficient CPF savings for retirement and little family support.

DBS estimates that a lump sum of about $10-12b will be set aside for the Silver Support scheme and returns from the investment of the $8b Pioneer Generation Fund will be used to finance it.

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