Additional $8B COVID-19 support measures for Singapore SMBs

While the COVID-19 situation in Singapore has been in better control in recent weeks, the circuit breaker measures and restricted air travel over the past few months have had a resounding impact on the local economy.

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Additional $8 Billion COVID-19 support measures for Singapore SMBs

18 August 2020 | SMB | 7 min read

The Singapore economy experienced its worst quarterly performance on record for the second quarter of 2020, where there was a 13.2% contraction year-on-year. The overall unemployment rate has also risen to 3.9% in the past quarter.

To aid businesses and workers to tide through these challenging times, the Government has introduced an additional $8 billion worth of COVID-19 support measures.

With these added measures, the Government hopes to provide continued support for workers, protect jobs, preserve the nation’s core capabilities, and transform our economy for a post-COVID-19 world.

Here are the highlights of Deputy Prime Minister Heng Swee Keat’s Ministerial Statement that will benefit local small and medium enterprises.

Protecting Jobs

The Jobs Support Scheme (JSS) was launched in February’s Unity Budget to help businesses retain local employees. As part of the Fortitude Budget in May, the JSS was extended for an additional month. To date, over $16 billion of JSS payouts have been issued, which has benefited over two million workers in more than 150,000 firms.

The latest announcement will see the JSS extended in the following ways:

1.      The JSS will be extended by up to seven months until March 2021. The payout will be distributed in March and June 2021.

2.      JSS support levels will be adjusted for different sectors, based on the projected recovery:

a.       Businesses in the Aerospace, Aviation and Tourism sectors will receive wage subsidies of 50% for seven months, until May 2021

b.      Firms in the built environment sector will receive wage subsidies of 50% for two months until October 2020, before the support is lowered to 30 per cent for the next five months

c.       Firms in the Arts and Entertainment, Food Services, Land Transport, Marine and Offshore, and Retail sectors will receive wage support of 30% for seven months, until May 2021

d.      All other remaining sectors will be provided with wage support of 10% until March 2021

e.       For sectors that are coping well during this COVID-19 pandemic, such as Biomedical Sciences, Financial Services and ICT, there will be 10% wage support for four months until December 2020.

Creating Job Opportunities

To support firms to increase the headcount of local employees over the next six months, with a focus on mature workers, a new $1 billion Jobs Growth Incentive programme will be launched. For every new local hire, there will be wage subsidy provided for a year (subject to a cap), where:

1.      There will be a co-payment of 25% for those below 40 years old

2.      For hires aged 40 and above, the co-payment be up to 50%

More details of the JGI programme will be provided by the Ministry of Manpower later this month. 

The Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment will be updated to include the NTUC’s proposed Fair Retrenchment Framework. This will be supported by the NTUC Job Security Council which has already found more than 20,000 displaced workers new employment opportunities. 

Preserving Core Capabilities

For the hardest-hit sectors, namely businesses in the Aerospace, Aviation and Tourism space, additional support will be provided to help retain their core capabilities and better position for an eventual recovery:

1.      An additional $187 million will be set aside to extend the support measures in the Enhanced Aviation Support Package, up until March 2021.

2.      Temporary Deployment Programme will be scaled up, where more jobs will be created to support areas of need such as in the healthcare sector.

3.      To support the tourism industry, $320 million of tourism credits, in the form of SingaporeRediscovers Vouchers, will be issued to Singaporeans to help boost local spending to try to make up for the decline in tourism expenditure.

4.      Further support will be extended to businesses in the Arts and Culture, and Sports sectors. The initial support provided in the Resilience Budget will be continued in consultation with the Ministry of Culture, Community and Youth to preserve core capabilities.

5.      For smaller businesses, like those in the nightlife industry, which are not able to resume their businesses anytime soon, help will be provided to transition to other activities or to ease their exit.

Transforming the Economy

To prepare for a post-COVID-19 world, there is a strong need for businesses to embrace innovation to better cope with uncertainty and seize new opportunities. In the Unity Budget, $8.3 billion over three years was allocated to support Transformation and Growth strategies. To further encourage innovation and entrepreneurship, up to $150 million will be set aside to enhance the Startup SG Founder programme in phases. This includes raising the startup capital grant and providing continued mentorship support.

The Emerging Stronger Taskforce, set-up earlier this year, has spent the last three months consulting and testing smart commerce and supply chain digitalisation solutions through the industry group, Alliances for Action. The business and Government partnership aims to create better jobs and find new opportunities that will transform the economy.

For the full transcript of the Ministerial Statement, please visit the Singapore Budget website.

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