Older workers, self-employed individuals as well as small businesses the focus as MPs debate new Fortitude Budget
SINGAPORE: Members of Parliament on Thursday (Jun 4) affirmed their support for the new Fortitude Budget, although some expressed concerns for groups such as older workers and self-employed individuals.
The S$33 billion Fortitude Budget is Singapore’s fourth budget this year, focusing on jobs and businesses affected by the COVID-19 pandemic, including support for those heavily impacted by the “circuit breaker”. It was unveiled by Deputy Prime Minister Heng Swee Keat on May 26.
Mr Heng, who is also Finance Minister, had previously announced support measures to help tide businesses, workers and households through the COVID-19 pandemic in his annual Budget speech in February, the Resilience Budget in March and the Solidarity Budget in April.
READ: S$33b Fortitude Budget aimed at providing jobs, supporting workers and firms through 'difficult period' of COVID-19
In his speech, MP Liang Eng Hwa emphasised the need to pay close attention to the employability of two groups in particular - first-time young job seekers and mid-career workers.
Creating jobs was only “one side of the equation”, said Mr Liang. There would also be a need to find workers with the required skill sets who can do the job, he added.
“During the Unity Budget debate, I spoke about the inherent friction a mid-career job seeker has to go through to make mid-career job changes. It is often a strenuous journey that comes with lots of pain points,” said Mr Liang.
“The job seekers often have to contend with the employers’ (bias) or specific preferences; whether it is experience, age and others. The other more complex challenge is a situation where there is no direct match between the jobs that are presently available versus the skills the workers currently have. We would need to train and right-skills the workers so as to match to the jobs that are available or in demand.”
Employers often want to hire those with the relevant work experience, and the workaround would be to offer on-the-job training by way of subsidised traineeships and programmes, said Mr Liang.
“I am glad the Finance Minister has noted this problem and in his fourth Budget introduced further support and funding for traineeships and training for both recent graduates and mid-career job seekers.”
One of the new measures under the new Budget will see the Government launching 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.
Of the 25,000 traineeships available, about 4,000 places are meant for mid-career job seekers, Mr Heng had said in May. The other 21,000 positions will go to local first-time job seekers like university graduates.
About S$2 billion will be set aside this year for this package, Mr Heng had said.
READ: Fortitude Budget: More than 40,000 jobs to be created as part of S$2b employment, training package
MP Jessica Tan lauded the Budget for the traineeship opportunities available specifically for mid-career workers who have lost their jobs.
“We all recognise this group of workers find it tougher, not just in COVID-19 times but even in ordinary times, they find it tougher and they do take longer in order to find employment after they lose their jobs.”
Noting that connecting these mid-career workers with the right opportunities will be key, she added: “While the jobs are there, there’s lots of information. We need to ensure that the people who need these jobs are well-connected.”
HELP FOR SMALL BUSINESSES
MPs also discussed the help available to small businesses, including the rental waivers to help small- and medium-sized enterprises (SME) with costs announced by Mr Heng in May. The Unity and Resilience Budgets also provided for a property tax rebate.
This additional rental relief will come in the form of a cash grant to property owners. With the property tax rebate, this 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.
This cash grant will cost about S$2 billion, Mr Heng had said.
On top of the rental waivers and property tax rebate, the Ministry of Law (MinLaw) laid out its proposed amendments to the COVID-19 (Temporary Measures) Act on Wednesday, for landlords to provide SME tenants with more rental relief.
With the proposed amendments, set to be introduced in Parliament on Friday, commercial property owners must waive the base rent for two months – June and July – for SME tenants that have seen “significant” revenue declines due to the pandemic, as long as the leases or licenses were in force on Apr 1.
MP Tin Pei Ling noted that the amendments to the COVID-19 (Temporary Measures) Act will address fears that initial reliefs would not be enough and that waivers would not be passed down to subtenants.
But she said, while businesses appreciate the loan deferments available, she cited a resident’s case, in which he realised the deferment interest exceeds the cash assistance available to him, and that there is no certainty whether his business will recover before he has to start repaying the loans.
“This seems to defeat the purpose of having this facility, even for viable businesses. Such a situation will save companies with normally healthy cash flow, but not those that may have been or are planning to invest in strategic capabilities.”
The Monetary Authority of Singapore (MAS) announced in March that SMEs facing temporary cash flow constraints will have options to defer principal payments on their secured term loans up to Dec 31, subject to the assessment of the banks and finance companies.
This will be available to SMEs that continue to pay interest and are in good standing with their banks and finance companies, MAS said, adding that more than S$40 billion of existing loan facilities to SMEs is estimated to qualify for this opt-in relief scheme.
Noting the implications on banks and the industry, Ms Tin suggested that businesses be offered a 0.1 per cent interest for existing business loans during this deferment period.
CONCERN FOR SELF-EMPLOYED WORKERS
Several MPs raised problems faced by self-employed workers, including those that fall outside of the eligibility criteria of the Self-Employed Person Income Relief Scheme (SIRS).
MP Lim Biow Chuan noted that individuals who reside in homes with an annual value of more than S$21,000, even if they do not own the homes, are not eligible for the scheme. Individuals whose trade income exceeds S$100,000 also do not qualify.
“I had received many messages from self-employed persons like housing agents, insurance agents, tuition teachers, instructors, contractors and people in the sales industry. They said for the last two months, their income had fallen drastically because they were all required to stay at home and unable to carry out their business activities,” said Mr Lim.
Just because a self-employed person “had a higher income in the last year” or lives in a home with an annual value of more than S$21,000 does not mean that they have the ability to survive two to three more months without income, he added.
“If these self-employed persons had less savings or they had higher expenses, should they be left without any support from the Government?”
Mr Lim urged Mr Heng to consider raising the trade income criteria of SIRS to S$250,000 and removing the home annual value criteria.
“In unprecedented times like this, the Government should try to assist as many people as possible. And for those who do not require any help from the Government, they can always be encouraged to return the grant or the subsidies back to the Government, which has been done by many companies,” he added.
CONCERN FOR THE CONSTRUCTION SECTOR
MP Lee Bee Wah expressed her concern for the construction sector in particular. She pointed out how “happiness” turned to “frustration” for contractors over the number of approvals needed to commence work.
“I received many complaints from them, they were very confused, they were very unhappy,” she said.
READ: Construction workers to be tested regularly when projects gradually resume after circuit breaker
The approvals needed include compulsory swab tests for workers, as well as the need for safe distancing officers (SDO) and safe management officers (SMO) on site, before contractors are able to start work, she said.
“This compulsory swab test exercise can easily stretch to August or September, so how to start work?” asked Ms Lee. “There’s a long queue too for training of SMO and SDO. I checked two days ago, the next available session is Jul 5. And this is an online course, why was this not conducted during the CB (“circuit breaker”). Can we have more sessions so that this does not become a bottleneck?”
The need for workers to be sent for swab tests every fortnight before they are allowed on the work site could also lead to a bottleneck, said MP Cheryl Chan.
“Based on current test rates, we only managed to test over 10 per cent of the total foreign worker population mainly residing in dormitories. With the added test requirement, how should the construction sector manage their schedule?” she asked.
Another issue employers face is that they will need to let MOM deploy their workers in order to receive the foreign worker levy rebates announced in the Fortitude Budget, added Ms Lee.
“Isn’t this very high handed? Why doesn’t MOM just return the workers to the rightful employers, why force people to give up their workers?” she asked. “With all these challenges, many would not be able to start work for at least another three months ... And the income will only come in another two three months later, maybe (at the) end of the year.”
Ms Lee suggested a few solutions, including the Government absorbing the cost of swab tests for workers beyond August, as well as extending the full cost of the foreign workers levy waiver as well as the levy rebate of S$750 till August.