If we need to do more, we will: PM Lee says economic challenge from COVID-19 very grave, but Government doing all it can

If we need to do more, we will: PM Lee says economic challenge from COVID-19 very grave, but Government doing all it can

Prime Minister Lee Hsien Loong said on Friday (Mar 27) that the Resilience Budget was unprecedented, but necessary. And if the COVID-19 situation worsens, he is prepared to tap on more reserves. Tan Si Hui reports.

SINGAPORE: On Friday (Mar 27), Prime Minister Lee Hsien Loong spoke about what lies ahead for Singapore amid the COVID-19 pandemic. He also addressed questions from the media in a doorstop interview. 

The following is an excerpt from the interview transcript: 

PM: I wanted to have a chance to talk to you because we had the Resilience Budget yesterday – it was a very major package. I wanted to give you my take on the situation and why we did this and what lies ahead. 

We are in a very grave situation. Health-wise, with a COVID-19 pandemic. Economy-wise, with the impact on economies all around the world and on Singapore. Also, in terms of the cohesion of the society, the confidence and response which is necessary. It is absolutely crucial for us to hold together, to respond effectively to the immediate challenge and also to give people confidence that we can cope with this - we have the resources, we know what we are doing, we are ready for what lies ahead. And what lies ahead is very uncertain. Many possibilities, which are very worrying. We have to be prepared for them and we must be ready if it comes, we are able to respond to them.

That is why yesterday, DPM Heng made the Resilience Budget, which had S$47 billion, and S$17 billion draw on the reserves with the President's approval. It is unprecedented, but in this situation, it is absolutely necessary. 

On the health side, the COVID virus. My analogy is that tide has not turned. We have been fighting, and the tide is still coming in. What has changed is that we have put up our dykes, we have held the water out, but the dyke leaks. We have got bits coming in, people coming home, the virus gets into Singapore. We have to keep a very vigilant eye on it continuously and make sure that every drop which comes in we mop it up quickly before a drop becomes a rivulet, a rivulet becomes a stream, then I have a flood and we are sunk. 

Why do I say this? Because you can see what is happening around the world. In China they have a tremendous outbreak, with superhuman effort they have brought numbers back down to zero. Now they are very worried about the virus coming back to them from other countries in the world. You see it taking off exponentially in Europe now – Italy, Germany, France, Spain and Britain. It is a very grave situation and they are imposing drastic emergency measures - lockdowns. Boris Johnson, as Prime Minister, tells his people, my instruction to you is very simple, just stay at home. Because they have decided that it is not tenable to let it just carry on and burn out. They have to do their best to put the fire out. But it is going to be very hard. 

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You see it in America, taking off now. Now the American numbers I think have exceeded or are about to exceed the Chinese numbers and still increasing rapidly in places like New York State, on the West Coast. It is a crisis situation. In Chinese they say 一 one wave not settled, the next wave has come. This is not the last wave, because you look at other countries in the region who are very worried. India is very worried, Russia, Southeast Asia, Malaysians have locked down, the Thais have closed their borders and Indonesians are also very anxious. 

This is all around us and the waves are going to take many, many months and maybe more than a year or two to settle. We in Singapore, we are sitting watching our dyke. Trying to keep ourselves safe and preventing any of this from coming in, and I have a situation which is going out of control. So I am in this for a very long time to come. To sustain this, I need everybody's cooperation - safe distancing, personal hygiene, cooperation when we are contact tracing and discipline when people come back, stay home notification, stay home. That way we slow the spread of the virus. If you have a spot pop up, we have a good chance to mop it up before it gets out of control and then we have a public health disaster. 

I think the healthcare part is a very big problem. The economy part is also an unprecedented problem, because it is so disruptive – production has stopped in the countries which are locked down, so our supplies cannot come in. 

I went to my market last weekend at Teck Ghee, and chatted with a tropical fish shop owner, who has been there donkey years. She says she has a problem - she cannot get her supplies. Her supplies come from Malaysia and Malaysia is locked down. Tropical fish is not an essential item, so how does she get her business going? That is just a small example. People are not moving. The goods are still flowing but impacted, but the economies are drastically down. America this week - their unemployment, people are applying for unemployment benefits. Usually they have a couple of hundred thousand. This week, they had 3 million people applying for unemployment benefits. 

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All around the world that is happening, that hits us, and in Singapore, it hits us particularly hard because we are so dependent on trade and our industries like aviation, tourism, travel, hotel, I mean business has gone to zero. SIA’s business had gone down by 96 per cent. It has come to a halt. This is not going to go away in a hurry, because we are protecting our borders until everything calms down. Other countries are doing that.  

China, having brought their cases down to zero, have now instead of relaxing controls on their borders, have now put up more stringent border protections around themselves, because they are dead scared of COVID-19 coming back into China. That is all going to affect the civil aviation industry as well as globalised economies like Singapore. It is going to last quite a long time. It is not a V-shaped down dip, it is not a U-shaped dip. It has come down. If you are lucky, you can sustain it at a diminished level for quite a long time. If you are not lucky, it will keep on going down and some pieces are going to have a lot of difficulty, just staying in existence.

The economic challenge is very grave. Therefore, in this situation, we must be quite clear, people must be quite clear that we are doing all we can to help them to stabilise the economy, to preserve jobs, to help companies stay in business - reduce their costs, to help the key industries which are drastically hit like aviation, to stay and be able to continue in semi-suspended animation, but able to come back to life when the opportunities come. Whatever it takes to do that, we will do them. That is how we came up with the package yesterday - very drastic wage support scheme - help for the self-employed, the gig economy, help for the companies, help for the households. In fact, we tripled the household support and assistance package. We want to see people through this. 

We are under no illusions that this is the end of the story because nobody can tell what lies ahead. In February when we made the Budget, we knew it would not be the last word but we thought that it would buy us a few months, and then we will have some time to assess the situation and down the road, we will do more and put together the next package and then see us through the next stage. But we did not expect within one month, the picture was totally changed, the health picture was totally changed, the economic picture was totally changed. Therefore, the policy response, the action from the Singapore government had to be totally changed. 

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Within one month, we have the supplementary Budget, which for these pieces, are four, five or six times bigger than the original February Budget. But it is necessary and we have the dry powder. If we need to do more, when we need to do more, we will do that down the road. But even then, there will be uncertainty, there will be pain, there will be job losses, there will be cases of the COVID-19 and I am sure along the way as time passes, there will be further people who will not survive and will succumb to the disease. We have to expect that. There will be ups and downs. Therefore, it is critical that we go into this eyes open, strong leadership, good government, united and determined to see this through. 

That is what I explained to the President. I did not really have to say in all that detail because the President is reading the newspapers and reading the Cabinet papers. She knows and she has her own feel for what is the situation. When we made the case to her, she understood and she supported what we are doing. That is what she said in her letter to Parliament, which the Speaker read out yesterday. 

So that is where we are now. I wanted to give you this backdrop and I am happy to take any questions you have. 

Q: PM, how long can this massive package tide us through? I think DPM Heng did not rule out the possibility of tapping into the reserves again. He also said that we might have to do more down the road. Do we have room for that and is that a likely scenario? 

PM: It is quite possible. The components of the package are designed to be lasting for three-quarters until the end of the year and the payments are meant to stretch out until the end of the year. 

So at the very least, as we approach the end of the year, we will have to think whether we need to extend that package, and if so, whether you want to modify it, increase or decrease it, or whatever. That we have prepared for, but we must also be psychologically prepared that if things actually get worse during the next few months before the end of the year, we may need to do something even before that. If it comes to that, we will go to the reserves. 

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We have tapped from the reserves for this package - S$17 billion. The total amount of reserves, that we do not publish but we have much more than that and it will see us through for quite a long time. It is just as well that we have not gone and listen to the people who said to us - you do not need so much, why are you saving all this money, just touch it and we will be all right. But, we kept it aside. I think this is not just a rainy day, it is a mighty storm as DPM said and we will do what we need to do. 

Q: What assurances can you give to Singapore businesses in terms of government support in the case of a drawn-out crisis that stretches to a year or two? 

PM: The cost side, we can do a lot because wages for example – we have the job support scheme across the economy is 25 per cent of wages. For the tourism industry, it is 50 per cent of wages, for travel and aviation it is 75 per cent of wages. That is a huge amount of money, and I think it makes up about S$15 billion out of the package yesterday, one third. That we can continue. 

If you are looking at rentals and costs like property tax, that also we have a lot of flexibility to continue to use those as means to help people. 

What is difficult for us to do is to bring back the business when there is no business. If I have to lock down the public entertainment, then is very difficult for the discos to operate. It is very difficult if you are a DJ, where do you get your gig? If there is no international flights, because other countries have locked down their borders, then it is very difficult to keep SIA pilots and crew flying. If they are not flying, they do not get their flying allowances, and that is 60 per cent of their pay. It is a very substantial hurt to them. There will be other impacts like that which is going to be very difficult for us to completely neutralise. What we can do is to find ways in which to redeploy the people who are now freed up. While their day job is not there, but SIA as an organisation is a very capable organisation. Their people are very good, they know how to do service and I am sure we can use them elsewhere. Whether we are using the organisation to do contact tracing, or whether we are using them to be guides, to be encouraging people to keep social distance and to have the right behaviour in public places. 

I think that we have to work hard to find ways to redeploy the people who are inevitably going to be at the very least under-employed during this period. You are talking about tens of thousands, maybe hundreds of thousands. The Americans, they had one estimate that they think, I do not know whether he meant it seriously, but this was a member of the Fed who said 30 per cent unemployment. 

Q: Just now we are talking about businesses, what about for households? How do we assure people that this is enough and how long can it go for? If we are looking at the lower-income families, is that enough? 

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PM: Well, we have always structured the household assistance to have more help for the lower income families, and we have done that here also. The specific schemes are that way, but also we have put more resources into ComCare and into the community, the social work agencies, and we will make sure that if somebody needs help, we will be able to get the help to them. 

But I would say that when we lock down, when we tighten up the restrictions, when we have less activities in schools, for example, less mixing in schools, less CCA, in fact, the households, the children who bear the burden more are the ones from the lower-income families. Because school is not just going to school and attending class and coming home. It is also a place where you socialise, where you mix, where the teachers guide you, where you get the enrichment classes, and that is how we level up our kids and make sure that the people from less advantaged families are well taken care of and have a chance to level up. 

But if enrichment has to stop, if your teachers are unable to socialise with their kids, you cannot guide them, and the parents are unable to make up at home, which in some cases will be so, then the kid is going to be put at a disadvantage. MOE tells me that already our long-term absenteeism rates have crept up in this crisis, because all these support activities have not been able to carry on and therefore the support is weaker. 

That is one of the reasons why we think very, very carefully when people ask us, why do we not close the schools. After all, the Japanese have done it, so many other countries have done it. I got a very nice letter from a young lady, she said she is taking her ‘O’ Levels, and she spent some time writing a very good essay, asking me why we do not close the schools and we solve this problem. 

I decided that if she wrote to me so seriously, I should write her a proper reply and I explained to her why it was, that actually schools can be safe places, and schools actually provide a very important service, which helps the kids and helps their parents. If you do not have them open, it does not mean that your problem has gone away, because where do the kids go? 

Those who have parents who can look after them at home, well, okay, they sit at home, do homework, no computer games. Those who have no parents at home, they may run down to the video arcade, or to the shops and roam around, and may be even more risk of catching COVID-19 than if they were in a controlled environment in school. 

We are watching that very carefully, we have got this PCF cluster, with mostly teachers infected. There is one cluster in Dover Court International School, also a couple of parents. But I think we should look at schools as individual schools rather than one whole system. Just as we look at workplaces as individual workplaces, rather than one whole work system, and if a workplace has a problem, we deal with that. We confine and we rub out that cluster, but it does not mean that I must shut the whole system down.

Q: If the General Election was to take place, how do you see castings, Nomination Day and voting happening? Will traditional campaigning and large scale campaigning be out of the picture completely? At the end of the day, what will you base your decision on? 

PM: I think it is a very difficult decision because we are going into a very big storm and you want to have the strongest team and mandate, and the longest runway so that Singapore can have the best leadership to see it through this storm. That is a very desirable, and in fact, an essential requirement for us to see through this together. If we were sure that the thing could settle within the next six months, I think we can say well, let us wait for six months, let things calm down, then we carry on. But nobody can say. I expect that it can easily get worse before it gets better. You have to make a judgement in this situation with an outbreak going on with all sorts of exceptional measures implemented in Singapore – is it possible for us to conduct an election and to get this done, so that we clear the decks and we can go through and deal with whatever lies ahead of us. That is a question. 

As I said, if you are shut down like the UK is shut down or like Wuhan was shut down, everybody stays at home, then nothing can be organised. How do I get ballot boxes, how do I count the ballots, and how do people come up to vote? It cannot be done. But short of that situation, even when you have restrictions and some safe distancing measures, life still goes on. People are working, people can travel, people can conduct the poll and countries have been conducting elections. Israel did one recently. The American primary elections in several states – many states have gone ahead. Some have postponed it, but most have carried on. So these are, to a large extent, solvable problems. You have to think of solutions for them, but it can be done. I think that we have to weigh conducting an election under abnormal circumstances, against going into a storm with a mandate which is reaching the end of its term. We have to make a decision on that. I would not rule any possibility out. I think once all the requirements are cleared, and that includes the electoral boundaries which has been reported, the electoral rolls have to be certified and republished. Once that is done, that means all possibilities are there. I will have to judge the situation. 


Q: I wanted to ask a question on the 4G leadership. The other day in Parliament we saw Minister Lawrence Wong getting emotional. How are the ministers, 4G leaders especially, coping with dealing with the crisis on the economic and health front, and what is your assessment? 

PM: I am very happy that we put Lawrence Wong and Gan Kim Yong to chair the multi-ministry task force. Heng Swee Keat is advising them, closely supervising this and was instrumental in putting together the Budget and then the Resilience Budget, which he delivered yesterday. I think people have seen them and they have watched them respond. They have watched them answer questions, deal with emergency situations – runs on food, runs on toilet rolls, big outbreaks, bad news – I think that they have gained experience and confidence. I believe that they have also gained in trust and rapport with people. 

It is a formative experience for the population and the leadership. The first generation, they were born in the crucible of fire. They came in, the world was upside down and they were part of a fight. They went fully into the fight and they brought us through that – independence, separation and forward. That was the Pioneer Generation. 

Then the Merdeka Generation – they lived through that, built and played a big part bringing Singapore here. They knew what life was about. But for quite a long time, we have had stable circumstances in Singapore. People worked hard and they take life seriously. At the same time, they cannot quite imagine what it is like when things are turned totally upside down – suddenly, when everything which you assumed was secure, your job, your health, your family, is at risk. We regularly tell people Singapore is fragile, what we have achieved is precious, we have to continue to work hard, it can disappear in a moment if you take your eye off the ball. People listen to us, but in the back of their mind they do wonder if it is true or not. After all, the show has gone on for so many years. Maybe you can go on autopilot. 

This shows everybody that it is quite serious – it is absolutely existential – life and death. It is not masak masak. I think, if you come through this, you have more than one generation settled, knowing what Singapore is about. 

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