As Mr Wong noted, Singapore expects to see steady recovery in 2022, with the economy projected to grow by 3% to 5%.

While the overall outlook is positive, he acknowledged that segments of the economy are still struggling, and pledged support for businesses in such sectors. The government will also continue to build digital capabilities and help firms innovate.

GST Hike

The GST hike will be delayed until 2023, with a staggered increase. The first increase takes place on 1 January 2023, from 7% to 8%. The second will occur on 1 January 2024, from 8% to 9%.

$500 million Jobs and Business Support Package

This package includes the Small Business Recovery Grant, a one-off cash support of $1,000 per local employee (up to a cap of $10,000 per firm) for small businesses most affected by COVID-19 restrictions over the past year. For example, those in the F&B, retail, tourism and hospitality sectors.

Also, the Jobs Growth Incentive (JGI). This will be extended by 6 months to September 2022, with stepped-down rates reflecting the improved labour market conditions. The extension covers mature workers who have not been employed for six months or more, persons with disabilities and ex-offenders.

Enhanced financing support for businesses

To support companies with cash flow needs, the Temporary Bridging Loan Programme and the enhanced Trade Loan Scheme will be extended with revised parameters. Both schemes will run for another six months, from 1 April to 30 September this year.

The Project Loans for the domestic construction sector will also be extended for another year, from 1 April 2022 to 31 March 2023.

The Merger and Acquisition Loan (EFS-M&A), which supports Singapore-based enterprises looking to scale and expand, will be enhanced for four years, from 1 April 2022 to 31 March 2026. It will now include domestic M&A activities. 

Building digital capabilities

The Government will extend support for the adoption of cutting-edge digital solutions, helping SMBs improve operational efficiency. From 1 April 2022, the IMDA’s Advanced Digital Solutions (ADS) initiative will be expanded to include solutions leveraging Artificial Intelligence (AI) and Cloud technologies. Participating enterprises will receive up to 70% funding support for these solutions.

The Grow Digital scheme will be expanded from 1 April 2022, to include more pre-approved digital platforms so businesses can internationalise without requiring an in-market presence.

The TechSkills Accelerator (TeSA) initiative, which aims to develop a skilled ICT workforce, will be expanded to SMEs and startups to provide more job opportunities for mid-career worker.

$600 million will also be set aside to expand the range of available solutions under the Productivity Solutions Grant (PSG), and encourage greater take-up of productivity solutions by SMBs. An estimated 100,000 productivity projects will be supported over the next four years. 

Promoting innovation

More support will be provided for local firms undertaking R&D activities. Centres providing research and innovation support to SMEs will have their capacities increased. Over the next five years, they will be able to undertake close to 2,000 innovation projects across five pilot sectors: agri-tech, construction, food manufacturing, precision engineering and retail.

Carbon tax hike

Singapore’s carbon tax will be raised to $25 per tonne in 2024 and 2025, and $45 per tonne in 2026 and 2027, with a view to reaching $50 to $80 per tonne by 2030.

Starting 2024, businesses will be allowed to use high-quality international carbon tax credits to offset up to 5% of their tax emissions in lieu of paying carbon tax.

Upskilling workers

To better support smaller and micro enterprises, a waiver of the Skills Development Levy requirement will be granted, for the qualifying period of 1 January 2021 to 31 December 2021. The deadline to claim the credit will also be extended by a year, to 30 June 2024.

Under the SGUnited Mid-Career Pathways Programme, company attachments for mature mid-career workers will become a permanent feature of the training and placement ecosystem.

Another measure to support mid-career workers is the new SkillsFuture Career Transition Programme, providing high-quality, industry-oriented training courses at a subsidised rate.

Foreign worker policy

From September this year, the minimum qualifying salary for new EP applicants will be raised from the current $4,500 to $5,000. For the financial services sector, which has higher salary norms, this will be raised from the current $5,000 to $5,500.

Likewise, the minimum qualifying salary for new S Pass applicants will be raised from the current $2,500 to $3,000 in September this year. A higher minimum qualifying salary of $3,500 will be introduced for the financial services sector.

Work permit policies in the construction and process sectors will be adjusted, to spur greater productivity improvements and support more manpower-efficient solutions. The Dependency Ratio Ceiling (DRC) will be reduced from the current 1:7 to 1:5. The current Man-Year Entitlement (MYE) framework will be replaced with a new levy framework encouraging firms to support more offsite work and employ more higher-skilled work permit holders.

For the full transcript of the Singapore Budget 2022 speech, please visit the Singapore Budget website.