Singapore's Deputy Prime Minister and Finance Minister Heng Swee Keat delivered a Supplementary Budget in Parliament today (26 March), to announce the government's additional support measures in response to the COVID-19 pandemic.
Minister Heng titled this the 'Resilience Budget', to reflect the government's "determination that Singapore and Singaporeans remain resilient in the face of these challenges," referring to the repercussions brought about by the outbreak.
This package includes measures worth S$48bn, and will address the three key thrusts:
1. Save jobs, support workers, and protect livelihoods
2. Help enterprises overcome immediate challenges
3. Strengthen economic and social resilience so that we can emerge intact and stronger
The points most relevant to HR and employers are summarised below:
Supporting over 1.9mn local employees, creating more than 10,000 jobs first-time job-seekers, and more
The immediate priority of the government, DPM Heng shared, is to save jobs, support workers, and protect livelihoods. Over one-third of the Resilience Budget is dedicated to this thrust.
First, Minister Heng shared: "For employees, our top priority is to help them stay employed. I will significantly enhance and extend the Jobs Support Scheme, to provide more impactful and sustained wage support. With these enhancements, a total of S$15.1 billion will be allocated to support more than 1.9mn local employees under the Jobs Support Scheme."
- With enhancements to the Job Support Scheme, the government will pay 25% of monthly wages for every local worker in employment, capped at S$4,600, for nine months until the end of 2020. Firms in the food services sector will receive higher support, at 50% of wages, and firms in the aviation and tourism sectors, which are the most badly affected sectors, will be supported at 75% of wages;
- The government will raise the monthly qualifying wage ceiling from S$3,600 to S$4,600, which is the median wage in Singapore.
Second, for self-employed persons, the government plans to provide direct cash assistance through the Self-Employed Income Relief Scheme, to help them tide over this period. Under this scheme, eligible self-employed persons (SEP) will receive S$1,000 a month for nine months, while the Self-Employed Persons Training Support Scheme will be extended to the end of 2020.
- Starting 1 May 2020, training allowance under the SEP Training Support Scheme will be enhanced to S$10/hour.
- Under a Point-to-Point Support Package, Special Reflief Fund payments of S$300 per vehicle per month will be given out to taxi hirers and private-hire car drivers, until end September 2020.
Third, to aid young people and first-time job-seekers, the government will launch the SGUnited Jobs Initiative to create about 10,000 jobs over the next one year, and introduce the SGUnited Traineeships programme, which will support employers in providing traineeships to fresh graduates entering the labour force, to help boost employability for new graduates.
Fourth, for lower-and middle-income Singaporeans who lose their jobs due to the COVID-19 impact, the government will provide a cash grant of S$800/month for three months, to tide them over while they find new jobs or attend training. Those who require immediate financial assistance in April 2020 are eligible to apply for the Temporary Relief Fund.
Last, as part of the Enhanced Workfare Special Payment, Singaporeans who received Workfare payments for work done in 2019 will receive a cash payment of S$3,000. This will benefit about 50,000 lower-income SEPs.
In supporting Singaporeans in paying their bills and household expenses, the government will enhance the Care and Support Package announced in Budget 2020 (also titled the Unity Budget), by tripling the cash payout from the earlier announced quantum. This means that all Singaporeans aged 21 and above in 2020 will receive S$300, S$600, or S$900 [Original: S$100, S$200, S$300].
The government will also provide an additional cash payout to each Singaporean parent with at least one Singaporean child aged 20 and below in 2020, up from the original S$100 to S$300; while all Singaporeans aged 50 and above this year will receive their S$100 PAssion Card top-up in cash.
Additionally, under the NTUC Care Fund (COVID-19), announced by NTUC Secretary-General Ng Chee Meng on 18 March, NTUC, its affiliated unions and associations as well as the government are collectively committing S$25mn to help eligible union members, who may receive a one-off relief of up to $300.
In addition to the above, eligible Singaporeans will be able to advance their usage of the SkillsFuture Credit top-ups for selected courses, beginning 1 April 2020.
Deferment of tax payment for firms and SEPs, 100% Property Tax Rebate for affected commercial properties, and more
In helping businesses, Minister Heng shared that the Resilience Budget will address the three Cs on the mind of every business owner now - cash flow, cost, and credit.
In helping cash flow, he shared the following:
- By the end of this month, more than S$600bn would have been disbursed to employers, under the former Wage Credit Scheme parameters;
- By the end of May, a total of S$5.6bn would have been paid out, under the Jobs Support Scheme and the Wage Credit Scheme; and
- Agencies are working hard to bring forward an additional S$5mn of wage credits under the enhanced parameters, from September to end-June.
- Altogether, the Jobs Support Scheme and Wage Credit Scheme will flow S$16.2 billion into the hands of businesses by October this year.
Minister Heng added: "To further ease cash flow for businesses in the immediate period, I will grant an automatic deferment of income tax payments for companies and self-employed persons, for three months. No application is required."
This means that for companies, the government will defer income tax payments due in April, May, and June 2020. Instead, income tax payments will only be payable from July 2020. "In other words, if you made money last year and need to pay tax this year, you will delay paying for three months. So you can use the cash to meet other urgent needs."
For SEPs, the government will defer the income tax payments due in May, June, and July 2020, so income tax payments will only start from August 2020.
Moving on to cost, he said: "For 2020, qualifying commercial properties that have been more badly affected by the COVID-19 outbreak, including hotels, serviced apartments, tourist attractions, shops, and restaurants, will pay no Property Tax. This is a big enhancement, from the 15% to 30% Property Tax Rebate announced in the Unity Budget." There will also be an increased Property Tax Rebate for Integrated Resorts - up from 10% to 60%.
Further, other non-residential properties will also benefit from a 30% rebate. Minister Heng "strongly urged" landlords to fully pass on the rebate to tenants, by reducing rentals, to directly ease the cash flow and cost pressures faced by tenants. "The government will lead by example in supporting tenants by enhancing rental waivers."
- There will be an increase in rental waiver from 0.5 months to two months, for eligible tenants of government agencies; all other non-residential tenants of government agencies will receive a 0.5-month rental waiver.
In addition, there will be a freeze on all government fees and charges by one year, from 1 April 2020 to 31 March 2021.
To address the concern of credit, the government will further enhance its financing schemes so "even the hardest-hit businesses can continue to have access to credit."
For instance, he shared that the government had previously enhanced the Enterprise Financing Scheme (EFS) - SME Working Capital Loan to alleviate SMEs’ cash flow concerns, and introduced the Temporary Bridging Loan Programme (TBLP) for enterprises in the tourism sector.
- Under this Resilience Budget, it will enhance the EFS – Trade Loan, by increasing the maximum loan quantum from S$5mn to S$10mn, and increasing the government’s risk-share from up to 70%, to 80%.
- There will also be an increase in subsidies to businesses for loan insurance premiums under the Loan Insurance Scheme, from 50% to 80%.
- The government will expand the Temporary Bridging Loan Programme (TBLP) to all sectors, and increase the maximum supported loan to S$5mn.
- At the same time, SMEs that require support beyond the TBLP can continue to tap on the EFS – SME Working Capital Loan. The maximum loan quantum for this will be further enhanced, from S$600,000 to S$1mn.
In addition, the government will work with participating financial institutions to defer capital payments for one year on the EFS-Working Capital Loan and the TBLP loans if requested by businesses, subject to assessment by the institutions.
On top of these enhancements, Minister Heng also announced S$20bn of loan capital to be set aside in this budget. "This will help to support good companies with strong capabilities, and catalyse private sector loan capital. As the situation is fluid, we will seek to provide help where the credit needs are more acute."
Support for specific, affected sectors and demographics
Under the enhanced Jobs Support Scheme, for every local worker in employment in this sector, the government will provide a total of 75% wage offset for the first $4,600 of monthly wages. This will be paid in the same months as the main Jobs Support Scheme payouts, and will cost the Government more than S$400mn.
There will also be. a new S$350mn enhanced aviation support package to fund measures such as rebates on landing and parking charges, and rental relief for airlines, ground handlers and cargo agents. "This will also allow Singapore to retain a minimum level of connectivity to the world even during the pandemic. This is critical to enable overseas Singaporeans to return home and keep our supply lines for essential goods open," Minister Heng stressed.
As per above, the Jobs Support Scheme for licensed hotels, travel agents, tourist attractions, cruise terminals and operators, and purpose-built MICE venue operators, will be enhanced to offset a total of 75% of the first S$4,600 of monthly wages.
Additionally, the government will set aside S$90mn to "help the tourism industry rebound strongly, when the time is right."
The Jobs Support Scheme for F&B companies will also be enhanced to provide a total of 50% wage offset, for the first S4,600 monthly wages.
Taxi and private-hire car drivers and operators
In support of this demographic which has faced a drop in riders due to more work-from-homes and a fall in visitorship, the government will extend and enhance the Point-to-Point Support Package. This will cost the government S$95mn.
Eligible taxi hirers and private-hire drivers will continue to receive the Special Relief Fund payments of S$300 per vehicle per month until end-September.
For operators - for instance, private bus owners, they will be provided with a one-year road tax rebate and a six-month waiver of parking charges at government-managed parking facilities, costing the government S$23mn.
Arts and culture
This sector will be provided an additional S$55mn support package, in saving jobs and supporting upskilling/digitalisation initiatives. Minister Heng shared as follows:
First, the government will provide additional support to major companies and leading arts groups, which are integral to our vibrant arts scene. This will help safeguard jobs, and retain capabilities in our local arts ecosystem.
Second, it will enhance the National Arts Council’s Capability Development Scheme for the Arts, to deepen skills and support the professional development of arts organisations and practitioners.
Third, the government will step up digitalisation efforts, by building the sector's digital capabilities, and establishing more digital arts platforms which can reach out to new audiences.
More details will be shared by the Ministry of Culture, Community and Youth.
Lead photo / Screenshot of DPM Heng Swee Keat speaking in Parliament in February