Singapore preps another S$33B in recovery funds

Finance Minister Heng Swee Keat delivers fourth budget speech on May 26, 2020.
Finance Minister Heng Swee Keat delivers fourth budget speech on May 26, 2020.

Finance Minister Heng Swee Keat today announced a fourth round of funding worth S$33 billion is on the way to help support the country’s economy amid the COVID-19 pandemic. 

Nearly half of that amount – S$13 billion – will go into a government contingency fund to act as a buffer should the government need to respond quickly to any unforeseen developments. Several other billions will go toward protecting and creating jobs for permanent residents.

The funds are likely to sail through the parliament today. Confirmed coronavirus cases in Singapore increased by another 383 today to hit 32,343. The official death toll stands at 23. 

The announcement came hours after the Ministry of Trade and Industry further downgraded the contraction of the economy this year to between 4% and 7%. Heng said the unemployment rate of resident Singaporeans increased to 3.3% in March. 

Heng said S$2.9 billion of the additional supplementary spending would go to shoring up jobs, extending the current wage support of 25% to 75% one month through November for all companies. Firms in the aerospace sector would receive 75% wage support while other sectors such as retail would receive 50% support.

About S$2 billion will be set aside to create jobs and provide training. Around 40,000 jobs are expected to be created under the SGUnited Jobs and Skills Package, of which 15,000 would be in the public sector.

Heng also announced incentives for employers to hire local workers who undergo relevant training. It would subsidize up to 40% of salaries for older workers 40 and up, capped at S$12,000. It would cover 20% of salaries for those under 40, capped at S$6,000.

Another S$800 million in COVID-19 Support Grant funds would be set aside for those who have lost their jobs, suffered pay cuts, or been put on unpaid leave.

More than S$500 million will go to businesses looking to digitize. Eligible F&B and retail businesses can receive payouts up to S$5,000 to invest in taking their businesses online, including payment methods or other processes.

A new bill will be tabled in parliament next week to mandate that commercial landlords waive lease payments for small-to-medium enterprise tenants who have suffered a significant drop in revenue in recent months. Those owners’ losses would be offset by S$2 billion in taxpayer money.

Each Singapore household would also receive S$100 to put toward their July or August utilities bills. This would apply to all property types housing at least one citizen.

A total of S$18 million would go to help social service agencies stay afloat, retain staff and digitize.

The latest round of economic stimulus will bring the total cost of COVID-19 aid to nearly S$100 billion. The overall budget deficit for Singapore this year will increase to S$74.3 billion, which Heng said is the largest since the country’s independence in 1965.

Heng said President Halimah Yacob has given her in-principle support to further draw S$31 billion from Singapore’s reserves, bringing the total to be drawn to S$52 billion.

Singapore’s “circuit breaker” lockdown measures are set to expire Monday, but the economy will only reopen gradually, in three phases that could take several months. 

Heng said that Singapore expects most businesses to reopen in July except for those in the tourism and aviation sectors. 

Editor’s note: This article has been updated to correct the additional spending amount on jobs. 

Other stories to check out:

Singapore’s high-paid politicians give up month’s pay during COVID-19 outbreak
Cash relief for Singaporeans coming in S$48B aid package
Singaporeans to each receive S$600 in cash as part of third COVID-19 aid relief

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