Singapore – Deputy Prime Minister Heng Swee Keat announced that businesses severely affected by the Covid-19 pandemic will receive additional assistance through enhanced schemes to help in the rebound process.
“As an open economy that’s highly integrated with the global economy, we will be deeply impacted by the global demand and supply shocks” caused by the virus, said Mr Heng. As a result, the Government has drafted an additional S$48 billion “Resilience Budget” on top of the previously announced S$6.4 billion “Unity Budget” to help the country cope in what Mr Heng described as “the worst economic contraction since independence.”
Speaking in Parliament on Thursday (March 26), Mr Heng illustrated the status of the economy amid the Covid-19 outbreak. Based on advance GDP estimates, the Singapore economy during the first quarter, contracted by 10.6 per cent quarter-on-quarter, reversing the 0.6 per cent growth in the previous quarter. Those in the tourism, aviation, and Food and Beverage (F&B) sectors were some of the ones severely affected by the unprecedented crisis.
The landmark package is a necessary response to a unique situation, said Mr Heng who noted that the total S$55 billion budget amounts to 11 per cent of Singapore’s GDP. A total of S$17 billion would be drawn up from past reserves to fund parts of the Resilience Budget.
Help Enterprises Overcome Immediate Challenges
One of the key areas of the Resilience Budget is assistance for enterprises to ensure that the economy remains afloat once the pandemic subsides. The three Cs, cash flow, cost and credit, were taken into consideration for the supplementary budget.
Companies will get an automatic deferment of income tax payments for three months, from April, May and June, said Mr Heng. No application required.
“This will allow companies to use the cash that has been freed up to meet other urgent needs,” he added.
Furthermore, there would be enhanced property tax rebates. Qualifying commercial properties badly affected by Covid-19 such as hotels will pay zero property tax (up from the 15 to 30 per cent in the Unity Budget), while all other non-residential properties would get a 30 per cent rebate for 2020.
On rental waivers, stallholders in hawker centres managed by NEA or NEA-appointed operators would receive three months rental waivers (up from the one month previously announced). Commercial tenants and all other non-residential tenants are eligible to two months and half month rental waivers, respectively.
Mr Heng also announced that all increases in Government fees would be deferred by one year, from April 1, 2020, to March 31, 2021.
A wage offset of 50 per cent for the first S$4,600 of monthly wages for F&B firms would be implemented. Meanwhile, licensed hotels, travel agencies, tourist attractions, cruise ship operators and MICE venue operators would receive a 75 per cent wage offset.
Another S$90 million will be set aside to help the tourism industry get back on its feet, when the time is right, said Mr Heng.
“In Singapore, we are doing everything we can, to keep you and your families safe,” said Mr Heng. “As the severity of the virus grew worldwide, we stepped up our measures which helped keep the number of confirmed cases at manageable levels during the first wave.”
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