Wednesday, 28 September 2022

Singapore government announces $41.9 billion solidarity budget in response to COVID-19

To help businesses preserve their capacity and capabilities during this circuit breaker period, Singapore’s deputy prime minister and minister for finance Heng Swee Keat announced the government’s solidarity budget, an additional support worth $41.9 billion (SGD 59.9 billion).

Through the solidarity budget, businesses in Singapore will receive additional help with labour costs, rental costs and financing support. Heng Swee Keat stated that support for firms’ immediate needs will be increased in three areas, including cash, cost and credit (3 Cs).

Help with labour costs

To help businesses retain their workers in the coming weeks when many firms may not be able to operate or can only at a much-reduced level, and for business to be up and running quickly after the circuit breaker is lifted, the Jobs Support Scheme (JSS) will be enhanced.

The wage subsidy for all firms will be raised to 75% of gross monthly wages for the $3,220 (SGD 4,600) of wages paid in Apr 2020 for all local employees. This is up from 25% of the first $3,220 (SGD 4,600) of gross monthly wages for all local employees previously.

This wage subsidy applies to every one of over 1.9 million local employees. The first JSS payout will be brought forward from May to April 2020.

In addition, help will be given to ease labour costs of employers who have hired foreign workers to help them take care of these workers during this circuit breaker period. There will be a waiver of monthly foreign work levy due in Apr 2020, as well as a foreign worker levy rebate of $525 (SGD 750) for each Work Permit or S-Pass holder, based on previous levies paid in 2020.

Help with rental costs

The Ministry of Law will introduce a bill to let businesses and individuals defer certain contractual obligations, such as paying rent, repaying loans or completing work, for a period. This bill will also ensure that property owners pass on the property tax rebate in full to tenants to ease their rental costs.

The government will increase rental waiver for industrial, office and agricultural tenants of government agencies to 1 month, up from the 0.5 month’s rental waiver previously announced.

Enhanced financing support

Further enhancements to financing support for enterprises will be made so businesses can continue to have access to credit, despite uncertainties.

The government’s risk share of loans made under the Temporary Bridging Loan Programme, Enterprise Financing Scheme (EFS) – Working Capital Loan and EFS – Trade Loan will be increased from 80% to 90% for loans initiated from 8 Apr 2020 till 31 Mar 2021. 

To help small and medium-sized enterprises with temporary cash flow difficulties, the Monetary Authority of Singapore, together with the financial institutions, introduced a package of measures.

Meanwhile, the Self-employed Person Income Relief Scheme (SIRS) will be enhanced to provide direct cash assistance for self-employed persons.

Re-disseminated by The Asian Banker

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