Covid-19 support measures in Budget 2020 ‘appropriate for now’, but Govt will maintain ‘state of dynamic vigilance’: Heng Swee Keat
“In the weeks and months to come, we will need to draw deeply on Singapore’s reserves of resilience, trust and solidarity,” said Deputy Prime Minister Heng Swee Keat.
SINGAPORE — The overall size of Singapore’s spending in Budget 2020 is “appropriate for now”, said Deputy Prime Minister Heng Swee Keat, as he responded to calls from Members of Parliament (MPs) over the past two days for the Government to do more to support businesses and households through the Covid-19 outbreak.
Rounding up the Budget debate on Friday (Feb 28), Mr Heng, who is also Finance Minister, said that the Budget had been calibrated to put sufficient purchasing power back into the economy, while injecting a boost of confidence, and was in fact higher than what most economists had expected.
Still, he noted that the Covid-19 outbreak is a “fast-moving, fluid situation” and so the Government will maintain “a state of dynamic vigilance” and be prepared to adjust course as new information comes in.
The Stabilisation and Support Package for businesses and the Care and Support Package for households rolled out in Budget 2020, totalling S$5.6 billion, dwarfed the S$230 million package introduced during the Sars (severe acute respiratory syndrome) crisis in 2003.
Budget 2020 also came on the back of lacklustre economic growth of 0.7 per cent last year, the weakest since the 2008 global financial crisis.
Mr Heng noted that many MPs had asked if more could be done for businesses and for a longer period of time.
In response, Mr Heng said: “We hope that will not become necessary.”
He added: “But if it does, for example if the outbreak becomes a worldwide pandemic, and the global economic impact is deeper and longer, we have the fiscal resources to do so, and the will to act.”
But for now, he said: “Let’s go forth and make the fullest use of the support available out there, before we review what more needs to be done.”
JOBS THE TOP PRIORITY
Mr Heng stressed that the Budget applies the support where it matters most — jobs.
And so the two biggest items in the S$4 billion Stabilisation and Support Package — the Jobs Support Scheme (JSS) and the Wage Credit Scheme (WCS) — are focused on preserving and enhancing jobs, he said.
“With greater job assurance, workers are in a better frame of mind to go for training. It will also avoid them having to cut down too much on consumption.
It was announced that the WCS, which co-funds wage increases for Singaporean employees earning a gross monthly wage of up to S$4,000, will be expanded to help fund wage increases for those earning up to S$5,000, for qualifying wage increases given in 2019 and 2020.
Additionally, the Government will also cofund five percentage points more, raising the levels to 20 per cent for wage raises in 2019 and 15 per cent for those in 2020.
Meanwhile, the JSS, which is expected to benefit more than 1.9 million employees, will offset 8 per cent of the wages of every employee who is a Singaporean or permanent resident for three months, up to a monthly cap of S$3,600.
Several MPs raised calls for the Government to expedite the flow of the S$1.3 billion JSS payout, slated for July, saying that many businesses are facing cash flow problems now and cannot wait that long for the funds.
In response, Mr Heng said the government agencies involved have, in the last few weeks, redoubled their efforts to check and validate information on workers, employers and payment mode and are now targeting to bring forward the JSS payment to end-May.
Employers using bank crediting will get the payout about a week earlier, he added.
The Government has also extended support to other groups who have felt the ripple effects of the Covid-19 situation, including the self-employed, Mr Heng added.
These include measures to support taxi and private hire car drivers, hawkers, tourist guides, and operators of food and beverage and retail outlets, totalling over S$200 million.
Mr Heng noted too that the Budget gives extra support for the sectors most impacted by Covid-19, namely tourism, accommodation and aviation.
These sectors will receive over S$400 million, in addition to the support they can get through JSS, WCS and the corporate income tax rebate, he said.
TRUST, RESILIENCE KEY TO FIGHTING COVID-19
Singapore has been able to respond strongly and effectively to Covid-19 because there is strong trust between the people and the Government, and the sense that we are all in this together, Mr Heng said.
“The Government can make decisions quickly and carry them out effectively, because Singaporeans have confidence that those responsible know what they are doing, care about their health and safety, and share their worries and concerns,” he said.
“We do not hide bad news, we do not flinch from doing the right thing, we will go the extra mile to help every one of us come through this together. That is why people comply with stringent quarantine orders, people accept reassurances about masks, people feel safe and carry on with their lives.”
He added: “In the weeks and months to come, we will need to draw deeply on Singapore’s reserves of resilience, trust and solidarity. And if we conduct ourselves well in this crisis, we will replenish those reserves, and strengthen our resilience and unity for another generation.”
