The introduction of a S$48 billion supplementary Budget — called the Resilience Budget — will serve as an enhancement to some of the measures introduced in the S$6.4 billion Unity Budget announced last month, said Deputy Prime Minister Heng Swee Keat.
Delivering his ministerial statement in Parliament on Thu (26 Mar), Mr Heng, who is also Finance Minister, said that the new stimulus package, at its core, focuses on the need to “save jobs, support workers and protect” the livelihood of Singaporeans in the midst of a weakened economy as a result of the COVID-19 pandemic.
Calling the Resilience Budget a “landmark package” and “a necessary response to a unique situation”, Mr Heng said that the Government will be drawing around S$17 billion from Singapore’s past reserves to partially fund measures introduced in the supplementary budget.
The COVID-19 crisis, he said, is the “sort of event that we had accumulated reserves for”.
“We have saved up for a rainy day. The COVID-19 pandemic is already a mighty storm and it is still growing,” Mr Heng added.
The Government, said Mr Heng, has obtained President Halimah Yacob’s in-principle approval to draw the aforementioned amount from the past reserves.
Singapore, he noted, has only drawn from its past reserves once — during the global financial crisis in 2009. The Government drew S$4.9 billion at the time.
Touching on how the Resilience Budget will help workers — particularly local workers in sectors hit most significantly by the outbreak such as aviation and tourism as well as the self-employed — Mr Heng said that certain measures under the Jobs and Support Scheme, for example, will be extended to provide “more impactful and sustained wage support”.
Under the enhancements, the Government will increase its co-funding of wages from the previously announced 8 per cent to 25 per cent for every Singaporean worker in employment, up to monthly wage cap of S$4,600.
The previous monthly wage cap was S$3,600.
“This is more than twice the level of support provided during the Global Financial Crisis. With this support from the Government, I urge employers to do your part to hold on to your workers,” said Mr Heng.
The Jobs and Support Scheme, he added, will be stretched to two more quarters.
Subsidy payouts will be made to employers in three tranches — by the end of May, Jul and Oct this year.
Firms do not need to apply for the scheme, as it will be computed based on their CPF contribution data. Those eligible for higher tiers of support will be informed closer to the date of the first payout.
Food services firms will receive a percentage of wage subsidies at 50 per cent, while the aviation and tourism sectors will receive 75 per cent.
A COVID-19 support grant has also been set up for lower- and middle-income workers who lose their jobs. Under the grant, qualifying persons may receive a monthly amount of S$800 for three months between May and Sep this year.
To be eligible for the grant, an applicant must not have a per capita household income of S$3,100 a month or live in a property with an annual value of S$21,000 or more, among other criteria. Beneficiaries can apply at their nearest social service offices (SSOs).
Self-employed persons, including taxi and private hire car drivers, to be paid S$1000 per month under specific income relief scheme
Self-employed persons, said Mr Heng, have called for “stronger support” from the Government, as they “have less income security” and “may be worse affected during this period of economic uncertainty”, based on feedback from the Labour Movement.
“This group has been harder to reach, as they work in diverse industries, many occupations, with varying working arrangements. They include taxi and private hire car drivers, real estate agents, media and art freelancers, and sports coaches,” said Mr Heng.
To temporarily ease the issue of income security during the COVID-19 outbreak, eligible self-employed persons will be paid S$1000 per month for nine months under a new Self-Employed Income Relief Scheme. This measure, he said, will cost S$1.2 billion dollars to implement.
Self-employed persons will also benefit from an extension of the Self-Employed Person Training Support Scheme — which has been stretched to Dec this year — with an increase from S$7.50 to S$10 in hourly training allowances.
“For taxi and private hire car drivers, we partnered with NTUC, the operators, and the Land Transport Authority to deliver help. They comprise the largest group of self-employed persons,” said Mr Heng.
Self-employed persons, said Mr Heng, will also be given “sustained support” to “make full use of any downtime during this period to train and upskill”.
“I will set aside another S$48 million to extend the Self-Employed Person Training Support Scheme to December 2020, and enhance the hourly training allowance from S$7.50 to S$10, with effect from 1 May 2020,” he added.
The enhanced training allowance, said Mr Heng, is “on top of the already generous training subsidies, which cover up to 90 per cent of fees”.
He added that trainees will be able to tap on their SkillsFuture Credit to further offset the course fees.
To assist job seekers in finding employment in the midst of the COVID-19 outbreak, Workforce Singapore — under the Adapt and Grow initiative — will be launching a virtual career fair on mycareersfuture.sg on Fri (26 Mar), which lists around 2,220 job vacancies.
Qualifying commercial properties such as hotels to be given property tax waiver; businesses may automatically defer income tax payments
Prioritising the improvement of three Cs — cash flow, cost, credit — Mr Heng said that the Resilience Budget aims to assist businesses by deferring income tax payments and waiving or giving rebates for property tax, among other measures.
Qualifying commercial properties including hotels, shops, restaurants and tourist attractions will not be subject to property tax this year, while non-residential properties such as offices and industrial buildings will get a 30 per cent rebate for property tax this year, he said.
Income tax payments will automatically be deferred for three months for firms and self-employed persons.
Rental will be waived for government-managed properties, such as hawkers managed by the National Environment Agency (NEA), which will receive three months of rental waiver up from the one month announced in last month’s Budget.
Public agencies, including the Housing Board and National Arts Council, will waive rent for eligible tenants for two months, up from half a month set out earlier. Social service agencies and charities will also benefit from the waiver.
The Resilience Budget, said Mr Heng, will also provide enhancements to financing schemes to enable even the most struggling businesses to have access to credit during this economic downturn.
Small and medium-sized enterprises (SMEs), for example, will benefit from a doubling of the quantum for trade loans to S$10 million under the Enterprise Financing Scheme (EFS).
A working capital loan for SMEs under the EFS will also have the maximum quantum increased from S$600,000 to S$1 million. The Government will also increase its risk-sharing from 70 per cent to up to 80 per cent.
The loan cap under the Temporary Bridging Loan Programme (TBLP) will be increased five-fold from S$1 million to S$5 million. Loan insurance premiums will be further subsidised from 50 per cent to up to 80 per cent.
Aviation sector to receive specific stimulus package over three times the amount announced in Feb budget
A S$350mil enhanced aviation support package – over thrice the S$112 million package announced earlier – will be given to support workers in the aviation and tourism sector.
Stressing the importance of “global connectivity” to Singapore, Mr Heng said that if Singapore’s aviation sector — which makes up around 5 per cent of the country’s GDP — collapses, it would be difficult to rebuild and will have a spillover effect on the rest of Singapore’s economy.
“Our aviation sector has significant linkages to the rest of our economy. If it collapses in a crisis, it will be very hard for the aviation industries to rebuild after the crisis is over, and the recovery of the rest of the economy will be impeded,” he said.
Consequently, aviation firms will benefit from a wage subsidy programme through which the Government will subsidise up to 75 per cent for the first S$4,600 of monthly wages for their local workers.
The additional support for the aviation sector also aims to pare down costs for airlines, ground handlers and cargo agents so that they can continue to sustain operations.
“We will also set aside $90 million to help the tourism industry rebound strongly, when the time is right,” Mr Heng added.
Referencing the Budget debate in Feb regarding a voluntary one-month salary cut among the political leadership, Mr Heng announced on Thu that “all political office holders will take an additional pay cut of two months, altogether a three-month cut in their salary”.
This move was made as a means of expressing their “solidarity” with Singaporeans.
“The President, Speaker, and both Deputy Speakers have informed me that they will join in, and take a similar three-month pay cut in total,” he said.
Prior to Mr Heng’s speech, Speaker of Parliament Tan Chuan-Jin said the economic hit resulting from COVID-19 is “different from the ordinary business cycle downturn” and is “likely to last longer than” that experienced by Singapore during the SARS outbreak and the 2009 Global Financial Crisis.