SINGAPORE – Tuesday, 26 May 2020: Singapore’s Finance Minister Heng Swee Keat unveiled a new raft of stimulus measures worth S$33 billion (US$23.2 billion) on Tuesday, bringing the total amount of stimulus to S$100 billion in 2020.
The Fortitude Budget, as these measures are known, are focused on saving as many jobs as possible.
“The central focus of this budget is jobs. This budget will continue to support workers and businesses who remain affected by border closures and safe distancing measures,” Heng said in his Parliament speech.
“Given the significant changes in the global economy ahead, we will provide support to enable our businesses and workers to adapt, transform and seize new opportunities, to emerge stronger,” he said.
Among the key items in the latest set of measures were further enhancements to a wage subsidy scheme first rolled out in February. The government will now offset up to 25 percent of the first S$4,600 of workers’ monthly wages for a 10-month period, up from nine months previously.
Jobs Support Scheme
The Jobs Support Scheme (JSS), which was first announced in the Unity Budget and later extended in the Resilience and Solidarity Budgets, will now be enhanced in three ways.
Firstly, businesses that are able to safely reopen after the circuit breaker ends on 1 June will receive an additional one month of wage support.
The payout amount they receive will be computed based on the wages paid in August 2020, and stay at the same level of support as during the circuit breaker period. They will receive it in October 2020.
Second, firms that are not allowed to reopen yet will receive wage support at 75 per cent until August 2020, or when they can reopen, whichever happens sooner.
This is set to help businesses including retail outlets, gyms, and cinemas which will remain closed.
Finally, wage support for firms that are more severely impacted will be adjusted to higher levels.
Companies in the built environment sector and aerospace sector including maintenance, repair, and operations firms, will now get 75 per cent wage support.
Retail, marine and offshore businesses will receive 50 per cent support.
Eligible firms will receive a back-payment to top up their previous JSS payouts to the higher level of support. This retrospective payment will be made by July.
In total, the three enhancements will cost S$2.9 billion.
Livelihood Support Measures
As part of the Fortitude Budget, Heng also announced a one-off S$100 utilities credit for each household with at least one Singapore citizen. This will cover all property types and will be credited in the July or August utilities bill, he said.
“In the three weeks after the COVID-19 Support Grant started, we received about 48,000 applications. We are committed to providing help to those who have been badly affected,” Mr Heng said.
Alongside the direct injections, Heng also unveiled an ambitious plan to create 40,000 jobs, 25,000 traineeships and 30,000 slots for retraining to offset expected job losses.
To support the hiring of mid-career workers, Heng said the government will double an incentive for employers to hire employees above the age of 40. Employers who sign up to this scheme will enjoy a 40 per cent subsidy on the wages of these workers for six months, up to a total cap of S$12,000.
The Singaporean economy is forecast by the Ministry of Trade and Industry (MTI) to shrink between 4 percent and 7 percent as the 2020 growth forecast is cut again on COVID-19’s impact. The last time Singapore posted a full-year contraction was during the dotcom bust in 2001 when growth fell by 1.1 per cent.
The combined stimulus measures amounts to 19.4 percent of Singapore’s GDP. The cost of these measures in 2020 will register a fiscal deficit of S$74.3 billion, or 15.4 per cent of GDP.