Day 1 of Budget debate wraps up with MPs urging greater support for those affected by Covid-19 outbreak

SINGAPORE — The need to expedite measures aimed at helping businesses get through the evolving Covid-19 crisis was a hot topic among Members of Parliament (MPs) on the first day of debate on this year’s Budget.

A total of 31 MPs spoke over seven hours on Wednesday (Feb 26), surfacing concerns and giving feedback that they had gathered over the past week since the Budget 2020 measures were unveiled by Deputy Prime Minister Heng Swee Keat on Feb 18.

Mr Heng, who is also Finance Minister, had announced special packages amounting to S$6.4 billion to aid households, enterprises, workers and frontline agencies in coping with the coronavirus situation. He also said in his Budget speech that the impending Goods and Services Tax (GST) increase will not occur in 2021.

TODAY summarises the various views and suggestions raised by MPs to help those hit hard by Covid-19 overcome the crisis.

A SECOND OFF-BUDGET COVID-19 PACKAGE?

Several MPs wondered if Singapore would be able to push out an off-Budget package to continue stabilising the country’s economy should the viral outbreak become protracted. The current term of government has an estimated accumulated surplus of S$7.72 billion remaining.

• Mr Henry Kwek, MP for Nee Soon Group Representation Constituency (GRC), said that a prolonged “U-shaped” economic situation, in which the economy declines gradually before rebounding slowly, appears more likely now, seeing that major economies may fail to implement containment and mitigation efforts decisively and transparently to tackle Covid-19. He asked Mr Heng to reveal what the criterion is for rolling out a second economic package that may be needed to address such a scenario. DPM Heng is due to respond to the MPs in a later speech.

• Mr Saktiandi Supaat, MP for Bishan-Toa Payoh GRC, wanted to know whether, in a worst-case scenario of a global pandemic, the Government has enough resources to undertake an off-Budget package to help businesses and workers. In such a situation, A pandemic may bring about knock-on effects and raise the cost of food and essentials, since the cost of imports could go up with rising shipping costs and a weakening of the Singapore dollar against other currencies.

• Ms Denise Phua, MP for Jalan Besar GRC, said that if such a package is warranted, many are worried about how long the Government will be able to sustain deficits of such a large amount. The projected deficit for this financial year is S$10.95 billion. She asked: “How will it be further financed if the impact is even more broad-based than the tourism and transport sectors directly hit by the outbreak, when supply chain continues to be disrupted, when consumer sentiments and demands continue to decline; and companies start to shed their local manpower?”

JOBS SUPPORT TOO LITTLE, TOO LATE?

A number of MPs spoke acout corporates who felt that the Budget measures to help businesses tide over the outbreak were too short-term. For example, the temporary Jobs Support Scheme (JSS) — which would subsidise wages and help companies retain workers — does so for only three months of workers’ salaries from October to December 2019.

The scheme is parked under a S$4 billion Stabilisation and Support Package announced last week.

• Mr Seah Kian Peng, Marine Parade GRC MP, said that the grants, which will be given out by July 31, are “rather late and does little to help mitigate cash-flow issues” for small- and medium-sized enterprises that are now urgently crying out for help.

• Mr Gan Thiam Poh, MP for Ang Mo Kio GRC, called on Mr Heng to reconsider disbursing the payments earlier than the targeted date of end-July. “The timing of the payouts could mean the difference between survival and failure. Furthermore, we must consider the knock-on effects of company closures on other connected businesses. The potential chain reaction should not be under-estimated.”

• Mr Saktiandi of Bishan-Toa Payoh GRC said that the measures would not stop businesses from laying off workers before they receive the payouts in July. “Does that not defeat the primary purpose of this scheme which is employee retention?” he asked.

• East Coast GRC MP Jessica Tan agreed that the short-term reliefs may not be enough to prevent layoffs. She said that employers need to take the leadership on cost management measures, and suggested that the Government work with businesses in this regard.

• Several MPs, including Mr Seah, Mr Saktiandi, Nominated MPs Douglas Foo and Arasu Duraisamy, noted that there are no cuts or waivers of foreign worker levies to enterprises affected by the Covid-19 outbreak. These include the food services and retail sectors that depend heavily on foreign sources of labour.

DO MORE FOR AFFECTED SECTORS

In this year’s Budget, Mr Heng identified five sectors — tourism, aviation, retail, food services, and point-to-point transport services — that are directly affected by the spread of Covid-19. These sectors will receive extra support such as rental waivers and tax rebates.

MPs said that the impact could be more spread out across the economy and called for measures to assist other sectors as well.

• Mr Gan of Ang Mo Kio GRC and Ms Denise Phua said that other businesses that are either linked to the five identified industry sectors, or rely heavily on businesses from China, are greatly affected by the outbreak. They include vendors and suppliers, as well as small businesses such as those in the food catering and event management industries.

• Mr Douglas Foo, president of the Singapore Manufacturing Federation, said that the outbreak has caused much anxiety and worry for manufacturing firms due to the disruption of the world-wide supply chain, which would make it more difficult and expensive to procure raw materials as well as distribute goods to customers.

• Several labour movement MPs also spoke up about the need to aid other workers who may not belong to the identified sectors, such as freelancers and self-employed workers.

PREPARING FOR FUTURE OUTBREAKS

The crisis this time has highlighted the need to prepare for future epidemics, MPs said. Several areas of improvement were brought up: Boosting health services, normalising business continuity plans and boosting social resilience against fear and anxiety.

While many spoke about the irrational grocery-buying spree and the rush for surgical masks, several MPs also made sure to highlight the selfless acts witnessed during this crisis, such as the bravery of healthcare workers and the noble deeds of ordinary Singaporeans.

• Mr Liang Eng Hwa, MP for Holland-Bukit Timah GRC, said that the sudden surge in demand for medical services due to this outbreak underscored the critical need to allocate sufficient funding for healthcare services, noting how recurring annual costs to provide healthcare services will surely rise over time as the population ages. While he lauded the decision to not raise the GST in 2021, more funding would still be needed to pay for the mounting health expenditures and other needs.

• Mr Kwek of Nee Soon GRC called for an “immediate review” of Singapore’s medical stockpile and resilience policy for basic drugs and medical disposables commonly used in pandemics. “If necessary, we should anchor relevant manufacturers in Singapore on strategic, and not purely economic, considerations. And if that is not possible, we could explore pre-position materials and manufacturing capabilities within Singapore,” he said.

• Other MPs expressed disappointment at the unsavoury treatment of healthcare workers during the crisis. Bukit Batok MP Murali Pillai suggested that the Courage Fund be used to cover the expenses of health workers and their families during this period, such as aborted travel plans and care arrangements. He also suggested that companies put together discounts and gifts for them.

• Mr Faisal Manap, Workers' Party MP for Aljunied GRC, emphasised the importance of psychological resilience during a crisis situation, which requires inculcating positive thinking and values in society.

• Dr Teo Ho Pin, Bukit Panjang MP, and Professor Yaacob Ibrahim, MP for Jalan Besar GRC, both spoke about the importance of business continuity plans when health epidemics occur. Prof Yaacob noted that many people have adjusted to a new normal of working in split teams or from home. But Dr Teo urged more firm action to compel businesses to formulate such plans within a decade: “With Covid-19, it is patently clear that even the best designed business continuity plan may be found wanting, especially when global supply chains are disrupted, and fear spreads within communities.”

• A number of MPs brought up the panic buying of food and sundries observed earlier in February. Mr Seah Kian Peng, group chief executive of supermarket chain NTUC FairPrice, said that he will encourage all those who had bought too much to donate the excess stocks to charities such as Food Bank or Food from the Heart.

The debate continues on Thursday in Parliament.