SINGAPORE: The Government is doing all it can to stabilise the economy, preserve jobs and help businesses stay afloat amid the grave economic challenge brought about by the COVID-19 outbreak, said Prime Minister Lee Hsien Loong on Friday (Mar 27).
It is also prepared to do more, said Mr Lee. “Whatever it takes to do that (help businesses), we will do,” he told reporters during an interview at the Istana, in which he gave his take on the situation and laid out what the future could look like.
“We are under no illusions that this is the end of the story because nobody can tell what lies ahead,” he said.
Singapore on Thursday announced an unparalleled S$48 billion stimulus package to save jobs and support workers; provide businesses, especially those that have been directly impacted, with help to cope with near-term challenges; as well as strengthen economic and social resilience.
READ: COVID-19 Resilience Budget: ‘Landmark’ S$48 billion package to tide Singapore through ‘unprecedented’ crisis
This is on top of the S$6.4 billion announced in Budget 2020 last month. Altogether, Singapore will earmark close to S$55 billion, or 11 per cent of the gross domestic product (GDP), for its fight against the novel coronavirus pandemic.
Mr Lee said the economy is seeing an “unprecedented problem” due to the disruptions brought about by the outbreak.
For instance, the lockdown of several countries around the world has stopped production, in turn affecting the flow of goods and supplies into Singapore.
Elsewhere around the world, about 3 million Americans applied for unemployment benefits this week, much higher than the usual “couple of hundred thousand”.
In China, more stringent border controls have been put up to prevent imported cases.
READ: If we need to do more, we will: PM Lee says economic challenge from COVID-19 very grave, but Government doing all it can
READ: “The tide is still coming in” – PM Lee says COVID-19’s impact on healthcare a “very big problem”
“All around the world that is happening, that hits us and in Singapore, it hits us particularly hard because we are so dependent on trade,” said Mr Lee, noting how business in some industries here such as aviation, tourism and hotels “has gone to zero”.
“It is going to last quite a long time,” he warned. “It is not a V-shaped down dip, it is not a U-shaped dip.”
“If you are lucky, you can sustain it at a diminished level for quite a long time. If you are not lucky, it will keep on going down and some pieces are going to have a lot of difficulty, just staying in existence,” added the prime minister as he laid out the Government’s rationale behind Thursday’s supplementary Budget.
During his interview, Mr Lee said when the Government drew up Budget 2020 last month, it thought the measures could buy it “a few months” to assess the situation and put together a second package.
“But we did not expect within one month, the picture was totally changed – the health picture was totally changed, the economic picture was totally changed.
“Therefore, the policy response … from the Singapore Government had to be totally changed,” he said, noting that the newly announced supplementary Budget is multiple times of what was put out in February and that its components are designed to last for three quarters until the end of the year.
READ: Singapore’s ‘bazooka’ stimulus to cushion COVID-19 pain, but recession still on the cards: Economists
“As we approach the end of the year, we will have to think whether we need to extend that package, and if so, whether you want to modify it, increase or decrease it, or whatever.
“That we have prepared for, but we must also be psychologically prepared that if things actually get worse during the next few months before the end of the year, we may need to do something even before that,” he said.
“If it comes to that, we will go to the reserves,” added Mr Lee, noting that Singapore has the “dry powder” to do more.
“We have tapped (S$17 billion) from the reserves for this package … The total amount of reserves – that we do not publish – but we have much more than that and it will see us through for quite a long time.”
Asked what assurances he would give to local businesses in case of a drawn-out crisis, Mr Lee said the Government can continue to provide support in terms of wage and rental costs.
“What is difficult for us to do is to bring back the business when there is no business,” he continued.
“If I have to lock down the public entertainment, then it is very difficult for the discos to operate. It is very difficult if you are a DJ, where do you get your gig? If there is no international flights, because other countries have locked down their borders, then it is very difficult to keep SIA pilots and crew flying.
“There will be other impacts like that which is going to be very difficult for us to completely neutralise,” he said.
“I think that we have to work hard to find ways to redeploy the people who are inevitably going to be at the very least under-employed during this period. You are talking about tens of thousands, maybe hundreds of thousands,” he added.