SINGAPORE (Apr 6): Singapore is injecting another $5.1 billion in relief measures to help Singaporeans and local businesses tide through a month-long circuit breaker period that kicks in from April 7.
Dubbed the Solidarity Budget, the additional measures announced April 6 will build on measures unveiled earlier in Budget 2020 on Feb 18 and the supplementary Resilience Budget on March 26.
Together, the total relief measures doled out by the government to help mitigate the impact of the Covid-19 outbreak now amounts to $59.9 billion – or some 12% of Singapore’s gross domestic product (GDP).
The latest round of measures comes as rising cases of local infections prompted the government to shut most workplaces and all schools to curtail non-essential activities until May 4.
See: Singapore to close most workplaces, schools in 'circuit breaker' to curb virus spread
"We must take short-term pains, to avoid even sharper pain later. Let us all bear these immediate pains with fortitude, and stay strong," said Deputy Prime Minister and Finance Minister Heng Swee Keat in a speech in Parliament on Monday.
The first part of the Solidarity Budget comprises $4 billion worth of support to businesses, employees and self-employed persons.
To help businesses retain workers, the government will raise its wage subsidy for all firms to 75% of gross monthly wages for each Singaporean employee in April, for the first $4,600 of wages for each employee. This is expected to benefit all of Singapore’s 1.9 million local workers.
For most companies outside of the aviation and tourism sectors, the wage offset is expected to revert to 25% from May onwards till the end of the year.
The first payout under this Jobs Support Scheme will also be brought forward to April, instead of May.
"I expect firms to make use of this JSS support to continue paying your workers and refrain from putting workers on no-pay leave during this period, or worse, retrenching them," Heng said.
To ease the load on firms that hire foreign workers on work permits and S-passes, the monthly foreign worker levy due in April will be waived. Employers will also receive a foreign worker levy rebate of $750 for each work permit or S pass holder, based on previous levies paid.
Heng said this will help firms reduce their cost and relieve the pressures on their cash flow, as well as enable them to preserve their business structure and quickly resume operations when the crisis is over.
Singapore is also slated to introduce a Bill on April 7 to let businesses and individuals temporarily defer certain contractual obligations, such as paying rent, repaying loans, or completing work, during this period.
Some $40 billion worth of SME loans could be deferred.
See: Businesses could soon get temporary relief from legal penalties for failing to meet contractual obligations
Under this proposed Bill, non-residential property owners will also be required to pass on the property tax rebate – received as part of the FY2020 Budget and supplementary Resilience Budget – in full to their tenants.
See: Singapore seeks to push property owners to pass on property tax rebate in full to tenants
On its part, government agencies will also increase its rental waiver for industrial, office and agricultural tenants to one month, from 0.5 months previously.
To provide more financial support to enterprises, the government is also raising its risk share of loans to 90%, from 80% previously. This will apply to loans initiated from April 8 this year to March 31 next year under the Temporary Bridging Loan Programme, Enterprise Financing Scheme - SME Working Capital Loan, and Enterprise Financing Scheme - Trade Loan.
Meanwhile, the Self-Employed Person Income Scheme (SIRS) will be extended to include self-employed persons who also earn a small income from employment work.
The annual value threshold will also be raised to $21,000, from the current $13,000, to include those who live in some condominiums and other private properties.
These enhancements will see a total of about 100,000 self-employed persons automatically eligible for SIRS and receiving three payments of $3,000 starting from May, Heng said.
On top of these relief measures to businesses, employees and self-employed persons, the government will spend another $1.1 billion to give every Singaporean adult above the age of 21 an additional $300 cash payout.
The $300 Care and Support cash payout announced earlier will also be brought forward.
The combined sum of $600 per Singaporean adult – now collectively called a solidarity payment – will be paid out April 14 onwards.
Other cash payouts earlier announced as part of the Care and Support Package will be brought forward from August to June.
Heng said he has sought and obtained in-principle support from President Halimah Yacob to draw on an additional $4 billion from Singapore’s past reserves to help fund the relief measures.
"We have brought all our resources and administrative capacity to bear, to mount a national effort for our workers, businesses, and families - to protect both lives and livelihoods,” said Heng, calling the Covid-19 outbreak a "generational crisis, with no precedent".
“The key now is in how we pull together, in solidarity, as a nation to implement these plans, and make adjustments as the situation continues to evolve," he added.