How Fortitude Budget will help SG adapt post Circuit Breaker

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Additional measures to help Singapore employees, companies and families adapt to the economy reopening

Singapore’s Finance Minister Heng Swee Keat while presenting the Unity Budget on February 18, introduced a slew of measures amounting to $5.6 billion, to deal with the coronavirus pandemic. But as things escalated quickly, he on March 26, unveiled a $48.4 billion supplementary Resilience Budget to support Singaporeans and businesses tide through an “unprecedented crisis of a highly complex nature”. Later, on April 6, as Singapore headed into a Circuit Breaker, the Government announced an additional $5.1 billion Solidarity Budget to further help Singapore-registered companies, employees, and Singaporean families, tide through, what it called the “circuit breaker” phase of the lock-down between April 7 and May 4.

All this combined is a help of $60 billion, or almost 12 percent of Singapore’s GDP.

Now, on May 26, Mr Heng has announced an unprecedented fourth budget this year, which was presented as the Fortitude Budget. According to him, “This $33 billion supplementary budget will provide support for businesses and workers to adapt, transform and seize new opportunities. It also gives additional support for households and the community to cope with the disruptions and seize new opportunities in adversity. In addition, the Fortitude Budget provides funding to frontline agencies, to boost the clinical management of cases and swabbing and testing capabilities.”

Below is the exhaustive summary of the major announcements in Singapore’s Fortitude Budget 2020.

For employees or workers

1) The Government has set-up a COVID-19 support grant, under which an additional $800m is set aside to support Singaporeans and PRs who need help. This includes those who have lost their jobs, are placed on no-pay leave or face significantly reduced salaries. Notably, eligible recipients will receive up to $800 per month for three months.

2) The Government is enhancing the Job Support Scheme (JSS) in three ways:

for one more month to cover wages in August 2020
for firms that cannot resume operations immediately after the circuit breaker, the Government will continue to provide wage support at 75 percent until August 2020, or when they are allowed to re-open (whichever is earlier)
increased support for some affected sectors (eg. aerospace sector, retail, marine and offshore) – an increase from the previous 25% to either 50% or 75%.

3) The Government is introducing a SGUnited Jobs and Skills Package, aimed at:

There will be a hiring incentive for employers which hire local workers who have completed eligible traineeship and training programmes. This will be expanded to cover workers of all ages. For eligible workers under the age of 40, the incentive will be 20% of the monthly salary for 6 months, capped at $6,000 in total. For those 40 and above, the incentive will be 40% of the monthly salary for 6 months, capped at $12,000 in total.
The SGUnited Traineeships programme will provide 21,000 traineeships for local first-time job seekers. Applications open from June 1.
A new SGUnited Mid-Career Traineeships scheme will be created to provide 4,000 traineeships for mid-career job seekers.
Under SGUnited Skills programme, training courses will be available for about 30,000 jobseekers to upgrade their skills while looking for a job. A training allowance of $1,200 per month for a course duration (between 6 to 12 months) will cover basic expenses. This will be rolled out progressively from July.
40,000 jobs will be created by end-2020. Of these 15,000 jobs will be in the public sector and 11,000 will be in the private sector. The remaining 14,000 places will come from the expanded career conversion programmes, such as the Place-and-Train conversion programmes under the Adapt and Grow Initiative, and Company-Led Training programmes under the TechSkills Accelerator or TeSA initiative.

For companies or businesses

1) Firstly, as is the norm these days, the Government will provide support to businesses to go digital. This will be in the form of a bonus of $3,000 per month for over 5 months, to encourage the adoption of e-payments by stallholders in hawker centres, wet markets, coffee shops and industrial canteens. Moreover, starting with food services and retail sectors, a payout of up to $5,000 will help businesses digitalise, with PayNow Corporate, e-invoicing, business process or e-commerce solutions. There will be an additional payout of $5,000 for businesses that use advanced solutions.

2) Then, there will be financial support for promising start-ups including $4.5b of loans through Government financial schemes like the Temporary Bridging Loan programme and the Enterprise Financing Scheme, and $285m additional financing support for promising start-ups by co-investing with the private sector.

3) The increase in CPF contribution rates for senior workers will be deferred by one year, from January 1, 2021, to January 1, 2022.

4) The Foreign Worker Levy and waiver rebate will be extended by up to two months for businesses that are not allowed to resume on-site operations after the circuit breaker. There will be a:

100% waiver and $750 rebate in June 2020
50% waiver and $375 rebate in July 2020.

5) The Government will give $2 billion in cash grants to help SME tenants with rental costs.

6) Including the property tax rebate for 2020, the Government will:

offset another 2 months’ rental for qualifying SME tenants of commercial properties;
offset 1 months’ rental for qualifying SME tenants of industrial and office properties.

7) Finally, there will also be additional rental waivers for commercial and other non-residential tenants of government properties – including stall holders of hawker centres and markets, tenants of commercial buildings and industrial, office and agricultural tenants.

For families or communities

Undoubtedly, families and household expenses have got the biggest hit because of the economic downturn caused by the ongoing pandemic. Thus, the government has decided to provide more help with household expenses.

1) Firstly, it will enhance the fund-raising programme, which will provide dollar-for-dollar matching on eligible donations raised between April 1, 2020, to March 31, 2021, capped at $250,000 matching per charity.

2) Then the Invictus Fund will provide an $18m top-up to help social service agencies maintain services, retain staff and adopt technology.

3) A one-off $100 Solidarity Utilities Credit for each household, covering all property types, with at least one Singapore Citizen will be credited in households’ July or August 2020 utilities bills with SP Group.

4) There will be financial support for lower-income seniors to own digital devices. Also, for seniors, a Seniors Go Digital movement to build digital literacy through one-to-one coaching and small-group learning, will be initiated.

5) There will be an accelerated timeline for all secondary school students to own a digital learning device.