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Solidarity Budget at a glance: An ‘unprecedented budget for extraordinary times’

SINGAPORE — A day before Singapore entered a “circuit breaker” period, to be marked by the closure of all but the most essential of businesses and services, the Government unveiled a third stimulus package to aid “as many as we can, as fast as possible”.

The Solidarity Budget comes after the S$10.9 billion Unity Budget on Feb 18 and S$48 billion Resilience Budget on March 26.

The Solidarity Budget comes after the S$10.9 billion Unity Budget on Feb 18 and S$48 billion Resilience Budget on March 26.

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SINGAPORE — A day before Singapore entered a “circuit breaker” period, to be marked by the closure of all but the most essential of businesses and services, the Government unveiled a third stimulus package to aid “as many as we can, as fast as possible”.

The Solidarity Budget, as it is called, amounts to S$5.1 billion, and will require another S$4 billion to be drawn from past reserves, adding to the S$17 billion set aside from the reserves previously for the Resilience Budget, Deputy Prime Minister Heng Swee Keat said on Monday (April 6) as he unveiled the range of support measures in Parliament.

This third round of aid comes after the S$10.9 billion Unity Budget on Feb 18 and S$48 billion Resilience Budget on March 26.

“This is a generational crisis with no precedent. We have brought all our resources and administrative capacity to bear, to mount a national effort for our workers, businesses, and families — to protect both lives and livelihoods,” Mr Heng, who is also Finance Minister, said.

President Halimah Yacob has given her in-principle support for both drawdowns of the past reserves. If she gives her final assent, this will be the first time in Singapore’s history that the country is dipping into its past reserves twice in a single year.

Mr Heng said: “We have the plans and the financial resources to carry out these plans without burdening future generations with the bill. We are grateful to our founding generation for their foresight and discipline. The key now is in how we pull together, in solidarity, as a nation to implement these plans, and make adjustments as the situation continues to evolve.”

Mr Heng said that the primary aim of the Solidarity Budget is to help Singapore tide through the four weeks of circuit-breaker measures lasting from April 7 until May 4, which are a significant increase from earlier safe-distancing measures to help fight the Covid-19 pandemic.

“The circuit breaker is essential, but we are acutely aware that it will be painful. It will disrupt businesses and impact workers severely. We will miss face-to-face interactions with our friends and family. Familiar routines will be put on hold. Many will be anxious about their jobs and families.”

As such, the S$5.1 billion stimulus is targeted at protecting livelihoods during the temporary period, helping businesses preserve their capacity and capabilities, and putting cash in the hands of households.

Out of this, S$4 billion will go to greater support for businesses and workers and the remaining S$1.1 billion will be spent on cash payouts for Singaporeans.

“This is an unprecedented budget, for extraordinary times,” Mr Heng said. “The situation remains highly fluid and uncertain. The Government stands ready to provide further support, should it become necessary.”

Here are the new measures at a glance: 

Enhanced Jobs Support Scheme

  • For the month of April, the Government will subsidise 75 per cent of the wages for local workers in all firms, for the first S$4,600 of each worker’s gross monthly wages.

  • This is a temporary expansion of the scheme. In the Resilience Budget, Mr Heng had announced a 25 per cent wage subsidy for three quarters, and up to a 75 per cent wage subsidy for businesses hit directly by the outbreak.

  • The first payout will be brought forward from May to April.

Further measures to ease labour costs

  • The monthly foreign worker levy due in April will be waived.

  • Employers will be given a foreign worker levy rebate of S$750 for each work permit or S-pass holder, based on previous levies paid in 2020, so as to help them preserve their business structure and resume operations quickly once the circuit-breaker measures are lifted. The rebate will be given as early as April 21.

Further support for rental costs

  • Rental waivers for industrial, office and agricultural tenants of government agencies will be raised to one month, up from the half-month rental waiver offered in the Resilience Budget.

  • Stallholders in hawker centres managed by the National Environment Agency (NEA) or NEA-appointed operators will continue to enjoy three months of rental waivers, while commercial tenants will continue to receive two months of rental waivers.

  • The Government will also introduce a new bill to allow businesses and individuals to defer their contractual obligations if they have been affected by Covid-19 and to make it mandatory for property owners to pass on their property tax rebates to tenants in full and in a timely manner.

Enhanced financing support

  • The Government will bear a higher risk share — 90 per cent, compared with 80 per cent previously — for loans under certain enterprise loan schemes. This applies to loans initiated from April 8, 2020 until March 31, 2021.

  • The Enhanced Self-Employed Person Income Relief Scheme (Sirs), to benefit around 100,000 self-employed persons in total, will give out S$1,000 a month for nine months to help tide them over the pandemic, as announced during the Resilience Budget.

  • A new enhancement from the Solidarity Budget will automatically include self-employed persons who also earn a small income from employment work.

  • The current home annual value threshold for Sirs will be raised from up to S$13,000 to up to S$21,000, to include those who live in some condominiums and other private properties.

Cash payouts 

  • All adult Singaporeans will receive another one-off Solidarity Payment of S$300, adding to the S$300 Care and Support cash payout announced earlier.

  • Other cash payouts under the Care and Support Package, which were earlier announced, will be brought forward to June instead of August.

Related topics

Solidarity Budget Heng Swee Keat Covid-19 coronavirus

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