ADDITIONAL Covid-19 support measures during Singapore's Heightened Alert period are expected to cost S$1.2 billion. This will be financed by a reallocation of monies previously budgeted for, Finance Minister Lawrence Wong said in Parliament on Monday as he introduced a Supplementary Supply Bill for this reallocation.

Half of the S$1.2 billion figure will come from capitalisation of development expenditure under the recently-passed Significant Infrastructure Government Loan Act (SINGA), while the rest will come from underutilisation of development expenditure.

When support measures were announced in May for the Phase 2 (Heightened Alert) period, which was originally meant to last four weeks, the estimated cost had been S$800 million. Support was subsequently extended alongside the extension of Phase 2 (Heightened Alert) and the later move to Phase 3 (Heightened Alert).

The support measures include enhanced Jobs Support Scheme support for affected sectors, rental relief, subsidies and the Covid-19 Recovery Grant (Temporary) for individuals.

"We sized the package based on what we assessed to be appropriate to meet the needs of businesses and individuals during this period," said Mr Wong, noting that most parts of the economy continued to operate in the last two months. This was unlike the "circuit breaker" period in 2020, when most activities were curtailed. The package also builds on existing support measures, such as the Jobs Growth Incentive, he added.

"Under these circumstances, I do not believe there is a need to draw on our past reserves," he said.

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While the government "will not hesitate to use the full measure of our fiscal firepower to protect the lives and livelihoods of Singaporeans", he said it must also be careful about the state of its public finances.

Half of the S$1.2 billion sum will come from capitalisation of previously-budgeted development expenditure.

This is from two major infrastructure projects that meet the criteria for financing under SINGA: the deep tunnel sewerage system, and the North-South Corridor. Funds for these projects had been set aside in Budget 2021.

With SINGA having been passed in May, these projects will now be funded by borrowing and their development expenditure will be capitalised from the fourth quarter of 2021.

"So the amount that was originally budgeted to finance these two projects can be reallocated to fund this support package," said Mr Wong.

Such a move will not be possible in future budgets, he noted: "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."

The remaining S$0.6 billion will be reallocated from development expenditure that is underutilised, mainly due to construction delays in projects arising from Covid-19.

"We expect to catch up on our development schedules as the situation stabilises. So, the delayed expenditure will still need to be incurred in future financial years," said Mr Wong.

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