SINGAPORE: Another S$5.1 billion has been earmarked to help Singapore weather the COVID-19 crisis in a third support package announced by Deputy Prime Minister Heng Swee Keat on Monday (Apr 6).
Called the Solidarity Budget, it is aimed at saving jobs and protecting livelihoods during the four weeks when schools and non-essential businesses have to be shut as part of the “circuit breaker” distancing measures that will kick in from Tuesday.
“These measures will impact our workers and businesses severely,” said Mr Heng as he spoke in Parliament.
“Additional support will be required to save jobs, preserve capabilities, and provide immediate direct assistance to Singaporeans to help them tide through this exceptional and difficult period.”
This is the first time that the Singapore Government has released three Budgets in less than two months, following the S$6.4 billion Unity Budget in February and the record-breaking S$48 billion Resilience Budget on Mar 26.
To fund this third booster, the Government has sought permission from President Halimah Yacob to draw an additional S$4 billion from past reserves, on top of the S$17 billion tapped for the Resilience Budget.
President Halimah has given her in-principle support.
Altogether, Singapore will be committing S$59.9 billion, or about 12 per cent of gross domestic product (GDP), for this battle against the COVID-19 pandemic.
READ: COVID-19 Resilience Budget: ‘Landmark’ S$48 billion package to tide Singapore through ‘unprecedented’ crisis
READ: COVID-19: Singapore makes ‘decisive move’ to close most workplaces and impose full home-based learning for schools, says PM Lee
“This is an unprecedented budget for extraordinary times,” said Mr Heng, who is also Finance Minister.
“The situation remains highly fluid and uncertain. The Government stands ready to provide further support, should it become necessary.”
COVID-19 PANDEMIC “EXPLODED” IN RECENT DAYS
Opening his speech on Monday, Mr Heng said the COVID-19 pandemic has “exploded” in the 11 days since he announced the Resilience Budget on Mar 26.
Singapore has “progressively” ramped up its measures but as the number of infections – especially local transmitted cases – kept rising in recent days, the Government decided to roll out an “extraordinary” set of “circuit breaker” measures to pre-empt the escalation.
“The circuit breaker is essential, but we are acutely aware that it will be painful. It will disrupt businesses and impact workers severely,” he said, adding that these are “hard decisions” that have to be made to protect people’s lives.
“We must take short-term pains, to avoid even sharper pain later,” he said.
READ: Singapore sees record daily spike of 120 COVID-19 cases, ‘significant number’ linked to worker dormitories
And as the spread of the coronavirus continues around the world, Singapore’s overall GDP is expected to “take a further hit” with restrictions put in place by the country’s trading partners likely to further curtail demand for exports.
“The primary aim of this Solidarity Budget is to take further steps to save jobs and protect the livelihoods of our people during this temporary period of heightened measures,” said Mr Heng.
“We will also help businesses preserve their capacity and capabilities, to resume activities when the circuit breaker is lifted.”
Households will also receive cash payouts to help them tide through this difficult period, he said.
“All of us will be affected by these necessary circuit breaker measures – some more than others. To reach as many as we can, as fast as possible, the enhanced measures in the Solidarity Budget are broad-based.”
S$4 BILLION HELP FOR BUSINESSES
About S$4 billion will go to bolstering support for businesses to help them retain workers and stay viable.
First, the Jobs Support Scheme will be further enhanced so that all companies will now get 75 per cent of wage support for local employees in April, up from 25 per cent previously.
In addition, the first payout under the scheme will be brought forward to April, with some firms to receive the first tranche next week.
READ: Solidarity Budget: Jobs support raised to 75% for April, payout brought forward
To ease the labour costs of hiring foreign workers, Mr Heng announced that the Government will waive the monthly foreign worker levy due in April.
It will also provide employers with a S$750 foreign worker levy rebate for each work permit or S pass holder, based on previous levies paid in 2020. Employers will receive the rebate as early as Apr 21.
READ: Solidarity Budget: Bill to allow firms, individuals to defer contractual obligations such as rent ‘for a period’
On rental costs, a Bill will be introduced on Tuesday to allow businesses and individuals to defer certain contractual obligations, such as paying rent “for a period”.
This will also ensure that landlords pass on the property tax rebate “in full” to tenants, said Mr Heng.
The Government will also continue to lead by example and will increase the rental waiver for industrial, office and agricultural tenants of government agencies to one month, up from the half-month rental waiver announced during the Resilience Budget.
There will also be additional financing help for businesses, announced Mr Heng.
The Government will take on a bigger risk share of loans made under the Temporary Bridging Loan Programme, the Enterprise Financing Scheme – SME Working Capital Loan, and the Enterprise Financing Scheme – Trade Loan from 80 per cent to 90 per cent for loans initiated from Apr 8 to Mar 31.
“The economy needs support and intervention in many different forms to go through this rough patch,” he said, as he urged all businesses, landlords, financial institutions and industry players to do their part in passing on the Government’s support measures to firms, workers and households.
READ: Solidarity Budget: Criteria broadened for freelancers’ financial assistance scheme
Meanwhile, the Government will broaden the support for self-employed people.
It will do so by extending the Self-Employed Person Income Relief Scheme (SIRS) to automatically include self-employed persons who also earn a small income from employment work.
It will also raise the current annual value threshold from up to S$13,000 to a maximum of S$21,000, to include some individuals who live in condominiums and other private properties.
Other criteria will remain unchanged.
S$1.1 BILLION CASH PAYOUTS TO SINGAPOREANS
Households will also receive “timely support” in the form of increased cash handouts.
All adult Singaporeans above the age of 21 will receive a one-off Solidarity Payment of $600 in cash – made up of the S$300 first announced in the Care and Support package in February and an additional S$300.
In total, these payments will amount up to S$1.1 billion, said Mr Heng.
For the majority of Singaporeans who have provided their bank account details to the Government, the Solidarity Payment will be credited directly into their bank accounts by Apr 14 this year.
READ: Solidarity Budget: S$600 cash support in total for all adult Singaporeans, other cash payouts to be brought forward to June
The rest will receive the payment by cheque, to be issued in stages later, starting Apr 30.
Other cash payouts under the Care and Support Package, which were earlier announced, will also be brought forward to June, instead of August.
“GENERATIONAL CRISIS WITH NO PRECEDENT”
The draw of an additional S$4 billion from past reserves will be used to fund the enhanced Job Support Scheme, the enhanced financing schemes and the Solidarity Payment to Singaporeans.
The remaining S$1.1 billion will be funded from the fiscal space of this term of Government, he said.
With the third tranche of support measures, the overall Budget deficit for the financial year 2020 will increase to S$44.3 billion, or 8.9 per cent of GDP.
READ: Solidarity Budget to cost S$5.1 billion, S$4 billion more needed from reserves
Mr Heng stressed that with the situation remaining highly fluid, the Government stands ready to provide further support when necessary.
“This is a generational crisis with no precedent,” he said.
“We have brought all our resources and administrative capacity to bear, to mount a national effort for our workers, businesses, and families – to protect both lives and livelihoods.”
He added: “We have the plans, and the financial resources to carry out these plans without burdening future generations with the bill.
“The key now is in how we can pull together, in solidarity as a nation to implement these plans, and make adjustments as the situation continues to evolve.”