DPM Heng unveils S$33b Fortitude Budget to deal with ‘unprecedented uncertainty’ in next phase of Covid-19 fight

SINGAPORE — Deputy Prime Minister Heng Swee Keat on Tuesday (May 26) introduced the nation’s fourth Budget so far this year, known as the Fortitude Budget, laying out an extra S$33 billion in spending — including a S$13 billion “contingent sum” to respond quickly to changing situations — as Singapore enters the next phase of its fight against Covid-19.

The latest statement to Parliament by Mr Heng, who is also Finance Minister, follows the S$10.9 billion Unity Budget on Feb 18, which was the regular yearly Budget. Then, as the Covid-19 crisis deepened worldwide, came the S$48 billion Resilience Budget on March 26, followed by the S$5.1 billion Solidarity Budget on April 6.

Altogether, Singapore will dedicate S$92.9 billion — about 20 per cent of the value of the country's economic output each year — to combat the economic fallout from the virus.

Governments around the world are having to commit similarly large sums, as a proportion of their economic size, to address the unfolding economic disaster, being likened by some in its potential impact to the Depression of about a century ago — the worst global economic event of the 20th century, and far worse than the global financial crisis of 2008.

“This is a landmark package and a necessary response to an unprecedented crisis,” said Mr Heng. The Government has previously indicated it would need to draw on the national reserves to a significant extent, a measure which, under Singapore’s Constitution, requires the approval of President Halimah Yacob.

Mr Heng said the key focus of this round of fiscal measures will be jobs, with S$3.8 billion directed at enhancing the Jobs Support Scheme for the extended circuit breaker period.

Another feature of the Fortitude Budget is a bigger “contingent sum” to help the Government deal with events down the line.

In each year's Budget, the Government keeps S$3 billion in two contingency funds, as allowed by the Constitution. Any advance from these funds has to be returned in the same financial year, so that the year ends with the full S$3 billion.

This is to cater for urgent and unforeseen expenditure needs that were not provided for in the yearly Budget statement, said Mr Heng.

The Fortitude Budget will see an extra S$13 billion being set aside. “We are dealing with unprecedented uncertainty, across all fronts. A bigger contingent sum will allow us to respond swiftly to fast-changing situations,” said Mr Heng. 

He added that the latest Budget will continue to "support workers and businesses who remain affected by border closures and safe distancing measures". 

“Given the significant changes in the global economy ahead, we will provide support to enable our businesses and workers to adapt, transform and seize new opportunities, to emerge stronger,” he said.

Besides bolstering jobs, more support will be given to households and the community to cope with the disruption caused by Covid-19 and help them seize opportunities that may emerge amid the adversity, he added.

Extra funding will also be provided to front-line agencies, helping to boost Singapore’s clinical management of Covid-19 cases and its testing and swabbing capabilities, said Mr Heng.