Posted on 21 February 2020
Covid-19 was the main topic of concern at Budget 2020, Deputy Prime Minister Heng Swee Keat acknowledged during his speech at 18 February 2020. He noted that while Budget details were normally settled early, the coronavirus outbreak meant urgent restructuring and re-evaluation.
The Budget is funded by various sources of income: taxes and fees, and returns from Singapore's invested reserves, or the Net Investment Returns Contribution (NIRC).
Minister Heng, who is also Deputy Prime Minister, said in his Budget speech that retaining jobs is the Government's foremost concern. Hence, a $4 billion package, the Stabilisation and Support Package, will be rolled out to keep workers in jobs, help companies with their cash flow and provide additional support for sectors directly affected by the coronavirus disease.
Additional measures are planned for the tourism, aviation, retail, food services and point-to-point transport services sectors, which have incurred heavy losses since the start of the outbreak.
While noting the structural shifts in the world as well as concerns over economic uncertainties and the coronavirus outbreak, Minister Heng nevertheless expressed confidence in Singapore’s ability to weather the changes and emerge stronger.
"Our nation has built up the capital - financial, human and social - to go the distance. The Singapore spirit is strong and growing. Together, we will advance, as One Singapore," he said.
Measures for Employers/Employees Affected by Covid-19
This year’s Budget included significant measures to help employers and employees weather the Covid-19 outbreak.
These included the new Jobs Support Scheme, which will subsidise the wages of local workers to help them stay employed during the coronavirus outbreak. Specifically, employers will receive an 8% cash grant on the gross monthly wages of each local employee for three months, subject to a monthly wage cap of $3,600 per employee. Payment will be given to employers automatically by 31 July 2020.
Also, the existing Wage Credit Scheme introduced in 2013 will be enhanced. In Budget 2020, it was announced that the government co-funding ratios for wage increases in 2019 and 2020 will be raised from the current 15% and 10%, to 20% and 15% respectively. The qualifying gross wage ceiling will also be raised to $5000 for both years, up from the current $4000.
Sectors that faced significant knock-on effects were the tourism, aviation, retail, food services and point-to-point transport services sectors. The government pledged further support towards these hard-hit businesses under the Adapt and Grow Initiative for their operating costs and cash flow, as well as to retain and re-skill workers. They also implemented specific assistance packages such as the Aviation Sector Assistance Package, and rental waivers for eligible stallholders in hawker centres and markers.
Other Initiatives for Employers/Employees
Separately from Covid-19, other measures were rolled out focusing on certain key areas. These included:
- A new SkillsFuture Mid-Career Support Package. It consists of a $500 top-up in SkillsFuture Credit for all Singaporeans 25 and older, and a further $500 top-up for mid-career workers in their 40s and 60s. In other words, under this package a worker who is 40-60 years old will receive a $1000 top-up, while a worker older than 25 will receive $500.
- A new Enabling Employment Credit scheme which will provide wage offsets to firms that employ those with disabilities. It will replace the existing Special Employment Credit and Additional Special Employment Credit schemes, which will expire on 31 December 2020. The minister added that he hopes the funds would help them strengthen organisational capabilities, increase productivity and enhance service infrastructure.
- An Enterprise Transform Package, which will include the launch of the Enterprise Leadership for Transformation Programme by Enterprise Singapore to support business leaders of promising SMEs. The aim is to support business leaders of enterprises in business transformation with training and mentorship over the next three years by collaborating with higher learning institutes, banks and industry experts.
- Reductions in the quota for skilled foreign workers in the construction, marine shipyard and process sectors over the next three years to encourage firms to hire more Singaporean skilled workers and technicians.
- A boost in government support for fair and exemplary employers who upskill their employees and hire and retain older workers. "Fair and sustainable employment practices make business sense. When you take care of your employees, they will take care of your business," Manpower Minister Josephine Teo had also said previously.
Photo credited to cattan2011
← Return to Insights