S$33b Fortitude Budget aimed at providing jobs, supporting workers and firms through 'difficult period' of COVID-19
SINGAPORE: A new S$33 billion Budget focused on providing jobs and helping to tide workers and businesses through the “difficult period” of COVID-19 was unveiled in Parliament by Deputy Prime Minister Heng Swee Keat on Tuesday (May 26).
Part of the next phase of Singapore’s fight against COVID-19, the Fortitude Budget, which is Singapore’s fourth of the year, aims to help businesses and workers adapt, transform and seize new opportunities in order to emerge stronger, said Mr Heng.
“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,” he said. "We aim to enable workers and businesses to go through this difficult period together in a synergistic way."
This comes as Singapore prepares to reopen its economy in three phases, following a "circuit breaker" period which has spanned almost two months.
"As we open up progressively, we will continue to give more support to businesses which are not yet ready to reopen, and workers who are still unable to resume work. The key is to reopen safely, and this needs to be done carefully," said Mr Heng.
Mr Heng, who is also Finance Minister, had previously announced support measures to help tide businesses, workers and households through the COVID-19 outbreak.
Apart from the annual Budget speech in February, there were the Resilience Budget in March and the Solidarity Budget in April.
“This is a landmark package, and a necessary response to an unprecedented crisis,” said Mr Heng. “A distinctive feature of this Budget is that we are setting aside a bigger contingent sum.
"We are dealing with unprecedented uncertainty, across all fronts. A bigger contingent sum will allow us to respond swiftly to fast-changing situations.”
Together with the Unity, Resilience and Solidarity Budgets, Singapore is dedicating S$92.9 billion to support its people in the fight against COVID-19, said Mr Heng. This is almost 20 per cent of the country’s Gross Domestic Product.
This comes as Singapore again downgraded its growth forecast for 2020 and is bracing for its worst recession.
In a Facebook post on Tuesday, Prime Minister Lee Hsien Loong said Singapore is grateful for the Pioneer Generation’s "sacrifices and stewardship" to build up its reserves and giving it the means to support its people.
"The fiscal prudence and discipline of successive governments have put us in a strong position to overcome this crisis, and emerge stronger after the pandemic," he said.
Mr Lee reiterated that saving and creating jobs will be the Government's priority, and added that it would also support frontline agencies, households and communities, and help the needy and vulnerable.
"No one will be left behind," said Mr Lee.
More details will provided when Parliament debates the Fortitude Budget at the next sitting on Jun 4 and Jun 5, said Speaker Tan Chuan-Jin in a Facebook post on Tuesday.
President Halimah Yacob has given her in-principle support for Singapore to draw on its past reserves to fund this new booster.
"In our fight against COVID-19, our past reserves have been critical in enabling us to respond comprehensively and robustly to the situation at hand. We will have to deploy it in a deliberate manner, and at decisive moments, in this battle against COVID-19," said Mr Heng.
READ: President Halimah Yacob gives in-principle support to draw on reserves for 4th COVID-19 support package
This latest Budget will do even more to protect the livelihoods of Singapore’s workers, said Mr Heng.
"The coming months will test our resolve as a society and as a people. We will need to adapt, and stay resolute and resilient amidst a rapidly evolving, uncertain situation," he said. "In that light, I have decided to call this the Fortitude Budget - courage in adversity."
MORE THAN 40,000 NEW JOBS IN PUBLIC, PRIVATE SECTORS
As part of a key thrust to help workers find jobs, the Government will launch an SGUnited Jobs and Skills Package. This will create more than 40,000 jobs in the public and private sectors, about 25,000 traineeships and 30,000 skills training opportunities.
READ: Fortitude Budget: More than 40,000 jobs to be created as part of S$2b employment, training package
About S$2 billion will be set aside this year for this package, said Mr Heng.
“The public sector will bring forward our hiring to meet long-term needs, like early childhood education, healthcare and long-term care,” said Mr Heng.
“Together with jobs to meet short-term needs related to COVID-19 operations, such as healthcare declaration assistants and swabbers, the public sector will create 15,000 jobs. Our agencies will also work with businesses to create 25,000 jobs.”
When it comes to traineeships, the Government will provide job seekers with a “wider range” of these opportunities to gain industry-relevant experience.
In addition, a new SGUnited Skills programme will also expand training capacity for about 30,000 job seekers this year.
Under the fourth component of the SGUnited Jobs and Skills Package, there will also be a hiring incentive, revealed Mr Heng.
Building on the existing hiring incentive under the SkillsFuture Mid-Career Support Package announced in the Unity Budget, there will be a doubling of the incentive to cover 40 per cent of the salary of eligible workers aged 40 and above, over six months. This is capped at $12,000 in total.
There will also be an expansion of the hiring incentive to cover workers of all ages. For eligible workers under the age of 40, the incentive will cover 20 per cent of their monthly salary over six months, capped at S$6,000 in total.
The COVID-19 pandemic has “accelerated” the rise of digital transformation, and the decline in support for globalisation, as well as shifts in global supply chains, said Mr Heng.
“These shifts were already taking place, but COVID-19 has accelerated them. Our businesses must adapt, and we will support them in this,” he said.
To accelerate change, the Government will allocate more than S$500 million to support businesses in their digital transformation, Mr Heng said.
READ: Fortitude Budget: More than S$500m allocated to support digital transformation of businesses amid COVID-19 outbreak
This includes agencies such as the National Environment Agency providing a bonus of S$300 per month over five months to encourage more stallholders in hawker centres, wet markets, coffee shops, and industrial canteens to use e-payments and avoid having to handle cash.
There will also be a Digital Resilience Bonus to help businesses take their "next step" to digitalise, starting with the food and beverage and retail sectors, two sectors most affected by the safe distancing requirements as Singapore re-opens the economy, said Mr Heng.
For example, eligible businesses can receive a payout of up to S$5,000 if they adopt PayNow Corporate and e-invoicing, as well as business process or e-commerce solutions, he added.
"TIMELY SUPPORT FOR BUSINESSES AND WORKERS"
When it comes to providing “timely support” for businesses trying hard to get back on their feet as they emerge from the circuit breaker, the Government will strengthen its support for businesses on the 3Cs – cash flow, costs, and credit, said Mr Heng.
For one, the Government will make three enhancements to the Jobs Support Scheme (JSS) - firstly, by increasing the duration of JSS payouts by one month for all firms.
In addition, for businesses that cannot resume operations immediately after the circuit breaker, the Government will continue providing wage support at 75 per cent until August this year or when they are allowed to reopen, whichever is earlier.
Thirdly, there will be a refinement of the classification of firms in the different JSS tiers.
In total, these three enhancements to the JSS will cost S$2.9 billion, said Mr Heng. Through the JSS, the Government is pumping in a total of S$23.5 billion to firms to support wage costs for 10 months, he said.
Touching on costs, Mr Heng said that the Government will extend the Foreign Worker Levy waiver and rebate for up to two months for businesses that will not be 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, he added.
HELP WITH RENTAL COSTS
Mr Heng also announced measures to help businesses, particularly small- and medium-size enterprises (SMEs), with rental costs.
This includes providing a cash grant of about S$2 billion to offset the rental costs of SME tenants. This 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, said Mr Heng.
A new Bill will also be introduced next week and will mandate that landlords contribute by granting a rental waiver to their SME tenants who have suffered a significant revenue drop in the past few months, he added.
“The Government does not ordinarily intervene in contracts after they have been entered into,” said Mr Heng.
“However, as the Minister for Law had explained in his second reading speech on the COVID-19 (Temporary Measures) Bill, in exceptional situations such as this, the Government needs to intervene, through legislation, with temporary targeted steps to safeguard the economic structure for the common good.”
If the Bill is passed, SME tenants in commercial properties who have suffered a significant revenue drop will benefit from a total of four months of rental relief – shared equally between the Government and landlords.
Rental relief for Government tenants will also be extended, with two more months of rental waivers for commercial tenants and hawkers, announced Mr Heng.
For industrial, office, and agricultural tenants of Government agencies, the Government will provide one more month of rental waiver.
The total rental waiver will now be four months for commercial tenants, while stallholders in hawker centres and markets managed by Government agencies will get a total of five months of rental waivers, said Mr Heng.
Noting that some 'promising" start-ups in Singapore are finding it hard to raise capital and develop their business, Mr Heng also announced enhanced financing support for such entities. This will include setting aside S$285 million “to catalyse and crowd in” at least another S$285 million in matching private investments.
“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,” said Mr Heng. “Based on our current reopening plans, we expect most businesses to reopen by July. This support would enable most sectors to recover in the coming months.”
Other sectors such as aviation and tourism will take longer to reopen fully, and the Government will consider providing additional help, depending on the situation and "longer-term shape" of these industries and plans for the economy, said Mr Heng.
ADDITIONAL SUPPORT TO THOSE IN NEED
The Government will continue to provide help for “immediate needs”, said Mr Heng. It plans to strengthen support to those in need by setting aside another S$800 million for the COVID-19 Support Grant.
READ: Fortitude Budget: Additional S$800 million set aside for COVID-19 Support Grant; S$100 one-off utilities credit
The grant covers those who have lost their jobs, are placed on no-pay leave, or who will see salaries significantly reduced in the coming months due to COVID-19.
"In the three weeks after the COVID-19 Support Grant started, we received about 46,000 applications," Mr Heng said. "We are committed to providing help to those who have been badly affected."
Mr Heng also noted that Singaporeans had given feedback that while they are saving on transport fares and other charges, they are expecting to spend more on their utility bills, as they stay home during the circuit breaker period.
As such, the Government will introduce a one-off S$100 Solidarity Utilities Credit to each household with at least one Singapore Citizen.
This is to "thank all Singaporeans for doing our part in staying home for Singapore", Mr Heng explained.
READ: Solidarity Budget: S$600 cash support for all adult Singaporeans, other cash payouts to be brought forward to June
This will cover all property types and will be credited in the July or August utilities bill.
At a wider level, Mr Heng noted that Singapore's charities and social service agencies are facing "difficulties" due to falling donations.
In order to provide more support for charities amid COVID-19, the Government will partner the Tote Board to enhance the matching for donations through Tote Board’s Enhanced Fund-Raising Programme, he said.
Charities can apply to receive dollar-for-dollar matching on eligible donations, which are raised from projects in this financial year, up to a cap of S$250,000 per charity. This includes donations raised through approved digital platforms.
To enable this, the Government will provide a top-up of S$100 million, to add to the existing S$70 million budget for the Enhanced Fund-Raising Programme, Mr Heng said.
ADDITIONAL S$13 BILLION FOR CONTINGENCIES FUNDS
Each year, Singapore sets aside S$3 billion as a buffer in the Contingencies Fund and the Development Contingencies Fund.
An additional S$13 billion will be put aside so that the Government can respond to urgent and unforeseen needs swiftly, said Mr Heng.
"This will allow the Government to respond quickly to any unforeseeable developments arising from COVID-19," he said.
"This could include public health or fiscal measures that have to be put in place quickly, if the medical or economic situation deteriorates. We will do our best to avoid this, but we must be prepared for any eventuality."
"The battle against COVID-19 will be a long one. The road ahead will be uncertain, with more ups and down," added Mr Heng. "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."
Watch the full statement: