Showing solidarity to help businesses, individuals survive Covid-19 challenges

THE Covid-19 circuit-breaker measures have effectively kicked in, placing an even greater strain on businesses that are already finding it extremely difficult to survive in today's climate of uncertainty. With the International Monetary Fund declaring that the world is facing an even greater downturn than the global financial crisis, Singapore, which is dependent on the global economy, cannot escape the economic effects of the coronavirus.

The Solidarity Budget announced by Deputy Prime Minister Heng Swee Keat on April 6 entails a further S$4 billion drawdown from past reserves, in addition to the S$17 billion drawn down for the Resilience Budget just two weeks ago.

And it is a warranted one, as it demonstrates the government's aggressive support in a bid to cushion the impact of the pandemic, as it urges enterprises to save and protect the livelihoods of workers, as we tide through this together.

BOLSTERING 3CS SUPPORT - CASH, COST AND CREDIT

Providing greater support for enterprises was extremely significant in the Solidarity Budget, given that S$4 billion of the S$5.1 billion has been allocated to bolster businesses in all three Cs - cash, cost and credit. Considering that this is the third package announced in six weeks, it is in and of itself a remarkable and commendable feat.

The biggest announcement involved boosting the Job Support Scheme to provide a 75 per cent wage subsidy (of up to the first S$4,600 gross monthly wages) for each local employee in April in all industries, and it is significant.

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The other measures to waive all foreign worker levy for the month of April, granting a rebate for each work permit or S pass holder and furnishing greater credit support for enterprises are also highly laudable.

Bringing forward these payouts to as early as next week also reflect the government's agility in pivoting policies to help businesses cope in these unprecedented times.

Passing new legislations to ensure that there is flexibility in contractual obligations and landlords pass on property tax rebates to tenants in full also show how well the government understands the situations that businesses face, and the commitment to intervene to help businesses stay viable.

LIMITED JOB SECURITY DESPITE SUPPORT

However, despite these holistic and broad-based measures announced, businesses - especially those that are unable to remain open during the month-long period of the circuit- breaker measures - may still grapple with the immense challenge of bearing the remaining wage costs that are not funded by the government. For instance, enterprises likely have staff who earn above the median income. Especially as we have continued to upskill and reskill as a nation, enterprises have had to match their workers' salaries accordingly.

Many who are higher income earners also fear for job security in this climate. Businesses who do employ a higher proportion of workers who earn above the median salary may still have difficulty managing these manpower costs.

Additionally, not all employees are Singaporeans or permanent residents, which in turn means that employers would not be eligible for the Job Support Scheme for such employees.

The foreign worker levy and rebate for the month of April will ease enterprises' burdens, though the extent of this measure would be limited in the larger context of overheads and operational costs.

FACING THE CRISIS IN SOLIDARITY

Granted, enterprises and individuals would have hoped for a package that can cover even more costs over an extended period of time. But we in Singapore are absolutely in a better place and situation compared to many other nations and governments who have been worse hit by this pandemic.

While Singapore continues to iterate its approach to addressing the Covid-19 situation for businesses and extending measures to all enterprises in Singapore, the same cannot be said for other countries, which have stepped in with single-stimulus packages for their economies.

In nations such as the United Kingdom or Australia, companies only qualify for wage support schemes when they are able to demonstrate how they have been severely impacted by the coronavirus.

The Solidarity Budget is intended to help businesses tide through the next month, where the pinch on our daily lives will be even more pronounced as these heightened measures take effect.

But even if the circuit-breaker measures are lifted come May 5, should the situation globally continue, or worsen, businesses would be in for an even tougher time.

And while the government continues to assure the nation that it will not hesitate to provide even more help if required, the question remains as to how much more can Singapore afford to continue drawing down from reserves. With a contracted economy and GDP, what other options should, or would, the government consider in the coming months?

For now, it is our hope that with the aptly named Solidarity Budget, the community will pool together collectively to help businesses and individuals hold steady as we stand united to overcome the fight against Covid-19.