An­other $48.4b to weather ‘mighty storm’ caused by virus

Pres­i­dent gives sup­port to draw up to $17b from past re­serves Eco­nomic growth fore­cast for 2020 re­duced to -4% to -1% Sup­port pack­age comes as 52 new coro­n­avirus cases are re­ported

The Straits Times - - FRONT PAGE - Roys­ton Sim Deputy News Edi­tor (Pol­i­tics) [email protected]

Sin­ga­pore will roll out a land­mark $48.4 bil­lion pack­age to sup­port busi­nesses, work­ers and families as the coun­try grap­ples with an un­prece­dented cri­sis fu­elled by the coro­n­avirus pan­demic.

This is in ad­di­tion to the $6.4 bil­lion worth of mea­sures it an­nounced just over a month ago to cush­ion the fall­out from Covid-19.

In all, Sin­ga­pore has mar­shalled nearly $55 bil­lion – 11 per cent of its gross do­mes­tic prod­uct – to re­spond to what Deputy Prime Min­is­ter Heng Swee Keat de­scribed as “the most se­ri­ous cri­sis we have faced in a gen­er­a­tion”.

Un­veil­ing the sup­ple­men­tary bud­get in Par­lia­ment yes­ter­day, he said: “This is a land­mark pack­age and a nec­es­sary re­sponse to a unique sit­u­a­tion.” In eco­nomic terms alone, “this will likely be the worst eco­nomic con­trac­tion since (Sin­ga­pore’s) in­de­pen­dence”, he noted, as he sketched out the grim global eco­nomic out­look.

The Min­istry of Trade and In­dus­try yes­ter­day slashed its 2020 growth fore­cast to a range of mi­nus 4 per cent to mi­nus 1 per cent, from an ear­lier es­ti­mate of mi­nus 0.5 per cent to 1.5 per cent. Sin­ga­pore last reg­is­tered a ful­lyear re­ces­sion in 2001, when the econ­omy con­tracted 1 per cent.

The pan­demic, which has in­fected more than 410,000 peo­ple across more than 190 coun­tries, is likely to take at least a year to be re­solved and the eco­nomic reper­cus­sions would last even longer, Mr Heng said. “This ex­tra­or­di­nary sit­u­a­tion calls for ex­tra­or­di­nary mea­sures.”

He said Pres­i­dent Hal­imah Ya­cob has given her in-prin­ci­ple sup­port to draw up to $17 bil­lion from the past re­serves to fund part of this “Re­silience Bud­get”. This is only the sec­ond time Sin­ga­pore has drawn on its na­tional re­serves to fund spe­cial bud­get mea­sures. It drew $4.9 bil­lion in 2009 dur­ing the global fi­nan­cial cri­sis.

The $48.4 bil­lion Re­silience Bud­get amounts to nearly half of the Govern­ment’s $106 bil­lion Bud­get for this year. It is also more than double the $20.5 bil­lion Re­silience Pack­age in the 2009 Bud­get.

It fo­cuses on three ar­eas, the first of which is to save jobs and pro­tect liveli­hoods by tak­ing “bolder and more ag­gres­sive moves”.

In all, $15.1 bil­lion will go to an en­hanced Jobs Sup­port Scheme to sup­port 1.9 mil­lion lo­cal em­ploy­ees.

Mr Heng, who is also Fi­nance

Min­is­ter, said the Govern­ment will co-fund 25 per cent of wages of ev­ery em­ployed lo­cal worker un­der the scheme, up from 8 per cent.

The monthly wage cap will be raised from $3,600 to $4,600, while the pay­outs will cover nine months in­stead of the ini­tial three.

Com­pa­nies in sec­tors worst hit by Covid-19 – avi­a­tion and tourism – will get 75 per cent wage off­sets for ev­ery em­ployed lo­cal worker.

The $1.6 bil­lion Care and Sup­port Pack­age will be boosted to $4.6 bil­lion, with cash pay­outs for all adult Sin­ga­pore­ans tripled from a range of $100 to $300, to $300 to $900, depend­ing on in­come.

Mr Heng also an­nounced mea­sures to help busi­nesses over­come im­me­di­ate chal­lenges, from de­fer­ring in­come tax pay­ments for com­pa­nies and self-em­ployed per­sons to en­hanc­ing prop­erty tax re­bates and rental waivers.

An­other $1.9 bil­lion has been set aside to build re­silience in Sin­ga­pore’s econ­omy and so­ci­ety.

The $48.4 bil­lion pack­age will raise Sin­ga­pore’s over­all Bud­get deficit for the 2020 fi­nan­cial year to a record $39.2 bil­lion.

“Our pru­dence and dis­ci­pline in sav­ing and grow­ing our re­serves give us the where­withal to re­spond de­ci­sively when our na­tion faces ex­tra­or­di­nary cir­cum­stances,” he said, call­ing the Covid-19 out­break a “black swan event that comes only once ev­ery few decades”.

The Govern­ment will keep mon­i­tor­ing the sit­u­a­tion closely, and he is pre­pared to pro­pose a fur­ther draw on re­serves if nec­es­sary.

Covid-19 is a defin­ing chal­lenge – one that will test Sin­ga­pore’s so­cial co­he­sion and psy­cho­log­i­cal re­silience, he said. The coun­try yes­ter­day re­ported 52 new coro­n­avirus cases, tak­ing the to­tal to 683.

While peo­ple are un­der­stand­ably fear­ful, they must not sur­ren­der to fear or panic, Mr Heng said.

“The Govern­ment will take all the so­cial and eco­nomic mea­sures we need to keep our peo­ple safe, keep our econ­omy grow­ing and pre­pare our­selves for the re­cov­ery. Now, more than ever, we need Sin­ga­pore­ans to be strong and ride through these chal­lenges to­gether.”

The Govern­ment will stand with Sin­ga­pore­ans from all walks of life to bat­tle the cri­sis. “I am con­fi­dent that to­gether, we will ride through this storm and emerge even stronger,” said Mr Heng, who re­ceived a stand­ing ova­tion in Par­lia­ment.

Par­lia­ment will debate the mea­sures when it next sits on April 6.

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