To help Singapore companies tide over near-term economic uncertainties, Deputy Prime Minister and Minister for Finance Heng Swee Keat announced a S$4 billion Stabilisation and Support package in the early part of his 2020 Budget on Tuesday (Feb. 18).
In his parliamentary speech, Heng said the special package aims to stabilise the economy and support Singaporean workers and businesses, noting that industry sectors directly affected by the ongoing Covid-19 outbreak will receive additional support.
In the roughly 24 hours since, this package has been welcomed by businesses in Singapore, although at least one observer felt more broad-based measures could have been implemented to address the knock-on effects of Covid-19 on other industries.
Vulnerability in key sectors of tourism and F&B
On Feb. 11, the Singapore Tourism Board (STB) revealed in its 2019 year-in-review that visitor arrivals this year are expected to drop by 25-30 per cent.
This is especially in view of the fact that the number of Chinese tourists who visited Singapore in 2019 reached 3.627 million, an increase of 6 per cent over 2018.
Despite China being Singapore's top tourist market, the government implemented a ban on visitors who have been to mainland China in the past 14 days on Feb. 1.
This, along with lower travel confidence globally, is why STB's Chief Executive Keith Tan deems the ongoing virus outbreak to be the tourism sector's "biggest challenge" since SARS in 2003.
Two days later, on Feb. 13, the Restaurant Association of Singapore (RAS) said there has been a significant dip in business for the F&B industry in Singapore, with the livelihoods of 200,000 people in the industry at risk.
According to a poll, many restaurateurs indicated that they are not well-prepared for the Covid-19 outbreak, with 57 per cent of them expecting losses of more than 50 per cent over the next three months.
RAS Vice-President Andrew Kwan said if the restaurants do not get any help from landlords or the government, it is possible that a number of them will close down.
Useful, but larger companies also "badly affected"
And so, the S$4 billion support package appears to have been largely welcomed by businesses in Singapore.
According to a statement from the Singapore Chinese Chamber of Commerce & Industry (SCCCI), this year's budget offers both short-term measures to support businesses affected by the Covid-19 outbreak and balances with ongoing longer-term measures to promote the transformation of the economy.
"The relief package such as access to short-term working capital, wage support, flexible rental payments, property tax rebate and corporate income tax rebate are useful forms of help. We look forward to an effective implementation process so that the affected companies can stand to benefit directly from these measures in a timely manner," said the SCCCI.
Singapore Business Federation (SBF) chairman S.S. Teo also applauded the government's efforts in cushioning the impact of the Covid-19 outbreak and the anticipated economic slowdown on local companies, but said he would have liked for the government to take more wide-ranging measures.
"Besides targeted measures for the more adversely affected sectors, we would have liked for the government to address the knock-on effects of Covid-19 on other industries and the larger companies that are also badly affected. If and when the situation worsens, we are confident that the government will be agile in rolling out more support," said Teo.
SBF CEO Ho Meng Kit ultimately pointed out that although this year's budget gives companies a chance to "turn crisis into opportunity", the onus to do this cannot be on just the government.
"We urge companies to embrace the technology incentives introduced in Budget 2020 and continue to invest in manpower planning, capability building and change management as part of their digital strategy. This is key to generating long-term value," said Ho.
CapitaLand pledges to pass on rebate fully to retailers
Meanwhile, real estate giant CapitaLand welcomed the property tax rebate for commercial properties, and pledged to pass on their full savings of the rebate to retailers operating across CapitaLand malls.
In addition to passing on the tax rebate, CapitaLand said in a statement that it will also roll out additional rental relief measures to help their tenants throughout the Covid-19 outbreak.
"The rental relief programme will form part of CapitaLand's comprehensive relief package for Singapore retailers. Previously announced measures in the package include the flexibility to operate shorter store hours and a S$10 million marketing assistance programme," it said.
According to their statement, as Covid-19 has impacted different malls and trade categories differently, the rental relief will be disbursed to retailers in a targeted manner, based on their individual needs and circumstances.
Top image from Unsplash.