SINGAPORE — The Singapore government will allocate over $48 billion to combat the “unprecedented” COVID-19 crisis, said Deputy Prime Minister and Finance Minister Heng Swee Keat in his Ministerial Statement delivered in Parliament on Thursday (26 March).

Dubbed the Resilience Budget, the sum comes on top of the $6.4 billion Unity Budget announced by Heng in February that was meant to alleviate the economic impact of the pandemic.

“Altogether, we are dedicating close to $55 billion to support people in this battle, amounting to 11 per cent of our (gross domestic product). This is a landmark package, and a necessary response to a unique situation,” said Heng.

He added that the government has received President Halimah Yacob’s in-principle approval to draw up to $17 billion from Singapore’s past reserves to fund part of the Resilience Budget.

Heng noted that the last time the country had to tap on the past reserves was during the 2009 global financial crisis, during which then President S R Nathan approved a draw of $4.9 billion to fund the Jobs Credit Scheme and special risk-sharing initiative.

Thanks to a sharp economic recovery, however, there was no need to tap past reserves then.

Saving jobs, helping businesses

The goals of the latest supplementary Budget are threefold: to save jobs, support workers and protect livelihoods; to help enterprises overcome intermediate challenges; and to strengthen the nation’s economic and social resilience.

Among measures to protect workers’ employment, an enhanced Jobs Support Scheme (JSS) will see the government co-funding 25 per cent wages till the end of the year. This percentage will be raised to 50 per cent for firms in the food services sector and 75 per cent for those in the aviation and tourism sectors.

In total, this scheme will see $15.1 billion spent to support more than 1.9 million local employees under the JSS.

For those who find themselves unemployed due to the pandemic, an $800 monthly grant will be started from next month, while a temporarily relief fund will also be started to help families in immediate need of financial aid.

Needy Singaporeans will also receive additional cash payouts and grocery vouchers as part of enhancements to previously announced schemes, among other measures. This enhanced Care and Support Package will cost around $4.6 billion, said Heng.

Beyond wage support schemes, the government will also deferring income tax payments for local businesses from April till June. To help firms with their costs, qualifying commercial properties will be excused from paying property tax for the whole of 2020.

“I strongly urge landlords to fully pass on the rebate to tenants, by reducing rentals, to directly ease the cash flow and cost pressures faced by tenants,” said Heng.

He added that the government will be “leading by example” in this effort by enhancing rental waivers for stallholders at hawker centres managed by the National Environment Agency (NEA) and tenants under other government agencies such as HDB and the National Arts Council.

On financing businesses, Heng announced a number of enhancements to existing schemes aimed at helping local enterprises. Among these are an expanded Temporary Bridging Loan Programme (TBLP), which will now cover all enterprises with a maximum supported loan sum of $5 million, as compared with $1 million before.

Small and medium-size enterprises (SMEs) that require support beyond the TBLP can tap on the Enterprise Financing Scheme (EFC) – SME Working Capital Loan, which will see its maximum loan quantum raised to $1 million.

Meanwhile, the maximum loan quantum under the Enterprise Financing Scheme (EFS) – Trade Loan will also be raised to $10 million, with the government also raising its risk-share in such loans to 80 per cent.

“In addition, we will work with participating financial institutions to defer capital payments for one year on 4th EFS-Working Capital Loan and the TBLP loans if requested by businesses,” said Heng. He noted that these deferments would be subject to assessment by the participating financial institutions.

Another $20 billion worth of loan capital will also be set aside to “support good companies with strong capabilities”, Heng added.

The Monetary Authority of Singapore (MAS) is also working with banks and insurers to look into helping businesses and individuals facing cash flow challenges with their loan obligations and insurance premium payments.