SINGAPORE: Singapore is feeling the full effects of the economic shocks and border closures caused by the COVID-19 pandemic around the world and within the country, the more stringent measures being put in place will have a bigger impact on the economy, said Deputy Prime Minister Heng Swee Keat on Tuesday (Apr 7).
The local economy is now being “hit on so many fronts that it is not possible to just restore the status quo”, he said during his round-up speech in Parliament.
Given Singapore’s status as an open economy, injecting funds will not be able to counter the extensive global supply and demand shocks, he added.
As such, the best response is to build up resilience in the economy and society, which is what the two additional support packages – a record-breaking S$48 billion Resilience Budget and the newly announced S$5.1 billion Solidarity Budget – aim to do.
Said Mr Heng: “For our economy, we build resilience by ensuring that viable businesses are not permanently damaged but instead, are able to preserve their capabilities to recover.”
Through these two support packages announced in quick succession over the past one-and-a-half weeks, businesses get help with costs, cash flow and credit.
Affected workers also receive support to bounce back and make the best use of this downtime, he said.
“For our society, we support our people by saving jobs, providing cash support and easing their cash flow needs,” he added.
READ: Solidarity Budget: Singapore spends another S$5.1b to save jobs, protect livelihoods amid impending circuit breaker rules
READ: COVID-19: Singapore makes ‘decisive move’ to close most workplaces and impose full home-based learning for schools, says PM Lee
HELP FIRMS BE RESILIENT TO SAVE JOBS
Having resilient firms will help to save more jobs, which is the Government’s other priority apart from saving lives.
To help firms stay viable, support measures such as larger wage support through the new Jobs Support Scheme (JSS), scrapping of property tax for those in harder-hit sectors, temporary deferment of corporate income tax payments and enhancements to various financing schemes have been announced.
Mr Heng urged firms to tap on these relief measures to keep things going as they do a stock-take and make adjustments for what could be a prolonged downturn ahead.
Businesses should also use the support – many of which are provided in a broad-based manner – “wisely and responsibly”, he said.
For instance, the JSS “will fail if firms take a short-term view, pocket the payouts in one month and retrench their workers the next month”.
“I urge businesses to take a longer-term view – retain and upskill your workers to accelerate their transformation for the future economy.”
Responding to questions from Members of Parliament (MPs) on what is being done to ensure employers that receive the wage support continue to hire workers, he said by design of the scheme, employers who reduce wages or put their employees on no-pay leave during this period will have their payouts reduced correspondingly.
“As long as you pay your employees’ wages and make the necessary CPF contributions, you will receive the corresponding JSS payouts for the relevant months,” he said.
READ: Solidarity Budget: Jobs support raised to 75% for April, payout brought forward
The Public Service is also working towards making faster payments to businesses supplying goods and services to the Government.
It has already brought forward the scheduled due date of more than 1,000 payment vouchers by an average of 11 days. This amounts to more than S$600 million and benefits close to 300 businesses, many of whom are small and medium-sized enterprises (SMEs), said Mr Heng.
On the topic of rental rebates, the Government will be imposing a legal obligation on property owners to “unconditionally pass on” the full amount of their property tax rebates to their tenants, amid feedback from some tenants that their landlords have yet to do so.
Some property owners have commented that such an obligation penalises them, but Mr Heng said this move does not make property owners worse-off. “In fact it staves off rental terminations and keeps their premises rented out,” he added.
With the rebates meaning that property owners will pay less or even no property tax for the year, he again urged property owners to pass the tax savings fully to their tenants as the property tax rebate is intended to benefit them.
For workers, Mr Heng said the best form of support is continued employment, both in the immediate and long-term. Help is also on hand for those who has seen their livelihoods hurt amid the virus outbreak.
This includes direct help for workers’ training and upskilling through enhancements of course fee subsidies and absentee payroll. For those who lost their jobs, the Government has stepped up efforts, such as through the SGUnited Jobs initiative, to help them find new roles in areas with emerging needs.
Support has also been ramped up for those who are self-employed, who can receive direct cash assistance through the new Self-Employed Person Income Relief Scheme.
READ: Solidarity Budget: Criteria broadened for freelancers’ financial assistance scheme
Mr Heng said the Government seeks “holistic, integrated support” for the economy, while keeping an eye on the long term.
“Beyond subsidising wages, we gave firms the resources to re-engineer their business operations, digitalise, retrain workers and even temporarily redeploy workers in their downtime,” he said.
“This is so that they can emerge stronger once the economy recovers.”
FIRMING UP SUPPLY CHAINS AND SOCIETY
Increasing resilience in Singapore’s supply chains will also be key as the COVID-19 outbreak has underscored the importance of further strengthening supply chain resilience and food security.
“They have urged us to press on, including on our ambitious ‘30 by 30’ goal to develop our own food production capabilities,” he said.
A multi-pronged strategy to ensure a stable supply of safe food and essential items has been in place for years and the Government will continue work on this, said Mr Heng, adding that Minister of Environment and Water Resources Masagos Zulkifli will provide details this week.
READ: Solidarity Budget: Adult permanent residents with Singaporean family members to receive S$300 cash payout
READ: Solidarity Budget: S$600 cash support in total for all adult Singaporeans, other cash payouts to be brought forward to June
When it comes to providing support for families and households amid the COVID-19 outbreak, Mr Heng announced that all adult permanent residents with Singaporean parents, spouses or children will be able to apply for a one-off Solidarity Payment of S$300.
Long-term visit pass-plus (LTVP+) holders who have Singaporean spouses will also receive similar benefits, Mr Heng said in Parliament, adding that more details will be available later.
The expansion of the cash payout scheme was in response to concerns that some Singaporean families with non-citizen members are not able to tap on measures under the Care and Support Package, he said.
Among other support measures, all adult Singaporeans aged 21 and above will receive a one-off Solidarity Payment of S$600 in cash, Mr Heng had announced earlier on Monday, as part of a Solidarity Budget.
“With this set of schemes, we balance between targeting our support for those who need it more and flowing support quickly to large groups,” he said.
“It is not an easy balance and we will do our best to calibrate this.”