Singapore, 6 July 2021 – Minister for Finance, Lawrence Wong, delivered the Ministerial Statement on Support Measures for Phase 2 and Phase 3 (Heightened Alert) in Parliament yesterday. He believed that we are in a much better position now than at the start of the pandemic in 2020 because we have:
- More robust public health defences;
- Almost 40 per cent of population fully vaccinated; and
- Most parts of economy continue to operate.
Strong base of on-going support measures announced in Budget 2021 include:
- Jobs Support Scheme (JSS);
- Jobs Growth Incentive;
- COVID-19 Recovery Grant; and
- GST Vouchers and CDC Vouchers.
Calibrated approach during Phase 2 and Phase 3 (Heightened Alert) is:
- Focused on high-risk activities in indoor settings
Hence, support was also targeted to:
- Jobs Support Scheme to help enterprises retain local workers;
- Rental support for Small and Medium Enterprises (SMEs) and eligible non-profit organisations;
- Additional rental waiver for hawkers in government-owned premises;
- Targeted help for affected groups and individuals:
- COVID-19 Driver Relief Fund;
- Hawkers: subsidies for table-cleaning and centralised dishwashing services; and
- COVID-19 Recovery Grant (Temporary) scheme.
Additional support measures for Phase 2 and Phase 3 (Heightened Alert) are expected to cost S$1.2 billion. This will be funded through reallocation of monies hence the government will not need to draw on Past Reserves.
Two sources of reallocation:
- S$0.6 billion from capitalising the development expenditure of the Deep Tunnel Sewerage System and North-South Corridor under the Significant Infrastructure Government Loan Act (SINGA):
- Funds had been set aside for these projects in Budget 2021;
- Now that the SINGA has been passed, the fund for these projects will be borrowed and the expenditure capitalised;
- The amount initially set aside for these projects can be reallocated for new spending;
- One-off adjustment as the development expenditure of future SINGA-eligible projects will be capitalised as part of the annual Budget.
- S$0.6 billion from underutilisation of development expenditure, mainly due to construction delays. This is the responsible approach to managing our finances. Reserves should be drawn down only in exceptional circumstances.
The government has designed the COVID-19 support packages to provide more help for SMEs.
- About two-thirds of the S$26.7 billion of JSS paid out to-date went to SMEs;
- About 90 per cent of the benefits from the Corporate Income Tax rebate available for Year of Assessment 2020 went to SMEs.
There is also an extension of the Temporary Bridging Loan Programme and Enhanced Enterprise Financing Scheme – Trade Loan for an additional six months from 1 October 2021 to 31 March 2022. The parameters for both schemes remain unchanged, including the government risk share of 70 per cent.
Overall Economic and Fiscal Outlook
Barring unforeseen circumstances amidst the uncertain global economic outlook, GDP is expected to grow at least of 4 per cent to 6 per cent this year. Recovery will be uneven across sectors. For FY2021, Singapore’s budget position remains expansionary. An overall deficit of S$11.0 billion is expected (2.2 per cent of GDP), similar to what was previously announced at Budget 2021.
One important part of the recovery process is the reopening of borders. To do so, vaccinations need to be expedited to reach very high level of coverage. The target is for two-thirds of population to be fully vaccinated by National Day.
Source: Ministry of Finance