Covid-19: Give out digital vouchers to encourage spending and help Singapore businesses

The Government has pulled out all the stops to help businesses stay afloat during the Covid-19 pandemic with wage subsidies and other forms of financial support.

While these measures help businesses save costs, they may not boost revenues. Without revenues, business will soon grind to a stop.

While we do not have control over external demand that will crank up Singapore’s export market, the Government should try to boost consumption to help domestic businesses in sectors such as retail and food and beverage.

All adult Singaporeans are set to receive a cash payout of at least S$600 to tide them over the pandemic.

While handouts put disposable cash into the hands of consumers, the impact on Singapore businesses may be muted during these trying times. In this economic slowdown, consumers are less willing to spend, as concerns over job and income losses loom large. Many people may end up saving the payouts for a rainy day.

The Government ought to take a more targeted approach that will benefit both citizens and local businesses. It should issue digital vouchers that allow consumers to buy merchandise, including groceries, from businesses operating in Singapore.

To encourage digitalisation, the vouchers could be distributed through a mobile application or QR (quick response) code tagged to citizens’ SingPass accounts or identity cards. This could take the form of spending credit in electronic-payment apps such as Fave or Grab.

These vouchers cannot be exchanged for cash, and may be used only for online or offline purchases from Singapore-based businesses.

This way, Singaporeans may support local businesses in retail, food and beverage, utilities and other industries. During the month-long closure of non-essential workplaces, we can expect many Singaporeans to buy food, groceries and household items online, and these digital vouchers will come in handy.

Some local governments in China have begun issuing digital vouchers via mobile payment apps to stimulate consumption.

If these vouchers are rolled out successfully in Singapore, we will be a few steps ahead in our push to become a cashless and digitally connected society after this pandemic blows over.

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