A Resilience Budget for Singapore to Combat the Covid-19 Situation

An extraordinary situation calls for extraordinary measures.

The Government has set aside $48 billion towards a supplementary budget to deal with the impact of the Covid-19 situation.

Combined with the $6.4 billion Unity Budget 2020 announced in February this year, Singapore will put forth about $55 billion, or 11 per cent of Singapore’s GDP.

It will also draw on $17 billion of past reserves, with the Singapore President's in-principle support.

The supplementary budget, or Resilience Budget, was announced by Deputy Prime Minister Heng Swee Keat in Parliament on 26 March 2020.

According to Mr Heng, the Resilience Budget introduces measures to protect jobs, help enterprises and strengthen resilience across Singapore’s economy.

The measures consist of both new and enhanced initiatives.

Job Support Scheme

The Government will extend and enhance the Job Support Scheme, which was announced at Budget 2020.

For every local worker, the Government will raise its co-funding of wages from 8 per cent to 25 per cent. The monthly qualifying wage ceiling will also be increased from $3,600 to $4,600.

Companies in the food services sector will receive a total of 50 per cent wage offset of the first $4,600 of monthly wages.

The aviation and tourism sectors, which are the most severely hit by the Covid-19 pandemic, will be supported at 75 per cent of wage offset of the first $4,600 of monthly wages.

The Job Support Scheme will be extended for another two quarters until the end of 2020, announced Mr Heng. Employers will receive a total of three payouts – May, July and October 2020.

“With these enhancements, a total of $15.1 billion will be allocated to support more than 1.9 million local employees under the Jobs Support Scheme. This is more than twice the level of support during the Global Financial Crisis. With this support from the Government, I urge employers to do your part to hold on to your workers,” he said.

Supporting Self-Employed Persons

The Self-Employed Person (SEP) Training Support scheme will be extended to December 2020.

SEPs will receive an enhanced hourly training allowance of $10 per hour of training, up from $7.50 previously announced.

The scheme will come into effect on 1 May 2020.

Mr Heng also announced a $1.2 billion SEP Income Relief Scheme to provide eligible SEPs with $1,000 a month for nine months. The Manpower Ministry will give details on this initiative.

“Over the last few weeks, I received feedback from the Labour Movement and many self-employed persons calling for stronger support for the self-employed, who have less income security, and whose livelihoods may be worse affected during this period of economic uncertainty,” said Mr Heng.

Taxi drivers and private-hire car drivers will continue to receive the Special Relief Fund payments of $300 per vehicle until the end of September 2020 to help them defray the cost of business. 

Meanwhile, private bus owners will be provided with a one-year road tax rebate, and six-month waiver of parking chargers at Government managed parking facilities.

Help for Lower-Income Workers

The Resilience Budget will see each lower-income workers get a payout of $3,000 in cash for those on the Workfare Income Supplement Scheme for work done in 2019, under an enhanced Workfare Special Payment.

This is up from the minimum payout of at least $100 when the Workfare Special Payment was first announced at Budget 2020 in February.

Creating Opportunities for Jobseekers

First-time jobseekers will also benefit from the SGUnited Traineeships programme to help them develop skills and boost employability.

Workforce Singapore (WSG) will co-share manpower costs with companies that offer traineeship for first-time jobseekers. WSG is looking to support 8,000 traineeships in 2020.

Mr Heng added that the Government will be launching the SGUnited Jobs initiative to create around 10,000 jobs over the next one year. 

He explained that the public sector would take the lead by accelerating hiring plans for long-term, permanent roles, and offer short-term temporary jobs to deal with Covid-19 related operations.

For the Unemployed

The Government will exercise more flexibility when considering applications for ComCare during the Covid-19 period. According to Mr Heng, this will ensure that all Singaporeans can receive assistance.

A Temporary Relief Fund will also be launched in April 2020 to provide immediate financial help to families who need urgent help.

Workers who have become unemployed due to the Covid-19 situation will benefit from a Covid-19 Support Grant from May to September 2020. The grant will provide them with $800 per month for three months, while they look for jobs or go for training.

Mr Heng said: “The best way to safeguard the wellbeing of our people is by supporting them to stay employed. But as the impact of Covid-19 on our economy deepens, some workers will lose their jobs or see their incomes significantly reduced. We will help them.”

Helping Households

The Care and Support Package will  be enhanced from $1.6 billion previously announced in February to 4.4 billion. The package aims to help all Singaporeans with their household expenses.

Under the enhanced package, all Singaporeans will now receive a cash payout of between $300 to $900. The range was previously between $100 to $300.

Parents with at least one Singaporean child below the age of 20 in 2020 will now get an additional cash payout of $300 – up from $100 previously.

Additionally, the earlier one-off $100 Passion card top-up will now be provided in cash to avoid long ques during this period.

Under the enhanced Care and Support Package, Singaporeans aged 21 and above, living in one-room and two-room HDB flats will now get $300 in Grocery Vouchers. They will get a total amount of $400 worth of vouchers in 2020 and 2021.

“The Labour Movement is also doing its part to help our workers and self-employed persons … To summarise we will protect jobs, support our workers and protect livelihoods. We will do this by helping employees stay employed, stepping up support for the self-employed and lower-income, creating more opportunities for jobseekers, helping unemployed workers tide over this period and helping our household with their expenses,” said Mr Heng.

Strengthening Economic Resilience

Mr Heng urged businesses to use the downtime to digitalise, restructure and transform.

To do so, he announced that the Government will enhance the SMEs Go Digital Programme to provide support to businesses in acquiring more digital solutions – from basic remote working tools to more advanced systems.

Companies will also benefit from a raised maximum support level for the Productivity Solutions Grant and the Enterprise Development Grant to 80 per cent and 90 per cent, respectively.

The three enhanced schemes will last until December 2020.

Mr Heng added that the enhanced training support will be extended to the arts and culture and land transport sectors, starting 1 April 2020.

At the Budget announcement in February, the Government increased course fee subsidies and absentee payroll to 90 per cent for sectors such as aviation, food services and retail trade as they were most impacted by the Covid-19 situation then.

From 1 May 2020, the Government will extend the 90 per cent absentee payroll rates to all employers. This is to provide additional cash flow relief to companies who send workers for training.

The duration of these enhancements will be extended to eligible courses starting before 1 January 2021.

All Singaporeans will be able to use the base $500 SkillsFuture Credit top-up from 1 April 2020, ahead of the full implementation in October.

Supporting Businesses

According to Mr Heng, the Resilience Budget also aims to help businesses overcome the immediate challenges brought about by the Covid-19 situation.

To help ease cash flow for businesses, the Government will grant an automatic deferment of income tax payments for companies and SEPs for three months. These businesses will not have to apply to be granted a deferment.

Businesses will defer payment due in April, May and June 2020, while SEPs will defer payment due in May, June and July 2020.

Qualifying commercial properties most badly hit by the Covid-19 outbreak such as hotels, serviced apartments, tourist attractions, shops and restaurants will not have to pay Property Tax for 2020.

Other non-residential properties such as offices and industrial properties are also affected by the Covid-19 situation will get a Property Tax Rebate of 30 per cent for the year 2020.

The Government will expand the Temporary Bridging Loan Programme to all enterprises and increase the maximum supported loan from $1 million to $5 million. Other credit initiatives that will be enhanced include the Enterprise Financing Scheme (EFS) – Trade Loan, and the EFS – SME Working Capital Loan.

Mr Heng also said that the Government will increase subsidies to businesses for loan insurance premiums under the Loan Insurance Scheme from 50 per cent to 80 per cent.

Read More: Labour MPs Respond to the Resilience Budget