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S$48.4b Resilience Budget for Singapore to tackle Covid-19 crisis
A RECORD S$48.4 billion is being committed in a supplementary budget unveiled on Thursday to help Singapore weather the Covid-19 crisis, with in-principle support gained to draw up to S$17 billion from past reserves for this, said Deputy Prime Minister and Finance Minister Heng Swee Keat in Parliament.
If it becomes necessary, the government is prepared to propose to the President that further draws be made on past reserves, he added.
Together with an earlier S$6.4 billion in Budget 2020, this means a total of S$54.8 billion - or 11 per cent of gross domestic product - being dedicated towards supporting the country amid the virus outbreak.
Some S$20 billion of the new Resilience Budget is set aside as loan capital, alongside enhancements to financing schemes for firms. Other measures include larger wage offsets, property tax rebates of up to 100 per cent, deferment of corporate income tax payments for three months, and even more help for harder-hit sectors.
With Singapore facing possibly the worst economic contraction since independence, the package includes measures to save jobs and support workers; help enterprises overcome short-term challenges; and strengthen longer-term resilience.
The Jobs Support Scheme's wage offsets will rise to 25 per cent, up from the previously-announced 8 per cent, with more for firms in badly-hit sectors: 50 per cent for food services, and 75 per cent for aviation and tourism. The monthly qualifying wage will be raised to S$4,600, and support will be extended for another two quarters.
There will be cash handouts and improved training support for the self-employed, and larger payouts for low-income workers. Two new schemes will provide 8,000 traineeships and 10,000 new jobs, while those who become unemployed due to the crisis will get S$800 per month for three months while they find jobs or go for training.
To help with cashflow, companies will get automatic deferment of income tax payments due in April, May, and June.
Earlier-announced property tax rebates will go further. Commercial properties that qualified for Budget 2020's rebates of 15 to 30 per cent will now pay zero property tax for 2020. A new property tax rebate of 30 per cent will be granted for non-residential properties such as offices and industrial properties. Rental waivers for tenants of government properties will be increased.
Financing will be improved, including the extension of the Temporary Bridging Loan Programme to firms in all industries, with the maximum supported loan increased to S$5 million from S$1 million previously.
The Monetary Authority of Singapore is working with banks and insurers to see how to help businesses and individuals with loan obligations and premium payments, with the details to come later.
More help will be given to the worst-hit sectors, with a S$350 million enhanced aviation support package; S$90 million set aside to help the tourism industry rebound when the time is right; more help for taxi and private hire car drivers; and an additional S$55 million support package for the arts and culture sector.
For households and firms alike, Mr Heng said all government fees and charges will be frozen for a year.
Government loan repayment and interest charges will be suspended for a year, and late payment charges on Housing Board mortgage arrears will be suspended for three months. Households will get more help with the tripling of cash payouts in Budget 2020's S$1.6 billion Care and Support Package, and more grants to self-help groups and community development councils.
Even as the package focuses on helping firms and households through the crisis, it includes S$1.9 billion for longer-term resilience. This includes investing in research and development; enhancing transformation schemes such as SMEs Go Digital, the Productivity Solutions Grant, and the Enterprise Development Grant; and supporting training.
As the Covid-19 situation develops, more safe distancing measures may be needed, noted Mr Heng. The government will provide appropriate help to mitigate the impact and support responsible behaviour.
Years of prudence and discipline have allowed Singapore to build up the reserves needed for precisely such a rainy day, with the current virus pandemic being "a mighty storm" that is still growing, he added. In these exceptional circumstances, the government sought and obtained President Halimah Yacob's in-principle support to draw up to S$17 billion from the past reserves.
But much uncertainty remains over the future course of the outbreak. The government will continue to monitor the situation closely, and do more as and when needed, said Mr Heng, including proposing further draws on past reserves if necessary.
With this supplementary budget, the overall budget deficit for FY2020 has risen to S$39.2 billion or 7.9 per cent of GDP, up from the initial S$10.9 billion estimate.
"We are able to support this unprecedented deficit, and still remain fiscally sustainable, because we have been disciplined in the use of past reserves, tapping on it only in exceptional circumstances like these," said Mr Heng.