3 takeaways from Singapore’s Finance Minister Lawrence Wong’s parliamentary speech

In addition to affirming the financial support for SMEs, Minister Wong shared that COVID-19 restrictions may be eased further from 12 July, allowing larger groups of five people to dine together.

In the latest parliamentary sitting (5 July), Singapore’s Minister of Finance Lawrence Wong touched on the nation’s progress in terms of public health, support for businesses, and fiscal health.

“It has been a year-and-a-half since the start of the COVID-19 outbreak. And when the pandemic first broke out, some even thought it might be all over after a year. Unfortunately, this scenario has not materialised.

“We are dealing with a very tricky virus, and each time you think you have it under control, it comes storming back.

“For Singapore, we can take heart that we are in a much better position to deal with the pandemic, now than at the start,” Minister Wong said.

We have summed up three relevant takeaways for employers and HR leaders to take note of.

#1 COVID-19 restrictions could be eased from 12 July onwards

In terms of public health, Minister Wong explained that “there was no need to go into an economy wide Circuit Breaker like what we had done last year” as Singapore has “more robust public health defences” that have enabled it “to quickly detect and contain the spread of new clusters.”

The defences, he mentioned, are in the form of mRNA vaccine procurement as well as testing and contact tracing abilities.

With that in mind, Minister Wong said the government is expecting to ease COVID-19 restrictions further from Phase Three (Heightened Alert) “to allow larger groups of five people to dine together” starting 12 July.

#2 More financial support for SMEs

“During times of crisis,” Minister Wong said, “we recognise that lower income households and SMEs face bigger challenges, and that is why we have designed our interventions to benefit them the most.”

He then drew out past and current such interventions in the government’s COVID-19 support packages, such as Jobs Support Scheme (JSS), rental relief, and COVID-19 Recovery Grant (Temporary) (CRG-T) that have helped Singapore’s entrepreneurs and businesses tide through Phase Two and Three (Heightened Alert).

To continue doing so, Minister Wong said that the Ministry of Finance (MOF) will extend:

• The temporary bridging loan programme (TBLP); and
• The enhanced enterprise financing scheme trade loan (EFS-TL) for an additional six months

This move will continue from 1 October 2021 to 31st March 2022. According to Minister Wong, the parameters for both schemes “remain unchanged”.

“The Monetary Authority of Singapore (MAS) will also extend the MAS Singapore Dollar Facility for Enterprise Singapore Loans accordingly.

“I encourage businesses to make use of this extension and other available schemes to ready themselves for the new normal. Many of our SMEs have already seized the opportunity to build new capabilities and future-proof their business,” Minister Wong added.

#3 Singapore needn’t draw on past reserves to help the economy recover

Even with all the support packages—previously and aforementioned—costing the country up to S$1.2bn, Minister Wong reiterated that there is no need for Singapore to draw on its past reserves to sustain these, instead “a reallocation of monies” will be used to fund the support package.

Minister Wong explained the mathematics. Approximately S$0.6bn out of the S$1.2bn, he said, will come from the capitalisation of development expenditure under the Significant Infrastructure Government Loan Act (SINGA).

Under SINGA, two projects are financed: the Deep Tunnel Sewerage System and the North-South Corridor, for which funds had been set aside in Budget 2021.

“With SINGA, we will borrow for these projects and capitalise their development expenditure from Q4 2021.

“So, the amount that was originally budgeted to finance these two projects can be reallocated to fund this support package. This is a one-off adjustment, as SINGA was passed after we started the financial year.

“Going forward, the amounts that will be capitalised under SINGA will be incorporated as part of future annual Budget estimates, and so we will not have such reallocation space in future,” Minister Wong said.

With regard to the other half of the S$1.2bn, Minister Wong mentioned that the funds will be reallocated from underutilisation of development expenditure, which comprises delayed projects due to COVID-19.

Image / Ministry of Communications and Information's YouTube

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