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Govt has resources and will to act if more support needed to mitigate Covid-19: Heng
REPLYING to calls for more help amid the Covid-19 outbreak, Deputy Prime Minister and Finance Minister Heng Swee Keat said that Budget 2020 is calibrated to the current situation. But more details of measures are on the way, and some aid will be disbursed ahead of original targets.
Beyond this crisis, Singapore must tackle longer-term issues such as fiscal sustainability and economic transformation, he said in his round-up speech in Parliament on Friday.
Regarding Covid-19, the overall spending in Budget 2020 "is appropriate for now", he said, adding: "We have calibrated it to put sufficient purchasing power back into the economy, while injecting a boost of confidence. Our sector-specific measures are calibrated according to the extent to which each sector has been affected."
The hardest-hit sectors of tourism, accommodation and aviation will get over S$400 million, in addition to broad-based support. This includes enhanced absentee payroll support for workers, with details to come from the relevant ministries.
Some S$200 million in additional support has been given to other groups such as taxi and private hire car drivers, hawkers, tourist guides and operators of food and beverage and retail outlets. Replying to requests for more help for the self-employed, Mr Heng said the relevant ministries will announce details later.
Jobs Support Scheme wage offsets - originally projected to reach firms by end-July - are now targeted to be paid out by end-May, thanks to redoubled efforts by agencies.
As for calls to do more and for a longer duration, Mr Heng said that if that becomes necessary, the government has both the resources and the will to act. "But for now, let's go forth and make the fullest use of the support available out there, before we review what more needs to be done."
Beyond the Covid-19 crisis, Mr Heng spoke on Singapore's fiscal approach and the need for the goods and services tax (GST) hike, noting that recurrent spending needs to be funded by recurrent revenues, "not one-off surpluses . . . which arose from an unexpected rally in global financial markets, and the unexpected buoyancy in the property market".
A broad-based tax like GST is an appropriate and responsible way to pay for major societal needs such as health care. As for concerns about its impact, he noted that the accompanying assurance package will, in effect, delay the impact of the hike for the majority of Singaporean households for at least five years. For lower-income Singaporeans, a higher offset means there will be, in effect, no increase for them for 10 years.
Foreigners residing in Singapore, tourists, and the top 20 per cent of resident households are estimated to account for over 60 per cent of the net GST borne by all households and individuals, he noted.
In response to suggestions of tapping into the reserves, Mr Heng reiterated the stance that the reserves are a nest egg to be stewarded for future generations.
Among long-term concerns, he highlighted efforts to tackle climate change. Measures go beyond protecting the coastline to reducing carbon emissions, boosting local food production and developing greener towns.
As for economic transformation, the journey has begun bearing fruit but efforts must continue, he said. This includes addressing structural changes in the labour force and supporting mid-career workers.