Jobs, businesses unlikely to fall off cliff when government aid ends

Extension and timing of payouts, coupled with transmission lag, should ease transition; financial and some other sectors doing well and hiring again

Janice Heng

Published Tue, Dec 22, 2020 · 09:50 PM

Singapore economy

Singapore

GOVERNMENT support and relief schemes have seen companies big and small through the worst of the pandemic's impact for much of this year.

But as these measures taper off into 2021, one worry is whether firms are strong enough to go it alone - or whether retrenchments and cessations were only delayed rather than avoided, and may now occur with a vengeance.

A sharp cliff effect, at least, should not manifest. The fiscal impact of government support will remain large in the new year "because of the extension and timing of payouts, coupled with transmission lags", said Maybank Kim Eng analysts Chua Hak Bin and Lee Ju Ye.

Measures such as the Jobs Support Scheme (JSS) wage subsidies have been extended "to 'smoothen'…