Taking Singapore through uncertain storms

WITH the ongoing Covid-19 situation, Singapore is heading towards not just rainy days, but a thunderstorm of unprecedented proportions.

As the coronavirus pandemic continues to wreak havoc on the economy, Deputy Prime Minister Heng Swee Keat unveiled an extraordinary stimulus package to the tune of S$48.4 billion in the form of various measures, grants and relief to support local enterprises, workers and families. The depth and breadth of the supplementary budget demonstrates the government's commitment to tackling the challenges of Covid-19, as well as its leadership and foresight.

Even as the country faces what has been described by DPM Heng as the "worst economic contraction since its independence", the Resilience Budget together with the Unity Budget will empower Singapore to face its challenges head-on and emerge a stronger, more united country that will retain its position as a global hub and the Transformation Capital of Asia.

Protecting enterprises and preserving jobs

This is only the second time in Singapore's history that the government is drawing upon its past reserves and the measures announced will raise the overall budget deficit to S$39.2 billion; one that is unmatched, coming up to 7.9 per cent of the gross domestic product.

This is a response that is much-needed, considering the rapidly deteriorating situation across the world with global markets and economies in constant turmoil.

In particular, the supplementary budget showed the priorities of the government in protecting enterprises in the services sector, the key engine of growth for Singapore's economy.

For the sectors that were hardest-hit by the Covid-19 economic fallout such as aviation, tourism, food and beverage as well as the land transport sectors, wages represent the largest and most critical business cost. The enhancements of the Job Support Scheme are substantial and will prove to be a lifesaver for these businesses in affected industries.

Beyond addressing wages, the enhancements to the Temporary Bridging Loan Programme (which increases loan quantum to S$5 million, and the government's share of risk raised to 80 per cent) will also mean enterprises have more helplines and resources to alleviate cash flow issues. This should in turn incentivise enterprises to preserve jobs rather than look at reducing workforces as a short-term measure to deal with cash flow challenges.

Not losing sight of transformation and growth

The Resilience Budget also highlights the government's continued focus on transformation, looking ahead to not only cushion the economic impact of Covid-19 but implementing measures that ensure businesses are ready to seize future growth opportunities when the economy recovers.

This is seen in the increased funding support of up to 90 per cent in enhancements to the Enterprise Development Grants, and up to 80 per cent under the enhanced Productivity Solution Grants. Hopefully, these will spur enterprises, especially SMEs (small and medium-sized enterprises), to leverage the downturn to transform.

Whether it is investing in skills upgrading or building up digital capabilities, enterprises must take a longer-term perspective to see how they can tap the slew of initiatives by the government to transform.

Amid these difficult circumstances, we must take comfort in Singapore's proven track record and ability in coming together as one nation and emerging stronger after each challenge.

Through the years, Singaporeans and our enterprises have consistently worked hard for the economy, creating wealth and contributing to the national reserves. This consistent and prudent approach has served us well, enabling us to have the flexibility and capability to tap into the reserves in moments of crisis such as the Covid-19 pandemic.

All businesses and Singaporeans would welcome these extraordinary efforts to build a resilient economy for the future.