Resilience Budget: DPM Heng unveils S$48 billion support package to see Singapore through Covid-19 crisis
SINGAPORE — With Singapore facing an unprecedented crisis caused by the Covid-19 outbreak, which is set to put the largest dent in its economy since independence, the Government on Thursday (March 26) unveiled a landmark S$48 billion package to help workers, businesses and households.
SINGAPORE — With Singapore facing an unprecedented crisis caused by the Covid-19 pandemic, which is set to put the largest dent in its economy since independence, the Government on Thursday (March 26) unveiled a landmark S$48 billion package to help workers, businesses and households.
This Resilience Budget comes on top of the S$6.4 billion support package unveiled during the Budget last month, to support businesses, workers, households and frontline agencies, Deputy Prime Minister Heng Swee Keat announced in Parliament.
To fund this Resilience Budget, the Government has sought and received President Halimah Yacob’s in-principle support to draw up to S$17 billion from the country’s reserves that were amassed during previous terms of government, Mr Heng said.
This is the second time that the Government is dipping into past reserves. It first did so during the 2009 global financial crisis, when it drew S$4.9 billion to fund schemes to protect jobs for Singaporeans and ensure that companies continue to have access to credit to sustain their operations and keep jobs.
Mr Heng said that the latest package to deal with the effects of the pandemic would not only save jobs, support workers and protect livelihoods, but help businesses overcome immediate challenges and make the society and the economy more resilient.
“This is a landmark package and a necessary response to a unique situation,” he added.
‘DEFINING CHALLENGE’ FOR SINGAPORE
Mr Heng noted that since he delivered the Budget statement last month, the Covid-19 outbreak has escalated quickly.
The World Health Organization has declared the disease a pandemic and it estimates that more than 410,000 people have been infected in more than 190 countries.
On Wednesday, Singapore recorded the largest single-day spike of 73 infections, taking its total number of cases to 631. It has registered two deaths from the disease so far.
Echoing comments from other government leaders, Mr Heng said that the health crisis — which he described as Singapore’s “defining challenge” — is likely to take at least a year to be resolved, with the economic fallout set to last even longer.
He noted that public health measures to contain the coronavirus, both here and internationally, have caused severe economic disruptions and uncertainties.
“As more countries implement their measures, the economic disruptions will be wider, deeper and more prolonged.”
The global economy is staring down a “supply-and-demand” shock, Mr Heng said, and supply chains have been disrupted as workers in places on lockdown are unable to work.
This will have knock-on effects worldwide, given highly integrated supply chains.
Aggregate demand has also fallen as people stay home and curtail spending, with consumer and business confidence plunging in the face of rising uncertainties, Mr Heng said.
With stock markets diving and global financial markets taking a beating, he said that these shocks would have a deep impact on Singapore’s economy, which is highly integrated with the global economy.
In the first quarter of this year, Singapore’s economy contracted by 2.2 per cent from the same period a year ago, advance estimates showed. The Government expects the economy to shrink by between 1 and 4 per cent in 2020, down from its earlier forecast, which ranged from a contraction of -0.5 per cent to an expansion of 1.5 per cent.
The hardest-hit sectors are aviation and tourism, with international visitor arrivals having nearly ground to a stop, Mr Heng said.
Sectors such as food services, retail and land transport have been significantly affected. Industries such as manufacturing and the wholesale trade have also been hit, along with falling external demand and disrupted supply chains.
Mr Heng said that how Singapore manages the crisis, and whether the country emerges stronger from it, would “define us as a people and nation”.
“Come what may, no matter how daunting the challenge at hand, we will bounce back stronger and more united than ever, as we weather this storm together.”
MOST SERIOUS CRISIS IN A GENERATION
Calling the Covid-19 pandemic the most serious crisis Singapore has faced in a generation, Mr Heng said that the whole nation has rallied in response to it, from cleaners, healthcare and frontline workers to the thousands of public officers working round-the-clock.
Families, too, have had to make difficult adjustments, with some undergoing quarantine, cancelling celebrations or putting off long-awaited plans, including weddings. Some workers have suffered job and income losses.
Mr Heng assured lawmakers that the Government and political leadership were “in this with Singaporeans” and shared their worries and anxieties, as he announced an extra two-month pay cut for ministers and other political office-holders to show solidarity with the people during the crisis.
President Halimah Yacob as well as the Speaker and Deputy Speakers of Parliament will take a similar cut.
Mr Heng warned that the months ahead would not be easy as the pandemic continues to evolve.
“The Government will lead the way,” he said.
“We will do our best to anticipate and respond to developments, make decisions based on facts and evidence, and exercise judgement when there are trade-offs.”
RESILIENCE BUDGET MEASURES
1. Protecting the workforce
The Government will allocate S$15.1 billion to support more than 1.9 million workers here who have been hit by the crisis. It will foot 25 per cent of the wages of every Singaporean worker in employment, with a monthly wage cap of S$4,600.
Freelancers including taxi and private-hire car drivers and other self-employed persons will receive S$1,000 a month for nine months under a new scheme to help them tide over the crisis. A sum of S$1.2 billion will be set aside for the scheme.
About 10,000 jobs will be created over the next year to help Singaporeans grappling with the crisis, with the public sector leading the way. Up to 8,000 traineeship positions in areas including science and technology will also be available for young first-time Singapore jobseekers this year.
2. Supporting households
To help households with expenses, cash payouts for Singaporeans will be tripled from what was announced during February’s Budget. This means that all adult Singaporeans will receive between S$300 and S$900, depending on their income, up from the S$100 to S$300 that was announced before. Parents with young children will see their extra cash payouts tripled.
3. Helping businesses
The Government will set aside S$20 billion in loan capital for companies, raise property-tax rebates, and defer payments of corporate income tax for three months to help businesses ease their cash flow, lower costs and have more access to credit.
For every Singapore worker that aviation firms employ, they will receive a 75 per cent wage offset for the first S$4,600 of monthly wages. Other hard-hit sectors, including tourism and food and beverage, will also receive wage offsets.
4. Building social and economic resilience
The Government will put aside S$1.9 billion to build resilience in Singapore’s economy and society, including continued investments in research and development.
For more on the Resilience Budget, visit tdy.sg/resiliencebudget