5.33 2007 was a good year for Singapore. Our fiscal position is strong. We can therefore afford to share some of the budget surplus with Singaporeans. I will distribute the surplus to all Singaporeans, but with particular focus on the lower and middle-income groups and older Singaporeans. Their needs are greater, and they are more affected than better-off Singaporeans in the current climate of rising prices.

5.34 I had earlier in the speech announced top-ups to the Post-Secondary Education Accounts and Medisave accounts, as well as Personal Income Tax rebates, as part of this surplus sharing exercise.

5.35 I have also decided to give Growth Dividends to all adult Singaporeans, to be paid out in two instalments in April and October this year. Those who have already signed up for their GST credits will automatically receive their Growth Dividends.

5.37 I will give older Singaporeans, those aged 60 and above, more. Most older Singaporeans will receive one and a half times what other Singaporeans will receive.

5.38 As with the GST Credits, we will include everyone. Those with Annual Incomes more than $100,000 will receive a Growth Dividend of $100.

Table 4 - Growth Dividends

5.39 We will give an additional dividend to those who have served and are currently serving national service. NSmen, ex-NSmen and NSFs including those below 21, will get an additional $100 of Growth Dividends, to recognise their contributions to our nation.

5.40 As before, we will provide the option for Singaporeans to donate their Growth Dividends to charity, so that those who wish to can conveniently contribute to a cause of their choice.

5.41 The Growth Dividends will cost the Government $865 million this year.

5.42 For government pensioners, the Government has decided to increase the Singapore Allowance further by $20 per month, and raise the gross pension ceiling from $1,150 to $1,170. This will give an additional $3 million a year to pensioners residing in Singapore.

5.43 There are some families who may need additional support, in meeting rising costs, beyond the significant sums they would receive in the GST Offset Package and the Growth Dividends that we are providing this year, as well as existing Government assistance schemes. Last year, as part of the GST Offset Package, we provided CCCs, self-help groups and VWOs with extra funds ($10 million over five years) to help needy families. This year, we will give these groups an additional $10 million. This would give them an extra $20 million over the five-year period. They are best placed to decide on which families need additional assistance. Over the last year alone, about 8,000 low-income families have been helped by the CCC ComCare Fund.

5.44 Taking together all the measures in this year?s surplus sharing package a retiree household in a two-room flat will receive $2,100 (Growth Dividends and Medisave Top-ups). This is on top of the $1,300 that they will also be receiving this year as part of the GST Offset Package introduced last year.

5.45 Take a middle-income family living in a five-room flat, which is also typically larger. Two working parents with two children, one in primary school and one in secondary school, and one grandparent. They will receive a total of $2,500 ($1,150 in Growth Dividends, $900 in PSEA top-ups, $450 Medisave top-up). This is on top of the $1,900 that they will also be receiving this year as part of last year?s GST Offset Package.

5.46 Overall, the rebates and dividends are weighted towards middle and lower-income households. Higher-income households will receive more in absolute dollars, because of the rebate on the higher personal income taxes that they are paying. However, lower and middle-income households will get more as a percentage of their incomes from the 2008 surplus sharing exercise. This is even more so if we include what they will receive this year as part of the GST Offset Package that has already been introduced and the WIS.

5.47 In total, we will be giving out $1.8 billion worth of benefits to Singaporeans as part of this surplus sharing package. This is our approach. When we have higher than expected economic growth and strong surpluses, we will share the benefits with Singaporeans while setting aside sufficient resources to meet future needs and challenges.