Deputy Minister Heng Swee Keat announced a massive Supplementary Budget on Mar. 26 to help Singaporeans, local residents, and businesses deal with the devastating impact of the Covid-19 outbreak on the economy.
Calling it the Resilience Budget, it totals S$48.4 billion.
Added to the S$6.4 billion announced in his earlier Unity Budget in Feb. 2020, Singapore will pump around S$54.8 billion into the economy to help mitigate the economic fallout of the virus.
1. Protecting jobs
Heng said the government's immediate priority is to save jobs, support workers and support livelihoods, with over a third of the Resilience Budget dedicated to achieving these goals.
Enhancing Jobs Support Scheme
The Jobs Support Scheme (JSS), which was introduced in the previous Unity Budget, co-funded 8 per cent of the wages of each local employed worker up to a monthly cap of S$3,600, for three months.
This will be boosted to 25 per cent of wages, with the wage ceiling raised from S$3,600 to S$4,600, the median wage in Singapore.
The JSS will also be extended for another two quarters, until the end of 2020.
Employers will receive three tranches of payouts, in May, July and October 2020.
This will total S$15.1 billion and help support more than 1.9 million local employees.
Heng urged employers to hold on to their workers.
Helping the self-employed, lower-income workers and the unemployed
Self-employed persons (SEPs), such as taxi and private hire car drivers, real estate agents, sports coaches, and media and art freelancers will also receive support, even as the virus halts gigs and other job opportunities.
A Self-Employed Person Income Relief Scheme (SIRS) will be introduced.
Eligible SEPs will receive S$1,000 a month for nine months, with S$1.2 billion set aside for this.
Another S$48 million will be set aside to extend the Self-Employed Person Training Support Scheme to December 2020 and enhance the hourly training allowance.
Recipients of the Workfare Special Payment will also get an increased payout of S$3,000 in cash.
Unemployed workers will benefit from immediate financial assistance from a Temporary Relief Fund, and also a Covid-19 Support Grant to help workers laid off because of the virus's impact.
Low and middle-income employees will get a grant of S$800 per month for three months to tide them over.
Creating job opportunities
Heng mentioned that fresh graduates may be concerned about the state of the current job market.
The SGUnited Traineeships programme will help support 8,000 traineeships across both large enterprises and SMEs.
The SGUnited Jobs initiative will also create about 10,000 jobs over the next year.
The public sector will take the lead by offering short-term, temporary jobs to assist the demand for work related to Covid-19, such as health declaration assistants.
Workforce SG will also launch the SGUnited Jobs virtual career fair on Mar. 27 with 2,200 immediate job vacancies.
Heng also announced support for households, with direct cash payouts to families.
The cash payout for all adult Singaporeans will be tripled, either to S$300 or S$900.
Cash payout for each Singaporean parent with at least one young child will be tripled to S$300.
Grocery Vouchers will be tripled to S$300, in addition to the S$100 in 2021.
Flexibility on fees and loans
The government will also exercise more flexibility on fees and loans.
All government fees and charges for government services will be frozen for one year, from April 1, 2020 to March 31, 2021.
All student loan repayment and interest charges will also be suspended for one year, from June 1, 2020 to May 31, 2021, applying to all graduates who have taken a government loan for university and polytechnic studies.
All late payment charges on HDB mortgage arrears for three months will also be suspended.
2. Supporting businesses
Heng also announced a slew of measures to help cash flow for businesses, and address cost and credit problems.
There will be a three-month, automatic deferment of income tax-payments for companies and SEPs.
Heng also enhanced the Property Tax Rebate, with eligible commercial properties paying no Property Tax, with other non-residential properties getting a 30 per cent rebate.
He urged landlords to fully pass on the rebate to their tenants by reducing rentals.
The government will also enhance rental waivers, with hawkers in National Environment Agency hawker centres getting three months of rental waiver.
Other government agencies will provide two months of rental waiver for eligible tenants, like charities.
Credit help for SMEs
The Enterprise Financing Scheme - SME Working Capital Loan will be enhanced to S$1 million.
The Temporary Bridging Loan Programme (TBLP), announced for enterprises in the tourism sector, will be expanded to all enterprises, and increased to S$5 million.
The government will work with financial institutions to defer capital payment for one year for these loans, if requested by businesses.
The Enterprise Financing Scheme - Trade loan will also be increased to S$10 million, increasing government's risk-share to 80 per cent.
In addition, the government will set aside S$20 billion of loan capital.
Heng also mentioned relief from legal obligations that can't be fulfilled due to Covid-19, such as forfeiting deposits for a cancelled event, and said that the Ministry of Law will present measures to address this.
Heng listed four industries that have been hit the hardest by the impact of Covid-19. These are:
- Consumer-facing industries, like food and beverage (F&B) outlets.
- Arts and culture.
Heng spoke of the importance of the aviation sector to Singapore's economy, with the Changi Air Hub alone employing 192,000 people and contributing to 5 per cent of Singapore's GDP.
The aviation sector will get a super-charged JSS, with the government co-paying 75 per cent of an employee's wage, for the first S$4,600.
A S$350 million aviation support package will be introduced, to fund measures such as rental relief and rebates on landing and parking charges to maintain Singapore's air connectivity.
The tourism industry will also benefit from the super-charged JSS, with 75 per cent of wage offset for employees in licensed hotels, travel agencies, tourist attractions, and so on.
S$90 million will be set aside to help the tourism industry "rebound" from this crisis.
F&B firms will get an increased JSS of up to 50 per cent wage offset for employees.
Meanwhile, taxi and private hire car drivers will benefit from an enhanced S$95 million to the Point-to-Point Support Package, while private bus owners will get a one-year rebate from road tax.
The arts and culture sector will receive an additional S$55 million to safeguard jobs, with more details to be provided by the Ministry of Culture, Community and Youth.
3. Bouncing back
Covid-19 will not last forever, and a day will come when the situation recovers.
Heng announced S$1.9 billion to be set aside to build resilience in the economy and enabling it to rebound.
These include investments in research and development, with earlier investments helping Singapore to develop a Covid-19 test kit.
More investments will be made to boost food supply and security.
The government will enhance the SMEs Go Digital Programme, the Productivity Solutions Grant and the Enterprise Development Grant to encourage businesses to use this time to restructure and transform themselves.
The 90 per cent absentee payroll rates, which was initially meant for employers in aviation, tourism, food services and retail to send their workers for training, will now be extended to all employers from May 1, 2020.
The Overall Budget Deficit for FY2020 will be raised to S$39.2 billion, or 7.9 per cent of GDP. However, the deficit can be supported and Singapore remains fiscally sustainable, the government has been prudent about maintaining the reserves.
Top image from Gov.sg