Government launches $5.1b solidarity budget amidst lockdown

They will introduce a bill allowing businesses to defer rent and law payments, amongst others.

The government has introduced a $5.1b solidarity budget to help manage the impact of the month-long lockdown, finance secretary Heng Swee Keat announced in a speech. This is in addition to the combined $54.8b from the unity and resilience budgets announced in February and March.

With the solidarity budget, the government has allotted a total of $59.9b against the ill effects of the COVID-19 pandemic, or 12% of the GDP. This brings Singapore’s overall budget deficit for FY2020 to $44.3b or 8.9% of GDP, according to Heng.

“The primary aim of this solidarity budget is to take further steps to save jobs and protect the livelihoods of our people during this temporary period of heightened measures. We will also help businesses preserve their capacity and capabilities, to resume activities when the circuit breaker is lifted,” Heng said in his speech.

All Singaporeans will receive a one-off solidarity payment of $600 in cash, adding $300 to the Care and Support cash payout announced earlier. Other cash payouts, such as the remaining $300-$600 from higher tiers of the package, as well as an additional $300 for each parent with children aged 20 and below, will be moved forward to June instead of August.

The solidarity payment will cost the government $1b in total, noted Heng.

Meanwhile, $4b has been allotted for additional support to businesses and workers. These include the expansion of the current Jobs Support Scheme to cover all firms. This will subsidise 75% of gross monthly wages for the first $4,600 of salaries paid for the month of April 2020. The subsidy will apply to the over 1.9 million local employees in the island regardless of their salary, for a maximum of $3,450.

The Ministry of Law will introduce a law on 7 April that will let businesses and individuals defer certain contractual obligations, such as paying rent, repaying loans, or completing work, for a period, according to Heng. The bill will also ensure that property owners pass on the property tax rebate in full, to tenants.

Heng also announced the extension of rental waiver for industrial, office and agricultural tenants of government agencies to 1 month, up from the half month’s rental waiver announced at the resilience budget. Further, stallholders in hawker centres managed by NEA or NEA-appointed operators will continue to have three months of rental waivers, whilst commercial tenants will continue to receive two months of rental waivers.

The government has also waived the monthly foreign worker levy in April. Employers will also be given a foreign worker levy rebate of $750 for each work permit or S-pass holder, based on previous levies paid in 2020. They can receive the rebate as early as 21 April 2020.

The Self-Employed Person Income Relief Scheme (SIRS) has been expanded to include self-employed people who also earn a small income from employment work; and raised the annual value threshold to $21,000, from only $13,000 previously. About 100,000 self-employed persons will automatically be eligible for the scheme, and will receive three payments of $3,000 each, starting from May 2020.

The government is also increasing its risk share of loans made under the Temporary Bridging Loan Programme, the Enterprise Financing Scheme – SME Working Capital Loan, and Enterprise Financing Scheme – Trade Loan from 80% to 90% for loans initiated from 8 April 2020 until 31 March 2021.