New S$1.5 billion package to help vulnerable, businesses fight inflation: DPM Lawrence Wong
SINGAPORE: To counter rising inflation, the Government on Tuesday (Jun 21) announced a S$1.5 billion support package targeted at providing immediate relief for lower-income and more vulnerable groups.
The ongoing war in Ukraine and continued COVID-19 restrictions in parts of the world have disrupted supply chains and resulted in higher energy and food prices, said the Ministry of Finance (MOF) in a press release.
Singapore’s core inflation had accelerated to 3.3 per cent year-on-year in April from a previous 10-year high of 2.9 per cent in March.
Energy and food prices have risen sharply and it is likely that global inflation will remain high for some time and even increase further before it stabilises and gets better, said Deputy Prime Minister Lawrence Wong at a press conference on Tuesday.
“The inflation situation will eventually stabilise, both globally and within Singapore. But for now, we must expect price increases to continue in the coming months,” Mr Wong said.
“In particular, energy prices are likely to remain elevated for the rest of the year.”
This is why the Government has decided to introduce another support package at S$1.5 billion, he said.
“The support measures in this package are tilted towards helping our lower-income and vulnerable groups because they are the ones who are disproportionately impacted by the effects of inflation.”
Another reason for such targeted measures is so that the fiscal stimulus does not itself create more inflationary pressure, said Mr Wong.
The package was "designed carefully" so that it does not spark more inflation in Singapore, he said.
Some of the key measures:
- All Singaporean households, including those in private properties, will receive a S$100 rebate on utilities
- Permanent enhancements to ComCare assistance schemes
- For businesses, there are higher subsidies for the Progressive Wage Credit Scheme and an Energy Efficiency Grant for local small- and medium-sized enterprises
- Enhancements to the Enterprise Financing Scheme
- Chicken slaughterhouses affected by Malaysia’s chicken export ban will get a 1-month foreign worker levy waiver
- Eligible taxi main hirers and private hire car drivers will receive a one-off relief of S$150 in August
The support package is funded from surpluses as there were higher revenues from financial year 2021 due to the stronger economic recovery, while spending on COVID-19 measures was lower than anticipated, said MOF. There will be no further draw on past reserves.
Mr Wong, who is also the Finance Minister, said that there will be no supplementary Budget at this point.
"Instead the ministries will re-prioritise within their existing budgets to fund this package," he said.
Mr Wong said that the Government will be upfront in sharing with Singaporeans the challenges ahead and how Singapore will tackle them.
“The situation is highly fluid and the Government will continue to monitor it closely, and adjust our measures and programmes as necessary,” he said.
“The bottomline is that we are all in this together and I’m confident that we will get through this together, as one united people.”
Mr Wong said in his closing remarks that Singapore is facing these challenges from a "position of strength".
"We have moved earlier than most central banks when it comes to tackling inflation and monetary policy, and we have the fiscal resources to help Singaporeans tide through the higher prices as well as any potential crisis that may emerge down the road," said the Deputy Prime Minister.
He also confirmed that a GST hike scheduled for 2023 will proceed as planned, in response to questions from reporters.