Budget 2022: Quick Takes on support packages for jobs, businesses, families

TWO major support packages will help eligible households and workers and businesses in Singapore that are still struggling with the pandemic's impact.

As announced in Budget 2022 on Friday (Feb 18), the government is setting aside a S$500 million Jobs and Business Support Package. This includes a grant for small and medium-sized enterprises (SMEs) most affected by Covid-19 restrictions, such as those in the food and beverage (F&B), retail, tourism and hospitality sectors, and a 6-month extension of the Jobs Growth Incentive to September 2022.

To help households with their daily essentials, utility bills and children's education, the government will roll out a S$560 million package. Among these measures is another S$100 in Community Development Council (CDC) vouchers for Singaporean households, and the doubling of the GST Voucher - U-Save rebates to up to S$285.

Here are some quick takes from analysts and observers on these support measures:

PwC Singapore partner, tax, Lennon Lee:

• "(As SMEs are) faced with significant increases in operating costs, the extension of the Jobs Growth Incentive and the S$1,000 payout per local employee, in my view, would not be sufficient to help a struggling SME with increased employment costs to retain its local worker population."
• "Given that eligible SMEs are already struggling with lower business income and increased operating costs, the extension of the Temporary Bridging Loan Programme and enhanced Trade Loan Scheme will be welcomed, but the benefit is likely short-lived given that these programmes and schemes are extended for only 6 months when the effects of the pandemic are unlikely to be gone in 6 months."

EIU country analyst, Asia, Yu Liuqing:

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• "The extended support packages are pared down significantly. This is in line with the expected economic growth and normalisation of endemic-Covid stance. However, the tapering from support risks stifling business sentiment while businesses are facing increasing costs. Despite some additional measures, businesses should not expect an outright brightening outlook without nuisances."

DBS group head of SME banking, Joyce Tee:

• "DBS is encouraged that the government recognises (the higher business costs that come with an inflationary environment) and has deferred the GST hike to Jan 1, 2023, and to pace the increase out over 2 years. This will provide SMEs a temporary reprieve as they find their footing in the post-Covid economy, and a short window for SMEs to ensure that they have the necessary provisions when the tax is implemented."
• "The Jobs and Business Support Package will provide an additional lifeline to SMEs in industries more badly affected by Covid-19 to cope with residual challenges amid the pandemic."

Edmund Tie head of research and consulting, Lam Chern Woon:

• "Selected businesses in the hard-hit sectors during the pandemic have been thrown a lifeline, albeit at a reduced magnitude, given that the announced S$1,000 per worker or S$10,000 per firm handout is lower than the Jobs Support Scheme during the course of last year. The government is sending a strong signal that as we regain normalcy, firms have to increasingly reinvent themselves to pull through the pandemic."
• "The support for the broader economy is also tapered with the Jobs Growth Incentive and various loan programmers extended by 6 months."

KPMG in Singapore partner, head of tax, Ajay Kumar Sanganeria:

• "Singapore Budget 2022 is aimed at bringing individuals and businesses forward ensuring that no one is left behind as Singapore charts a new way ahead. In this spirit, it is no surprise that the Finance Minister's speech started with a targeted S$500 million support for vulnerable sectors and businesses in Covid-19. It will help SMEs and businesses in the F&B and aviation industries navigate the nation's transition from a pandemic to endemic reality."

OCBC head of treasury research and strategy, Selena Ling:

"Businesses will get some extended support, especially SMEs, but foreign worker tightening measures will force companies to feel greater urgency to speed up efforts to become manpower-lean and accelerate technology adoption."

• "Businesses will get some extended support, especially SMEs, but foreign worker tightening measures will force companies to feel greater urgency to speed up efforts to become manpower-lean and accelerate technology adoption."

"Businesses will get some extended support, especially SMEs, but foreign worker tightening measures will force companies to feel greater urgency to speed up efforts to become manpower-lean and accelerate technology adoption."

Get the latest updates on Budget 2022 here: bt.sg/budget22

READ MORE:

• Budget 2022: S$500m to support businesses and jobs as economy recovers
• Budget 2022: Loan assistance for SMEs, construction sector extended by 6 months to a year
• Budget 2022: S$560m support package to help families with bills, daily essentials
• Help with costs, sustaining business top Malay-Muslim SMEs' Budget wish list
• How Budget 2022 can help the tourism and entertainment sectors