Fortitude Budget: S$2.9 billion to boost and extend Jobs Support Scheme; SMEs to get more rental relief
SINGAPORE: As the COVID-19 pandemic continues to hit demand and supply, businesses will get more help with labour and rental costs under the S$33 billion Fortitude Budget announced by Deputy Prime Minister Heng Swee Keat in Parliament on Tuesday (May 26).
To help businesses retain workers, the Government will extend wage subsidies under the Jobs Support Scheme (JSS) by one month for all firms, computed based on wages paid in August.
This means companies will get wage subsidies for all local employees for 10 months. Firms will receive this additional month of subsidies in the October payout.
READ: COVID-19: 75% wage subsidy for firms in all sectors to be extended till May, measures to cost S$3.8 billion
Under the JSS, which was first announced in February, the Government co-funds between 25 per cent and 75 per cent of the first S$4,600 of gross monthly wages paid to each local employee.
Mr Heng, who is also Finance Minister, had raised the wage subsidy for all firms to 75 per cent for the months of April and May.
For businesses that cannot resume operations immediately after the "circuit breaker" period, Mr Heng said the Government will continue to provide a 75 per cent wage subsidy until August, or when they are allowed to reopen, whichever is earlier.
Such businesses include retail outlets, gym and fitness studios, as well as cinemas.
READ: S$33b Fortitude Budget aimed at providing jobs, supporting workers and firms through 'difficult period' of COVID-19
The Government will also refine the classification of firms in the different JSS tiers to give more support to sectors that are more severely impacted by the pandemic, Mr Heng said.
For example, firms in the aerospace sector, including those in maintenance, repair and overhaul, will receive 75 per cent in wage subsidies. Firms in the retail, as well as marine and offshore sectors will now receive 50 per cent support.
Eligible firms will receive a back-payment by July that tops up previous JSS payouts to the higher level of support.
In all, these enhancements to the JSS will cost S$2.9 billion.
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FOREIGN WORKER LEVIES
For businesses employing foreign workers that are not allowed to resume operations on-site immediately after the circuit breaker is lifted, the Government will extend the foreign worker levy waiver and rebate for up to two months.
This includes businesses in the construction, marine and offshore, and process sectors.
Mr Heng said the waiver will be 100 per cent in June and 50 per cent in July, while the rebate will be S$750 in June and S$375 in July.
The minister had announced on Apr 6, as part of the Solidarity Debate, that he will waive the levy due in April and give employers with a rebate of S$750 for each work permit or S pass holder, based on previous levies paid in 2020.
CPF CONTRIBUTIONS FOR SENIOR WORKERS DEFERRED
To help businesses further manage costs, the Government will defer the planned increase in Central Provident Fund (CPF) contribution rates for senior workers by one year, from Jan 1, 2021 to Jan 1, 2022.
"The CPF Transition Offset scheme will similarly be deferred until after the higher contribution rates take effect," Mr Heng said.
READ: Highlights: Heng Swee Keat delivers Fortitude Budget to support Singaporeans amid COVID-19 pandemic
RENTAL RELIEF FOR SMEs
To help small- and medium-sized enterprises (SME) with rental costs, the Government will "significantly add" to the support earlier provided through the property tax rebate for 2020 in the Unity and Resilience Budgets.
This additional rental relief will come in the form of a cash grant to property owners, Mr Heng said.
With the property tax rebate, he said the additional support will 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.
The cash grant will cost about S$2 billion, Mr Heng said.
The Government will also introduce a new Bill next week to mandate that landlords grant a rental waiver to SME tenants "who have suffered a significant revenue drop in the past few months".
If the Bill is passed, Mr Heng said it will give qualifying SME tenants in commercial properties a total of four months of rental relief – shared equally between the Government and landlords.
RENTAL RELIEF FOR GOVERNMENT TENANTS
Commercial tenants and hawkers under government agencies will get two more months of rental waivers, increasing the total rental waiver to four months for commercial tenants and five months for hawkers.
Industrial, office and agricultural tenants of government agencies will get one more month of rental waiver, increasing the total rental waiver to two months.
"We will also ensure that these measures flow through to help sub-tenants, many of whom are SMEs," Mr Heng said. "This will dovetail with measures for SMEs being studied by the Minister for Law."
TARGETED SUPPORT FOR HARD-HIT SECTORS
As for sector-specific needs, the Government will further support the built environment sector, which includes construction.
Mr Heng said the Government will co-share additional costs that will be incurred by businesses that need to meet additional requirements in order to resume their existing projects safely.
"The Minister for National Development and Building and Construction Authority will announce the details later," he added.
READ: COVID-19: Construction sites can resume work from Jun 2; priority given to projects that follow new safety measures
READ: Fortitude Budget: More than 40,000 jobs to be created as part of S$2b employment, training package
The Government will also consider giving more support to sectors that take longer to reopen fully, including aviation and tourism. This will depend on the situation and longer-term shape of these industries, as well as plans for the economy, Mr Heng said.
FINANCING SUPPORT FOR START-UPS
To help promising start-ups sustain their innovation and entrepreneurship activities, Mr Heng said the Government will set aside S$285 million "to catalyse and crowd in" at least another S$285 million in matching private investments.
This is in addition to the S$300 million already set aside under the Unity Budget for deep-tech startups to gain better access to capital, expertise and industry networks under Startup SG Equity.
"These start-ups can also make full use of the SGUnited Traineeship scheme to bring in graduating students with deep interests in the fields they are exploring, and build up our talent base," Mr Heng said.