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Resilience Budget: Govt may propose further draws on reserves amid Covid-19 storm

SINGAPORE’S Deputy Prime Minister Heng Swee Keat on Thursday said he is prepared to propose to the President further draws on the country’s past reserves to deal with the coronavirus situation, should it become necessary.

“I trust that every member of this House will deeply internalise the mission to be careful stewards of our reserves,” he said in Parliament, while announcing a new Resilience Budget that substantiallys boost measures to help businesses and households amid the Covid-19 pandemic.

“The government will continue to monitor the situation closely, and do more as and when we need to,” said Mr Heng, who is also Finance Minister, on Thursday.

President Halimah Yacob has given in-principle support for the government to draw up to S$17 billion from past reserves to fund part of the Resilience Budget – the second package of measures aimed at rescuing the coronavirus-battered economy and saving jobs.

In his speech, Mr Heng cautioned that there remains a high level of uncertainty over the future course of the outbreak, which is bringing a confluence of multiple external shocks.

He added that this is not a normal business cycle that could have been anticipated and dealt with using the revenues collected by each term of government.

“But because we have prepared ourselves well, Singapore has the resources to meet this crisis with confidence,” he said. “We will use our resources to get through this together.”

The pandemic, and the threats it poses to Singapore, is the sort of event that the government had accumulated reserves for, Mr Heng noted.

“We have saved up for a rainy day. The Covid-19 pandemic is already a mighty storm, and is still growing.

“If over the years we had frittered the reserves away, on more immediate but less existential needs, big and small… we would be in a much weaker position today.”

Until now, the government has drawn on past reserves only once – during the Global Financial Crisis. During that period, the President approved a draw of S$4.9 billion to fund the Jobs Credit Scheme and special risk-sharing initiative. 

Measures in the new Resilience Budget include enhancements to the Jobs Support Scheme and Enterprise Financing Scheme, an income relief scheme for self-employed persons, a temporary bridging loan programme for enterprises in all sectors, and a sizeable Aviation Support Package.