Resilience Budget: Singapore President gives in-principle support for 'substantial' support package

SINGAPORE'S president has given in-principle support for the government to draw on past reserves to fund a "substantial" second support package aimed at rescuing the coronavirus-battered economy.

"Our reserves were built up over the years through prudent spending, and were set aside precisely to cater for rainy days. The situation we are heading into looks more like a thunderstorm than a drizzle," President Halimah Yacob said in a message that was delivered by Speaker of Parliament Tan Chuan-Jin on Thursday.

"We need to do our utmost to help our businesses and people quickly. It is a matter of survival."

This is Mdm Halimah's first message to Parliament as custodian of the government's past reserves after she became head of state in 2017.

The details and size of the package are set to be revealed by Deputy Prime Minister and Finance Minister Heng Swee Keat in his Resilience Budget speech at 3.30pm on Thursday.

This comes as Singapore on Thursday morning reported a 2.2 per cent contraction in its first-quarter gross domestic product (GDP).

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The Ministry of Trade and Industry has also lowered its 2020 growth forecast to between -4 and -1 per cent, revised downwards from its February outlook of -0.5 per cent to 1.5 per cent.

Mdm Halimah noted that the government has only had to draw on past reserves once since Singapore established the reserves protection framework in 1991. In 2009, then-President S R Nathan approved a draw of S$4.9 billion to fund part of the Resilience Package.

Calling the current crisis "unparalleled in modern history", Mdm Halimah said her in-principle support for the government's proposal was given after careful deliberations, considering the grave circumstances and highly uncertain outlook.

"In particular, I want to share my considerations on whether the proposed draw is necessary, whether the measures will be effective and whether the process by which the government has engaged me was a reasonable one," she said, adding that her message to Parliament is not meant to influence the parliamentary discussion that follows.

The option of drawing on past reserves if the situation worsens was first discussed when the government briefed her about Budget 2020, Mdm Halimah said, but they did not do it immediately as current reserves were still sufficient for the scale of the package then.

This first package, the Stabilisation and Support Package announced during Budget 2020, is said to cost S$4 billion.

Since then, however, the situation appears to have worsened, with Europe becoming a new epicentre of the Covid-19 pandemic after China seemed to be stabilising.

Mdm Halimah said this economic shock is "totally different" from an ordinary business cycle downturn, and her conversations with Singaporeans and unions indicate that companies and workers are suffering badly.

This is why a second support package is needed swiftly to stabilise the economy, to keep as many workers as possible employed and help viable enterprises to survive, Mdm Halimah said, adding that it is the government's responsibility to come up with "relevant and impactful measures".

She said she is satisfied with the process by which the government has proactively reached out to her and the Council of Presidential Advisers in proposing this draw on reserves.

The due process following this is that the Supplementary Estimates and Supplementary Supply (FY2020) Bill should first pass through this Parliament, Mdm Halimah said.

"If the estimates and bill pass the vote in this house, the bill will be presented to me for the presidential assent. At that stage, I will scrutinise it further, before giving my assent to the bill," she added.