- How To Decide When To Refinance Or Reprice For Your Loans
- Why Open A Business Account With A Bank?
- Guide to Incorporating A Business And Setting Up A Business Account
- The Best SME Business Account In Singapore 2023
- Who's Liable For Your Debt After You Pass On?
- Guide To Home Office Scheme In Singapore
- You've Heard It Before: Charitable Donations Can Help Your Business With Your Taxes. But How?
- Can Directors be Liable for Company Debts in Singapore?
- Complete Guide to Hiring Property Conveyancing Lawyer In Singapore
- Who Acts As A Guarantor In A Business Loan? A Detailed Legal Advice Before You Become a Loan Guarantor!
COVID-19: 8 Key Points You Need To Know From The Fortitude Budget 2020
Two months have passed since our third Resilience Budget was announced on 26th March 2020. As of today, Singapore has a total of 32,343 Covid-19 cases and 23 deaths. Global cases have also exceeded over 5 million cases, and over 340,000 deaths worldwide.
“Circuit Breaker” measures will be lifted from 2nd June 2020 onwards, but our economy will only open up gradually in three phases. It is definite that life will not (yet) go back to how it was before Covid-19.
Many Singaporeans are anxious about keeping their jobs, new graduates concerned with looking for jobs, and businesses struggling with cash flow issues and staying afloat.
Today, Deputy Prime Minister Heng Swee Keat announced the fourth Budget this year. The Fortitude Budget, funded by a second draw on Singapore’s past reserves this year, aims to fight the effects of Covid-19 and to prevail the challenges ahead. The Government has provided a total S$92.9 billion in financial support since March 2020, nearly 20% of total GDP.
The distinctive feature of Fortitude Budget is setting aside a bigger contingency sum of S$33 billion to prepare for tough times - to protect livelihoods, transform businesses, support households and community, and to support frontline agencies in the fight against the pandemic.
The focus of support for businesses will continue to be on the three “Cs” - Cash flow, Costs and Credit.
- Government will help businesses on Cash flow by enhancing the Job Support Scheme (JSS) in retaining and paying their workers.
There will be 3 enhancements to JSS, which will cost S$2.9 billion in total
- Duration of JSS to be extended by one month for all firms. This will be computed based on the wages paid in August, and paid out together in the October JSS payout
- Firms not allowed to reopen after 1st June will get wage support at 75% until August 2020 or when they are allowed to reopen, whichever is earlier
- Increased wage support for firms in sectors that are more severely impacted, from previous 25% to either 75% (for aerospace sector) or 50% (for retail, marine and offshore sectors)
- To help manage costs of businesses, Foreign Worker Levy waiver and rebate will be extended by up to 2 months for businesses that have to remain close even after Circuit Breaker measures are lifted. This will include all firms in the construction, marine and offshore, and process sectors.
The waiver will be 100% in June and 50% in July, while the rebate will be S$750 in June and S$375 in July.
- Increase in CPF contribution rates for senior workers will be deferred to 2022. This is to help businesses manage costs in challenging times, as well as keeping jobs for our senior workers during this period.
- Hawkers and commercial tenants will get two more months or rental waivers, while other tenants of government agencies, such as industrial, office and agricultural tenants will get an additional month of waiver. This means that Hawkers will get a total of 5 months rental waivers, Commercial tenants will get 4 months in total, and the other tenants of government agencies will get a total of 2 months rental waivers.
SME tenants in commercial properties will benefit from 4 months of rental relief.
S$2 billion will be disbursed as a cash grant to offset rental costs for qualified SME tenants. This will be disbursed directly to property owners by end-July.
A new Bill will also be introduced to mandate that landlords grant a rental waiver to their SME tenants who have been badly hit and suffer significant revenue loss.
- There will be targeted support for sectors that are hard-hit. For the built environment sector, which includes construction, the Government will provide support to co-share the additional costs incurred by businesses that will need to meet additional requirements in order to resume their existing projects safely.
The Government will also consider giving more support to other sectors, such as Aviation and tourism, as they will take longer to reopen fully, depending on the situation and plans for the economy.
- The amount of business loans under the Enterprise Financing Scheme such as Temporary Bridging Loan Programme has disbursed a total of S$4.5 billion so far, benefitting 5,000 businesses, more than 3 times the amount in the whole of 2019.
The Government has also included financing support for promising startups, with S$285 million to catalyse and crowd in at least another S$285 million or more in matching private investments.
- There will be a Digital Transformation Support of S$500 million to encourage businesses to adopt digital solutions, as telecommuting, on-demand food and services, and even virtual events are now the norm. It is important for businesses to be digitally connected, especially those who have been hit hard during the Circuit Breaker period.
As an encouragement to make use of e-payments in hawker centers, wet markets, and coffeeshops, the Government will give a bonus of up to S$300 per month over five months.
A Digital Resilience Bonus will be introduced to help businesses take the next step. Eligible businesses in the F&B and retail sectors can also receive a payout up to S$5,000 if they adopt PayNow Corporate and e-invoicing, as well as business process or e-commerce solutions, and an additional S$5,000 for businesses that adopt advanced solutions.
- As Singapore prepares for more job losses in the next 12 months, supporting workers is also a key feature in the Fortitude Budget.
A few initiatives will also be put in place, as Singaporeans have to pick up new skills and learn to adapt.
- SGUnited Jobs and Skills Package will create close to 100,000 job opportunities
- SGUnited Traineeship Programme to create 21,000 traineeship positions this year for local first-time Job seekers
- SGUnited Mid-Career Traineeship Scheme for 4,000 unemployed mid-career Job seekers
- SGUnited Skills Programme for 30,000 job seekers from July onwards, with training allowance of S$1,200 per month
There will also be incentives for hiring locals who have gone through the eligible traineeship and training schemes
- For those aged 40 and above, there will be an incentive to cover 40% of monthly salary over 6 months, capped at S$12,000 in total
- For those under 40, incentive will be 20% of monthly salary over 6 months, capped at S$6,000 in total
An additional S$13 billion will also be set aside as contingency funds, to allow the Government to respond quickly to any unforeseeable developments arising from Covid-19, says DPM Heng.
On top of the initiatives in helping Singapore households, there will be a one-off S$100 credit in utility bill for households with at least one Singapore citizen. This will be credited in the July or August utilities bill.
More than 100,000 self-employed individuals can also look forward to receiving the first payout of the Self-Employed Persons Income Relief Scheme (SIRS) this week, while an additional S$800 million will be set aside for the Covid-19 Support Grant to help those who have lost their jobs, are placed on no-pay leave or with significant reduction in salaries.
Many key uncertainties arise from the virus itself, as there are many things we still do not know about Covid-19. The wait for a viable vaccine could take up to 18 months, and even so we do not know how fast and widely available it would be. The situation of Covid-19 is fast evolving, disrupting major economies, and increasing unemployment rate. How long and how fast the global economy will take to recover remains a big question mark.