In an unprecedented move in the nation’s history, Singapore’s Finance Minister has announced a fourth Budget within two months.
Speaking in Parliament on 26 May 2020, Deputy Prime Minister and Finance Minister Heng Swee Keat announced that an additional $33 billion will be put in Singapore’s Budget for 2020’s financial year.
“The central focus of this Budget is jobs. This Budget will continue to support workers and businesses who remain affected by border closures and safe distancing measures. Given the significant changes in the global economy ahead, we will provide support to enable our businesses and workers to adapt, transform and seize new opportunities, to emerge stronger. We aim to enable workers and businesses to go through this difficult period together in a synergistic way,” said Mr Heng.
Additional support will also be given to households and frontline agencies to cope with the COVID-19 situation.
President Halimah Yacob has given in-principal approval to further draw from Singapore’s reserves.
Calling it the Fortitude Budget, Mr Heng said the amount would go to enhancing to the following initiatives.
The Jobs Support Scheme (JSS) will be increased by one month for all firms, announced Mr Heng. The additional month of support will be computed based on the wages paid in August 2020.
The support will be paid according to the same levels as non-circuit breaker months, he added. All firms will be given the additional payout in October 2020.
However, for firms who cannot resume operations immediately, the Government will continue to provide wage support at 75 per cent to all firms until August 2020 or when they can re-open, whichever is earlier, said Mr Heng. These firms include retail outlets, gym and fitness studios, and cinemas.
The classification of firms in the different JSS tiers will also be refined to help firms in sectors that are more severely impacted
Firms in the aerospace sector including those in maintenance, repair, and overhaul, will now receive 75 per cent wage support. Firms in the retail, and marine and offshore sectors will now receive 50 per cent support.
For the built environment sector, which includes construction, the Government will raise the wage support to 75 per cent. This sector will be affected by the phased and gradual resumption of activities. This 75 per cent support will only apply to wages paid between June and August, added Mr Heng.
The Government will also extend the Foreign Worker Levy waiver and rebate for two months for businesses that are not allowed to resume operations on-site immediately after the circuit breaker is lifted.
This will include all businesses in the construction, marine and offshore, and process sectors.
According to Mr Heng, the waiver will be 100 per cent in June, and 50 per cent in July. Meanwhile, the rebate will be $750 in June, and $375 in July.
The Government will defer the planned increase in CPF contribution rates for senior workers by one year, from 1 January 2021 to 1 January 2022. This is to help businesses manage costs during the pandemic.
Increase in CPF Contribution Rates for Senior Workers (from 1 Jan 2022)
|
Age of employee
(as of 1 Jan 2022)
|
>55 – 60 | >60 – 65 |
>65 – 70
|
|
Total CPF Contribution |
28%
(+2%)
|
18.5%
(+2%)
|
14%
(+1.5%)
|
|
Employee CPF Contribution |
14%
(+1%)
|
8.5%
(+1%)
|
6%
(+1%)
|
| Employer CPF Contribution |
14%
(+1%)
|
10%
(+1%)
|
8%
(+0.5%)
|
In response to the announcement, NTUC Deputy Secretary-General Heng Chee How said in a Facebook post that the NTUC supports the Government’s deferment of the planned increase.
He said: “Doing so will help save jobs for more older workers. The clear timeline also makes clear to older workers that their longer-term interests remain the joint commitment of the tripartite partners.
“I ask of employers to take care of all their workers, including older workers, with fairness and compassion in this difficult time. I urge employers to tap fully into Government support to save jobs, and to take all measures necessary to make their businesses resilient, safe and age universal. I also urge older workers to be as adaptable as possible and be ever ready to learn new skills and demonstrate performance as companies restructure and transform to meet the challenges ahead.”
SMEs will be getting a cash grant to offset their rental costs. This cash grant will be disbursed through property owners.
“Taken together with the Property Tax Rebate, the Government will, in effect, offset about two months of rental for qualifying SME tenants of commercial properties, and about one month for qualifying SME tenants of industrial and office properties. The grant will be disbursed automatically to property owners from end-July,” said the Finance Minister.
The Government will also provide financing support for promising start-ups.
Some $285 million of the Budget will be set aside for start-ups. This will be done in sync with at least another $285 million in matching private investments. The amount is on top of the $300 million set aside under the Unity Budget.
“Taken together, our support in past Budgets and this Fortitude Budget will help tide businesses through their periods of closure, and to retain and rebuild core capabilities. Based on our current re-opening plans, we expect most businesses to re-open by July. This support would enable most sectors to recover in the coming months.
But some sectors, such as aviation and tourism, will take longer to re-open fully, given the restrictions on global travel for the foreseeable future. The Government will consider providing additional help, depending on the situation and longer-term shape of these industries, and plans for the economy. In the interim, I urge businesses to make good use of the existing support and consider how to transform for a post-COVID world,” said Mr Heng.
The Government will launch an SGUnited Jobs and Skills Package that will create close to 100,000 opportunities.
The opportunities come in the form of 40,000 jobs, 25,000 traineeships and 30,000 skills training, said Mr Heng.
“This will support the immediate needs of our workers, and raise the skills of our people for future jobs. Together, these cater to workers with different skill levels and career aspirations, and to the needs of diverse firms across industries,” he added.
Mr Heng said that the public sector will bring forward its long-term hiring needs in areas such as early childhood education, healthcare and long-term care. Hiring will also be done together with short-term needs such as healthcare declaration assistants and swabbers.
In total, the public sector will create 15,000 jobs.
Mr Heng added that government agencies will also be working with businesses to create 25,000 more jobs.
The Government has also set a target to create 25,000 traineeship programmes in 2020.
Of this, 21,000 will be from the SGUnited Traineeships programme, and another 4,000 places from a new SGUnited Mid-Career Traineeships scheme.
The new SGUnited Mid-Career Traineeships scheme will be catered for unemployed mid-career job seekers. Government agencies will work with interested companies to meet the needs of mid-career individuals, allowing them to learn new skills and embark on new careers.
The Government has also announced the SGUnited Skills programme, to expand training capacity for about 30,000 job seekers this year.
Participants of this SGUnited Skills programme will take industry-relevant and certifiable training courses full-time. The course fees can also be offset using the SkillsFuture Credit.
Job seekers will be given opportunities such as attachments or participation in company projects. They will also be provided with career guidance and job placement support.
During their training, job seekers will be given $1,200 a month, during the course of their training.
The programme will be progressively rolled out in July 2020.
As a gesture of appreciation for staying at home during the circuit breaker measures, the Government will be providing a one-off $100 Solidarity Utilities Credit to each household with at least one Singapore Citizen.
This will cover all property types and will be credited in the July or August utilities bill.
The Government have also set aside an additional $13 billion in the Contingencies Funds. This is on top of the $3 billion the Government sets aside as a buffer in its annual Budget.
“To meet this unprecedented level of uncertainty, we will set aside a larger sum in the Contingencies Funds, so that we can respond to urgent and unforeseen needs swiftly … This [the amount] will allow the Government to respond quickly to any unforeseeable developments arising from COVID-19,” said Mr Heng.
Mr Heng also urged all Singaporeans to “come together to recover and rebuild for a stronger, more sustainable tomorrow.”
“The battle against COVID-19 will be a long one. The road ahead will be uncertain, with more ups and downs. Our generation must have the fortitude to persevere, to adapt and to emerge stronger, just like our founding generation. This is why I have named this our Fortitude Budget – courage in adversity.
“Moving forward with Fortitude – as we stay united as one people, remain resilient in the face of adversity, and stand in solidarity with one another. We will overcome. We will emerge stronger together as Singapore United, Singapore Together,” said Mr Heng.
