Citing the pandemic-triggered recession as the worst Singapore has faced, Deputy Prime Minister Heng Swee Keat said that the overall Budget deficit for FY2020 is also the largest since Singapore’s independence, at S$64.9 billion, or 13.9 per cent of GDP.
During the Budget reading on Tuesday (Feb 16), DPM Heng said that nearly S$100 billion, on top of the usual spending, was committed last year through five Budgets to support Singaporeans and help tide businesses over. He added that the measures also saved or created an estimated 155,000 jobs on average over 2020 to 2021.
Under the Emerging Stronger Together 2021 Budget, DPM Heng announced S$11 billion has been set aside for a Covid-19 Resilience Package. Out of this, under the Jobs Support Scheme (JSS), S$700 million will be set aside for sectors that continue to be hard hit.
DPM Heng explained that
For firms in Tier 1 sectors such as aviation, aerospace and tourism:
• JSS will be extended by six months;
• Firms will receive 30 per cent support for wages paid from April to June 2021;
• Firms will receive 10 per cent support for wages paid from July to September 2021.
For firms in Tier 2 sectors such as retail, arts and culture, food services and built environment:
• JSS will be extended by three months;
• Firms will receive 10 per cent support for wages from April to June 2021.
DPM Heng added that the next phase of the SGUnited Jobs and Skills Package will also aim to provide up to 35,000 traineeships and training opportunities for job seekers.
“The company is the basic economic unit”
Mr Heng also noted that to catalyse a wide range of capital to co-fund and enable businesses – from start-ups to small, medium and large enterprises – to innovate, transform and scale, the Government will step up risk-sharing arrangements with providers of capital, and provide grants, to support businesses at various stages of growth.
He added that as part of the Venture Debt programme, the Government shares up to 70 per cent of the risk of eligible loans with participating financial institutions, increasing the cap on loan quantum supported, from S$5 million to S$8 million.
He noted that with this, the Government expects about S$45 million of venture debt to be catalysed over the next year.
He cited that some Singaporeans are concerned about Singapore’s reliance on, and competition from, foreign manpower. However, he added, business and trade associations have said that it is difficult to hire locals, and have asked the Government not to tighten the foreign worker quotas further.
Mr Heng said that the way forward is neither to have few or no foreign workers nor to have a big inflow. To strike a balance, Singapore must focus on enhancing the complementarity of local and foreign manpower, and step up on industry transformation, he added.
He said that in line with this, he will support the employment of Singaporeans through supporting wage increments for companies to retain or draw locals, adding that the Wage Credit Scheme will be extended for a year, at a co-funding level of 15 per cent. /TISG