SINGAPORE: Singapore has “sizeable” reserves to tap into should the COVID-19 outbreak further impact the economy, but it is important to be “careful stewards” of the resources, said Deputy Prime Minister and Minister for Finance Heng Swee Keat on Friday (Mar 27).
Speaking to CNA’s Otelli Edwards on News 5 Tonight, Mr Heng said: “As finance minister, I’m very committed to making sure that our reserves are used properly, used only for the right purpose and the right purpose is when you face an extraordinary situation like this, we must be prepared to use it to support our people.”
“So what will be the tipping point when we do that? As I said, the situation is evolving very rapidly, but I’m very glad that we have these sizeable reserves to allow us to respond to any further deterioration of the situation. But at the same time, all of us in Singapore must be fully committed to not squandering our reserves, to not frittering it (away).”
Mr Heng had on Thursday afternoon delivered a ministerial statement on the Government’s additional support measures for businesses and households in response to the COVID-19 pandemic.
READ: COVID-19 Resilience Budget: ‘Landmark’ S$48 billion package to tide Singapore through ‘unprecedented’ crisis
This second stimulus package, which Mr Heng called a “supplementary Budget”, comes after a slew of new measures and enhancements to existing schemes costing S$4 billion aimed at stabilising Singapore’s economy amid the uncertainties caused by COVID-19.
Mr Heng unveiled an unparalleled S$48 billion package of measures to steer aid to workers and businesses – with more targeted help for those hardest-hit by the coronavirus pandemic – as well as strengthening economic and social resilience.
To fund this supplementary Budget, the Government will draw up to S$17 billion from Singapore’s past reserves, he said.
“DEEPER, BROADER AND MORE PROLONGED” IMPACT
Mr Heng also stressed that the current situation was different to previous crises.
“I went through the global financial crisis, I went through the Asian financial crisis. Now this is a crisis where we are fighting a battle on three fronts – the medical front, fighting the global pandemic, the financial front and the economy front,” he said.
And with the global economy more integrated, this would mean a “deeper, broader and more prolonged” economic impact, he added.
READ: Singapore’s economy contracts by 2.2% in Q1 as COVID-19 outbreak hits construction, services sectors
“Because of that, we wanted to make sure that we are able to protect Singaporeans,” added Mr Heng. “Our first priority is to protect lives, protect livelihoods and therefore a big part of the Budget goes towards saving jobs, protecting our workers and ensuring that livelihoods are not badly disrupted.”
It was also announced on Thursday that more financial support would be provided to self-employed people, firms and first-time job seekers.
Those who are self-employed will receive cash support through the new Self-Employed Person Income Relief Scheme, which offers quarterly payouts of S$3,000 each in 2020.
Mr Heng said in his interview that the Government had taken into account feedback from the self-employed.
“In the Unity Budget, we had already taken into account the needs of the self-employed in the form of our taxi-drivers and private-car hire drivers. Now, as we looked at this, we thought that the impact was going to be broader and deeper,’ he said.
“And indeed, even as we were preparing the Budget, we had quite a lot of feedback from the self-employed because the activities have been cut down severely.”
Responding to a question on how many jobs might be lost should the pandemic extend into 2021, Mr Heng said this would be difficult to forecast.
“It is difficult to predict first and foremost how the pandemic will evolve. We are basically fighting a moving target … As countries lock down, there will be greater repercussions, supply chains have been disrupted. In that way, I don’t think it will be possible for us to say what exactly it’ll be,” he said.
“We are predicting a recession, our economy is going to contract and our growth projection is between -1 per cent and -4 per cent. Will we need to revise it further? It is hard to say at this point, but we have to be prepared for the worst.”
In his speech on Thursday, Mr Heng had also announced that all political office holders will take an additional two-month pay cut, bringing their total salary cut to three months.
Mr Heng stressed that it is important that those who are able to “sacrifice more”, do so.
“I think it is a very important aspect of our values in our society that those who are able to sacrifice more should do more,” he said. “This is a very unprecedented crisis and it is important for us to stand together with Singaporeans, because we are in this together.”