Fortitude Budget: S$33 billion package to support firms, save and create jobs

TO support firms, save jobs, and create opportunities for workers, a S$33 billion supplementary Budget was presented by Deputy Prime Minister and Finance Minister Heng Swee Keat in Parliament on Tuesday, drawing a further S$31 billion from past reserves for Singapore's fourth Budget this year.

"While we try to preserve jobs in the midst of this crisis, we cannot protect every job. However, you have my assurance that the government will protect every worker," he said.

With this Fortitude Budget, the total amount of government support in the Covid-19 crisis has risen to S$92.9 billion, or almost a fifth of GDP. Singapore faces its largest overall budget deficit since independence, of S$74.3 billion or 15.4 per cent of GDP.

As Singapore gradually re-opens its economy after the circuit breaker period ends on June 1, the Fortitude Budget extends existing support schemes for firms. Wage support under the Jobs Support Scheme will be enhanced in three ways, with the changes costing S$2.9 billion in total.

First, it will be extended by one month for all firms, at non-circuit breaker levels; second, firms that cannot resume operations immediately will continue to receive wage support of 75 per cent until August 2020 or when they can re-open, whichever is earlier; and third, more sectors will be considered "severely impacted", receiving higher support of 75 per cent or 50 per cent, up from 25 per cent previously.

Foreign work levy waivers and rebates will be extended for up to two months for businesses that cannot resume operations immediately.

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To help with rentals, a S$2 billion cash grant will be given to small and medium enterprises, and a new law will require landlords to grant rental waivers to SME tenants who have suffered a significant revenue drop. Government tenants will receive one to two more months of rental waivers.

Certain firms will get targeted support, with S$285 million set aside in financing for promising startups, aiming to catalyse at least another S$285 million in matching private investments. The built environment sector will get co-funding for costs incurred in meeting additional requirements for the safe resumption of work.

Most businesses are expected to re-open by July, said Mr Heng. But for sectors such as aviation and tourism, which will take longer to re-open fully, the government "will consider providing additional help, depending on the situation and longer-term shape of these industries, and plans for the economy", he said.

With the pandemic having accelerated firms' digital transformation efforts, the Fortitude Budget will allocate more than S$500 million to encourage this. Stallholders in hawker centres, wet markets, coffee shops, and industrial canteens will get bonuses to encourage e-payment adoption. A new Digital Resilience Bonus will give payouts to firms that adopt certain digital solutions, starting with the F&B and retail sectors in this pilot phase.

For workers, the Fortitude Budget includes the S$2 billion SGUnited Jobs and Skills Package, which will create 40,000 jobs, 25,000 traineeships, and 30,000 full-time training places. The package also has a hiring incentive for employers who hire local workers of all ages who have undergone eligible traineeship or training schemes.

Households will get more support. A further S$800 million will be set aside for the previously-announced Covid-19 Support Grant. All households with at least one Singapore citizen, regardless of property type, will get a one-off S$100 Solidarity Utilities Credit. Students and seniors will also get support in going digital.

On the social front, top-ups will be made to the existing Enhanced Fund-Raising Programme and Invictus Fund for social service agencies.

Apart from these new moves, the Fortitude Budget also includes the provision of S$3.8 billion for support during the extended circuit breaker period, previously announced on April 21.

The Fortitude Budget marks the second draw on past reserves in this financial year, taking the total draw on past reserves up to S$52 billion this year. For the previous three Unity, Resilience, and Solidarity Budgets, "we used up almost all our accumulated surpluses since the start of this term of government", noted Mr Heng.

The Constitution provides for Parliament to create Contingencies Funds, with a total of S$3 billion set aside each year in the Budget as a buffer in the Contingencies Fund and the Development Contingencies Fund.

With unprecedented levels of uncertainty in the Covid-19 crisis, and four Budgets within four months, the government will set aside a larger sum in the Contingencies Funds "so that we can respond to urgent and unforeseen needs swiftly", said Mr Heng.

An additional S$13 billion will thus be set aside, allowing the government to respond to unforeseeable developments, for instance by putting in place public health or fiscal measures. "We will do our best to avoid this, but we must be prepared for any eventuality."

The Fortitude Budget will be debated in Parliament on June 4.