In his February 16 budget speech, Finance and Deputy Prime Minister Heng Swee Keat acknowledged that Singapore has faced the worst recession since its independence.

The country’s GDP contracted by 5.4% in 2020. Its overall budget deficit last year was also the largest since independence, standing at $64.9 billion.

To date, four support packages have been released to help enterprises during this challenging period. Mr. Heng also announced the setting aside for $11 billion for a COVID-19 Resilience Package, which will continue supporting workers and firms in 2021.  

Here is a round-up of what SMBs can expect. 

Jobs Support Scheme (JSS)

Set up last year to help businesses retain local employees, the JSS will be extended towards the hardest-hit sectors, costing $700 million. These include:

• Tier 1 sector firms (aviation, aerospace, and tourism): Extension of JSS by six months. Eligible businesses will receive 30% support for wages paid from April to June 2021, followed by 10% from July to September 2021.
• Tier 2 sector firms (such as retail, arts and culture, food services and built environment): Extension of JSS at 10% for three months, covering wages paid up to June 2021. Supermarkets are excluded.
  
• For Tier 3A sector firms, the JSS will continue covering wages up to March 2021 as these businesses recovering.

Nightlife establishments like pubs and karaoke outlets can apply for grants from the Ministry of Trade and Industry and Enterprise Singapore, to pivot to other permissible activities or wind down.

Extending finance programmes

The Temporary Bridging Loan Programme and the enhanced Enterprise Financing Scheme – Trade Loan have helped multiple businesses with over 20,000 receiving $17 billion in loans. Both have been extended while the Enterprise Financing Scheme will focus on loans for local construction jobs.

Added support for hardest-hit sectors

Targeted support and extended cost relief will be provided for the aviation sector, costing $870 million.

The Arts and Culture Resilience Package and Sports Resilience Package will be extended in FY2021, to support businesses and self-employed persons in these sectors. A total of $45 million will be set aside.

Enabling business innovation

Mr Heng emphasised the need for business to innovate and collaborate on a global scale.

To enable this, the government will invest in three key platforms:

1. Firstly, the new Corporate Venture Launchpad, which will provide co-funding for corporates to build new ventures through pre-qualified venture studios.
2. Secondly, the Open Innovation Platform (OIP), which facilitates the matching of problems faced by companies and public agencies with solution providers. This will be enhanced with new features like a cloud-based Digital Bench, for accelerated virtual prototyping and testing.
3. Thirdly, the Global Innovation Alliance (GIA), which catalyses cross-border collaboration between Singapore and global innovation hubs. The Co-Innovation Programme will support up to 70% of qualifying costs for cross-border innovation and partnership projects.

The Singapore Intellectual Property Strategy 2030 is also being developed, equipping businesses with tools to value their IP and IA.

Enterprise Financing Scheme - Venture Debt programme

The programme will be extended to ensure high-growth enterprises receive continued access to financial capital. The loan quantum cap will be increased from $5 million to $8 million. 

Support for digital transformation

To encourage digital transformation, the Government will co-fund the adoption of digital solutions and new technologies for mature firms.

The Emerging Technology Programme will co-fund the costs of trials and adoption of frontier technologies like 5G, artificial intelligence and trust technologies.

Additionally, the new Digital Leaders Programme supports promising firms in hiring a core digital team and implementing digital transformation roadmaps.

Enhanced support levels for existing enterprise schemes

Support levels will be extended by up to 80% for schemes such as the Scale-up SG programme, Productivity Solutions Grant, Market Readiness Assistance Grant and Enterprise Development Grant, till end-March 2022.

The Productivity Solutions Grant – Job Redesign will also be enhanced, with the raising of the Government’s co-funding ratio from 70% to 80%, till end-March 2022.

SGUnited Jobs and Skills Package

An additional $5.4 billion will be allocated to a second tranche of the Jobs and Skills Package. Of this, $5.2 billion will go to the Jobs Growth Incentive (JGI). This helps extend the hiring window by seven months, up to end-September 2021. The increased funding means the JGI can hire 200,000 locals and provide 35,000 training opportunities for jobseekers.

Companies hiring eligible locals are provided up to 12 months of wage support from the month of hire. 

Firms hiring mature workers, persons with disabilities and ex-offenders will receive up to 18 months of enhanced wage support.

Innovation & Enterprise Fellowship Programme

Under the new programme, the National Research Foundation (NRF) will support about 500 Fellowships over the next five years. It will collaborate with partners like accelerators, venture capital firms and deep tech startups, to meet needs in cybersecurity, artificial intelligence and health tech.

Wage Credit Scheme

The scheme will be extended for a year, to support wage increments for companies that retain or hire locals. Co-funding will be at 15%

Capability Transfer Programme (CTP)

Supporting foreign-to-local skills transfer, the CTP will be extended up to end-September 2024. As of end-2020, more than 140 companies have benefitted from 40 projects.

Mr Heng acknowledged community concern about the reliance on overseas workers and opposing concerns from businesses finding it difficult to hire locals. Both the Wage Credit Scheme and CTP are designed to support the employment of Singaporeans while increasing the skill base at the same time.

Senior Employment and Re-employment

The Senior Worker Early Adopter Grant and the Part-Time Re-employment Grant have been increased by $200 million. It’s hoped this will motivate businesses to raise retirement and re-employment ages.

Agri-Food Sector

The new Agri-Food Cluster Transformation Fund (worth $60 million) is designed to increase technology adoption in the sector. It will replace the Agriculture Productivity Fund.

Electric vehicle adoption

To encourage the adoption of electric vehicles (EVs) better infrastructure will be developed, including deployment of 60,000 charging points by 2030. This more than doubles the previous target of 28,000. A further $30 million will be spent on EV- related projects over the next five years.

In terms of costs the Additional Registration Fee for EVs will be lowered to zero while petrol duties will be raised. Premium petrol will increase by 15 cents a litre, and 10 cents for intermediate petrol.

Carbon tax

To ensure business certainty the carbon tax will remain at $5 per tonne of greenhouse gas emissions until 2023.

GST extended

From 1 January 2023 the GST will also include imported low-value goods to create a level playing field. Both overseas and local businesses will be subject to the same GST requirements.

For the full transcript of the Singapore Budget 2021 speech, please visit the Singapore Budget website.