The Singaporean government has announced a supplementary Budget to its 2020 Budget, designed to address the COVID-19 pandemic and its impact.
Heng Swee Keat, Finance Minister of Singapore, unveiled a S$48 billion raft of measures to steer aid to workers and businesses, with more targeted help for those hardest-hit by the pandemic – as well as strengthening economic and social resilience.
In a statement, the Singapore government said, “The COVID-19 pandemic is likely to have long-lasting economic repercussions, as the global economy faces demand and supply shocks, falling growth forecasts and rising uncertainty.”
“To pull through this difficult time, additional support will be given to businesses. Addressing immediate challenges, the Resilience Budget will tackle the 3 Cs on business owners minds – cash flow, cost, and credit, in addition to offering help to specific sectors affected by COVID-19,” it added.
The Government will draw on Singapore’s strategic reserves, which serves as a bulwark against ‘extraordinary shocks and crises’. The first time this was used was during the global financial crisis of 2008, when President S.R. Nathan approved a draw of S$4.9 billion. This time, President Halimah Yacob has given in-principle support to draw S$17 billion of the reserves.
Together with the S$6.4 billion announced in the primary 2020 Budget, Singapore has set aside close to S$55 billion – or 11 percent of GDP – for the fight against COVID-19. The Resilience Budget dwarfs the previous off-Budget package rolled out in 2009, which was worth S$20.5 billion.
According to estimates released on 26 March, Singapore’s economy is expected to contract by 2.2 percent year-on-year for the first quarter of 2020. The COVID-19 outbreak has affected the construction and services industries – aside from the effects of the US-China trade war and the already-cooling global economy.
The Resilience Budget targets four areas to help businesses: cash flow, business costs, credit, as well as helping the most affected sectors.
In his speech outlining the Resilience Budget, Heng said, “This is a landmark package, and a necessary response to a unique situation.” Describing the COVID-19 pandemic as an “unprecedented crisis of a highly complex nature”, Heng added, “In economic terms alone, this will likely be the worst economic contraction since independence.”
Heng also warned that the worst of the fallout from COVID-19 may yet materialise. “The COVID-19 pandemic is likely to take at least a year to be resolved, and the economic repercussions would last even longer. The world is seeing successive waves of infection, and importation of infections. We must be prepared to take further tougher measures,” he said.
“The months ahead will not be easy, as the situation continues to evolve dynamically and unpredictably. We must continue to be on high vigilance, mentally and psychologically prepared for every scenario,” Heng concluded.
The supplementary Budget has seen wide support from businesses. In a statement, the Singapore Business Federation (SBF) said, “The SBF welcomes the S$48 billion Resilience Budget unveiled this afternoon by Deputy Prime Minister Heng Swee Keat. This ramps up support substantially for our businesses and sends a strong signal of the Government’s priority and commitment to keep businesses going and preserve jobs.”
S.S. Teo, Chairman of the SBF further added, “Unprecedented times call for extraordinary measures. We strongly applaud and support the Resilience Budget and the Government’s decision to draw on the country’s reserves. The business community is extremely heartened that the Government has responded swiftly and comprehensively to the feedback they have given on the assistance that they need. This massive landmark budget will help cushion the fallout for our businesses in the short- to medium-term and give them the confidence to keep their workers and train them in preparation for the eventual rebound.”