The outbreak of COVID-19 has upended the global economy and in Singapore, the Gross Domestic Product (GDP) this year is expected to shrink between 4% and 7%, while local unemployment currently stands at 3.3% (as of March 2020) – the highest since December 2009.
In a bid to help businesses and workers weather the COVID-19 storm, the Government unveiled the Fortitude Budget – the latest supplementary budget that totals $33 billion. This is the fourth budget introduced this year and takes the total financial support tally from the Government to $92.9 billion, which is equivalent to 19.2% of Singapore’s GDP.
The key aim of the Fortitude Budget is to provide support for businesses and workers to adapt, transform and seize new opportunities to emerge stronger.
Here are the highlights of the Fortitude Budget that will benefit local small and medium enterprises:
Extend and Enhance Jobs Support Scheme
The Jobs Support Scheme (JSS) was first introduced in February's Unity Budget to help businesses retain local employees.
The latest announcement will see the JSS extended and enhanced in the following ways:
- The JSS will be extended for an additional month to cover wages paid in August 2020. The payout will be distributed in October 2020.
- For businesses that are not able to resume operations once the circuit breaker is lifted, the Government will continue to provide wage support at 75% until August 2020, or when they are allowed to reopen (whichever is earlier).
- Increased level of wage support for firms in sectors that are more severely impacted, from the previous 25%, to either 75% or 50%.
- Firms in the aerospace sector including those in Maintenance, Repair, and Overhaul, will now receive 75% of wage support.
- Firms in the retail, and marine and offshore sectors will now receive 50% support. The full list of eligible sectors and the qualifying criteria are in the annex available on the Budget website.
- For the built environment sector, which includes construction, the wage support will be raised to 75%. This sector will be affected by the phased and gradual resumption of activities. This 75% support will only apply to wages paid between June and August.
- Eligible firms will receive a back-payment to top up their previous JSS payouts to the higher level of support. This retrospective payment will be made by July.
Extend Foreign Worker Levy Waiver and Rebate
For firms that employ foreign workers on work permits and S-passes and are unable to resume operations after the circuit breaker, there will be an extension of the Foreign Worker Levy waiver and rebate for up to two months. The Foreign Worker Levy waiver will be 100% in June and 50% in July. Employers will also receive a Foreign Worker Levy rebate of $750 in June and $375 in July for each work permit or S-pass holder.
Defer the increase in CPF contribution rates for senior workers
To help businesses manage their costs during these challenging times, the planned increase in CPF contribution rates for senior workers will be deferred by a year, from 1 January 2021 to 1 January 2022.
Expand Rental Relief
The Government will provide a cash grant of about $2 billion to offset the rental costs of SMB tenants, to be disbursed through property owners. The grant will be paid out automatically to property owners from the end of July.
Also, there will be a new Bill introduced that will require landlords to contribute by granting a rental waiver to their SMB tenants who have suffered a significant revenue drop.
There will also be an extension of rental relief for Government tenants. There will be an additional two months of rental waivers for commercial tenants and hawkers, and one month of rental waiver for industrial, office and agricultural tenants.
Enhance Financing Support for Startups
To support startups on their entrepreneurial journey, there will be financing support of $285 million, to catalyse and crowd in at least another $285 million in matching private investments.
Transforming to Seize New Opportunities
There will be $500 million set aside to support businesses in their digital transformation to help prepare for the future.
Support Adoption of E-payments
IMDA, NEA, JTC, HDB, and Enterprise Singapore will provide a bonus of $300 per month over five months to encourage more stallholders in hawker centres, wet markets, coffee shops, and industrial canteens to use e-payments and avoid having to handle cash.
Digital Resilience Bonus
Under the Digital Resilience Bonus, businesses that take their basic payment and invoicing functions digital will receive a payout of up to $5,000. This includes the adoption of PayNow Corporate, e-invoicing, along with business process or e-commerce solutions.
There will be an additional tier of $5,000 for F&B and retail businesses who also incorporate advanced solutions.
Support Digitalisation Partnerships
There will be $250 million set aside to help businesses digitalise in partnership with platform solution providers and industry champions.
Launch National Innovation Challenges
A new set of National Innovation Challenges will also be introduced in a bid to encourage partnerships between corporates and startups to develop industry-led solutions to the challenges all businesses face, starting with how Singapore can reopen safely.
SGUnited Jobs and Skills Package
The package is launched to create close to 100,000 opportunities in three areas – 40,000 jobs, 25,000 traineeships and 30,000 skills training. This will support the immediate needs of our workers, and raise the skills of our people for future jobs.
Additional Support for Hiring
In the Unity Budget, a hiring incentive under the SkillsFuture Mid-Career Support Package was announced. For eligible workers aged 40 and above, the incentive is doubled to cover 40% of their salary over six months, capped at $12,000 in total.
The hiring incentive is further expanded to cover workers of all ages. For eligible workers under 40, this incentive will cover 20% of their monthly salary over six months, capped at $6,000 in total.
For the full transcript of the Ministerial Statement on the Fortitude Budget 2020, please visit the Singapore Budget website.
