Singapore unveils $33b ‘Fortitude' Budget

The new budget focuses on employee retention and rental support.

As Singapore prepares for lifting of lifting circuit breaker in three phases starting 2 June, Deputy Prime Minister Heng Swee Keat revealed its fourth budget amounting to $33b, dubbed as the “Fortitude” budget.

The new budget has three main agendas, protecting livelihood and transforming businesses, supporting households and communities and providing further support to frontline agencies.

On the same note, the government made three enhancements in the Job Support Scheme (JSS). The first one is the additional one-month payout for all firms, which can be received in October. As for firms that cannot resume operations as soon as the circuit breaker is lifted, Heng also announced that they will raise the wage support coverage to up to 50% or 75%. Lastly, the third enhancement is on broadening the classification of firms eligible for JSS.

In addition, foreign worker levy waiver and rebates for firms closed during the circuit breaker have been extended. Each employee may expect $750 in June and another $375 in July.

On the rental front, Heng stated that they will allot a total of $2b to help offset rents. This will include cash grants for property owners to bring another batch of rental relief for their tenants. The government said that commercial and hawker tenants will receive two more months of rental relief and one more month for firms under industrial, office and agriculture.

Further, a new bill will be introduced by next week, which will require landlords to contribute by granting a rental waiver to their SME tenants.

As for startups, Heng has set aside $285m to boost investments.

Another $500m will be given to firms for ramping up digital transformation. A bonus of $300 per month over five months will be given to stallholders, such as hawker centres, wet markets and coffee shops, to use e-payments. The government will also release the Digital Resilience Bonus for F&B and retail companies, which comprise $5,000 for those that adopt PayNow and e-invoicing.

“[W]e recognise that more needs to be done in order to help restart businesses, in turn saving jobs and rebuilding the economy. For example, there is a need to ensure that the basics such as digitising records and the use of more electronic documents are in place. Whilst schemes like the Enterprise Development Grants can help SMEs, we hope that there will be greater flexibility in the eligibility and scope of schemes so that more businesses qualify for such assistance,” commented Harvey Koenig, partner for tax at KPMG Singapore.

Lastly, Heng vowed to set aside an additional $13b for their contingencies fund, which will allow the government to respond swiftly to possible unforeseen occurrences. Other allotments will be for the education sector, charities, encouraging senior workers to acquire digital skills and more training programmes for workers.

Boosting employment
As Singapore’s unemployment rate further widens, Heng shared a number of initiatives to counter it, which includes a plan to introduce 100,000 job opportunities.

To encourage firms to open more job positions, the government vowed to provide incentives for hiring locals. Workers aged 40 to 60 will receive 40% of monthly salary over six months, capped at $12,000. Meanwhile, those under 40 years old will have 20% of monthly salary over the same period and are capped at $6,000.

In addition to this, Heng has allotted $2b for SG United Jobs and Skills Package. It includes the COVID-19 support grant totalling $800m, which will give 100,000 self-employed individuals $3,000 in its first payout. Its Solidarity Utilities Credit also brings a one-off $100 credit for each household with at least one Singaporean citizen.