SINGAPORE (Feb 18): Help is here for companies and employees grappling with the effects of Covid-19, as the government introduces a $4 billion package to stabilise its economy and support its local workers amid near term economic uncertainties.
Unveiled by Deputy Prime Minister and Finance Minister Heng Swee Keat in his Budget speech on Tuesday, the stabilisation and support package consists of two parts: a new Jobs Support Scheme worth $1.3 billion, and improvements to the existing Wage Credit Scheme.
The Jobs Support Scheme will help companies retain their local employees, or some 1.9 million workers, during this period of uncertainty. Employers will receive an 8% cash grant for each local worker in employment, with a monthly ceiling of $3,600 for three months. Heng says that the sum is expected to be paid to employers by the end of July.
On the other hand, the existing Wage Credit Scheme, a government grant that co-funds wage increases, will receive a $1.1 billion top-up. Under the current scheme, the government will co-fund 40% of wage increases given to Singaporean employees earning a gross monthly wage of up to $4,000.
With the enhancement, the scheme’s wage ceiling will be increased to $5,000 for qualifying wage increases given in 2019 and 2020, in a bid to benefit more local employees.
Heng says that the government’s co-funding levels for qualifying wage increases in 2019 and 2020 will each be raised by five percentage points to 20% and 15% respectively.
Heng adds that more than 700,000 Singaporeans employed by some 90,000 enterprises will stand to benefit from these enhancements.
Apart from these, the package also consists of broad-based economic support to ease business concerns about cash flow. These include a corporate income tax rebate, enhancements to the existing corporate tax system and helping businesses to retrain and reskill workers.
Director of global mobility at PwC International Assignment Services Grace Huang terms the stablisation and support package a "decisive response" on the part of the government.
"[The package] will help employers defray staff costs for local employees and put cash in the hands of Singapore enterprises in these trying times," says Huang.