SINGAPORE: The COVID-19 pandemic may have hit the economy, battered some industries and disrupted livelihoods, but Singapore has an economic strategy to emerge stronger, Deputy Prime Minister Heng Swee Keat said in Parliament on Friday (Feb 26).
He noted that the Government committed close to S$100 billion last year to fight the crisis, adding that this year's Budget - with the theme Emerging Stronger Together - will further help Singaporeans.
“The impulses from last year’s measures continue to flow through the economy to complement Budget 2021. The combined effects of the two years’ Budgets imply a material support to GDP in 2021,” said Mr Heng in his wrap-up speech on the third and final day of the Budget debate.
READ: Singapore should strive to remain fiscally prudent amid highly uncertain global outlook: DPM Heng
Citing examples of how measures have helped businesses and workers, Mr Heng said the SGUnited Jobs and Skills Package has helped to cushion the labour market fallout, and nearly 76,000 local job seekers were placed in jobs and skills opportunities through the SGUnited Jobs and Skills package between April and December last year.
"Looking back, the waters of 2020 have been rough. But we have kept our ship intact, with all hands on deck pulling together to navigate it out of the storm," said Mr Heng, who is also Finance Minister.
But Singapore has to seize opportunities for a post-pandemic future, he added.
“Now is the time to chart our course, position ourselves to catch the winds of opportunity, sail boldly in the reshaped world," he told the House.
HELP FOR BUSINESSES AND WORKERS
More than 60 Members of Parliament had spoken on various issues during 15 hours of debate on the Budget, with many raising concerns about jobs and help for businesses.
The Government’s S$24 billion action plan over the next three years is about pursuing medium- to longer-term economic goals while tackling immediate challenges, Mr Heng reiterated.
“This seeks to give our workers and businesses a distinct advantage in the global marketplace. We will build an ecosystem that fosters a virtuous cycle of innovation and knowledge transfer,” he said.
READ: Day 2 of Budget 2021 debate: MPs discuss supporting women, youths, sustainability and fiscal position
The Budget measures also seek to stimulate private investment over a longer period and boost the supply-side capacity of the post-COVID economy, he added.
“This will help Singapore capitalise on the post-COVID economic recovery and emerge stronger. This emerging-stronger component of the Budget therefore has a strong medium-term orientation through an enduring effect on supporting the level of labour productivity in the economy,” he added.
Some of the sectors hit the hardest by the pandemic are today “starting to see light at the end of the tunnel”, Mr Heng noted. He gave the example of sectors like retail and food services experiences a gradual recovery to around 85 per cent of pre-COVID-19 output by the last quarter of 2020.
He added that S$18 billion worth of loans to more than 20,000 enterprises were supported under Enterprise Singapore's financing scheme. Almost all of them were micro-enterprises and small- and medium-sized enterprises (SMEs).
Helping local SMEs expand their potential remains a focus, he said, noting that most local workers are employed in such companies.
“The success of SMEs will enable our workers to have better jobs and better pay,” he said.
HELP FOR AFFECTED SINGAPOREANS
While this year’s Budget is aimed at long-term improvements and seeks to support the transformation of the economy and workers, Mr Heng assured the House that the Government has been putting in place “multiple layers of support” which will continue to provide “targeted, customised relief to help Singaporeans” differently affected the pandemic and the uneven economic recovery.
He pointed to “broad-based, permanent schemes” to provide social support and safety nets that protect all Singaporeans, especially the vulnerable. These were then enhanced with temporary assistance to provide additional support to vulnerable groups.
He also spoke about quick relief for Singaporeans’ day-to-day expenses, with more being given to lower-income groups.
“We cushioned the vulnerable against the worst of the crisis and mitigated social inequality. As a result of these efforts, our Gini coefficient after taxes and transfers is at a record low,” he said.
Noting that Leader of the Opposition Pritam Singh pointed out the divergence between the data on inequality and the lived experience on the ground, Mr Heng said: “We are fully aware that there are families who have been deeply impacted by the pandemic, and some more than others.
"This is exactly why we have tilted our support significantly towards the lower-income and vulnerable groups, and the Government has partnered the community to reach out to those groups during this period."
He added: “Mr Singh himself noted that there was ‘not-insignificant’ support."
Mr Heng acknowledged the suggestion by some MPs for unemployment insurance for workers who have lost their jobs, but said such a scheme would not be sustainable.
”While an unemployment insurance appears attractive, this would not be sustainable without longer-term structures to help our workers bounce back,” he said.
“In the midst of significant disruption, interim, bridging support is needed to tide workers over. The COVID-19 Recovery Grant will support our workers who need more help while they find new jobs or go for training during this period,” he said.
Having a job is the best welfare, Mr Heng said, echoing comments made by MP Xie Yao Quan (PAP-Jurong).
“At the same time, I recognise that as the global economy goes through an even faster pace of change, the nature of jobs and skills will be changing faster too. We will partner our business leaders, Labour Movement, and academics to study how to support employability and help those who falter, through measures that suit our context,” he said.
SUPPORTING MIDDLE-INCOME, MULTI-GENERATIONAL HOUSEHOLDS
Addressing concerns from MPs Gerald Giam (WP-Aljunied) and Jessica Tan (PAP-East Coast) on middle-income households, Mr Heng said that “the bulk of every Budget goes towards uplifting all members of our society, including the broad swathe of our middle class”.
A total of S$42 billion was set aside for social spending and transfers, he said, adding that this is on top of security spending and investments in the economy.
He said that support packages help different groups, with some targeting those with less means and some helping all, including the middle class.
“We should not look at each Budget in terms of ‘goodies for me’, but whether the totality of the spending creates more opportunities for us and our children,” Mr Heng said.
The Government has put in place measures to support the aspirations of middle-income earners such as affordable housing and “strong support” for couples who want to start a family, he added.
Housing subsidies allow a majority of Singaporeans to buy HDB flats, and a majority of new home owners have “little or no cash outlay on their mortgage payments”, he noted.
Addressing requests from MPs Cheng Li Hui (PAP-Tampines) and Hany Soh (PAP-Marsiling-Yew-Tee) for more to be done to support parenthood and first-time parents, Mr Heng said that over the years, the Government has strengthened its support for families with children to defray the cost of education and childcare, through a combination of broad-based grants, subsidies and tax benefits.
Greater support is available for those who come from less-privileged backgrounds, he added.
Mr Heng also said Singapore remains “committed” to helping all seniors retire with greater peace of mind through the Central Provident Fund system, with more support over the next five years. He noted that most seniors have housing assets that they could use to support their retirement.
After detailing the support given on housing, education, retirement and healthcare, Mr Heng said: “With the most important items in life well-taken care of, I hope members like Mr Leong Mun Wai will agree that his position that our support is ‘ad-hoc, short term and unpredictable’ is wrong, and in fact, that our support is systematic, well structured, and balanced.”
NEED FOR PETROL DUTY HIKE
Mr Heng also responded to concerns over the petrol duty hike which kicked in on Feb 16.
The increase was aimed at encouraging more to switch to electric vehicles (EV), but some MPs questioned the timing of it, saying the EV infrastructure is not ready.
"The petrol duty adjustments are to set price signals and change behaviour," said Mr Heng.
"Just like how we have made deliberate decisions to protect our environment, we want people to make conscious decisions, conscious choices about how to drive, how much to drive, and whether to even drive at all."
READ: Rise in petrol duties ‘ill-timed’ with electric vehicles not yet a viable option, says Pritam Singh
He noted that other than electric vehicles, hybrid vehicles are also an alternative.
“We are also keeping public transport affordable and accessible through rail and bus subsidies, and investing in public transport infrastructure,” Mr Heng said.
There will “never be a good time to raise petrol duty”, he added.
He reiterated that the Government expects to channel almost all of the increase in duty collections in 2021 back to petrol vehicle owners as offsets, and that more support will be provided to those who drive for work.
Mr Heng acknowledged however that broad-based rebates will not be able to cater to every unique circumstance.
“They may also not reach those in more informal work arrangements. We are working with the Labour Movement to see how we can provide further help to self-employed delivery workers and limousine drivers,” he said.
“Ultimately, protecting our environment must be our commitment to future generations of Singaporeans. This is just one of the many small but necessary steps in our whole-of-society, multi-generational effort to preserve our clean living environment.”
COMING TOGETHER TO EMERGE STRONGER
In concluding his round-up speech, Mr Heng said that while COVID-19 has tested the strength, unity and resolve of countries, socially, economically, and fiscally. Singapore has done “relatively well so far”.
The Singapore society came together to battle the “invisible but deadly enemy”, standing united, he said.
“We protected the livelihoods of Singaporeans amidst the immediate economic fallout. Now, our economy is gradually, but steadily, recovering,” he said.
The years ahead will be crucial, he cautioned, with a “narrow window of opportunity" to transform Singapore's economy.
While the Government has laid out its strategy to emerge stronger and is committed to putting in the investments, it cannot do it alone, he said.
Businesses should continually innovate and support their workers through opportunities for training, growth and progression; workers should seize the opportunities to up-skill and re-skill; and Singaporeans should lend a hand to those who need more help, he said.
“Government, businesses and the community must come together to overcome our shared challenges and Singaporeans must care and look out for one another along the way, so that Singapore will emerge stronger together.”