The Singapore Government has announced its intention to commit $48b to its existing $6.4b to as a Covid-19 Resilience Package, making up approximately 11 per cent of Singapore’s GDP. Deputy Prime Minister Heng Swee Keat saying, “This is a landmark package, and a necessary response to a unique situation” and, “In economic terms alone, this will likely be the worst economic contraction since independence.”
The funds will be drawn from Singapore’s national reserves, only the second time it has done so, the first being during the 2008-2009 global financial crisis. The budget is to be split up into three areas:
- Save jobs, support workers, and protect livelihoods.
- Help businesses overcome immediate challenges.
- Strengthen economic and social resilience.
Related read: Unity Budget measures for COVID-19 »
Let’s break those three components down and see what it means for Singaporeans in terms of both health and wealth.
1. Save Jobs, Support Workers, and Protect Livelihoods
Worst-Hit Sectors to Receive the Most Assistance
- Aviation sector to receive $350 million in support.
- Tourism industry to receive $90 million in support.
- Taxi and private-hire car drivers to receive $95 million as part of the Point-to-Point support package.
- Private bus owners to receive $23 million in the form of road tax rebates and parking fee waivers.
- Arts and Culture to receive $55 million for job retention and digitalisation.
Loan Assistance for SMEs
In total, $20 billion in loan capital will be allocated to support small and medium-sized enterprises (SMEs), and accelerate private sector loan capital.
- SMEs will have their trade loans doubled to $10 million through the enterprise financing scheme (EFS).
- Government to to increase its share of risk from 70 per cent to 80 per cent.
- Loan insurance premium subsidies will be increased from 50 per cent to 80 per cent.
- The maximum loan under the Temporary Bridging Loan Programme (TBLP) will increase fivefold from $1 million to $5 million.
- Working capital loans for SMEs under the EFS will have the maximum loan amount increased from $600,000 to $1 million.
- Loan payments for the working capital loan and TBLOP can be deferred for eligible applicants.
Wage Subsidies to Be Extended and Enhanced
The Jobs Support Scheme was introduced in the February Budget, and was designed to retain local workers — it has now been extended to the end of 2020, and increased to $15.1 billion for over 1.9 million workers.
- Qualifying monthly wage cap to be raised from $3,600 to $4,600, which is the median wage in Singapore.
- Will co-fund up to 25 per cent of the first $4,600 of an employee’s wage, up from 8 per cent.
- Sectors will be supported according to the severity of Covid-19 effects, e.g. food services will get 50% while aviation will get 75% of wage support.
Cash Payouts for Self-Employed Singaporeans
A new Self-Employed Person Income Relief scheme will cost $1.2 billion.
- Eligible Singaporeans who are self-employed will receive $1,000 a month for 9 months.
- An extra $48 million will go to extending the Self-Employed Person Training Support Scheme till the end of the year, with hourly training allowances jumping from $7.50 to $10.
A Freeze on Government Charges
- All Government service fees and charges will be frozen for one year from 1 April 2020 to 31 March 2021.
- Student loans and interest fees will be suspended for one year from June 1st.
- Late mortgage payment charges will be suspended for 3 months on Housing Board mortgage arrears.
Creating Opportunities for First-Time Job Seekers
An SGUnited Jobs initiative will aim to bring 10,000 new jobs.
- Jobs for both the immediate Covid-19 response, and long-term public sector positions.
- Private sector will also be recruiting to fill demands for their own recovery.
- SGUnited Traineeships programme to help up to 8,000 first-time job seekers get work experience.
Extra Help for the Unemployed
The Government makes $145 million available to help the unemployed.
- Social Service Offices (SSOs) and community centres will administer funds.
- Temporary relief fund for families needing immediate assistance.
- A Covid-19 Support Grant from SSOs to give the newly unemployed $800 per month.
Bigger Payouts for Families
The Care and Support scheme from February’s budget will essentially be tripled, with higher payouts going to those who earn less.
- Those who were to get $100 will now get $300.
- People who were to get $200 will now get $600.
- Those who were to get $300 will now get $900.
- Parents with at least one Singaporean child aged 20 and below who were to get $100 now get $300.
- Eligible Singaporeans aged 21 and above living in 1-2 bedroom flats will now get $300 in grocery vouchers, up from $100.
- All Singaporeans aged 50 and over will receive their $100 PAssion Card top-up in cash.
More Funds for Self-Help Groups
- Self-help groups will have their funding doubled to $20 million over the next two years.
- Community development councils will go from $20 million in funding to $75 million.
Lower-Income Workers and Families to Receive Extra Funds
- Lower-income workers (including self-employed) aged 35 and over who received Workfare payouts in 2019 will receive a flat cash payout of $3,000.
2. Help Businesses Overcome Immediate Challenges
Assistance with Income and Property Taxes
- No property tax in 2020 for shops, hotels, restaurants, and tourist attractions.
- Integrated resorts will receive a 60% property tax rebate
- Businesses in non-residential properties, e.g. offices, will receive a 30 per cent rebate on their property tax.
- Firms and self-employed people will have their income tax payments deferred for three months. No application process is needed.
Increased Rental Waivers
- Public agencies will waive rent for eligible tenants for two months.
- Hawkers administered by the National Environment Agency will have three months rent waived.
3. Strengthen Economic and Social Resilience
Helping Companies to Be More Resilient
- Trade Associations and chambers or business groups will have their SG Together Enhancing Enterprise Resilience programme matching rate doubled from $1 for every $4 to $1 for every $2.
- Support levels for the Productivity Solutions Grant will be raised to 80 per cent until the end of 2020.
- Support levels for the Enterprise Development Grant will be raised to 90 per cent until the end of 2020.
Training Support Expansion
- Enhanced training support will be expanded to the land transport and arts and culture sectors from April 1st.
- The 90 per cent absentee payroll rate to help employers with cash flow will be extended to all employers from May 1st.
- Students will be able to access their $500 SkillsFuture credit from April 1st, instead of October.
Co-Funding for COVID-19 Cleanup
The Government will co-fund business to help get professional cleaning services if they have had confirmed Covid-19 cases.
These are trying times not just for businesses, but for the people and families who form them. While there is significant reassurance thanks to a strong government response, you might still need assistance in finding the right solution for your situation.
Our experienced team at Rikvin consists of qualified accountants, bankers and insurance brokers who can help you navigate the current landscape.
If you have any questions about how your business can forward with the Covid-19 outbreak, please do contact us — it’s both our job and pleasure to assist.
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Alton has deep technical expertise in the Singapore Financial Reporting Standards as well as hands-on experience in accounting for publicly-listed entities and growing enterprises in Singapore. Beyond that, Alton also provides expertise to fund managers and family offices on structuring.